<PAGE>
                                       

                                  FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

             Annual Report Pursuant to Section 13 or 15(d) of the
                       Securities Exchange Act of 1934

For the fiscal year                                          Commission file
ended June 30, 1997.                                          No. 33-17679-D
      --------------                                              ----------

                          PIERCE INTERNATIONAL, INC.
            -----------------------------------------------------
            (Exact name of registrant as specified in its charter)

         Colorado                                              84-1067694
-------------------------------                          ---------------------
(State or other jurisdiction of                          (I.R.S. Employer ID.)
incorporation or organization)

             13275 E. Freemont Place #101A, Englewood, CO     80112
          ------------------------------------------------------------
          (Address of principal executive offices)          (Zip Code)

Registrants's telephone number, including area code  (303)-792-0719
                                                    ----------------

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

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

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  x   No 
                                              -----    -----
 
    As of June 30, 1997, 6,380,703 shares were outstanding and the aggregate
market value of stock held by non-affiliates of the Registrant computed by
reference to the average bid and asked price was $0.

    Documents incorporated by reference:  NONE.

    This Form 10-K consists of 29 pages.

    Exhibits are indexed on page 11.

<PAGE>

                                        PART I
ITEM 1. BUSINESS.

HISTORY AND ORGANIZATION

    Pierce International, Inc. (The "Company") was organized under the laws of
the State of Colorado July 22, 1987, for the purpose of creating a corporate
vehicle to acquire business opportunities.

    In February, 1988 the Company completed a public offering of 40,000,000
shares of its no par value common stock at an offering price of $.01 per share. 
The net proceeds to the Company from the initial offering were approximately
$332,900.

    Currently, the Company is concentrating its business efforts in two areas:

              1.   Industrial Development
              2.   Natural Resources

NATURAL RESOURCES

    The Company owns an interest in the Como Property through its 100% owned
subsidiary, Como, Inc.  Como consists of gold and gravel mining leases on a
property situated approximately 50 miles southwest of Denver, Colorado, near
Como, Colorado in Park County.  The Company had sold the property to a
subsidiary under a stock purchase agreement, however, the subsidiary defaulted
on the agreement and the Company reclaimed the property as of June 11, 1996. 
The Company continues to carry $200,000 in debt related to the original purchase
of the Como leases.  This $200,000 will be paid from the net profits generated
by the property.  Further, a shareholder is entitled to 10% of net profits
received by the Company on this project.  


INDUSTRIAL DEVELOPMENT

    EASIWALL (STRAWBOARD)

    On May 23, 1994, the Company agreed to purchase a used strawboard factory
for $50,000.  A payment of $10,000 was paid at execution, and the balance of
$40,000 was paid in a series of payments, with the final payment being made
September 30, 1994.  This equipment was part of an operation in Yuba City,
California.  The Company has an agreement with Stramit Industries Ltd. of
Yaxley, England, who will refurbish the equipment and supervise the proper
installation of the equipment at a site yet to be determined.  The equipment has
an estimated market value of $900,000.

    The machine produces a product known internationally as "strawboard".  The
Company's trade marked names for its products are "Easiboard" and "Easiwall". 
The product has a history of use in the building industry for more than 40
years.  A number of the plants are currently operating worldwide.  However,
there is no such operating manufacturing plant in the United States.


<PAGE>

The technology includes the use of wheatstraw in a compressed state to 
produce building panels.

    The Company is engaged in marketing factories, technical expertise, 
and exclusive sales of the product.  Although no deals have yet been completed,
the Company has had serious negotiations with several rural communities who are
interested in financing a factory in their area.

    Easiboard is a solid, versatile domestic partitioning system ideally suited
to the needs of today's contractor.  The system is simple to install and
replaces the use of timber and studwork in residential and commercial
applications.  It offers cost benefits and provides excellent sound and thermal
insulation properties in all types of dwellings.  It is also a fire retardant. 
According to building contractors and building specialty products professionals,
Easiboard may very well replace drywall, wood studs and in some instances,
plywood.  But more importantly, Easiboard's primary component is straw, and
ever-renewing, largely wasted agricultural by-product.

    The Company is also entering into a relationship with Stramit Industries
LTD to introduce even more technological applications for Easiboard and to
provide for technological changes in the equipment.  Details regarding this
agreement will be forthcoming.

EMPLOYEES

     The Company and its subsidiaries do not currently have any employees.  All
services are provided by various individuals on a consulting basis.

COMPETITION

     The Company and its subsidiaries compete against many significantly larger
enterprises with respect to their business activities.   Nearly all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than the Company and its subsidiaries, and,
consequently, the Company and its subsidiaries are at a competitive
disadvantage.

ITEM 2.   PROPERTIES.

   The Company leases it office space which consists of approximately 500 square
feet from a non-affiliated party.   The office is located at 13275 E. Freemont
Place, Suite 101A, Englewood, CO.  The lease is on a month to month basis.  
Current rent is $478 per month.

ITEM 3.   LEGAL PROCEEDINGS.

     The Company, is not engaged in any material pending legal proceedings.

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

     No matter was submitted during the forth quarter of the fiscal year covered
by this report to a vote of security holders.


