UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

               [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                   OF THE THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 1998

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                   OF THE THE SECURITIES EXCHANGE ACT OF 1934
             For the Transition Period from __________ to: _________

                        Commission File Number: 333-06966

                               IMMECOR CORPORATION
                 (Name of small business issuer in its charter)


                                   California
                                   68-0324628
(State or jurisdiction of incorporation or  (I.R.S. Employer Identification No.)
                                  Organization)

       100 Professional Center Drive, Rohnert Park, California 94928-2137
                    (Address of principal executive offices)

                                 (707) 585-3036
                           (Issuer's Telephone Number)

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

                  Securities registered under Section 12(g) of
                               the Exchange Act:
                         Common Stock, Without Par Value

         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 [
]

Check if there is no  disclosure  of  delinquent  filers  contained  in this
form in response  to item 405 of  Regulation  S-B,  and no disclosure will be
contained,  to the best of registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in  Part  III of  the Form
10-KSB or any amanedment to this Form 10-KSB. [X]

         State Issuer's revenues for its most recent fiscal year: $ 4,551,593.

         The aggregate  market value of the issuer's  Common Stock,  without par
value, held by non-affiliates of December 31, 1998, was $ 1,761,774. This amount
is based upon the offering price of $ 5.25 per share since there is currently no
public market for the Company's Common Stock as described in PART II, ITEM 5.

         As of December 31, 1998,  there were  2,435,376  shares of the issuer's
Common Stock, without par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

                                       -1-
<PAGE>



                               IMMECOR CORPORATION

                                      INDEX
                                TABLE OF CONTENTS

                                     PART I

       Item 1.         Description of Business
       Item 2.         Description of Property
       Item 3.         Legal Proceedings
       Item 4.         Submission of Matters to a Vote of Security Holders

                                     PART II

       Item 5.         Market for Common Equity and Related Stockholder Matters
       Item 6.         Management's Discussion and Analysis or Plan of Operation
       Item 7.         Financial Statements
       Item 8.         Changes In and Disagreements with Accountants  on
                       Accounting and Financial Disclosure.

                                    PART III

       Item 9.         Directors, Executive Officers, promoters and Control
                       Persons; Compliance with Section 16 (a) of the Exchange
                       Act
       Item 10.        Executive Compensation
       Item 11.        Security Ownership of Certain Beneficial Owners and
                       Management
       Item 12.        Certain Relationships and Related Transactions
       Item 13.        Exhibits and Reports on Form 8-K

                           FORWARD LOOKING STATEMENTS

         Immecor  Corporation  (the  "Company")  cautions  readers  that certain
important  factors may affect the Company's  actual results and could cause such
results to differ  materially  from any  forward-looking  statements that may be
deemed to have been made in this Form 10-KSB or that are otherwise made by or on
behalf of the Company.  For this purpose,  any  statement  contained in the Form
10-KSB  that  are  not  statements  of  historical  fact  may  be  deemed  to be
forward-looking  statements.  Without  limiting the generality of the foregoing,
words  such as "may",  "expect",  "believe",  "anticipate",  "intend",  "could",
"estimate", or "continue" or the negative other variations thereof or comparable
terminology are intended to identify  forward-looking  statements.  Factors that
may affect the Company's results include,  but are not limited to, the Company's
limited  history  of  profitability,  its  dependence  on a  limited  number  of
customers and key personnel,  its possible need for additional financing and its
dependence  on certain  industries.  The Company is also  subject to other risks
detailed herein or detailed from time to time in the Company's  filings with the
Securities and Exchange Commission.

                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

         The Company designs and assembles  specialized computer systems used in
semiconductor   manufacturing   processes  in  addition  to  personal  computers
customized to  specifications  by business and individual  users.  The necessary
components   are  purchased   from  domestic  and  foreign   manufacturers   and
distributors.  The Company  markets the finished  product  through its own sales
force.

         The Company's  initial direct public offering filed with the Securities
and  Exchange  Commission  on Form SB-2 became  effective  on November 18, 1997.
California  approved the filing effective December 19, 1997. The price per share
was set at $5.25 per share and the Company set aside 750,000  shares to be sold.
There was no minimum number of shares that had to be sold.

         The Company sold 14,376  shares of common stock raising  $75,474.
However such amount was offset by $107,119 of costs related to the offering.
The offering was closed November 17, 1998

                                       -2-
<PAGE>

The Company was incorporated in the State of California on January 14, 1994. The
Company's  corporate offices are located at 100~105  Professional  Center Drive,
Rohnert Park,  California  94928-2137.  The Company's  telephone number is (707)
585-3036. The Company's facsimile number is (707) 585-6838. The Company's e-mail
address is  immecor@immecor.com,  and the Company's  world wide web home page is
http//www.immecor.com.

