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

                                  FORM 10-QSB/A
                                (Amendment No. 1)

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For Quarter Ended March 31, 1998
                         Commission file number: 0-12806

                           Dynatec International, Inc.
                 (Name of small business issuer in its charter)

            Utah                                        87-0367267
(State or other jurisdiction                         (I.R.S. Employer
 of incorporation or                               Identification No.)
 organization)

                  3820 Great Lakes Drive
                  Salt Lake City, UT 84120
                  (Address of principal (Zip Code)
                  executive offices)
Issuer's telephone
 number:          (801) 973-9500

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

Securities registered under to Section 12(g) of the Exchange Act:
                   Common Stock (Par Value $0.01 per share)
                                   (Title of Class)

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

         As of May 14, 1998, the Registrant had 2,780,112 shares of Common Stock
outstanding.  The aggregate market value of voting stock held by  non-affiliates
of the Company at May 14, 1998 was $20,728,768.

Transitional small business disclosure format.  Yes__  No  X 


<PAGE>



                                  INTRODUCTION

     This  Amendment  No.  1 to the  Quarterly  Report  on Form  10-QSB  for the
quarterly  period  ended March 31, 1998,  of Dynatec  International,  Inc.  (the
"Company") is submitted to amend the following Items:

Part I - Financial Information
         Item 1.  Financial Statements (Incorporated by reference)
         Item 2.  Management's Discussion and Analysis



                         PART I. - FINANCIAL INFORMATION


ITEM 1 - FINANCIAL STATEMENTS

         Reference  is made to the  attached  Unaudited  Consolidated  Condensed
Financial  Statements  for the first  quarter of  calendar  years 1998 and 1997.
These condensed financial  statements are hereby incorporated by reference.  The
information for the Company's first three months of calendar years 1998 and 1997
ended March 31,  1998 and 1997 is  unaudited,  but in the opinion of  management
reflects  all  adjustments  which  are  necessary  for a  fair  presentation  of
operations for such periods.



<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS:

         For the quarter  ended March 31,  1998,  the  Company  generated  total
revenues of  $3,647,786  compared to total  revenues of  $2,554,618 in the prior
three month period ended March 31, 1997.  Comparative  period revenues increased
$1,093,168 or 43%.

         Overall,  the Company  experienced net income of $103,878 for the first
quarter of 1998  compared  to a net loss of  $511,864  for the first  quarter of
1997.

Telephone Accessories:

         For the quarter ended March 31, 1998,  there was an overall increase of
$254,997 (17%) in the revenues  generated from the telephone  accessory  product
segment of the Company  compared to total  revenues for the quarter  ended March
31, 1997.  Although the sales mix for various  shoulder rests changed  slightly,
overall 1998 sales of shoulder rests  remained  fairly  constant,  increasing by
approximately  $96,799  over 1997  sales.  The  remainder  of the  increase  was
attributable to increased volume on sales of other telephone accessory products.

Hardware/Housewares:

         The  hardware/housewares  products  segment  produced  an  increase  in
revenues  during the three month period ended March 31, 1998 of $189,151 or 23%
compared to the period ended March 31, 1997. During 1997, the Company introduced
several new drawer  organizer  products which have accounted for the majority of
the increase in the current year.  Sales in this segment continue to grow as the
Company  continues  to  aggressively  market and expand the  housewares  product
lines.

Mass Market:

         Sales in the mass market  segment were  $114,051 for the quarter  ended
March 31, 1998 compared to $-0- for the quarter ended March 31, 1997.  Virtually
all of the sales in this segment were to Dolgencorp, Inc. Historically, products
in this segment have  consisted of cameras,  audio cassette  tapes,  three piece
flashlights, and disposable lighters.

