<PAGE>

<PAGE>

                           U.S. SECURITIES AND EXCHANGE COMMISSION

                                    WASHINGTON, DC 20549

                                        FORM 10-QSB

(X)     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

For the quarterly period ended November 30, 1998

               OR

(  )    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

        Commission File Number:            0-27380
        EchoCath, Inc.
        ------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as specified in its charter)

<TABLE>
<S>                                                <C>

                  New Jersey                       22-3273101
------------------------------------------------   ----------------------------
(State or Other Jurisdiction of Incorporation      (I.R.S. Employer
or Organization)                                    Identification No.)
</TABLE>

                       P.O. Box 7224, Princeton, NJ 08543
-------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                  Issuer's Telephone Number......(609) 987-8400

-------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, If Changed Since
Last Report

Check whether Issuer (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                       YES          X        NO
                                  ------              ------

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

<TABLE>
<CAPTION>
CLASS OF COMMON EQUITY                       OUTSTANDING AT JANUARY 14, 1999
----------------------                       -------------------------------
<S>                                                               <C>
Class A common stock (No Par Value)                                2,352,078
Class B common stock (No Par Value)                                1,172,018
</TABLE>


Transitional Small Business Disclosure Format (check one)

                       YES                    NO        X
                                 ------               -----


                                       1





<PAGE>

<PAGE>




                          PART 1: FINANCIAL INFORMATION
                            PART 2: OTHER INFORMATION

                                 ECHOCATH, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                       Page
                                                                       ----
<S>                                                                    <C>
Item 1:   Financial Statements
Balance Sheets,
August 31, 1998 and November 30, 1998 (Unaudited)                         3

Statements of Operations for the three months ended
November 30, 1997 (Unaudited), and November 30, 1998 (Unaudited)          4

Statements of Cash Flows for the three months ended
November 30, 1997 (Unaudited), and November 30, 1998 (Unaudited)          5

Notes to Financial Statements                                        6 -  7

Item 2:  Management's Discussion and Analysis of Financial
         Condition and Results of Operation                          8 - 10

Signatures                                                               11
</TABLE>


                                       2




<PAGE>

<PAGE>



Item 1: Financial Statements

                                 ECHOCATH, INC.

                                 BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>

                                                                 August 31, 1998   November 30, 1998
                                                                 ---------------   -----------------
                                                                                         (Unaudited)
<S>                                                                   <C>              <C>
Current assets:
  Cash and cash equivalents                                        $    256,234        $    223,752
  Accounts receivable                                                     4,905                  --
  Inventory                                                             189,121             185,706
  Prepaid expenses                                                      106,449              96,817
                                                                   ------------        ------------
                Total current assets                                    556,709             506,275
  Furniture, equipment and leasehold improvements, net                  254,180             236,969
  Intangible assets, net                                                282,145             285,160
  Other assets                                                           19,731              20,583
                                                                   ------------        ------------
                                                                   $  1,112,765        $  1,048,987
                                                                   ============        ============

                            LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Notes payable                                                    $    540,000        $  1,065,000
  Accounts payable                                                       71,061             115,315
  Accrued expenses                                                      550,299             606,956
  Obligations under capital leases, less current portion                 16,069              13,854
                                                                   ------------        ------------
                Total current liabilities                             1,177,429           1,801,125
Obligations under capital leases                                         22,398              19,630
Other liabilities                                                       149,244             164,675
                                                                   ------------        ------------
                Total liabilities                                     1,349,071           1,985,430
                                                                   ------------        ------------
Stockholders' deficit:
  Preferred stock, no par value, 5,000,000 shares authorized;
    280,000 shares of Series B cumulative convertible issued and
    outstanding, senior in liquidation to Class A and Class B
    common stock, (liquidation value $1,400,000)                      1,393,889           1,393,889
  Class A common stock, no par value, 18,500,000 shares
    authorized; 2,352,430 issued and outstanding as of
    November 30, 1998 and 2,332,078 as of August 31, 1998             7,248,219           7,248,757
  Class B common stock, no par value, 1,500,000 shares
    authorized; 1,172,018 shares issued and outstanding,
    327,982 shares retired and transferred to Class A shares;
    convertible into one share of Class A common stock                4,023,470           4,023,470
  Accumulated deficit                                               (12,901,884)        (13,602,559)
                                                                   ------------        ------------
                Total stockholders' deficit                            (236,306)           (936,443)
                                                                   ------------        ------------
                                                                   $  1,112,765        $  1,048,987
                                                                   ============        ============
</TABLE>




See accompanying notes to financial statements.