<PAGE>

                                       PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a)  PRINCIPAL MARKET OR MARKETS.   The Company's stock is traded on the
OTC bulletin board under the symbol PRCI.  Trading resumed September 18, 1997,
therefore, high and low bid prices were unavailable for the four quarters that
relate to the year ended June 30, 1997.
                                                           BID
              Quarter Ended:                         HIGH       LOW
              -------------                          ----       ---
                   September 30, 1997                $0.01      $0.01

     (b)  APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK.   The number of
beneficial holders of the Company's no par value common stock at June 30, 1997,
were approximately 450.

     (c)  DIVIDENDS.   Holder of common stock are entitled to receive such
dividends as may be declared by the Company's Board of Directors.   No dividends
have been paid with respect to the Company's common stock and no  dividends are
anticipated to be paid in the foreseeable future.

ITEM 6.   SELECTED FINANCIAL DATA.

     The following table sets forth certain selected financial data with respect
to the Company.

<TABLE>
<CAPTION>
Balance Sheet Data:     At June 30,
----------------------------------------------------------------------------------
                           1997        1996        1995        1994       1993
<S>                      <C>         <C>         <C>         <C>         <C>
Total Assets              564,849     570,562     584,041     599,737     395,767
Long Term Debt            200,000     200,000     200,000     200,000     200,000
Working Capital          (315,755)   (217,311)   (220,578)   (171,729)   (241,872)
Total Liabilities         527,130     446,429     453,130     594,441     575,192
Stockholder's Equity       37,719     124,133     130,911    (134,626)   (298,017)
Deferred Revenue                0           0           0      66,187           0

<CAPTION>

Statement of Operations Data:  For the year ended June 30,
----------------------------------------------------------------------------------
                           1997        1996        1995        1994       1993
<S>                      <C>         <C>         <C>         <C>         <C>
Revenues                  135,410     245,947     210,357     148,421    271,366
Net Earnings (Loss)      (106,414)     (6,778)     52,465      57,039    167,322
Net Earnings (Loss) Per
 Common Share              (0.017)     (0.001)      0.009       0.012      0.001

</TABLE>

<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION OF THE YEAR ENDED JUNE 30, 1997.

INTRODUCTION

    The Company is concentrating on its two major industries, natural resources
and industrial development.   The Company is making a concentrated effort to
sell strawboard equipment, and to presell strawboard.

LIQUIDITY

    Working capital at June 30, 1997 was a negative $315,755.  A significant 
portion of current liabilities are advances from stockholders.  Cash flow
continues to be irregular and the Company will continue to rely heavily on its
current investments to produce future cash flow.

RESULTS OF OPERATIONS

    For the year ended June 30, 1997, the Company had a net loss of $106,414
and for the year ended June 30, 1996, the net loss was $6,778.  The Company
generated $115,000 in revenues related to the sale of strawboard equipment
during 1997 and $205,144 during 1996.    As the Company develops its two primary
business operations, costs have increased in the areas of legal, accounting,
travel, and outside consulting fees.


<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.

    The financial statements and schedules are set forth on pages F-1 through
F-13 hereto.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

    On August 26, 1997, the Company dismissed its independent accountant, 
Doran Peck, C.P.A. P.C., and engaged independent accountant, Spicer, Jeffries &
Co.   The former accountant issued a report that was modified as to uncertainty
(Going Concern).  The decision to change independent accountants was approved by
the board of directors.   There was not any disagreements with the former
accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures.


<PAGE>

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICER OF THE REGISTRANT.

    The Directors and Officers of the Company are as follows:

         Name                Age       Position
         ----                ---       --------

    Pierce D. Parker         70       Director, Chairman of the Board, and
                                      President

    Nancy A. Cooper          38       Director, Vice President
                                      and Secretary

    Mark S. Cooper           38       Director

    Dr. Parker should be considered a "parent and organizer" of the Company 
(as such term is defined by Rule 405 under the Securities Act of 1933), in as
much as he has taken significant initiative in founding and organizing the
business of the Company and because of his control position in the Company.  Dr.
Parker devotes full time to the operations of the Company.  Ms. Cooper devotes
only a limited amount of time to the Company on an as-needed basis.  

    There is no family relationship between any director or executive officer
except:  Ms. Cooper is the daughter of Pierce D. Parker and the spouse of Mark
Cooper.

PIERCE D. PARKER

    Dr. Parker has served as the President, Treasurer and as a Director of 
the Company since its inception on August 10, 1987.  Dr. Parker became 
Vice-President and Chairman of the Board  on August 15, 1988.  He continues as
Chairman of the Board and has been President of the Company since April 1, 1990.
In addition, he serves as President and Director of Pierce International
Discovery, Inc. since its inception April, 1989.  From October, 1988 until
March, 1992,  Dr. Parker was President, Treasurer and a Director of Pierce
International Gold, Inc., a publicly-held company which was a majority-owned
subsidiary of Pierce International, Inc., and held certain gold and silver
mineral rights.  Since his retirement in May, 1986 as President of AMAX
Exploration, Inc. and Chief Geologist of AMAX, Inc., Dr. Parker has been
consulting for the natural resources industry under the name Parker Consulting
Services, Inc.   His consulting clients include AMAX, Inc. and several small
mining groups.   Dr. Parker was employed by AMAX, Inc. over 26 years prior to
his retirement.   His first 13 years with AMAX, Inc. included positions as
Geologist, Project Manager, Regional Manager, and Manager of Technical and
Coordinating Services.   From 1972 until 1978, he served as Chief Geologist,
AMAX Exploration, Inc.  From 1978 until 1982, he served as Senior Vice
President, AMAX Exploration, Inc. and Chief Geologist, AMAX, Inc.   From 1982
until May, 1986, he served as President of AMAX Exploration, Inc. and Chief
Geologist of AMAX, Inc.   As President of AMAX Exploration, Inc., he was in
charge of evaluations and recommendations for major mining projects, and was
responsible for monitoring and approving ore reserves throughout the world.  
Dr. Parker received a Bachelor of Science Degree with Honors in Geological
Engineering and Mining Engineering in 1951 from Montana 