EMPLOYEES

         As of December  31, 1998,  the Company had fourteen  (14) full time and
three (3) part time emplyees.

ITEM      2.      DESCRIPTION OF PROPERTY

          The   Company's   corporate   headquarters   are  located  at  100~105
Professional  Center Drive,  Western  Business Park,  Rohnert Park,  California,
where the Company  maintains 8,000 square feet of office,  showroom and assembly
space.

         The Company maintains 1,500 square feet of office space  at 1445 Koll
         Circle, Suite 103, San Jose, California 95112.

ITEM     3.       LEGAL PROCEEDINGS

         The  Company  filed a  lawsuit  against  three  shareholders  who  were
formerly  officers  and  directors  of the  Company  seeking  rescission  of the
issuance  of  500,000  shares of common  stock in the  acquisition  of  Advanced
Network  Communications,  Inc. in 1994. In addition,  the Company is seeking the
return of funds it believes  were  embezzled and taken through fraud during 1994
by the three  defendants.  The  Company  and its legal  counsel  are  rigorously
pressing  this  litigation  and the case has been set for trial in  September of
1999.  There is no  assurance  of the outcome of the  litigation.  Although  the
Company is the Plaintiff and does not incur the risk of an adverse judgment, the
litigation costs of the action may be material to any individual  interim period
or fiscal year and may be material to the outstanding share balance.

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

         None.

                                     PART II

ITEM     5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's  initial direct public offering filed with the Securities
and  Exchange  Commission  on Form SB-2 became  effective  on November 18, 1997.
California  approved the filing effective December 19, 1997. The price per share
was set at $5.25 per share and the Company set aside 750,000  shares to be sold.
There was no minimum number of shares that had to be sold.

         The Company sold 14,376  shares of common stock  directly to the public
raising $75,474.  However such amount was offset by $107,119 of costs related to
the offering.  There are no  broker/dealer  agreements in effect  regarding this
offering. The offering was closed November 17, 1998

         The stock transfer  agent and registrar for the Company's  common stock
is U.S. Stock Transfer  Corporation  located at 1745 Gardena  Avenue,  Glendale,
California 91204-2991.

         There is currently no public market for the Company's  Common Stock and
there is no assurance that a public market will develop.

         The Company  plans a secondary  offering of its common stock during the
remainder of 1999 through an underwriter and expects to list its common stock on
various exchanges as soon as it can meet the numerical requirements imposed upon
new listings by these stock exchanges.

HOLDERS
         As of December 31, 1998 there were  approximately  94 holders of record
of the Common Stock.



                                       -3-
<PAGE>

DIVIDENDS
         The Board of Directors  does not currently  contemplate  the payment of
cash dividends.  Any decisions as to the payment of cash dividends on the Common
Stock will depend on the Company's  ability to generate  earnings,  its need for
capital,  its overall financial condition and such other factors as the Board of
Directors deems relevant.

SALES OF UNREGISTERED SECURITIES

         None.

ITEM     6.       MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following  discussion  and analysis  should be read in  conjunction
with the Company's  financial  statements and the notes thereto included in Part
II, item 7 of this report.

RESULTS OF OPERATIONS

FISCAL 1998 AS COMPARED TO FISCAL 1997

         Net sales  decreased  by  $808,497  or 15% from  $5,360,090  in 1997 to
$4,551,593 in 1998.  The Company  experienced a decrease in sales due to a major
customer  delaying receipt of firm orders to the first quarter of 1999. Sales to
this major customer for high-end specialty  computers have continued to increase
steadily since the Company has been able to meet strict  shipping  deadlines and
to maintain high quality  control  standards.  This customer alone accounted for
68% and 67% of  total  sales in 1998 and  1997  respectively.  Existing  and new
orders on the books of the Company for the first two  quarters of 1999  indicate
that this trend will continue.  Nevertheless,  the loss of this major  customers
would have a material  adverse  effect on the Company's  financial  position and
results  of  operation.  Management  believes  that with its  current  marketing
strategy which includes  partnering with other technology  companies the Company
will be able to diversify sales.

         Gross  profit  decreased,  as a  percentage  of net sales,  from 24% in
1997 to 22% in 1998 due to  slightly  higher  costs of manufacturing.

         Selling,  general and administrative expenses increased as a percentage
of net sales from 15% in 1997 to 20% in 1998.  The  increase  in  expenses  as a
percentage of net sales was due to hiring of additional employees,  the addition
of assembly space,  increased compensation levels for employees and by decreased
sales volume.

         Income before income taxes  decreased  from $466,040 or 9% of net sales
in 1997 to $76,181 of 2% of net sales in 1998.

         Net  income  per  share  decreased  from 12 cents in 1997 to 2 cents in
1998.

