SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

         For the quarterly period ended           Commission file number
                    6/30/98                             333-6440


                           DOWNSTREAM INCORPORATED-DS1
       (Exact name of small business issuer as specified in its charter)

                  Utah                                    87-0567618
     (State or other jurisdiction of             (IRS Employer Identification
     incorporation or organization)                         Number)

       2046 E Murray Holladay Rd.
                Suite 202
          Salt Lake City, Utah                             84117
     Address of principal executive                      (Zip Code)
                offices)

         Issuer's telephone number, including area code (801) 272-5174

         Check  whether the issuer (1) filed  all reports  required to  be filed
by Section 13 or 15 (d) of the  Securities  Exchange Act of 1934 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
    --------      -------

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

         As of June 30, 1998, the issuer had outstanding 4,334,000 shares of its
Common Stock, $0.001 par value.

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

         The  unaudited  balance  sheet  of  Downstream   Incorporated-DSI  (the
"Company")  as of June 30, 1998 and the  related  audited  balance  sheet of the
Company as of December 31, 1997, the unaudited related  statements of operations
and cash flows for the three and six month periods ended June 30, 1998,  and the
notes to the  financial  statements  are  attached  hereto as  Appendix  "A" and
incorporated herein by reference.

         The accompanying  financial  statements  reflect all adjustments  which
are, in the opinion of  management,  necessary to present  fairly the  financial
position of the Company.

         The Company was  organized on November 26,  1996,  and soon  thereafter
issued  3,300,000  shares  of its  common  stock  to its  founders  and to other
shareholders.  The Company  commenced a public  offering of its common  stock on
April 28, 1997 pursuant to which it raised  $51,700 in gross  offering  proceeds
and issued an  additional  1,034,000  shares of its  common  stock at the public
offering  price of $0.05 per share.  During the third quarter of 1997 a Security
Division was created when the Company was presented with an opportunity from the
Security Project Manager of U.S.  Satellite,  a division of American Stores. The
Security  Division has been the only source of income for the Company  since its
inception. However, due to a change in managment at U.S. Satellite, that account
was lost.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Results of Operations.

         During the three months ended June 30, 1998,  the Company had operating
revenues of $410,  compared to operating revenues of $000.00 for the three month
period ended June 30, 1997.  The Company had operating  revenues of $104,017 for
the six months  ended June 30, 1998,  compared to operating  revenues of $000.00
for the six month period ended June 30, 1997.  Loss per share was  approximately
$0.00 for the three months ended June 30, 1998, and approximately  $0.00 for the
six months ended June 30, 1998.  The notable  difference in sales from the first
vs. the second quarters of 1998 is due to 10 security  contracts the Company was
awarded during the first quarter, vs. no contracts during the second.

         Costs of sales for the three  month  period  ended  June 30,  1998 were
$1,056,  compared to $000.00 for the three month period ended June 30, 1997. For
the six month period ended June 30, 1998, costs of sales were $45,473,  compared
to $000.00 costs of sales for the six month period ended June 30, 1997.

         For the three month period  ended June 30, 1998,  the Company had a net
loss of $(19,998),  resulting in a net loss per share of  approximately,  $0.00,
compared to a net loss of $(1,433)  for the three  month  period  ended June 30,
1997,  resulting  in a  net loss per share  of $0.00.  For the six month  period
ended June 30, 1998, the Company had a net profit of $20,163, resulting in a net
profit per share of $0.005, compared to a net loss of $(3,411) for the six month
period ended June 30, 1997, resulting in a net loss per share of $0.005.

         General and administrative expenses for the three months ended June 30,
1998, were $19,628,  compared to general and  administrative  expenses of $1,358
for the  three month period ended  June 30,  1997.  General  and  administrative

<PAGE>

expenses  for the six  months  ended June 30,  1998 were  $38,795,  compared  to
general and administrative  expenses of $3,261 for the six months ended June 30,
1997.

         The Company's  losses during the three month period ended June 30, 1998
were attributed to general and  administrative  expenses.  The Company's profits
for the six month  period  ended June 30,  1998 were  attributed  to 10 contacts
awarded to the  Security  Division of the Company by U.S.  Satellite  during the
first quarter.  Those contracts were completed.  Subsequently,  that account was
lost due to a change in management at U.S. Satellite.