<PAGE>

College of Mineral Science and Technology, Butte, Montana.   He received his 
Masters of Science Degree (Magna Cum Laude) in Geology from the University of 
Wisconsin in 1956 and his Ph.D. (Magna Cum Laude) in Geology from that same 
university in 1960.   Dr. Parker has authored several technical publications 
and given numerous talks and seminars in the natural resources and minerals 
economics area.

MARK S. COOPER

    Mr. Cooper has served as Vice President and Director of the Company since
January, 1990.   He is also an Officer and Director of Pierce International
Discovery, Inc.  He obtained his real estate license in the state of Colorado in
1993.  Currently, he is President of an unrelated Real Estate Company.   Mr.
Cooper was a professional football player in the National Football League from
1983 through the 1989 season.   From 1987 to 1989, he played for the Tampa Bay
Buccaneers.   From 1983 to 1987 he played for the Denver Broncos.  He received a
Bachelor of Science Degree in Communications from the University of Miami in
1983.  Mr. Cooper is available to work for the Company on a consulting basis.

NANCY A. COOPER

    Ms. Cooper began working for Pierce Financial (then MRG Financial) in
November of 1987. Ms. Cooper was a full time employee of the company until
August 15, 1991.  She is currently employed as a Regional Sales Manager for
Health Script.  Ms. Cooper oversees the sales and marketing of Health Script's
product lines in the midwest and central regions of the U.S. Ms. Cooper received
her Bachelor of Science degree with a major in Human Resources from Colorado
State University.  She is available to work for the Company on a consulting
basis.

    All directors of the Company will hold office until the next annual meeting
of the shareholders and until their successors have been elected and qualified.

    The Officers of the Company are elected by the Board of Directors at the
first meeting after each annual meeting of the shareholders, and hold office
until their death, or until they shall resign or have been removed from office.

ITEM 11.  EXECUTIVE COMPENSATION

RENUMERATION

    None of the Company's Officers and Directors currently receives a salary
from the Company and its subsidiaries.  They may receive fees for consulting
work, however, none have received fees in excess of $60,000 per year.

    Although Directors do not receive compensation for their services as
Directors as such, Directors may be reimbursed for expenses incurred in
attending Board meetings.


<PAGE>

INCENTIVE STOCK OPTION PLAN

    On August 10, 1987, the Company adopted an Incentive Stock Option Plan (the
"Plan") under which options granted are intended to qualify as "incentive stock
options" under Section 422A of the Internal Revenue code of 1954, as amended
(the "Code"). Pursuant to the Plan, options to purchase up to 400,000 shares of
the Company's Common Stock may be granted to employees of the Company.  The Plan
is administered by the Board of Directors which is empowered to determine the
terms and conditions of each option, subject to the limitation that the exercise
price cannot be less than the market value of the Common Stock on date of the
grant (110% of the market value in the case of options granted to an employee
who owns 10% or more of the Company's outstanding Common Stock)  and no option
can have a term in excess of 10 years (5 years in the case of options granted to
employees who own 10% or more of the company's Common Stock).

    As of the date of this report, no options have been granted under this
Plan.


<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

    The following table sets forth, as of June 30, 1997, the stock ownership of 
each person known by the Company to be the beneficial owner of five percent or
more of the Company's Common Stock, each Director individually and all Directors
and Officers of the Company as a group.  Each person has sole voting and
investment power with respect to the shares shown.

Name and Address                 Amount of                  Percent of Class
of Beneficial Owner          Beneficial Ownership         Currently Outstanding

Pierce D. Parker                 2,061,602 (1)                   32.31%
13041 N. Travois Trail
Parker, CO  80134

Nancy A. Cooper                    319,550 (2)                    5.00%
19754 E. Euclid Dr.
Aurora, Co  80016

Mark S. Cooper                     599,550                        9.40%
19754 E. Euclid Dr.
Aurora, CO  80016

Alan Wakefield                     400,000                        6.27%
122 Waterway
Willis, TX  77378

All Directors and Officers as
a Group (4 Persons)              3,380,702 (1)(2)                52.98%

1)  Includes 1,200,000 shares owned directly by Dr. Parker, and 861,602 shares
owned by Parker Consulting Services (Dr. Parker is the primary shareholder).