                                       3



<PAGE>

<PAGE>




                                 ECHOCATH, INC.
                             STATEMENT OF OPERATIONS
                    THREE MONTHS ENDED NOVEMBER 30, 1997 AND
                                NOVEMBER 30, 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                         1997              1998
                                                         ----              ----
<S>                                                <C>               <C>
REVENUE:
License fees                                       $  800,000        $       --
Product sales                                              --            15,719
                                                   ----------        ----------
Cost of sales                                              --             7,725
                                                   ----------        ----------
Gross profit                                          800,000             7,994

Operating expenses:
R&D                                                   341,392           389,734
Marketing and G&A                                     456,865           283,555
                                                   ----------        ----------
Total operating expenses                              798,257           673,289
                                                   ----------        ----------

Profit (Loss) from operations                           1,743          (665,295)

Net interest expense                                     (645)          (16,480)
                                                   ----------        ----------
Net income (loss)                                  $    1,098        $ (681,775)
                                                   ==========        ==========

Basic and diluted net income (loss) per share      $        0        $     (.25)
Weighted average shares outstanding                 2,414,897         2,691,096
</TABLE>




See accompanying notes to financial statements.


                                       4


<PAGE>

<PAGE>



                                 EchoCath, Inc.
                            Statements of Cash Flows
                  Three Months ended November 30, 1997 and 1998
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                            1997          1998
                                                                            ----          ----
<S>                                                                 <C>              <C>
Cash flows from operating activities:
  Net profit (loss) to common stockholders                           $     1,098     $(681,775)
      Adjustments to reconcile net profit (loss) to net cash
       used in operating activities:
         Depreciation and amortization                                    27,931        29,140
         Change in operating assets & liabilities:
             Decrease in trade accounts receivable                            --         4,905
             (Increase) decrease in inventory                             (1,218)        3,415
             Decrease in prepaid expenses and other current assets        19,164         9,632
             Decrease in other assets                                         --           773
             (Decrease) increase in accounts payable                     (10,215)       59,594
             (Decrease) increase in accrued expenses                     (29,483)       58,594
             Increase (decrease) in other liabilities                     15,431        (3,469)
                                                                     -----------     ---------
                Net cash provided (used) in operating activities          22,708      (519,191)
                                                                     -----------     ---------

Cash flows from investing activities:
         Purchase of furniture, equipment and leasehold improvements     (10,248)       (6,056)
         Purchase of intangible assets                                   (22,444)       (8,890)
                                                                     -----------     ---------
                     Net cash used in investing activities               (32,692)      (14,946)
                                                                     -----------     ---------
Cash flows from financing activities:
         Principal payments on capital lease obligations                   2,234        (4,983)
         Net proceeds from initial public offering and
           over-allotment option and employee stock purchase plan            195           538
         Issuance of Class A common stock                              1,049,000            --
         Class B preferred dividends                                     (18,900)      (18,900)
         Net proceeds from IPA note                                           --       525,000
                                                                     -----------     ---------
                     Net cash provided by financing activities         1,032,529       501,655
                                                                     -----------     ---------

Net cash provided by (used in) cash and cash equivalents               1,022,545       (32,482)
Cash and cash equivalents, beginning of year                             788,933       256,234
                                                                     -----------     ---------

Cash and cash equivalents, end of period                             $ 1,811,478     $ 223,752
                                                                     ===========     =========

  Supplemental disclosure of cash flow information:
      Interest expense                                               $    14,546     $  19,018
                                                                     -----------     ---------

  Supplemental disclosure of noncash information:
      Equipment acquired under capital lease                         $     8,190     $      --
                                                                     ===========     =========
</TABLE>


                                       5




<PAGE>

<PAGE>


ECHOCATH, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE A: GENERAL AND BUSINESS

The summary financial statements included herein have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the management of EchoCath, Inc. (the "Company") believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these summary financial statements be read in
conjunction with the financial statements and the notes thereto included in the
Company's Form 10-KSB for the fiscal year ended August 31, 1998.

In the opinion of management, all adjustments (consisting solely of normal
recurring adjustments) necessary to present fairly the financial position,
results of operation and cash flows at November 30, 1997 and 1998 have been
made.

The Company did not anticipate being profitable for fiscal year 1998, therefore
a provision for income tax was not established for the first quarter.