LIQUIDITY AND CAPITAL RESOURCES

STATEMENTS OF CASH FLOWS

         The Company had net cash  provided by operating  activities of $273,647
in 1997  compared to $78,212 in 1998.  The net  decrease  relates  primarily  to
accounts  receivable and sales orders being carried forward to the first quarter
of 1999. The Company had net cash provided by financing activities of $12,299 in
1998  compared  with net cash used by financing  activities of $122,386 in 1997.
The net change  relates  primarily to repayments of notes and offering  costs in
1998.

LINE OF CREDIT

         The Company's line of credit with  WestAmerica  Bank currently  permits
borrowing of up to 80% of eligible accounts  receivable to a maximum of $500,000
and is collaterized by a security interest in all accounts receivable, inventory
and equipment. The line of credit is also personally guaranteed by the Company's
major  shareholder.  Interest is 4.0% over prime rate  (11.75% at  December  31,
1998)  with a  maturity  date of May 31,  1998.  The line of  credit  had a zero
balance as of December 31, 1998.


                                      -4-
<PAGE>

ITEM  7.       FINANCIAL STATEMENTS
                                                                            Page
      The following Financial Statements are filed as part of this report:

      Report of Independent Certified Public Accountants for 1998            10

      Report of Independent Certified Public Accountant for 1997             11

      Balance Sheets                                                         12

      Statements of Income                                                   13

      Statements of Shareholders' Equity                                     14

      Statements of Cash Flows                                               15

      Notes to Financial Statements                                       16-19

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

         On January 27,  1999,  the Company  engaged  Grant  Thornton LLP as the
principal accountants to audit the Company's financial statements.  Prior to the
engagement of Grant  Thornton,  the Company did not consult with Grant  Thornton
regarding the  applicaton of  accounting  principles to a specific  completed or
contemplated transaction, or the type of audit opinion that might be rendered.
                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

The  following  table sets forth the names of all  directors and officers of the
Company and the position held held by them:

      Name                           Age      Position

     Heinot H. Hintereder           66       President & CEO, Director

     Jason C. Lai                   30       Vice President, Sales & Marketing,
                                              Director

     Keith W. Racuya                52       Secretary, Director

     Richard C. Thiede              60       Treasurer, Director

     Nhon K. Tran                   34       Vice President, Engineering,
                                              Director

         Heinot H.  Hintereder is cofounder of the Company.  Was the Founder and
served  as  President  and CEO of  Immecor  Corporation  of  Delaware  until its
acquisition  by the  Company.  Served  5 years as  Manager  of the  Financial  &
Corporate Support Unit,  Fireman's Fund Insurance  Companies until retirement in
1992. For 25 years held various other  managerial and  supervisory  positions at
Firemans Fund. President, Founder, and CEO of Biblionics Corporation, a software
development company. Founder, Partner, and General Manager of W. Koehler K.G., a
German trading company.  In all, Mr. Hintereder has 35 years experience in large
business   systems   design,   selection  of  computer   equipment   and  system
configuration.  Mr.  Hintereder  was  educated  in Germany  and holds the German
equivalent of a Masters degree in Business Administration.

         Jason C. Lai is cofounder of the  Company.  Served as Vice  President
Sales & Marketing  of Immecor  Corporation  of Delaware until its  acquisition
by the Company in 1994.  Before  joining the  Company Mr. Lai served 3 years as
Sales and  Marketing  Executive forComrex Systemation from 1991 to 1993. Before
1991 Mr. Lai was an independent  distributor for Apple computers.  Mr. Lai has
10 years experience in the computer business.
                                       -5-

<PAGE>

Keith  W.  Racuya  is a local  businessman  for the  last 4  years.  Mr.  Racuya
previously  served as large scale computer  equipment planner for Fireman's Fund
Insurance  Companies until retirement in 1994 after 30 years of service,  all in
computer related capacities.

         Richard  C.  Thiede  served as  executive  in the  Systems  Department
of  Firemans  Fund  Insurance  Companies  where he was responsible for the
development and  implementation of several large corporate  computer systems.
He also served as Director of M.I.S. Administration  for the same  company from
which he retired in 1991 after 25 years of service.  Mr.  Thiede was director of
finance and administration  for the Sea Ranch Association for 4 years and in
1995 became an independent  computer  consultant.  Mr. Thiede combines 30 years
of experience in the field of computer  system design and computer  financing.
Mr. Thiede holds a B.S. degree in Finance from Lehigh University.

         Nhon K. Tran is a major  investor in the  Company.  Before  joining the
Company in July of 1995 as Vice President, Engineering, Mr. Tran served 10 years
with Parker Hannifin  Corporation in the field of computer driven robotic motion
control  products,  five years of which he served as Associate  Engineer for new
product development. Mr. Tran received part of his education in Vietnam.

         Directors  of the  Company  hold their  offices  until the next  annual
meeting of the Company's  stockholders and until their successors have been duly
elected and  qualified  or their  earlier  resignation,  removal  from office or
death.