2)  Includes 119,550 shares owned directly by Nancy A. Cooper and 200,000 owned
by Nancy Cooper As Custodian for Michael Parker Cooper.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    The Company continues to owe Pierce D. Parker/Parker Consulting Services,
an officer and director, $242,080 from advances made over a period of time.  In
addition, the Company owes $200,000 to Parker Consulting Services Profit Sharing
Plan for amounts directly related to the Como property.  See the business
description under the heading, "Natural Resources".


<PAGE>

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)1.  The financial statements filed as a part of this 10-K are as follows:

                                                                  Page 
Independent Auditor's Report                                    F-1, F-2
                        
Balance Sheets, June 30, 1997 and 1996.                            F-3
    
Statement of Operations, for the years ended June 30, 1997,
1996, and 1995.                                                    F-4

Statement of Changes in Stockholders' Equity, for the years
ended June 30, 1997, 1996, and 1995.                               F-5

Statement of Cash Flows, for the years ended June 30, 1997,
1996 and 1995.                                                     F-6

Notes to Financial Statements                                   F-7 to F-9

(a)2.    Financial Statement Schedules:

Independent Auditor's Report on Additional Information          F-10, F-11
Schedule V - Property and Equipment                               F-12
Schedule VI - Accumulated Depreciation on Property and Equipment  F-13

All other schedules have been omitted because they are inapplicable, not
required or the information is included elsewhere in the financial statements or
notes thereto.

(a)3.  The exhibits required by Item 601 of Regulation S-K are as follows:

              Description                   Location
              -----------                   --------

  (3)  Articles of Incorporation and Bylaws--incorporated by reference 
from Form S-18 effective with the Commission on January 20, 1988, 
(SEC File No. 33-17679-D).

  (11) Statement re: computation of per share earnings

  (16) Letter regarding change in certifying accountants


<PAGE>

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

    No annual report or proxy material has been sent to security holders.    If
any annual report or proxy material is furnished to security holders subsequent
to this filing, copies of such material will be furnished to the commission when
they are sent to shareholders.


<PAGE>

                                      SIGNATURES

     Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                       PIERCE INTERNATIONAL, INC.

Dated:  October 9, 1997                BY: /s/ Pierce D. Parker
                                          -----------------------------
                                          Pierce D. Parker,
                                          President


     Pursuant to the requirements of the Securities Act of 1934, this Report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.

    Signature                Capacity
    ---------                --------
                                   
/s/ Pierce D. Parker         Chairman of the Board, President and
------------------------     Director (Chief Executive Officer, and
Pierce D. Parker             Principal Financial and Accounting Officer)

October 9, 1997
-----------------            
Date


/s/ Nancy A. Cooper          Vice President, Secretary and Director
------------------------     
Nancy A. Cooper        

October 9, 1997
-----------------            
Date


/s/ Mark S. Cooper           Vice President and Director
------------------------     
Mark S. Cooper

October 9, 1997
-----------------            
Date

<PAGE>

                           PIERCE INTERNATIONAL, INC.

                              FINANCIAL STATEMENTS
                              YEARS ENDED JUNE 30, 
                              1997, 1996 AND 1995 


<PAGE>

                           PIERCE INTERNATIONAL, INC.

                                    CONTENTS



                                                                          PAGE  

Independent Auditors' Reports                                           F-1, F-2

Balance Sheets, June 30, 1997 and 1996                                       F-3

Statements of Operations - Years ended June 30, 1997, 1996 and 1995          F-4

Statements of Changes in Stockholders' Equity - 
     Years ended June 30, 1997, 1996 and 1995                                F-5

Statements of Cash Flows - Years ended June 30, 1997, 1996 and 1995          F-6

Notes to Financial Statements                                         F-7 to F-9

Independent Auditors' Reports on Supplemental Information             F-10, F-11

Schedule V - Property and Equipment                                         F-12

Schedule VI - Accumulated Depreciation and 
     Amortization of Property and Equipment                                 F-13


All other schedules have been omitted because they are inapplicable, not
required or the information is included elsewhere in the financial statements or
notes thereto.<PAGE>


<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Directors 
Pierce International, Inc.


We have audited the accompanying balance sheet of Pierce International, Inc. as
of June 30, 1997, and the related statements of operations, changes in
stockholders' equity and cash flows for the year ended June 30, 1997.  These
financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our 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 the 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 Pierce International, Inc. as
of June 30, 1997 and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern. 
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.



                                   SPICER, JEFFRIES & CO.


Denver, Colorado 
September 23, 1997


                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Directors
Pierce International, Inc.

We have audited the accompanying balance sheet of Pierce International, Inc. as
of June 30, 1996, and the related statements of operations, changes in
stockholders' equity and cash flows for the years ended June 30, 1996 and 1995. 
These financial statements are the responsibility of the Company's management. 
Our responsibility is to express and opinion n these financial statements based
on our audit.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pierce International, Inc. as
of June 30, 1996 and the results of their operations and cash flows for the
years ended June 30, 1996 and 1995 in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern. 
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.


                                   DORAN PECK, C. P. A., P. C.