Flashlights:

         Total  sales  in the  flashlight  segment  were  $190,941  compared  to
$128,143  for the  periods  ended  March  31,  1998 and 1997,  respectively.  In
February of 1998, Nordic Technologies,  Inc. (Nordic), a wholly owned subsidiary
of the Company,  signed a letter of intent setting forth terms and conditions to
form the basis of a joint  venture/partnership  with a  flashlight  supplier  in
Taiwan.  According  to terms of this letter of intent,  Nordic and the  supplier
would each own 50% of the new company  with Nordic  occupying  four of the seven
Board of Director  seats of the new company.  Other terms of the  agreement  are
still under negotiation.
<PAGE>

Telecommunications Headsets

     Revenues in the  telecommunication  headset  segment were  $455,095 for the
quarter  ending March 31, 1998 compared to $-0- for the same period in 1997. The
Company has been aggressively  developing a line of telecommunications  products
to  include  wired  and  wireless  telephone  headsets,  telephones,  conference
speakers,  and  other  products.  In  first  quarter  1998  initial  orders  for
telephonic  amplifiers  and headsets were filled with Lucent  Technologies.  The
Company has been able to secure pages in several  catalogues  of  providers  for
various  office  products  which  will be coming  out  during  second  and third
quarter.


 Expenses

     Overall gross margins of the Company for the quarters ending March 31, 1998
and 1997 were 37% and 30% , respectively.  This overall increase in gross margin
is largely  attributable to increased  sales of telephone  accessory and headset
products which have gross margins ranging from 35% to 50%.

     The Company spent $33,200 and $136,154 in research and development expenses
for the  quarters  ending  March 31,  1998 and 1997.  Most of the  research  and
development  expenses over these two periods was spent in developing the headset
and flashlight product lines.  Research and development  expenses have decreased
during 1998, as current year research and development  efforts relate to product
enhancements as opposed to initial product development.


LIQUIDITY AND CAPITAL RESOURCES:

     At March 31,  1998,  the  company  experienced  a net  increase in its cash
position of $346,753 from December 31, 1997.  The Company had a decrease in cash
from  operations  of  $438,364.  The  majority  of this  decrease  was caused by
increases in trade  accounts  receivable  ($598,513)  and  inventory  ($465,297)
offset by first  quarter  income.  The increase in  inventories  was offset by a
corresponding  increase in accounts payable of $238,221 for the same period. The
Company  experienced a net increase in cash position  resulting from the receipt
of funds ($940,000) pursuant to a Regulation S stock offering,  as authorized by
the  Board  of  Directors  in  March  of  1997,   partially  offset  by  capital
expenditures  of $167,478  in the quarter  ending  March 31,  1998.  The Company
anticipates  that the  inventory and related  payables will increase  throughout
1998 as sales increase in the flashlight and telecommunication headset segments.



<PAGE>


     Current assets increased from $5,092,374 at December 31, 1997 to $6,111,797
at March 31, 1998. Of this increase,  approximately  $465,297 reflects increases
in  inventory  which  are  offset  by  increases  in  accounts  payable  and the
obligation  under a line of credit  of  $547,338  as the  company  prepares  for
increased sales in calendar year 1998.  Additionally,  trade accounts receivable
also increased due to increased  first quarter sales of  approximately  $168,323
over fourth quarter 1997.

     Under the terms of a line-of  credit  agreement with a bank, the Company is
required to  maintain  certain  financial  covenants  and  ratios.  The bank may
withdraw the line-of-credit upon default by the Company of various provisions in
the  line-of-credit  agreement.  At  March  31,  1997  the  Company  was  not in
compliance  with the provisions  requiring a minimum  current ratio of 1.5 to 1.
The ratio of total current assets to total current liabilities was 1.34 at March
31, 1998.

     The Company has received a commitment  letter from a financing  institution
offering a new,  larger  line-of-credit  to pay off the current line and to fund
future operations.  In addition, the Board of Directors approved the terms of an
engagement  letter  with a  financial  services  firm  which  provides  for  the
placement of $1,500,000  in  convertible  debentures  and up to  $10,000,000  in
common stock in the form of an equity line-of-credit.

     In March 1998, the Company  received  $580,000 as a  nonrefundable  payment
under an agreement with a third party pursuant to which the third party acquired
nonexclusive rights to market certain of the Company's products internationally.
The cash paid to the Company was obtained from the sale of the Company's  common
stock by such third  party.  The Company is  therefore  of the opinion  that the
proceeds of such  transaction  were not  attributable  to the  culmination of an
earnings  process.  Consequently,  such  proceeds  have been  accounted for as a
capital addition in the accompanying consolidated financial statements.