         General  and  administrative  expenses  should  generally  be viewed as
likely to recur in the normal  course of business,  although the amounts of such
expenditures will vary.

         Professional fees represent one component of general and administrative
expenses. Professional fees reflect legal, accounting and other consulting costs
associated with the preparation and filing of reports to the U.S. Securities and
Exchange  Commission,  services  rendered in connection with capital raising and
financing transactions, and other general legal and accounting work.

         After the loss of the  Company's  only income  producing  account,  the
Company's  Board of Directors has determined it would be in the best interest of
the Company,  and the Company's  shareholders,  to seek other  opportunities  to
create revenues for the Company.

Balance Sheet Information

         Assets

         As of June 30, 1998, the Company  reported total assets of $38,230,  up
$20,163,  from the $18,067,  reported as of December 31, 1997. Current assets as
of June 30,  1998 were  $37,036,  up $20,330,  from the  $16,706  reported as of
December 31, 1996.  Fixed assets were $984 as of June 30, 1998,  down $136, from
the $1,120 of fixed  assets  reported as of  December  31,  1997.  The change in
current assets during the three months ended June 30, 1998, reflects an increase
in cash of $20,330.

         Other  assets  were  $210 as of June 30,  1998,  down $31 from the $241
reported as of December 31, 1997. The change in total assets reflects  primarily
an infusion of cash from revenues  received for  performance  on contracts  with
U.S.  Satellite,  less  general and  administrative  costs  incurred  during the
quarter.

         Other assets represent organizational costs net of amortization.

         Liabilities

         The Company had  liabilities  of $000.00 as of June 30, 1998.  The same
amount was reported as of December 31, 1997.

Liquidity and Capital Resources - June 30, 1998

         The Company  received an  infusion of a  significant  amount of capital
from  contracts the Company  received from U.S.  Satellite  that were  completed
during the first quarter of 1998. This has provided the Company with the ability
to continue as a going concern for approximately six to nine months. However, to
continue  as a going  concern  the  Company  will need to find other  sources of
revenue.

<PAGE>

         The Company's most significant cash needs in the foreseable future will
include payment of general and administrative expenses,  expenses related to the
Company's search for other revenue producing  opportunities,  and other expenses
relating to the Company's business.

         The  Company  has  decided  to seek to expand its  resources  by taking
advantage of other  opportunities as they may develop. No assurance can be given
that the  Company's  resources  will be adequate to take  advantage  of any such
opportunity, or that such opportunities will ever materialize.

                     (This Space Intentionally Left Blank)


<PAGE>

                           PART II OTHER INFORMATION

Use of Proceeds from Sale of Securities

         Effective  September  2,  1997  the  SEC  rescinded  the use of Form SR
stating that the forms were "no longer necessary or  appropriate",  but that the
use of proceeds was "to be reported in each periodic report thereafter until the
registrant has disclosed the use of all proceeds".

         For the period  ending July 28, 1997 a Form SR was filed by the Company
in which it reported that after deducting the expenses of its  underwriting  the
Company  was left with net  offering  proceeds  of  $40,516.  Other  expenses of
approximately  $5,450,  were  reported in that  filing.  Additional  expenses of
$9,864,  were  reported in the  Company's  quarterly  report for the three month
period  ending  September  30, 1997.  Expenses of $11,876  were  reported in the
Company's  annual  report for the three month period  ending  December 31, 1997.
Further  expenses of $9,775 were reported for the three month period ended March
31, 1998. The above amounts totaled $36,965, leaving approximately $3,551 of net
offering  proceeds.  The  remaining  proceeds  were spent during the three month
period ended June 30, 1998 as follows:

                  Rent:               600.00
                  Legal:             1401.00
                  Accounting:         650.00
                  Salaries:           707.00
                  Misc. G&A:          193.00
                                    --------
                  Total:            3,551.00


This brings the total  amount of net  offering  proceeds  spent by the  Company,
including  sums from the first report of July 28, 1997, up to and including this
report for the  period  ended  June 30,  1998,  to  approximately  $40,516.  All
proceeds  from the offering have been spent,  accounted  for and reported.  This
will be the last report made by the Company concerning said proceeds.