Denver, Colorado
October 12, 1996


                                      F-2
<PAGE>


                           PIERCE INTERNATIONAL, INC.
                                 BALANCE  SHEETS
                           --------------------------
<TABLE>
<CAPTION>
                                                            JUNE 30,
                                                      --------------------
                          ASSETS                         1997       1996  
                          ------                      ---------  ---------
<S>                                                   <C>        <C>
CURRENT ASSETS:
  Cash                                                $  10 846  $ 13 004 
  Investments                                               162    15 747 
  Other                                                     367       367 
                                                      ---------  ---------
                                        
        TOTAL CURRENT ASSETS                             11 375    29 118 
                                                      ---------  ---------

PROPERTY AND EQUIPMENT (Note 1):                
  Undeveloped mineral property (Note 2)                 434 918   434 918 
  Furniture and equipment                                 7 705     7 705 
  Strawboard equipment (Note 3)                          57 120    57 120 
                                                      ---------  ---------
                                                        499 743   499 743 
    Less accumulated depreciation and amortization       (5 674)   (4 791)
                                                      ---------  ---------
                                                              
        NET PROPERTY AND EQUIPMENT                      494 069   494 952 
                                                      ---------  ---------
                                                      
OTHER ASSETS                                             59 405    46 492 
                                                      ---------  ---------

                                                      $ 564 849  $570 562 
                                                      ---------  ---------
                                                      ---------  ---------

       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                    $  85 050  $ 15 780 
  Advances and accrued expenses from
   officers/directors/stockholders (Note 4)             242 080   230 649 
                                                      ---------  ---------

        TOTAL CURRENT LIABILITIES                       327 130   246 429 
                                                      ---------  ---------

NOTE PAYABLE (Note 5)                                   200 000   200 000 
                                                      ---------  ---------

STOCKHOLDERS' EQUITY (Notes 6 and 7):
  Preferred stock, no par value;
   400,000 shares authorized;
   80,000 shares issued and outstanding                  20 000      -    
  Common stock, no par value; 
   30, 000,000 shares authorized;                     
   6,380,703 and 5,980,703 shares issued and          
   outstanding as of June 30, 1997 and 
   June 30, 1996, respectively                          844 542   844 542 
   Accumulated deficit                                 (826 823) (720 409)
                                                      ---------  ---------
                                                      
          TOTAL STOCKHOLDERS' EQUITY                     37 719   124 133 
                                                      ---------  ---------

                                                      $ 564 849  $570 562 
                                                      ---------  ---------
                                                      ---------  ---------
</TABLE>

The accompanying notes are an integral part of these statements.


                                      F-3
<PAGE>

                           PIERCE INTERNATIONAL, INC.
                             STATEMENTS OF OPERATIONS   
                           --------------------------
<TABLE>
<CAPTION>
                                           YEAR ENDED JUNE 30,
                                   ----------------------------------
                                      1997        1996        1995   
                                   ---------    ---------   ---------
<S>                                <C>          <C>         <C>
REVENUE:
   Sales                           $ 115 000    $ 205 144   $   -    
   Cost of goods sold                 70 121       64 685       -    
                                   ---------    ---------   ---------

GROSS MARGIN                          44 879      140 459       -    
                                   ---------    ---------   ---------
EXPENSES:
   Administrative                     22 859       58 654     41 265 
   Bad debt reserve                   81 702      162 200       -    
   Outside services                   12 050       36 300     78 354 
   Advertising and promotion             300        4 310      2 239 
   Other                                -            -         1 689 
   Professional fees                  39 106         -          -    
   Occupancy and equipment costs      11 208         -          -    
                                   ---------    ---------   ---------

      TOTAL EXPENSES                 167 225      261 464    123 547 
                                   ---------    ---------   ---------

NET OPERATING LOSS                  (122 346)    (121 005)  (123 547)

   Other income                       20 410       40 803    210 357 
   Loss on subsidiary                   -            -        (9 381)
   Foreign exchange gain (loss)         -            (184)       346 
   Loss on investment                   -        (381 695)   (25 310)
   Gain on asset claim (Note 2)         -         434 918       -    
   Gain on disposition of assets        -          20 385       -    
   Other expenses                     (4 478)        -          -    
                                   ---------    ---------   ---------

NET INCOME (LOSS)                  $(106 414)   $  (6 778)  $ 52 465 
                                   ---------    ---------   ---------
                                   ---------    ---------   ---------
NET INCOME (LOSS)                  
  PER COMMON SHARE                 $  (0.017)   $  (0.001)  $  0.009 
                                   ---------    ---------   ---------
                                   ---------    ---------   ---------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                 6 319 165    5 980 703  5 980 703 
                                   ---------    ---------  ----------
                                   ---------    ---------  ----------
</TABLE>

     The accompanying notes are an integral part of these statements.


                                      F-4
<PAGE>

                        PIERCE INTERNATIONAL, INC.
              STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                YEARS ENDED JUNE 30, 1995, 1996 AND 1997
              ---------------------------------------------
<TABLE>
<CAPTION>
                               PREFERRED STOCK         COMMON STOCK
                               ----------------  ------------------------       ACCUMULATED
                               SHARES    AMOUNT     SHARES        AMOUNT         DEFICIT   
                               ------    -------   ---------    ----------     ------------
<S>                            <C>       <C>     <C>            <C>            <C>
BALANCES, JUNE 30, 1994           -      $  -    149 317 572    $1 052 462     $(1 187 088)

  Additional paid in 
   capital to Subsidiary          -         -          -            34 719           -    

  Adj. for foreign sub.           
   translation                    -         -          -              -              -    