<PAGE>




                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the Registrant has duly caused this amended report to be signed on its behalf by
the undersigned hereunto duly authorized on the March 31, 1999.


                           DYNATEC INTERNATIONAL, INC.

                       /s/Frederick W. Volcansek, Sr.
                       -----------------------------------
                       Frederick W. Volcansek, Sr.
                       Chairman and Chief Executive Officer


                       /s/Paul A. Boyer
                       -----------------------------------
                       Paul A. Boyer
                       Senior Vice President-Chief Financial Officer


<PAGE>







                           DYNATEC INTERNATIONAL, INC.

                         CONDENSED FINANCIAL STATEMENTS

                             March 31, 1998 and 1997




















<PAGE>



                                 C O N T E N T S



                                                                 Page

CONDENSED BALANCE SHEETS                                          3

CONDENSED STATEMENTS OF OPERATIONS                                5

CONDENSED STATEMENTS OF CASH FLOWS                                6

NOTES TO CONDENSED FINANCIAL STATEMENTS                           8








<PAGE>
<TABLE>
<CAPTION>


                                            DYNATEC INTERNATIONAL, INC.
                                             Condensed Balance Sheets
                                       March 31, 1998 and December 31, 1997


                                                                               March 31, 1998                   Dec. 31, 1997
ASSETS                                                                           (Unaudited)                      (Audited)
                                                                        ------------------------------     ------------------------
                                                                            (Restated-see Note2)
<S>                                                                         <C>                                <C>
CURRENT ASSETS                                                                
 Cash                                                                           $       679,647                $     332,894
 Trade accounts receivable, net of allowance for doubtful
accounts of $21,038 in 1998 and $29,684 in 1997                                       2,148,401                    1,549,888
 Related party and other receivables                                                     53,520                      426,131
 Inventories (Note 2)                                                                 2,987,446                    2,522,149
 Prepaid expenses                                                                       226,468                      234,120
 Other                                                                                   16,315                       27,192
                                                                        ------------------------------     ------------------------
         TOTAL CURRENT ASSETS                                                         6,111,797                    5,092,374

PROPERTY, PLANT AND EQUIPMENT, NET                                                    3,941,811                    3,941,587

OTHER ASSETS
 Deposits                                                                                55,361                      107,631
 Intangible assets, net                                                                 251,633                      267,825
                                                                        ------------------------------     ------------------------
       TOTAL OTHER ASSETS                                                               306,994                      375,456
                                                                        ------------------------------     ------------------------

            TOTAL ASSETS                                                        $    10,360,602                $   9,409,417
                                                                        ==============================     ========================

</TABLE>





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

<PAGE>
<TABLE>
<CAPTION>


                          DYNATEC INTERNATIONAL, INC.

                      Condensed Balance Sheets (Continued)
                      March 31, 1998 and December 31, 1997


                                                                                March 31, 1998                  Dec. 31, 1997
LIABILITIES AND EQUITY                                                           (Unaudited)                      (Audited)
                                                                        ---------------------------     ---------------------------
                                                                             (Restated-see Note2)
<S>                                                                          <C>                         <C>
CURRENT LIABILITIES                                                                 
 Short-term note payable                                                       $     1,653,873                 $     1,331,169
 Current portion of long-term debt                                                     745,845                       1,003,477
 Current portion of capital lease obligations                                           16,492                          15,699
 Accounts payable                                                                    1,230,853                         992,632
 Accounts payable-other                                                                961,250                          85,000
 Accrued expenses                                                                      153,362                         238,121
 Accrued advertising                                                                   128,481                         350,000
 Accrued royalties payable                                                              91,401                          17,882
                                                                        ---------------------------     ---------------------------
            TOTAL CURRENT LIABILITIES                                                4,981,557                       4,033,980

LONG-TERM LIABILITIES
 Long-term debt                                                                      1,899,259                       1,994,355
 Capital lease obligations                                                              40,912                          46,086
 Deferred income taxes                                                                   5,036                           5,036
                                                                        ---------------------------     ---------------------------
            TOTAL LIABILITIES                                                        6,926,764                       6,079,457
                                                                                           