Item 6. Exhibits and Reports on  Form 8-K.

        (a)     There are no exhibits included with this report.

        (b)     The  Company has filed no reports on Form 8-K during the quarter
                ended June 30, 1998.



                     (This Space Intentionally Left Blank)


<PAGE>


                                   SIGNATURES

         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  Registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                        DOWNSTREAM INCORPORATED-DSI
                                        (Registrant)

Date: August 10, 1998                   By: /s/ Barry A. Ellsworth
                                           -------------------------
                                           Barry A. Ellsworth
                                           President

<PAGE>
                                  APPENDIX "A"




                                DOWNSTREAM, INC.
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                       June 30, 1998 and December 31, 1997



                                      F-1

<PAGE>



                                 C O N T E N T S


Independent Accountants' Report .......................................  F-3

Balance Sheets ........................................................  F-4

Statements of Operations ..............................................  F-5

Statements of Stockholders' Equity ....................................  F-6

Statements of Cash Flows ..............................................  F-7

Notes to the Financial Statements .....................................  F-9


                                      F-2

<PAGE>



                         INDEPENDENT ACCOUNTANTS' REPORT


The Board of Directors
Downstream, Inc.
(A Development Stage Company)
Salt Lake City, Utah

The accompanying balance sheet of Downstream, Inc. (a development stage company)
as of June 30,  1998 and the related  statements  of  operations,  stockholders'
equity and cash flows for the three  months and six months  ended June 30,  1998
and 1997 and from  inception on November 26, 1996 through June 30, 1998 were not
audited by us and,  accordingly,  we do not  express  an  opinion  on them.  The
accompanying  balance  sheet as of  December  31,  1997 was audited by us and we
expressed an unqualified opinion on it in our report dated February 25, 1998.



Jones, Jensen & Company
Salt Lake City, Utah
August 4, 1998



                                      F-3

<PAGE>
<TABLE>
<CAPTION>

                                                 DOWNSTREAM, INC.
                                           (A Development Stage Company)
                                                  Balance Sheets


                                                      ASSETS

                                                                             June 30,            December 31,
                                                                               1998                  1997
                                                                         -----------------     -----------------
                                                                            (Unaudited)
CURRENT ASSETS

<S>                                                                      <C>                   <C>              
  Cash                                                                   $          37,036     $          16,706
                                                                         -----------------     -----------------

     Total Current Assets                                                           37,036                16,706
                                                                         -----------------     -----------------

 FIXED ASSETS, net (Note 7)                                                            984                 1,120
                                                                         -----------------     -----------------

OTHER ASSETS

  Organizational cost, net (Note 4)                                                    210                   241
                                                                         -----------------     -----------------

     Total Other Assets                                                                210                   241
                                                                         -----------------     -----------------

     TOTAL ASSETS                                                        $          38,230     $          18,067
                                                                         =================     =================

                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

  Accounts payable                                                       $           -         $          -
                                                                         -----------------     ----------------

     Total Current Liabilities                                                       -                    -
                                                                         -----------------     ----------------

     TOTAL LIABILITIES                                                               -                    -
                                                                         -----------------     ----------------

STOCKHOLDERS' EQUITY

  Preferred stock: 50,000,000 shares
   authorized of $0.001 par value, -0-
   shares issued and outstanding                                                     -                    -
  Common stock: 100,000,000 shares authorized of
   $0.001 par value, 4,334,000 shares issued and
    outstanding                                                                      4,334                 4,334
  Additional paid-in capital                                                        50,170                50,170
  Deficit accumulated during the development stage                                 (16,274)              (36,437)
                                                                         -----------------     -----------------

     Total Stockholders' Equity                                                     38,230                18,067
                                                                         -----------------     -----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $          38,230     $          18,067
                                                                         =================     =================
</TABLE>