         Officers of the Company serve at the pleasure of the Board of Directors
and until the first meeting of the Board  following  the next annual  meeting of
the  Company's  stockholders  and until  their  successors  have been chosen and
qualified.

ITEM     10.      EXECUTIVE COMPENSATION

         The  Company's  Summary  Compensation  Table is set forth below.  As in
previous  years the  Company had no  Option/SAR  Grants,  Aggregated  Option/SAR
Grants  Exercises or Fiscal Year End  Option/SAR's  for the years ended December
31, 1997 and 1998, nor were there any long-term  incentive plan awards, or stock
options or stock appreciation rights. The Company's compensation to non-employee
directors consists of a fee of $100 per meeting of the Board of Directors.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S>                             <C>         <C>             <C>                 <C>

Name and                                    Compensation     Compensation       All other
Principal Position              Years       Paid             Deferred           Compensation

Heinot H. Hintereder            1997        $  82,666        $    50,000        None
Chief Executive Officer         1998        $ 128,833        $    39,167        None

Jason C. Lai                    1997        $ 160,048        $    14,093        None
Vice President                  1998        $ 157,126        $    16,259        None

Nhon K. Tran                    1997        $ 107,048               None        None
Vice President                  1998        $  94,000        $    10,000        None
</TABLE>

Note 1: All deferred  compensation was accrued in the financial statements as of
December 31, 1998.


EMPLOYMENT AGREEMENTS

         On April 16, 1998, the Company  entered into a one (1) year  employment
agreement  with Jason C. Lai ("Lai") the Company's  Vice  President of sales and
marketing.  The  agreement is renewable for  successive  one year terms with the
consent of both  parties.  The Company may  terminate the agreement for cause at
any time and Lai may  terminate  the  agreement  at any time by  giving  written
notice to the  Company.  For a period of one year  after its  expiration  or its
termination by the Company for cause,  the agreement  prohibits Lai from selling
any products  then being  marketed by the Company to its three major  customers.
This provision may not be enforceable in whole or in part, subject to California
court  determination.  As consideration for performance of specified duties, the
Company payS Lai a base annual  salary of $100,000 and, in months in which gross
sales exceed  $250,000,  a monthly  cash bonus  ranging from 0.5% to 1.5% of the
Company's gross sales.

                                       -6-

<PAGE>


INDEMNIFICATION AGREEMENTS

         The  Company  has  entered  into or will enter into an  indemnification
agreement  with its  directors  and  executive  officers.  Each  indemnification
agreement  provides or will provide that the Company will  indemnify such person
against certain liabilities (including settlements) and legal action, proceeding
or  investigation  (other than actions brought by or in the name of the Company)
to which he or she is, or is  threatened to be, made a party by reason of his or
her status as a director,  officer or agent of the Company,  provided  that such
director,  executive  officer or agent acted in good faith and in a manner he or
she  reasonably  believed  to be in or not  opposed to the best  interest of the
Company and, with respect to any criminal  proceedings,  had no reasonable cause
to believe his or her conduct was unlawful.  With respect to any action  brought
by or in the right of the Company,  a director,  executive officer or agent will
also be  indemnified,  to the extent not prohibited by applicable  law,  against
expenses  and  amounts  paid  in  settlement,  and  certain  liabilities  if  so
determined  by a  court  of  competent  jurisdiction,  actually  and  reasonably
incurred by him or her in connection with such action if he or she acted in good
faith and in a manner he or she  reasonably  believed to be in or not opposed to
the best interest of the Company.  Insofar as  indemnification  for  liabilities
arising under the federal securities laws may be permitted, the Company has been
advised  that in the opinion of the  Securities  and  Exchange  Commission  such
indemnification is against public policy and is, therefore, unenforcable.

ITEM     11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  following  table sets forth as of December  31, 1998 the number of
shares of Common  Stock  owned of  record or  beneficially  owned by each of the
Company's  officers,  directors,  and  stockholders  owning  at  least 5% of the
Company's issued and outstanding shares of Common Stock, by all of the Company's
officers and directors as a group,  and the percentage of the total  outstanding
shares represented by such shares.
<TABLE>
<CAPTION>
<S>                             <C>                             <C>

Name and Address                Shares Beneficially             Approximate
Beneficial Owner                Owned                           Percent of Class

Mr. Jason C. Lai                337,500                         13.94
5625 Mireille Drive
San Jose, CA 95118

Heinot H. Hintereder            887,300                         36.65
131 Keppel Way
Cotati, CA 94931

Nhon K. Tran                    375,000                         15.49
7235 Cadiz Court
Rohnert Park,  CA 94928

James Chu *                     166,666                          6.88
Address
Unknown

Fred Pao *                      166,667                          6.88
Address
Unknown

Grace Lee *                     166,667                          6.88
Address
Unknown

All officers and directors    1,599,800                         66.08
as a group
</TABLE>

* The  issuance  of these  shares may be  rescinded  subject to the outcome of a
pending law suit as described in PART I, ITEM 3.