STOCKHOLDERS' EQUITY
  Common stock, $.01 par value,  authorized  100,000,000 shares
     2,871,627 issued at March 31, 1998 and
     2,859,940 issued at December 31, 1997                                              28,716                          28,599
 Treasury Stock, at cost, 91,515 shares                                               (915,150)                       (915,150)
 Additional paid-in capital                                                          5,596,723                       5,596,840
 Accumulated deficit                                                                (1,276,451)                     (1,380,329)
                                                                        ---------------------------     ---------------------------
              TOTAL STOCKHOLDERS' EQUITY                                             3,433,838                       3,329,960
                                                                        ---------------------------     ---------------------------

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                                       $    10,360,602                 $     9,409,417
                                                                         ==========================      =========================

</TABLE>






     The  accompanying  notes are an integral part of these condensed  financial
statements
<PAGE>
<TABLE>
<CAPTION>


                           DYNATEC INTERNATIONAL, INC.
                       Condensed Statements of Operations
               For the Three Months ended March 31, 1998 and 1997
                                   (Unaudited)

                                                                Three months Ended March          Three months Ended
                                                                        31,1998                     March 31, 1997
                                                               ---------------------------     --------------------------
                                                               (Restated-see Note 2)
<S>                                                                       <C>                            <C>            
REVENUE                                                                   $     3,647,786                $     2,554,618
COST OF SALES                                                                   2,281,051                      1,779,783
                                                               ---------------------------     --------------------------

GROSS PROFIT                                                                    1,366,735                        774,835

EXPENSES
  Selling expenses                                                                665,767                        587,749
  Research and development                                                         33,200                        136,154
  General and administrative expenses                                             439,215                        457,563
  Provision for losses on accounts receivable                                           -                          5,000
                                                               ---------------------------     --------------------------
         TOTAL EXPENSES                                                         1,138,182                      1,186,466
                                                               ---------------------------     --------------------------

OPERATING GAIN (LOSS)                                                             228,553                      (411,631)

OTHER INCOME/(EXPENSE)
  Interest income                                                                   3,340                          3,982
  Interest expense                                                              (107,009)                      (103,715)
  Loss on sale of asset                                                          (21,006)                              -
                                                               ---------------------------     --------------------------

TOTAL OTHER EXPENSE                                                             (124,675)                       (99,733)
                                                               ---------------------------     --------------------------

INCOME (LOSS) FROM CONTINUING OPERATIONS                                          103,878                      (511,364)

INCOME TAX EXPENSE (Note 6)                                                             -                          (500)
                                                               ---------------------------     --------------------------

NET INCOME (LOSS)                                                          $      103,878                $     (511,864)
                                                               ===========================     ==========================

BASIC NET INCOME (LOSS) PER SHARE                                          $         0.04                $        (0.25)
                                                               ==========================      ==========================
                                                                                                     
DILUTED NET INCOME (LOSS) PER SHARE                                        $         0.03                $        (0.25)
                                                               ==========================      ==========================
                                                                                                     
</TABLE>




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


<PAGE>
<TABLE>
<CAPTION>


                           DYNATEC INTERNATIONAL, INC.
                       Condensed Statements of Cash Flows
               For the Three Months ended March 31, 1998 and 1997
                                   (Unaudited)
                                                                     Three months ended March         Three months ended March
                                                                             31, 1998                         31, 1997
                                                                    -----------------------------    -----------------------------
                                                                       (Restated-see Note2)
<S>                                                                        <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                         
Net income (loss)                                                          $       103,878                 $      (511,864)
Adjustments to reconcile net income (loss) to net cash
 used in operating activities:
Depreciation                                                                        87,333                          110,670
Amortization                                                                        15,942                           16,067
Loss on sale of assets                                                              21,006                                -
Provision for losses on accounts receivable                                              -                            5,000
Changes in operating assets and liabilities:
  Trade accounts receivable                                                       (598,513)                        (391,145)
  Related party and other accounts receivable                                      372,611                                -
  Inventories                                                                     (465,297)                        (151,507)
  Prepaid expenses                                                                   7,652                         (15,719)
  Other                                                                             10,877                            6,500
  Deposits                                                                          52,270                         (30,290)
  Accounts payable                                                                 238,221                          401,658
  Accounts payable-other                                                           (63,750)                                -
  Accrued expenses                                                                 (72,594)                         (62,725)
  Accrued advertising                                                             (221,519)                                -
  Accrued royalties payable                                                         73,519                            7,378
  Income tax payable                                                                     -                              100
                                                                    -----------------------------    -----------------------------