  Change in minority
   interest                       -         -          -            15 000           -    

  Change in foreign sub.
   translation                    -         -          -              -              -    

  Stock in lieu of
   compensation
   (no market value)              -         -        200 000          -              -    

  PIDI investment to
   Equity Method from 
   Consolidated                   -         -          -          (257 639)        420 992 

  Net income                      -         -          -              -             52 465 
                               ------    -------   ---------    ----------       ---------
BALANCES, JUNE 30, 1995           -         -    149 517 572       844 542        (713 631)

  25 for 1 Reverse split 
    March 13, 1996                -         -   (143 536 869)         -              -    

  Net loss                        -         -          -              -             (6 778)
                               ------    -------   ---------    ----------       ---------
BALANCES, JUNE 30, 1996           -         -      5 980 703       844 542        (720 409)

  Issuance of 80,000
   shares of preferred 
   stock                       80 000     20 000      -               -               -    

  Issuance of 400,000
   shares of common stock 
   in lieu of services            -          -       400 000          -               -    

  Net loss                        -          -         -              -           (106 414)
                               ------    -------   ---------    ----------       ---------
BALANCES, JUNE 30, 1997        80 000    $20 000   6 380 703    $  844 542       $(826 823)
                               ------    -------   ---------    ----------       ---------
                               ------    -------   ---------    ----------       ---------
</TABLE>

      The accompanying notes are an integral part of these statements.


                                      F-5
<PAGE>

                           PIERCE INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                           --------------------------
<TABLE>
<CAPTION>
                                                FOR THE YEAR ENDED JUNE 30,      
                                               1997         1996        1995   
                                            ---------    ---------   --------
<S>                                         <C>          <C>         <C>
CASH FLOWS FROM 
 OPERATING ACTIVITIES:
Net Income (loss)                           $(106 414)   $  (6 778)  $ 52 465 
Adjustments to reconcile net
 income (loss)to cash used in 
 operating activities:
  Depreciation and amortization                   883          883        618 
  Subsidiary loss                                -            -         9 381 
Changes in operating assets           
 and liabilities:
  Increase in accounts receivable 
   and other assets                           (12 913)     (20 199)   (25 472)
  Decrease (increase) in
   related party receivable                      -         110 002   (106 771)
  (Decrease) increase in
   accounts payable and
   accrued expenses                            69 270       10 242    (16 004)
  (Gain) loss on sale of               
   investments                                   -        (455 303)    25 310 
                                            ---------    ---------   --------
    NET CASH USED IN OPERATING         
     ACTIVITIES                               (49 174)    (361 153)   (60 473)
                                            ---------    ---------   --------
CASH FLOWS FROM 
 INVESTING ACTIVITIES:
  Acquisition of equipment                       -            -        (4 415)
  Decrease in investments                      15 585      391 417     99 405 
  Investment in Strawboard                       -          (1 125)   (45 995)
                                            ---------    ---------   --------
    NET CASH PROVIDED BY
     INVESTING ACTIVITIES                      15 585      390 292     48 995 
                                            ---------    ---------   --------
CASH FLOWS FROM
  FINANCING ACTIVITIES:               
 Advances (payments) from (to) 
  officers/directors/stockholders              11 431      (16 943)    14 847 
 Payments on notes payable                       -            -        (5 059)
 Issuance of preferred stock                   20 000         -          -    
                                            ---------    ---------   --------
    NET CASH PROVIDED BY (USED
     IN) FINANCING ACTIVITIES                  31 431      (16 943)     9 788 
                                            ---------    ---------   --------
NET (DECREASE) INCREASE 
  IN CASH                                      (2 158)      12 196     (1 690)

CASH, at beginning of year                     13 004          808      2 498 
                                            ---------    ---------   --------

CASH, at end of year                        $  10 846    $  13 004   $    808 
                                            ---------    ---------   --------
                                            ---------    ---------   --------
</TABLE>

     The accompanying notes are an integral part of these statements.


                                      F-6
<PAGE>

                           PIERCE INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                          ------------------------------


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company was incorporated under the laws of the State of Colorado on July 
22, 1987, for the purpose of obtaining capital to seek potentially profitable 
business opportunities.  Currently, Pierce International, Inc. (PI) has 
business interest in two industries, natural resources and industrial 
development.

Net income (loss) per common share is computed based upon the weighted 
average number of shares outstanding during the period.  Common stock 
equivalents were not considered (for losses only), as their effect would be 
antidilutive. 

The Company states property and equipment at cost. Depreciation is being 
provided by the straight-line method over estimated useful lives of three to 
five years.  All costs related to the acquisition (including associated legal 
and other costs), exploration, evaluation, and development, of the mineral 
properties have been capitalized.  These costs will be amortized by the 
units-of-production method of accounting based upon estimated recoverable 
reserves.

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.

The accompanying financial statements have been prepared on a going concern 
basis, which contemplates continuity of operations and realization of assets 
and satisfaction of liabilities in the normal course of business.  The 
continuation of the Company as a going concern is dependent upon the company 
raising additional capital, and attaining and maintaining profitable 
operations.  The Company has suffered recurring losses from operations that 
raise substantial doubt about its ability to continue as a going concern.

Cash and cash equivalents for purposes of the statements of cash flows 
includes highly liquid investments with a maturity of three months or less at 
the date of acquisition. 