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

                                       F-4
<PAGE>
<TABLE>
<CAPTION>

                                DOWNSTREAM, INC.
                          (A Development Stage Company)
                            Statements of Operations
                                   (Unaudited)

                                                                                                                    From
                                                                                                                 Inception on
                                           For the Three                            For the Six                  November 26,
                                            Months Ended                            Months Ended                 1996 Through
                                              June 30,                                June 30,                      June 30,
                                       1998               1997                1998                1997                1998
                                 ---------------    ----------------    ----------------    ----------------    ----------------

<S>                              <C>                <C>                 <C>                 <C>                 <C>             
REVENUES                         $           410    $         -         $        104,017    $         -         $        116,282

COST OF SALES                              1,055              -                   45,473              -                   45,473
                                 ---------------    ----------------    ----------------    ----------------    ----------------

   Gross Profit                             (645)             -                   58,544              -                   70,809
                                 ---------------    ----------------    ----------------    ----------------    ----------------

EXPENSES

   General and administrative             19,628               1,358              38,795               3,261              87,190
   Depreciation and
     amortization                             83                  75                 167                 150                 474
                                 ---------------    ----------------    ----------------    ----------------    ----------------

       Total Expenses                     19,711               1,433              38,962               3,411              87,664
                                 ---------------    ----------------    ----------------    ----------------    ----------------

NET INCOME (LOSS) FROM
 OPERATIONS                              (20,356)             (1,433)             19,582              (3,411)            (16,855)
                                 ---------------    ----------------    ----------------    ----------------    ----------------

OTHER INCOME                                 358              -                      581              -                      581
                                 ---------------    ----------------    ----------------    ----------------    ----------------

NET INCOME (LOSS)                $       (19,998)   $         (1,433)   $         20,163    $         (3,411)   $        (16,274)
                                 ===============    ================    ================    ================    ================

NET EARNINGS (LOSS)
 PER SHARE                       $         (0.00)   $          (0.00)   $           0.00    $          (0.00)
                                 ===============    ================    ================    ================

WEIGHTED AVERAGE
  NUMBER OF SHARES
  OUTSTANDING                          4,334,000           4,334,000           4,334,000           3,493,165
                                 ===============    ================    ================    ================
</TABLE>

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

                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                                                  DOWNSTREAM, INC.
                                            (A Development Stage Company)
                                         Statements of Stockholders' Equity
                                                     (Unaudited)


                                                                                    Additional
                                                         Common Stock                Paid-in      Accumulated
                                                  Shares              Amount         Capital         Deficit
                                               --------------   --------------   --------------   --------------
<S>                                             <C>             <C>              <C>              <C>      
Balance, November 26, 1996                             -        $       -        $       -        $       -

Common stock issued for services
 rendered valued at $0.005 per share                1,500,000            1,500            6,000           -

Common stock issued for cash
 valued at $0.005 per share                         1,800,000            1,800            7,200           -

Net loss from inception on
  November 26, 1996 through
  December 31, 1996                                    -                -                -               (10,991)
                                               --------------   --------------   --------------   --------------

Balance, December 31, 1996                          3,300,000            3,300           13,200          (10,991)

Common stock issued for cash
  valued at $ 0.05 per share                        1,034,000            1,034           50,666           -

Stock offering costs                                   -                -               (13,696)          -

Net loss for the year ended
 December 31, 1997                                     -                -                -               (25,446)
                                               --------------   --------------   --------------   --------------

Balance, December 31, 1997                          4,334,000            4,334           50,170          (36,437)

Net income for the six months ended
 June 30, 1998 (unaudited)                             -                -                -                20,163
                                               --------------   --------------   --------------   --------------

Balance, June 30, 1998 (unaudited)                  4,334,000   $        4,334   $       50,170   $      (16,274)
                                               ==============   ==============   ==============   ==============
</TABLE>

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

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

                                DOWNSTREAM, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)
                                                                                                                     From
                                                                                                                 Inception on
                                           For the Three                           For the Six                   November 26,
                                           Months Ended                            Months Ended                  1996 Through
                                             June 30,                                June 30,                       June 30,
                                      1998               1997                 1998               1997                 1998
                                 ---------------    ----------------    ----------------    ----------------    ----------------