NET CASH USED IN OPERATING ACTIVITIES                                      $      (438,364)                  $     (615,877)
                                                                    -----------------------------    -----------------------------

</TABLE>









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


<PAGE>
<TABLE>
<CAPTION>
                           DYNATEC INTERNATIONAL, INC.
                 Consdensed Statements of Cash Flows (Continued)
               For the Three Months ended March 31, 1998 and 1997
                                   (Unaudited)

                                                                         Three Months ended March        Three Months ended March
                                                                                 31, 1998                        31, 1997
                                                                       ----------------------------     --------------------------
                                                                           (Restated-see Note2)
<S>                                                                         <C>                         <C>
CASH FLOWS FROM INVESTING ACTIVITIES:                                               
  Proceeds from sales of assets                                              $       47,000                    $         -
  Receivable from related parties                                                         -                         60,876
  Capital expenditures                                                             (167,478)                       (87,699)
                                                                        ----------------------------     --------------------------

NET CASH USED IN INVESTING ACTIVITIES                                              (120,478)                       (26,823)
                                                                        ----------------------------     --------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under line of credit agreements                                    322,704                       (372,215)
  Increase in debt issuance costs                                                         -                          3,255
  Net borrowings (payments) on long-term debt                                      (352,728)                       339,811
  Net payments on capital lease obligations                                          (4,381)                        (6,808)
  Proceeds from deposit for stock issuance                                          940,000                              -
  Issuance of Stock pursuant to Regulation S offerings                                    -                        500,000
                                                                        ----------------------------     --------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                           905,595                        464,043
                                                                        ----------------------------     --------------------------

INCREASE (DECREASE) IN CASH                                                         346,753                      (178,657)

CASH AT BEGINNING OF PERIOD                                                         332,894                        240,145
                                                                        ---------------------------     --------------------------

CASH AT END OF PERIOD                                                       $       679,647                  $      61,488
                                                                        ===========================     ==========================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:

Cash paid for interest                                                      $       118,818                  $      93,587
Cash paid for income taxes                                                               -                            400

</TABLE>







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


<PAGE>


                           DYNATEC INTERNATIONAL, INC.
                     Notes to Condensed Financial Statements
               For the Three Months Ended March 31, 1998 and 1997



  NOTE 1 -        BASIS OF PRESENTATION

                    The accompanying  unaudited,  condensed financial statements
                    have been prepared in accordance  with the  instructions  to
                    Form 10-QSB,  and therefore,  do not include all information
                    and footnotes  necessary for a complete  presentation of the
                    results of  operations,  the  financial  position,  and cash
                    flows,  in conformity  with  generally  accepted  accounting
                    principles.  This report on Form 10-QSB for the three months
                    ended March 31, 1998 should be read in conjunction  with the
                    Company's  annual  report on form  10-KSB for the year ended
                    December 31, 1997.

                    The accompanying  unaudited condensed consolidated financial
                    balance  sheets,  statements  of  operations  and cash flows
                    reflect  all normal  recurring  adjustments  which  are,  in
                    management's  opinion,  necessary for a fair presentation of
                    the Company's financial position,  results of operation, and
                    cash flows. The results of operations for the interim period
                    ended March 27, 1998 are not  necessarily  indicative of the
                    results to be expected for the full year.


  NOTE 2 - RESTATEMENT OF QUARTERLY FINANCIAL INFORMATION

                    In  March  1998,   the  Company   received   $580,000  as  a
                    nonrefundable  payment under an agreement with a third party
                    pursuant  to which the  third  party  acquired  nonexclusive
                    rights  to  market   certain  of  the   Company's   products
                    internationally.  The cash paid to the Company was  obtained
                    from the sale of the  Company's  common  stock by such third
                    party.  The Company is  therefore  of the  opinion  that the
                    proceeds of such  transaction  were not  attributable to the
                    culmination  of  an  earnings  process.  Consequently,  such
                    proceeds have been  accounted  for as a capital  addition in
                    the accompanying consolidated financial statements.