                                       -7-
<PAGE>



COMPLIANCE WITH SECTION 16 (A) OF THE 1934 ACT

         Section  16  (a) of the  1934  Act  requires  the  Company's  executive
officers,  directors and holders of more than 10% of the Company's Common Stock,
to file reports of ownership and changes in ownership  with the  Securities  and
Exchange  Commission.  Such  persons are  required  to furnish the Company  with
copies of all Section 16 (a) forms they file.

         Based solely on oral or written  representations from certain reporting
persons that no Forms 5 were required for those  persons,  the Company  believes
that, with respect to 1998, its executive  officers,  directors and greater than
10% beneficial owners complied with all such filing requirements.

ITEM     12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Since its inception,  from time to time,  certain  executive  officers,
directors  and  shareholders  have provided  short-term  funds to the Company in
order to finance medium to large purchases of computer components.  All of these
funds have been repaid by the Company as noted in Notes to Financial Statements.


 ITEM    13.      EXHIBITS AND REPORTS ON FORM 8-K

A. All schedules have been omitted,  as the  information is  inapplicable or the
information is presented in the Financial statements or Notes thereto.

B. No reports on Form 8-K were required to be filed in the last quarter of 1998.


                                       -8-
<PAGE>

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

                                                              IMMECOR CORPRATION

Date:    April 15, 1999                          By:   /s/  Heinot H. Hintereder
                                                        -----------------------
                                                     Heinot H. Hintereder
                                           President and Chief Executive Officer

Date:    April 15, 1999                                  By:   /s/  Wil Lindgren
                                                        -----------------------
                                                               Wil Lindgren
                                                         Chief Financial Officer


         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on  the  dates  indicated.requirements  of the  Securities  Act  of  1933,  this
Pre-Effective  Amendment  to  the  Registration  Statement  was  signed  by  the
following persons in the capacities and on the dates stated.

SIGNATURE                                                     DATE


/s/ Heinot H. Hintereder
_____________________________________                April 15, 1999
Heinot H. Hintereder, Director

/s/ Jason C. Lai
_____________________________________                April 15, 1999
Jason C. Lai, Director

/s/ Nhon K. Tran
_____________________________________                April 15, 1999
Nhon K. Tran, Director


                                       -9-
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
Immecor Corporation

We have  audited the  accompanying  balance  sheet of Immecor  Corporation  (the
Company)  as of  December  31,  1998,  and the  related  statements  of  income,
shareholders'  equity and cash flows for the year then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit 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 audit provides 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 Immecor  Corporation  as of
December 31, 1998,  and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.


By: /s/

GRANT THORNTON LLP
March 15, 1999


                                      -10-

<PAGE>

                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


To the Shareholders and Board of Directors
of Immecor Corporation

I have  audited  the  accompanying  balance  sheet of Immecor  Corporation  (the
Company) as of December 31, 1997,  and the related  statements  of income,  cash
flows  and  shareholders'  equity  for the years  then  ended.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatements. 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.
I believe that my audit provides a reasonable basis for my opinion.

In my  opinion,  the  financial  statements  present  fairly,  in  all  material
respects, the financial position of Immecor Corporation as of December 31, 1997,
and the results of its operations and its cash flows for the year ended December
31, 1997, in conformity with generally accepted accounting principles.


By: /s/

L. V. Dorn II
March 12, 1997




                                      -11-

<PAGE>

                               IMMECOR CORPORATION
                                 Balance Sheets
                                  December 31,
                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                           <C>                   <C>


                                                                      1998                   1997
CURRENT ASSETS
Cash                                                          $     207,040         $      164,125
Accounts receivables (net of allowance for doubtful
amounts of 1998 and $10,478 in 1997)                                262,078         $      520,426
Inventories                                                         553,387                343,158
Prepaid and other assets                                             15,190                  9,231
Deferred tax assets                                                   7,717                  4,905
                                                                      -----                  -----
Total current assets                                              1,045,412              1,041,845
                                                                  ---------              ---------

PROPERTY AND EQUIPMENT  - net                                        85,107                 54,955
Deferred offering cost                                                                      63,898
Total Assets                                                   $  1,130,519          $   1,160,698

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                               $    413,475          $    3 21,391
Accrued liabilities                                                  88,422                 128759
Note payable, due within one year                                     4,185                  3,800
Income taxes                                                         31,202                131,725
                                                                     ------                -------
Total current liabilities                                           537,284                585,675