Certain 1996 amounts have been reclassified to conform to the 1997 
presentation.

NOTE 2 -  UNDEVELOPED MINERAL PROPERTY

On June 11, 1996, PI reclaimed the "Como" property from Pierce International 
Discovery, Inc. (PIDI).  PIDI, a 17.24% owned subsidiary, failed to comply 
with the stock purchase agreement.  Como consists of gold and gravel mining 
leases on property situated approximately 50 miles southwest of Denver, 
Colorado, near Como, Colorado in Park County.


                                      F-7
<PAGE>

                         PIERCE INTERNATIONAL, INC.
                        NOTES TO FINANCIAL STATEMENTS
                        ------------------------------
                                (CONTINUED)

NOTE 3 -  STRAWBOARD EQUIPMENT

The Company purchased strawboard equipment for $57,120. This equipment is 
seen as an investment and the Company intends to resell the equipment.

NOTE 4 -  RELATED PARTY TRANSACTIONS

Advances include $191,080 due Pierce D. Parker, officer and director, or his 
company Parker Consulting Services, and $51,000 is accrued consulting fees 
due Pierce D. Parker.

NOTE 5 -  NOTE PAYABLE

As of June 30, 1997, PI had the following long term note payable:

          PCS Profit Sharing Plan    $200,000

PI is obligated to pay $200,000 to Parker Consulting Services Profit Sharing 
Plan, owned by Pierce D. Parker, for funds it advanced for the purpose of 
funding the Como project.  This debt is to be paid from net profits generated 
by the Como property.

NOTE 6 -  STOCKHOLDERS' EQUITY

As of June 30, 1997, PI had 6,380,703 common shares issued and outstanding.  
There are 30,000,000 shares authorized.  A reverse split of 1 for 25 shares 
was approved on March 13, 1996.

The Company issued 80,000 shares of Series I convertible preferred stock.  
The stock was issued in conjunction with a private placement conducted by the 
Company.  There are 400,000 shares of preferred stock authorized and may be 
determined by the Board of Directors as to dividend rights, dividend rate, 
conversion rights, voting rights, redemption rights and terms, liquidation 
preferences, the number of shares constituting the series and the designation 
of each series.

The Series I Convertible Preferred stockholders are entitled to dividends 
when and as declared by the Company's Board of Directors from funds which are 
legally available. The Series I Preferred Stock is convertible, at any time 
into an identical number shares of the Company's Common Stock. Holders of the 
Series I Convertible Preferred Stock are entitled to one vote per share on 
all matters submitted to a vote of the Company's stockholders.  Series I 
Convertible preferred stock does not have preemptive rights and it is not 
redeemable.


                                      F-8
<PAGE>

                         PIERCE INTERNATIONAL, INC.
                        NOTES TO FINANCIAL STATEMENTS
                        ------------------------------
                                 (CONCLUDED)

NOTE 7 -  INCENTIVE STOCK OPTION PLAN

On August 10, 1987, the Company adopted an Incentive Stock Option Plan (the 
"Plan") under which options granted are intended to qualify as "incentive 
stock options" under Section 422A of the Internal Revenue Code of 1954, as 
amended (the "code").  Pursuant to the Plan, options to purchase up to 
400,000 shares of the Company's Common Stock may be granted to employees of 
the Company.  The Plan is administered by the Board of Directors which is 
empowered to determine the terms and conditions of each option, subject to 
the  limitation that the exercise price cannot be less than the market value 
of the Common Stock on date of the grant (110% of the market value in the 
case of options granted to an employee who owns 10% or more of the Company's 
outstanding Common Stock) and no option can have a term in excess of 10 years 
(5 years in the case of options granted to employees who own 10% or more of 
the Company's Common Stock).

As of the date of this report, no options have been granted under this Plan.

NOTE 8 -  INCOME TAXES

At June 30, 1997, the Company has available to reduce future taxable income, 
a net operating loss carryforward of approximately $660,000 which expires in 
the years 2003 through 2012.

This net operating loss carryforward may result in future income tax 
benefits; however, because realization is uncertain at this time, a valuation 
reserve in the same amount has been established.  Significant components of 
the Company's deferred tax liabilities and assets as of June 30, 1997 and 
1997 are as follows:

                                                        1997         1996
                                                     ---------     ---------
      Deferred tax liabilities                       $    -        $    -   
                                                     ---------     ---------
                                                     ---------     ---------
      Deferred tax assets
        Net operating loss carry forwards              247 500       207 900
        Valuation allowance for deferred tax assets   (247 500)     (207 900)
                                                     ---------     ---------
                                                     $    -        $    -     
                                                     ---------     ---------
                                                     ---------     ---------

NOTE 9 -  FAIR VALUES OF FINANCIAL INSTRUMENTS

SFAS 107 requires disclosure of the fair value of financial instruments, both 
assets and liabilities recognized and not recognized in the statement of 
financial position, for which it is practicable to estimate fair value.  The 
carrying amounts of current assets and current liabilities approximate fair 
value.

                                      F-9
<PAGE>

                         INDEPENDENT AUDITORS' REPORT
                         ON SUPPLEMENTAL INFORMATION



To the Stockholders and Directors
Pierce International, Inc.