NOTE B:

Inventories are summarized as follows:

<TABLE>
<CAPTION>
                               August 31, 1998       November 30, 1998       
                               ---------------       -----------------
<S>                                 <C>              <C>
Raw Materials                       $   96,659        $  104,748
Work in Process                         15,605            11,178
Finished Goods                          76,857            69,780
                                    ----------        ----------
                                    $  189,121        $  185,706
                                    ==========        ==========
</TABLE>

NOTE C:

On July 7, 1995, the Company entered into an agreement with Alliance Partners
("Alliance") in order to amend its previously existing agreement. In accordance
with the new agreement, the partners of Alliance and certain other entities and
individuals became entitled to receive a 35% equity interest in the Company in
exchange for Alliance's repayment of the Company's $750,000 of outstanding
borrowings under the Company's bank demand note payable, which was paid in full
in August 1995. The payment of such indebtedness is to be treated as a capital
contribution; however, if 75% of the Class B warrants to be issued in connection
with the initial public offering are subsequently exercised providing the
Company with $23,040,000 in proceeds, then $750,000 of such proceeds will be
repaid to Alliance. In addition, the new agreement provides that funds
previously advanced to the Company by the partners of Alliance (aggregating
$1,050,368 as of January 1996) are to be treated as permanent capital. On
September 7, 1995, the partners of Alliance and certain other entities and
individuals received 525,000 shares of Class B common stock pursuant to this
agreement. As of October 31, 1997, Alliance released the $750,000 contingent
payment in exchange for 50,000 shares of Class A common stock and an option to
purchase 50,000 shares of common stock, thereby converting the Company's
contingent liability to equity. The option is exercisable at $2.00 per share of
common stock and such option expires 6 years from the date of grant. This
transaction was treated as a capital contribution, consistent with the original
Alliance transaction.

NOTE D:
License Agreements with Medtronic, Inc.

On December 30, 1996 the Company announced that it entered into an exclusive
license agreement with Medtronic, Inc. for the licensing of EchoMark'r' and
ColorMark'r' proprietary technologies for certain medical procedures. Under the
agreement the Company expects to receive a series of payments totaling $950,000
after the completion of certain milestones. The Company has received no
licensing revenue to date under this agreement. The total payments to the
Company under the December 1996 Medtronic Agreement are $200,000 as of December
31, 1998. The Company is currently in negotiations with Medtronic, Inc.
concerning the terms and conditions of this agreement.


                                       6





<PAGE>

<PAGE>



The Company entered into an exclusive license agreement dated February 27, 1997
with EP MedSystems, Inc. (EP MedSystems). The agreement provides that certain
products can be incorporated into the EP MedSystems' diagnostic catheter line.
The Company expects to receive development milestone payments up to $700,000.
The milestones include the testing of a limited series of patients, system
capability demonstration, and the sale of a limited quantity of product. When
products are commercially available the Company will receive royalties under the
terms of the agreement. The Company has received no milestone payment nor has it
earned any royalties to date under this agreement. The agreement provides that
any royalty payment can be reduced, but not to an amount below zero, by an
amount equal to the amount of any dividends under the Company's Series B
cumulative preferred stock which are accrued but not paid as of that date. As of
November 30, 1998 the Company has $132,300 of accrued preferred stock dividends
which is included as a component of the accrued liabilities on the accompanying
Balance Sheet.


On October 30, 1997, the Company announced it had reached a second definitive
licensing and development agreement with Medtronic, Inc. Pursuant to the terms
of the October 1997 Medtronic Agreement, the Company, granted Medtronic (i) a
worldwide exclusive license to make, have made, use sell and have sold products
utilizing the Company's ColorMark and EchoMark technologies in guiding devices
during cardiothoracic surgical procedures: and (ii) the exclusive right and
option at any time within six (6) months of the effective date of the October
1997 Medtronic Agreement, to acquire a worldwide exclusive license to the
Company's EchoEye and EchoFlow technologies for use in guiding device during
cardiothoracic surgical procedures.

In consideration of the grant of the exclusive rights to Medtronic, Medtronic
agreed to pay to the Company a combined total of $1,800,000, which amount
included, (i) $800,000 paid to the Company in upfront licensing fees and (ii)
$1,000,000 from the purchase of 363,636 restricted shares of the Company's Class
A common stock, no par value (the "Class A common stock"), issued to Medtronic
Asset Management, Inc., a wholly-owned subsidiary of Medtronic. Additionally,
the Company may receive minimum annual royalties from Medtronic upon product
commercialization.