LONG-TERM LIABILITIES
Note payable, due after one year                                      8,558                 12,659
Deferred income taxes                                                16,984                  8,646
                                                                     ------                  -----
Total long-term liabilities                                           25542                 21,305
                                                                      -----                 ------
Total liabilities                                                   562,828                606,980

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Preferred stock, no par value,  20,000,000 shares  authorized;  no shares issued
and outstanding Common stock, no par value, 50,000,000 shares authorized; issued
and outstanding, 2,435,376 shares in 1998 and
2,421,000 shares in 1997                                            288,855                320,500
Retained earnings                                                   278,838                233,218
                                                                    -------                -------
Total shareholders' equity                                          567,693                553,718
                                                                    -------                -------
Total liabilities and shareholders' equity                  $     1,130,519        $     1,160,698
                                                            ---------------        ---------------
</TABLE>



The accompanying notes are an integral part of these statements




                                      -12-

<PAGE>

                               IMMECOR CORPORATION
                              STATEMENTS OF INCOME
                             Year ended December 31,


<TABLE>
<CAPTION>
<S>                                                                            <C>             <C>

                                                                                         1998             1997
Net sales                                                                      $    4,551,593   $    5,360,090
Cost of sales                                                                       3,555,740        4,096,793
                                                                                    ---------        ---------
Gross profit                                                                          995,853        1,263,298
Selling, general and administrative expenses                                          916,660          798,710
                                                                                      -------          -------
Operating income                                                                       79,193          464,587
Interest income                                                                         2,243            3,994
Interest expense                                                                       (5,255)          (2,541)
                                                                                       ------           ------
Income before income taxes                                                             76,181          466,040
Income taxes                                                                           30,561          181,100
                                                                                       ------          -------

NET INCOME                                                                     $       45,620     $    284,940
                                                                               --------------     ------------

Net income per share - basic and diluted                                       $          .02     $        .12
Weighted average shares outstanding - basic and diluted                             2,427,638        2,421,000

</TABLE>


The accompanying notes are an integral part of these statements


                                      -13-

<PAGE>

                               IMMECOR CORPORATION
                        STATEMENT OF SHAREHOLDERS' EQUITY
                     Years ended December 31, 1998 and 19997
<TABLE>
<CAPTION>
<S>                                 <C>              <C>                 <C>                       <C>


                                    Number of                            Retained
                                    Outstanding      Common              Earnings
                                    Shares           Stock               (Accumulated
                                                                          Deficit)                 Total

     Balance - January 1, 1997      2,421,000        $   320,500         $    (51,722)             $   268,778

     Net income                             -                  -              284,940                  284,940
                                      -------            -------              -------                  -------

     Balance - December 31, 1997    2,421,000            320,500              233,218                  553,718

     Sale of common stock, less
       offering costs of $107,119      14,376            (31,645)                   -                 (31,645)

     Net income                             -                  -               45,620                  45,620
                                       ------             ------              -------                 -------



     Balance -  December 31, 1998   2,435,376        $   288,855          $   278,838             $   567,693
                                    ---------        -----------          -----------             -----------

</TABLE>



     The accompanying notes are an integral part of these statements





                                      -14-

<PAGE>

                               IMMECOR CORPORATION
                            STATEMENTS OF CASH FLOWS
                             Year ended December 31,

<TABLE>
<CAPTION>
<S>                                                                             <C>             <C>


                                                                                         1998             1997
Increase (decrease) from cash Cash flows from operating activities:
Net income                                                                      $      45,620    $     284,940
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                                           17,444           13,572
Provision for losses on accounts receivable                                             8,271              478
Deferred income taxes                                                                   5,526           18,575
Disposal of equipment                                                                       -           15,246
Change in assets and liabilities:
Accounts receivable                                                                   250,077         (134,782)
Inventories                                                                          (210,229)        (213,737)
Income taxes                                                                         (100,523)         131,725
Prepaid and other assets                                                               10,279           (4,681)
Accounts payable                                                                       92,084           67,017
Accrued liabilities                                                                   (40,337)          95,294
                                                                                      -------           ------
Net cash provided by operating activities
                                                                                       78,212          273,647
Cash flows from investing activities:
Purchase of equipmen                                                                  (47,596)         (41,813)
                                                                                      -------          -------
Net cash used in investing activities                                                 (47,596)         (41,813)

Cash flows from financing activities:
Proceeds from sale of common stock, less offering costs                                16,015          (47,660)
Proceeds from notes payable                                                                 -           17,314

Principal payments on notes payable                                                    (3,716)         (30,461)
Payments on shareholders advances                                                           -          (61,579)
                                                                                       -------          -------
Net cash provided by (used in) financing activities                                    12,299         (122,386)
                                                                                       ------         --------