CASH FLOWS FROM
 OPERATING ACTIVITIES

<S>                              <C>                <C>                 <C>                 <C>                 <C>              
  Net loss                       $       (19,998)   $         (1,433)   $         20,163    $         (3,411)   $        (16,274)

  Adjustments to Reconcile
    Net Income
  (Loss) to Net Cash Used in
    Operating Activities:
  Stock issued for services               -                   -                   -                   -                    7,500
  Depreciation and amortization
    expense                                   83                  75                 167                 150                 474
  Increase (decrease) in
    accounts payable                      -                     (356)             -                     (559)             -
                                 ---------------    ----------------    ----------------    ----------------    ----------------

     Net Cash (Used) Provided
       by Operating Activities           (19,915)             (1,714)             20,330              (3,820)             (8,300)
                                 ---------------    ----------------    ----------------    ----------------    ----------------

CASH FLOWS FROM
  INVESTING ACTIVITIES

  Fixed assets purchased                  -                   -                   -                   (1,189)             (1,359)
  Organization costs paid                 -                   -                   -                   -                     (309)
                                 ---------------    ----------------    ----------------    ----------------    ----------------

     Net Cash (Used) Provided
       By Investing Activities            -                   -                   -                   (1,189)             (1,668)
                                 ---------------    ----------------    ----------------    ----------------    ----------------

CASH FLOWS FROM
  FINANCING ACTIVITIES

  Stock offering costs                    -                   (8,622)             -                  (10,381)            (13,696)
  Common stock issued for cash            -                   51,700              -                   51,700              60,700
                                 ---------------    ----------------    ----------------    ----------------    ----------------

     Net Cash Provided By
       Financing Activities               -                   43,078              -                   41,319              47,004
                                 ---------------    ----------------    ----------------    ----------------    ----------------

NET INCREASE IN CASH AND
   CASH EQUIVALENTS                      (19,915)             41,364              20,330              36,310              37,036

CASH AND CASH EQUIVALENTS
   AT BEGINNING OF PERIOD                 56,951                 711              16,706               5,765              -
                                 ---------------    ----------------    ----------------    ----------------    ----------------

CASH AND CASH
   EQUIVALENTS AT END
  OF PERIOD                      $       37,036     $         42,075    $         37,036    $         42,075    $         37,036
                                 ==============     ================    ================    ================    ================
</TABLE>

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

                                       F-7
<PAGE>
<TABLE>
<CAPTION>

                                DOWNSTREAM, INC.
                          (A Development Stage Company)
                      Statements of Cash Flows (Continued)
                                   (Unaudited)
                                                                                                                     From
                                                                                                                 Inception on
                                            For the Three                           For the Six                  November 26,
                                            Months Ended                            Months Ended                 1996 Through
                                              June 30,                                June 30,                     June 30,
                                       1998               1997                1998                1997                1998
                                 ---------------    ----------------    ----------------    ----------------    ----------------
Cash Paid For:
<S>                              <C>                <C>                 <C>                 <C>                 <C>          
  Interest                       $          -       $           -       $           -       $           -       $           -
  Income taxes                   $          -       $           -       $           -       $           -       $           -
</TABLE>

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

                                       F-8
<PAGE>

                                DOWNSTREAM, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                       June 30, 1998 and December 31, 1997


NOTE 1 -      ORGANIZATION AND HISTORY

              a.  Organization

              The financial statements  presented are those of Downstream,  Inc.
              (a development stage company).  The Company was incorporated under
              the laws of the State of Utah on November  26,  1996.  The Company
              was   incorporated   to  engage  in  the   business  of  financial
              consulting.  During 1997,  the Company formed a dba named Security
              Solutions,  Inc. to engage in the business of installing  security
              systems.

              b.  Accounting Method

              The Company's financial  statements are prepared using the accrual
              method of  accounting.  The Company has elected a December 31 year
              end.

              c.  Cash and Cash Equivalents

              Cash equivalents  include  short-term,  highly liquid  investments
              with   maturities   of  three  months  or  less  at  the  time  of
              acquisition.