NOTE E:
Preferred Stock Subscription Agreement

The Company entered into a subscription agreement dated February 27, 1997 with
EP MedSystems. EP MedSystems purchased 280,000 shares of the Company's Series B
cumulative convertible preferred stock for $1,400,000. The agreement provides
for an annual dividend of $.27 per share. The Company can redeem the preferred
stock if certain performance goals of the Class A common stock are achieved. The
Series B preferred stock is convertible into Class A common stock. The
conversion of Series B cumulative convertible preferred stock to Class A common
stock will be at the conversion rate of 1 share of Class A common stock for each
1.2 shares of Series B cumulative preferred stock through 1999. Thereafter, the
conversion rate shall be 1 share of Class A common stock issuable for each 1.3
shares of Series B cumulative convertible preferred stock.

NOTE F:
Earnings Per Share

Basic loss per share is based on net loss for the relevant period, divided by
the weighted average number of shares outstanding during the period. Diluted
loss per share is based on net loss for the relevant period, divided by the
weighted average number of common shares outstanding during that period. Common
share equivalents, such as outstanding stock options, are not included in the
calculation since the effect would be antidilutive.

NOTE G:
Convertible Debentures

The Company issued two convertible debentures to Investment Partners of America,
L.P. (IPA), a New Jersey limited partnership in the amounts of $250,000 on
September 18, 1998 and $275,000 on October 27,1998. The first debenture was
issued directly to IPA and the second debenture was issued to IPA on behalf of
eight of its regular customers, all of whom are accredited investors. The
debentures pay 6.5% interest and mature six months from the date of issuance.
The debentures are convertible into shares of the Company's Class A common stock
at the then current market price, but not greater than $2.00 per share and no
less than $1.00 per share. The shares of


                                       7






<PAGE>

<PAGE>



Class A common stock issuable upon conversion of the debentures carry price
protection in that the holders of such shares will receive additional shares
equal to the price difference if the Company sells shares to a third party at
a price less than the conversion price. In addition, an affiliate of IPA
received a six-month consulting agreement with the Company for $5,000 monthly
on October 27, 1998.

NOTE H:
Comprehensive Income

On June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income".
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains, and losses) in a full set
of general purpose financial statements. SFAS No. 130 requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be reported in financial statements that are displayed with
the same prominence as other financial statements. SFAS No. 130 is effective for
fiscal years beginning after December 15, 1997. Reclassification of financial
statements for earlier periods provided for comparative purposes is required.
The Company adopted SFAS No. 130 for the quarter ended November 30, 1998.
Comprehensive income (loss) for the three month period ended November 30, 1998
and November 30, 1997 was $(681,775) and net income $1,098 respectively.


NOTE I:
LIQUIDITY AND CAPITAL RESOURCES

Need For Additional Financing
 
The Company will require substantial additional financing in the future to
fully implement its proposed business plan. Former sources of capital are not
obligated, but may contribute, loan or provide any additional financing to the
Company. The Company has no binding commitments from any third parties to
provide funds to the Company. While it anticipates funding from various
sources, there can be no assurances that additional financing will be available
on terms favorable or acceptable to the Company, if at all. In addition, if the
convertible debentures issued to Investments Partners of America, L.P. are not
converted the Company will have to repay such debentures in March and April 1999
(see Note G). The Company believes that additional cash resources should be
available either through financing provided by the completion of license
agreements and strategic alliances, and if necessary, by reducing the level of
its operating expenses by deferring certain research and development or
marketing expense. The Company entered into an option agreement on January 11,
1999 with another Company that is interested in licensing certain of its
technology. The term of the option is three months and the consideration
received for the option was $100,000. However, the Company's current cash
balance is only sufficient to meet its cash requirements through the end of
January 1999 and is therefore in need of immediate additional funds. Failure
to obtain such additional financing would have a material adverse effect on
the Company and could require the Company to severely limit or cease its
operation.