Our report on our audit of the basic financial statements of Pierce  
International, Inc. for the year ended June 30, 1997 appears  on Page F-1.  
The audit was made for the purpose of forming  an opinion on the basic 
financial statements, taken as  a  whole.   The accompanying supplementary 
schedules are presented  for purposes of additional analysis and are not a 
required  part  of the basic financial statements taken as a whole.

The  accompanying  financial  statements  have been prepared assuming  that 
the Company will continue as a going concern. As  discussed  in  Note  1  to 
the financial statements, the Company's ability to continue in existence is 
dependent upon their  obtaining  additional  equity  capital and ultimately 
attaining   and  maintaining  profitable  operations.    The Company  has  
suffered recurring losses from operations that raise  substantial  doubt 
about its ability to continue as a going  concern.  The financial statements 
do not include any adjustments  that  might  result  from  the  outcome of 
this uncertainty.


                                                 SPICER, JEFFRIES & CO.


Denver, Colorado
September 23, 1997



                                      F-10
<PAGE>

                INDEPENDENT AUDITORS' REPORT 
                  ON ADDITIONAL INFORMATION



To the Stockholders and Directors
Pierce International, Inc.

Our report on our audit of the basic financial statements of Pierce 
International, Inc. for the years ended June 30, 1996 and 1995, appears on 
Page F-1.  The audit was made for the purpose of forming an opinion on the 
basic financial statements, taken as a whole.  The accompanying supplementary 
schedules are presented for purposes of additional analysis and are not a 
required part of the basic financial statements and is fairly stated in all 
material respects in relation to the basic financial statements taken as a 
whole.

The accompanying financial statements have been prepared assuming that the 
Company will continue as a going concern. As discussed in Note 1 to the 
financial statements, the Company's ability to continue in existence is 
dependent upon their obtaining additional equity capital and ultimately 
attaining and maintaining profitable operations.  The Company has suffered 
recurring losses from operations that raise substantial doubt about its 
ability to continue as a going concern.  The financial statements do not 
include any adjustments that might result from the outcome of this 
uncertainty.


                                             DORAN PECK, C. P. A., P. C.


Denver, Colorado
October 12, 1996


                                      F-11
<PAGE>

                                                                      SCHEDULE V

                           PIERCE INTERNATIONAL, INC.
                             PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
                                                                      OTHER CHANGES 
                                  BEGINNING  ADDITIONS                 ADD (DEDUCT)-   ENDING
   CLASSIFICATION                 BALANCES    AT COST    RETIREMENTS    DESCRIBE      BALANCES
   --------------                 ---------  ---------   -----------  --------------  --------
<S>                               <C>        <C>         <C>          <C>             <C>
YEAR ENDED JUNE 30, 1997

  Mineral properties              $434 918    $   -        $  -        $   -          $434 918
  Furniture and equipment            7 705        -           -            -             7 705
  Strawboard equipment              57 120        -           -            -            57 120
  Leased equipment                    -           -           -            -              -
                                  --------    --------     -------     --------       --------
                                  $499 743    $   -        $  -        $   -          $499 743
                                  --------    --------     -------     --------       --------
                                  --------    --------     -------     --------       --------

YEAR ENDED JUNE 30, 1996                     

  Mineral properties              $   -       $   -        $   -       $434 918(a)    $434 918
  Furniture and equipment            7 705        -            -           -             7 705
  Strawboard equipment              55 995       1 125         -           -            57 120
  Leased equipment                    -           -            -           -             -   
                                  --------    --------     -------     --------       --------
                                  $ 63 700    $  1 125       $   -     $434 918       $499 743
                                  --------    --------     -------     --------       --------
                                  --------    --------     -------     --------       --------
</TABLE>

(a)  Seized property for non-compliance with purchase agreement.


                                      F-12
<PAGE>

                                                                    SCHEDULE VI



                              PIERCE INTERNATIONAL, INC.
                   ACCUMULATED DEPRECIATION AND AMORTIZATION 
                            OF PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
                                                                      OTHER CHANGES 
                                  BEGINNING  ADDITIONS                 ADD (DEDUCT)-   ENDING
   CLASSIFICATION                 BALANCES    AT COST    RETIREMENTS    DESCRIBE      BALANCES
   --------------                 ---------  ---------   -----------  --------------  --------
<S>                               <C>        <C>         <C>          <C>             <C>
YEAR ENDED JUNE 30, 1997

   Mineral properties             $   -       $    -       $  -        $  -           $   -    
   Furniture and equipment           4 791         883        -           -              5 674 
   Leased equipment                   -            -          -           -               -    
                                  --------    --------     -------     --------       --------
                                  $  4 791    $    883     $  -        $  -           $  5 674 
                                  --------    --------     -------     --------       --------
                                  --------    --------     -------     --------       --------

YEAR ENDED JUNE 30, 1996

  Mineral properties              $   -       $    -       $  -        $  -           $   -
  Furniture and equipment            3 908         883        -           -              4 791                           
  Leased equipment                    -            -          -           -               -
                                  --------    --------     -------     --------       --------
                                   $ 3 908    $    883     $  -        $  -           $  4 791
                                  --------    --------     -------     --------       --------
                                  --------    --------     -------     --------       --------
</TABLE>

                                      F-13