              d.  Net Loss Per Share

              The  computations  of net loss per share of common stock are based
              on the weighted  average number of shares  outstanding  during the
              period of the financial statements.

              e.  Provision for Taxes

              At June 30, 1998, the Company had net operating loss carryforwards
              of approximately $16,000 that may be offset against future taxable
              income  through  2013.  No tax  benefit  has been  reported in the
              financial  statements  because the Company believes there is a 50%
              or greater chance the net operating loss carryforwards will expire
              unused.  Accordingly,  the  potential  tax  benefits  of  the  net
              operating loss  carryforwards are offset by a valuation  allowance
              of the same amount.

              f.  Estimates

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions that affect the reported amounts of
              assets and  liabilities  and  disclosure of contingent  assets and
              liabilities  at the  date  of the  financial  statements  and  the
              reported  amounts of revenues  and expenses  during the  reporting
              period. Actual results could differ from those estimates.

                                       F-9
<PAGE>

                                DOWNSTREAM, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                       June 30, 1998 and December 31, 1997


NOTE 1 -      ORGANIZATION AND HISTORY (Continued)

              g.  Property, Equipment and Depreciation

              Property  and  equipment  are  carried  at cost.  Depreciation  is
              calculated  using the  straight-line  method over their  estimated
              useful life of 5 years.

              h.  Unaudited Financial Statements

              The accompanying unaudited financial statements include all of the
              adjustments which, in the opinion of management, are necessary for
              a fair presentation.  Such adjustments are of a normal,  recurring
              nature.

NOTE 2 -      GOING CONCERN

              The Company's  financial  statements are prepared using  generally
              accepted accounting principles applicable to a going concern which
              contemplates   the   realization  of  assets  and  liquidation  of
              liabilities in the normal course of business. However, the Company
              does not have significant cash or other material assets,  nor does
              it have an established source of revenues  sufficient to cover its
              operating  costs and to allow it to continue  as a going  concern.
              The   accompanying   financial   statements  do  not  include  any
              adjustments   that  might   result   from  the   outcome  of  this
              uncertainty.   The  Company  has  begun  its  primary  operations.
              Management  feels that sales will provide  sufficient cash for the
              operation of the Company.

NOTE 3 -      STOCK TRANSACTIONS

              On December  10,  1996,  the Company  issued  1,500,000  shares of
              common stock for services  rendered by a related party. The shares
              were valued at $0.005 per share.

              On December 10, 1996, the Company issued 1,800,000 shares of stock
              for cash at $0.005 per share.

NOTE 4 -      ORGANIZATION COSTS

              The Company is amortizing  the  non-recurring  costs of organizing
              the  Company  over a five year  period.  Amortization  expense for
              December 31, 1997 and 1996 was $62 and $6, respectively.

NOTE 5 -      PUBLIC OFFERING

              The Company has  completed an offering of 1,034,000  shares of its
              previously unissued common stock to the public at $0.05 per share.
              The Company  incurred  offering costs of $13,696 which were offset
              against the proceeds of the offering.

                                      F-10
<PAGE>

                                DOWNSTREAM, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                       June 30, 1998 and December 31, 1997


NOTE 6 -      COMMITMENTS

              Officer  Compensation  - The Company has  committed  to paying the
              President  $2,000 per month since more than  $50,000 was raised in
              the public offering. In addition to the salaries,  the Company has
              agreed to pay its President and the other officers a commission of
              up to 20% of revenues generated by their efforts.

NOTE 7 -      FIXED ASSETS

               Fixed assets at June 30, 1998 and December 31, 1997  consisted of
               the following:

                                                       June 30,    December 31,
                                                        1998          1996
                                                      ---------     ---------
                     Fax Machine                      $     424     $     424
                     Televisions                            935           935
                                                      ---------     ---------
                                                          1,359         1,359

                     Less accumulated depreciation         (375)         (239  )
                                                      ---------     ---------

                     Net fixed assets                 $     984     $   1,120
                                                      =========     =========

               Depreciation  expense for the six months  ended June 30, 1998 and
               for  the  year  ended  December  31,  1997  was  $136  and  $239,
               respectively.

                                      F-11