NET INCREASE IN CASH                                                                   42,915          109,448

Cash balance - beginning of year                                                      164,125           54,677
Cash balance - end of year                                                      $     207,040      $   164,125
                                                                                -------------      -----------
Supplemental disclosure of cash flow information: Cash paid during the year for:
Interest                                                                        $       5,255      $    4 ,241
Income taxes                                                                    $     120,617      $    30,800

</TABLE>

The accompanying notes are an integral part of these statements




                                      -15-

<PAGE>

                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1998 and 19997

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Immecor Corporation (the "Company") designs and assembles  specialized  computer
systems  used  in  semiconductor   manufacturing  processes  including  personal
computer  customization  to  specifications  required by business and individual
users.  The  necessary  components  are  purchased  from  domestic  and  foreign
manufacturers and distributors. The Company markets the finished product through
its own sales force, primarily in the United States. * Revenue Recognition
        Revenue is recognized when products are shipped.
*       Inventory
        Inventory consists of computer hardware and purchased software. Cost is
determined using the first-in, first-out method.
*       Depreciation
        Depreciation is provided in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service lives, using the
straight-line method. Service lives range from three to ten years.
*       Income Taxes
        The Company follows the liability method in accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax basis of assets.
Additionally, deferred tax items are measured using current tax rates. A
valuation allowance is established if it is more likely than not the deferred
tax assets will be realized.
*        Advertising Costs
         The Company expenses costs of advertising when the advertising takes
place. The amount expensed in 1998 and 1997 was $51,918 and $42,351,
         respectively.
*        Use of Estimates
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions.  These estimates and assumptions  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.
*        Basic and Diluted Net Loss per Share
         The Company adopted SFAS No. 128,  "Earnings per Share" during the year
ended December 31, 1997. Basic earnings per share is computed using the weighted
average number of common shares outstanding during the period.  Diluted earnings
per share is computed  using the  weighted  average  number of common and common
equivalent  shares  outstanding  during the  period.  Common  equivalent  shares
consist of the incremental common shares issuable upon conversion of convertible
securities (using the if-converted method) and shares issuable upon the exercise
of stock  options  and  warrants  (using  the  treasury  stock  method).  Common
equivalent shares are excluded from the
         computation if their effect is anti-dilutive.
*        Cash and Cash Equivalents
         All highly liquid instruments with an original maturity of three months
or less are considered cash equivalents.
*        Fair Value of Financial Instruments
         The fair value of cash and cash  equivalents  accounts  receivable  and
trade payables  approximates carrying value due to the short-term nature of such
instruments. The fair value of long-term obligations approximates carrying value
based on terms available for similar instruments.



                                      -16-
<PAGE>

                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1998 and 19997

NOTE B - INVENTORIES

Inventories consist of the following as of December 31:
<TABLE>
<CAPTION>
<S>                                                              <C>               <C>

                                                                       1998               1997

               Purchased parts                                   $   540,867       $    263,570
               Finished systems                                       12,520             79,588

                                                                 $   553,387       $    343,158

NOTE C - PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31:

                                                                        1998               1997

              Equipment and furniture                            $    60,703       $     51,742
                      Vehicles                                        63,449             24,814
                                                                     124,152             76,556
                 Less accumulated depreciation                        39,045             21,601

                                                                 $    85,107       $     54,955

NOTE D - NOTE PAYABLE

Note payable consists of the following as of December 31:

                                                                        1998               1997
Note payable, collaterized by vehicle, payable in
monthly installments of $443 including interest of
10.5% through September 2001                                     $    12,743       $     16,459

            Less amount due in one year                                4,185              3,800

                                                                 $     8,558       $     12,659
</TABLE>

Maturity of note payable at December 31, 1998 is as follows:

Year ending
December 31,
<TABLE>
<CAPTION>
<S>       <C>                                   <C>

          1999                                  $     4,185
          2000                                        4,646
          2001                                        3,912

                                                $    12,743

</TABLE>


                                      -17-
<PAGE>



                               IMMECOR CORPORATION
                    NOTES TO FINANCIAL STATEMENTS (continued)
                           December 31, 1998 and 19997

NOTE E - LINE OF CREDIT

The Company has a $500,000 line of credit which expires April 30, 1999. Advances
under the line of credit can not exceed 80% of eligible accounts  receivable and
is secured by a security  interest in all  accounts  receivable,  inventory  and
equipment.  The line of credit is also  personally  guaranteed  by the Company's
major  shareholder.  There were no advances on the line of credit as of December
31, 1998.

NOTE F - COMMITMENTS

The Company leases its premises under a  noncancelable  operating  lease,  which
expires in January  2001.  The Company is also  obligated  to pay its  pro-rated
share of utilities for the building on a monthly basis.

Minimum future rental payments under the lease agreement as of December 31, 1998
are as follows:

Year ending
December 31,
<TABLE>
<CAPTION>
<S>       <C>                                   <C>

          1999                                  $     58,652
          2000                                        60,998
          2001                                         5,100

                                                $    124,750
</TABLE>

Rent  expense was $56,578 and $53,533 for the year ended  December  31, 1998 and
1997, respectively.