                  The following  table  outlines the revisions to the previously
                  reported condensed consolidated financial statements:
<TABLE>
<CAPTION>

                                                                                           Three Months Ended
                                                                                             March 31, 1998
                                                                                   ------------------------------------------
                                                                                    As Restated       As Previously Reported
                                                                                   -------------      -----------------------
                                                                                                 (Unaudited)
                 <S>                                                              <C>                      <C>       
                  Product Revenue.......................................           $3,647,786               $4,227,786

                  Gross profit..........................................            1,366,735                1,946,735 

                  Operating gain........................................              228,553                  808,553

                  Income from operations................................              103,878                  683,878

                  Net income............................................              103,878                  683,878

                  Basic net income per share............................                0.04                     0.25

                  Diluted net income per share..........................                0.03                     0.20
</TABLE>


<PAGE>



  NOTE 2 - RESTATEMENT OF QUARTERLY FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>


                                                                                           Three Months Ended
                                                                                             March 31, 1998
                                                                                 -------------------------------------------
                                                                                    As Restated       As Previously Reported
                                                                                 ---------------      ----------------------
                                                                                                 (Unaudited)
                  <S>                                                           <C>                       <C>        
                  Related party and other receivables...................         $     53,520              $   633,520

                  Accumulated deficit...................................           (1,276,451)                (696,451) 

                  Total stockholders' equity............................            3,433,838                4,013,838

</TABLE>


  NOTE 3  -       INVENTORIES

                    Effective  January 31, 1998, the Company  changed its method
                    of determining the cost of inventory from last-in, first-out
                    (LIFO) to  first-in,  first-out  (FIFO).  Historically,  the
                    difference between the LIFO and current costs of inventories
                    has been immaterial.

                    Inventories,  consisting principally of telephone accessory,
                    hardware/houseware, flashlights, telecommunication headsets,
                    and  other  miscellaneous   products  sold  to  mass  market
                    merchandisers as of March 31, 1998 and December 31, 1997 are
                    summarized as follows:
<TABLE>
<CAPTION>

                                          March 31             December 31
                                            1998                   1997       
                                        -----------           ------------
                             <S>        <C>                   <C>        
                             Raw        $ 1,185,819           $   831,483
                             Finished     1,801,627             1,690,666
                                        ------------          -------------
                                        $ 2,987,446           $ 2,522,149
                                        ===========           ============
</TABLE>


NOTE 4 -   NET EARNINGS PER SHARE

                    On December 31, 1997, the Company  adopted the provisions of
                    FAS No.  128,  Earnings  Per  Share.  FAS 128  requires  the
                    presentation  of both basic and diluted  earnings  per share
                    (EPS). Basic EPS is the amount of net income or loss divided
                    by the  weighted  average  number of shares of common  stock
                    outstanding. Diluted EPS is the amount of income or loss for
                    the period divided by the weighted  average number of shares
                    plus all potentially dilutive common shares.



<PAGE>



NOTE 4 -   NET EARNINGS PER SHARE (Continued)

                    In calculating  EPS, the earnings were the same for both the
                    basic and diluted  calculation.  The effect of common  stock
                    options  is not  included  in the 1997  calculation  as such
                    options would be anti-dilutive. A reconciliation between the
                    basic  and   diluted   weighted-average   number  of  shares
                    outstanding  as of March 31, 1998 and 1997 is  summarized as
                    follows:
<TABLE>
<CAPTION>

                                                              1998                        1997
                                                   ----------------------------     -----------------
                                                       (Restated-see Note  2)
<S>                                                          <C>                       <C>      
Basic weighted-average number of  shares                     2,779,982                 2,047,982
Weighted-average number of common stock options                583,429                         -
                                                   ============================     =================
     Diluted weighted-average number of shares               3,363,411                 2,047,982
                                                   ============================     =================
</TABLE>


NOTE 5 -   YEAR 2000

                    During 1997,  the Company  developed a plan to deal with the
                    Year 2000 problem and began  converting its computer systems
                    to be Year 2000 compliant. During the fourth quarter of 1997
                    and the first quarter of 1998, the Company began  converting
                    to a new accounting and materials resource planning software
                    program. The Year 2000 problem is the result of the computer
                    programs  being written using two digits rather than four to
                    define the  applicable  year.  The  Company is  capitalizing
                    costs  associated  with the new software as the new software
                    is being  implemented to provide better  inventory  tracking
                    and accounting controls.  All other system changes are being
                    expensed as incurred.  The Company does not  anticipate  any
                    year 2000 compliance problems.

NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS

                    The Company adopted Financial  Accounting  Standards No. 130
                    (SFAS  130),  Reporting   Comprehensive  Income,   effective
                    January  1,  1998.  SFAS  130   establishes   standards  for
                    reporting  and  displaying  comprehensive  earnings  and its
                    components  in financial  statements.  As of March 31, 1998,
                    the  Company  has  no  items  to  report  as  components  of
                    comprehensive income.

NOTE 7  -         INCOME TAXES

                    The Company has net operating loss  carryforwards from prior
                    years  which will exceed the income  generated  in the first
                    quarter of 1998.  The  deferred  tax asset  related to these
                    carryfowards was fully reserved for as of December 31, 1997.
                    Accordingly, no income tax expense is being reported for the
                    period ended March 31, 1998.




<PAGE>



NOTE 8 -          STOCKHOLDERS' EQUITY

                    As of March 31, 1998,  $940,000 in funds,  which is included
                    in  accounts  payable-other  in the  accompanying  condensed
                    balance sheet,  has been received in  anticipation of future
                    Regulation S common stock offerings as approved by the Board
                    of Directors  in March 1997.  The terms and  agreements  for
                    these  stock   offerings   are  still   under   negotiation.
                    Regulation  S  stock  is  typically  sold  at a  significant
                    discount from market value because of its restricted nature.

NOTE 9 - STOCK OPTIONS

     A summary of stock  options is as follows  for the period  ended  March 31,
1998:
<TABLE>
<CAPTION>
                      FIXED OPTIONS:                                          Shares
                                                                          (Restated-see
                                                                             Note 2)            Exercise
                                                                             (000's)             Price
                                                                          ---------------     -------------
                      <S>                                                 <C>               <C>  
                      Outstanding at December 31, 1997                         934               $2.50
                      Exercised                                                (12)              $2.50
                                                                          ===============
                      Outstanding at March 31, 1998                            922              Various
                                                                          ===============
                      Options exercisable at March 31, 1998                    184               $2.50
                                                                          ===============
                      Weighted average fair value of
                        options granted during first quarter...               $0.00

                      Weighted average remaining
                         contractual life for exercisable
                         options at March 31, 1998                          3.9 years

</TABLE>
<TABLE>
<CAPTION>

                      VARIABLE  OPTIONS:                                      Shares
                                                                          (Restated-see
                                                                             Note 2)            Exercise
                                                                             (000's)             Price
                                                                          ---------------    -------------
                      <S>                                                 <C>               <C>  
                      Outstanding at December 31, 1997                         945               $2.50
                                                                          ---------------
                      Outstanding at March 31, 1998                            945              Various
                                                                          ===============
                      Weighted average fair value of
                        options granted during first quarter...               $0.00

</TABLE>



<PAGE>


NOTE 10 -         OTHER

                  In  February  of  1998,  the  Company's   subsidiary,   Nordic
                  Technologies, Inc. (Nordic), signed a letter of intent setting
                  forth  terms  and  conditions  to form  the  basis  of a joint
                  venture/partnership  with a  flashlight  supplier  in  Taiwan.
                  According  to terms of this  letter of intent,  Nordic and the
                  supplier  would each own 50% of the new  company  with  Nordic
                  occupying four of the seven Board of Director seats of the new
                  company.   Other  terms  of  the  agreement  are  still  under
                  negotiation.

                  On April 2, 1998, the Board of Directors approved the terms of
                  an  engagement  letter  with a financial  services  firm which
                  provides   for  the   placement  of   $1,500,000   of  Company
                  convertible  debentures  and up to $10,000,000 in common stock
                  in the form of an equity  line of  credit.  Additionally,  the
                  Company  has  received a  commitment  letter  from a financing
                  institution  offering a new, larger  line-of-credit to pay off
                  the current line and to fund future operations.