NOTE G - SALES TO MAJOR CUSTOMERS

A material  part of the  Company's  business  is  dependent  upon sales to major
customers,  the  loss of which  would  have a  material  adverse  effect  on the
Company's  financial  position and results of operation.  One customer accounted
for 68% and 67% of total sales in 1998 and 1997 respectively.

NOTE H - INCOME TAXES

The  provision  for income taxes  consists of the  following for the years ended
December 31:
<TABLE>
<CAPTION>

<S>                                                            <C>               <C>
                                                               1998              1997
         Currently payable:
         Federal                                               $      16,905     $      125,540
         State                                                         8,130             36,985
         Deferred taxes                                                5,526             18,575

                                                                $     30,561     $      181,100

</TABLE>


                                      -18-
<PAGE>



                               IMMECOR CORPORATION
                    NOTES TO FINANCIAL STATEMENTS (continued)
                     Years ended December 31, 1998 and 19997

NOTE H - INCOME TAXES (continued)

A  reconciliation  of the statutory  federal  income tax rate with the Company's
effective tax rate is as follows:
<TABLE>
<CAPTION>
<S>                                                                       <C>               <C>

                                                                          1998              1997

         Statutory rate                                                   34.0%             34.0%
         Reduction due to income under $100,000                           (8.0)                  -
         State income taxes                                                7.1               7.7
         Nondeductible cost                                                5.1               1.0
         Other                                                             1.9              (3.8)

                                                                          40.1%             38.9%

Deferred income taxes (benefits) reflect the tax effect of temporary differences
between  the  amounts of assets and  liabilities  for  financial  reporting  and
amounts as measured for tax purposes. The tax effect of temporary differences as
of December 31, 1998 are as follows:

                                                                          1998             1997

         Deferred tax liability
         Depreciation                                                     $  16,984        $  8,646
         Deferred tax assets
         Inventory, accounts receivable allowance                         $   7,717        $  4,905

</TABLE>


NOTE I - STOCK OFFERING

The Company's initial direct public stock offering filed with the Securities and
Exchange Commission became effective November 18, 1997.  California approved the
filing effective  December 19, 1997. The price per share of common stock was set
at $5.25 and the  Company  set  aside  750,000  shares to be sold.  There was no
minimum number of shares that had to be sold.

The Company sold 14,376 shares raising $75,474.  However, such amount was offset
by $107,119 of costs related to the offering.

At December 31, 1997,  $63,898 of costs had been measured in connection with the
offering.  In the prior year financial statement these costs were offset against
equity. This amount has been restated to deferred offering costs at December 31,
1997 and  offset  such  costs  against  equity  in 1998  when the  offering  was
completed.




                                      -19-


<PAGE>


<TABLE>
<CAPTION>
<S>                                 <C>                <C>

LEGEND                                                       IMMECOR CORPORATION
MULTIPLIER                                                   1
CURRENCY                                                     1
TABLE
S                                          C                 C
PERIOD-TYPE                             YEAR              YEAR
FISCAL-YEAR-END                       DEC-31-1997       DEC-31-1998
PERIOD-START                           JAN-1-1997        JAN-1-1998
PERIOD-END                            DEC-31-1997       DEC-31-1998
EXCHANGE-RATE                              1                 1
CASH                                  164125            207040
SECURITIES
                                           0                 0
RECEIVABLES                           530904            280827
ALLOWANCES                             10478             18749
INVENTORY                             343158            553387
CURRENT-ASSETS                       1105743           1045612
PP&E                                   76556            124152
DEPRECIATION                           21601             39045
TOTAL-ASSETS                         1160698           1130519
CURRENT-LIABILITIES                   606980            562826
BONDS                                      0                 0
PREFERRED-MANDATORY                        0                 0
PREFERRED                                  0                 0
COMMON                                320500            288855
OTHER-SE                              233218            278838
TOTAL-LIABILITY-AND-EQUITY           1160698           1130519
SALES                                5360090           4551593
TOTAL-REVENUES                       5360090           4551593
CGS                                  4096793           3555740
TOTAL-COSTS                          4895503           4472400
OTHER-EXPENSES                             0                 0
LOSS-PROVISION                             0                 0
INTEREST-EXPENSE                        2541              5255
INCOME-PRETAX                         466040             76181
INCOME-TAX                            181100             30561
INCOME-CONTINUING                     284940             45620
DISCONTINUED                               0                 0
EXTRAORDINARY                              0                 0
CHANGES                                    0                 0
NET-INCOME                            284940             45620
EPS-PRIMARY                                 .118             0.018
EPS-DILUTED                                 .118             0.018
</TABLE>



                                      -20-