ITEM 2:     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATION

GENERAL

Certain statements in this Report on Form 10-QSB ("Report") under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" and elsewhere constitute "forward-looking statements" within the
meaning of Private Securities Litigation Reform Act of 1995, including, without
limitation, statements regarding future cash requirements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of the Company,
or industry results, to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: limited
commercial operations; no assurances of success; need for additional financing;
uncertainty of market acceptance; reliance on collaborative agreements;
competition and rapid technological change; failure to receive or delays in
receiving regulatory approval; limited manufacturing and assembly experience;
limited marketing and sales experience; dependence upon, and need for, key
personnel; uncertain protection of patent and proprietary rights; lack of
reimbursement; general economic and business conditions; industry capacity;
industry trends; demographic changes; changes in business strategy or
development plans; quality of management; availability, terms and deployment of
capital; potential adverse impact of FDA and other government regulations;
limitations on third party reimbursement; potential adverse impact of
anti-remuneration laws; potential product liability; risk of loss in lawsuit;
risk of low prices stocks; and other factors referenced in this Report. When
used in this Report, statements that are not statements of material fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "anticipates," "plans," "intends," "estimates," "projects," "believes,"
"expects" and similar expressions are intended to identify such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.


                                       8




<PAGE>

<PAGE>



RESULTS OF OPERATIONS
Three Months Ended November 30, 1998 and 1997

Revenue:

The Company had revenues of $15,719 from product sales for the quarter ended
November 30, 1998 and had revenues of $800,000 for the quarter ended November
30, 1997, all of which were from license fees.

The Company had cost of sales of $7,725 for the quarter ended November 30, 1998
and no cost of sales associated with the license fees for the quarter ended
November 30, 1997.

Research and Development:

Research and Development expenses increased $48,342 or 14.2% during the three
months ended November 30, 1998 because of a reallocation of facilities space and
payroll and a large increase in materials and this increase in expenditures was
partially offset by a decrease related to a computer conversion in the quarter
ended November 30, 1997.

Selling, General and Administrative:

Selling, General and Administrative expenses decreased $173,310 or 37.9% during
the three months ended November 30, 1998 because of a large decrease in legal
expenses. The November 30, 1997 quarter included legal expenses for the EP
MedSystems litigation, satisfying listing requirements on the NASDAQ Small Cap
Market, a license agreement with Medtronic, and an agreement with Alliance
Partners to reclassify a contingent liability to permanent capital. The Company
also recognizes $49,000 of compensation associated with the issuance of Class A
common stock to Alliance Partners in the quarter ended November 30, 1997. The
reclassification of certain payroll and facility expenses in the quarter ended
November 30, 1998 contributed to the decline in Selling, General and
Administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

Need For Additional Financing

The Company will require substantial additional financing in the future to fully
implement its proposed business plan. Former sources of capital are not
obligated, but may contribute, loan or provide any additional financing to the
Company. The Company has no binding commitments from any third parties to
provide funds to the Company. While it anticipates funding from various sources,
there can be no assurances that additional financing will be available on terms
favorable or acceptable to the Company, if at all. In addition, if the
convertible debentures issued to Investment Partners of America, L.P. are not
converted the Company will have to repay such debentures in March and April 1999
(see note G). The Company believes that additional cash resources should be
available either through financing provided by the completion of license
agreements and strategic alliances, and if necessary, by reducing the level of
its operating expenses by deferring certain research and development or
marketing expense. The Company entered into an option agreement an January 11,
1999 with another Company that is interested in licensing certain of its
technology. The term of the option is three months and the consideration
received for the option was $100,000. However, the Company's current cash
balance is only sufficient to meet its cash requirements through the end of
January 1999 and is therefore in need of immediate additional funds. Failure
to obtain such additional financing would have a material adverse effect on
the Company and could require the Company to severely limit or cease its
operations.

     Year 2000 Compatibility. The Company is working to resolve the potential
impact of the Year 2000 on the ability of the Company's computerized information
systems to accurately process information that may be date-sensitive. Any of the
Company's programs or computer-assisted systems that recognize a date using "00"
as the year 1900 rather than the Year 2000 could result in errors or systems
failures. It is also possible that certain computer systems or software products
of the Company's suppliers and contractors may not be year 2000 compatible. The
Company is requesting assurances from all software vendors from which it has
purchased or from which it may purchase software that such software will
correctly process all date information at all times. Furthermore, the Company
is querying its suppliers and contractors as to their progress in identifying
and addressing problems that their computer and other technological systems
will face in correctly processing date information as the Year 2000 approaches.
The Company has not completed its assessment, but currently believes that costs
of addressing this issue will not have a material adverse impact on the
Company's financial position. However, if the Company and third parties upon
which it relies are unable to address this issue in a timely manner, it could
result in a material financial risk to the Company. In order to assure that this
does not occur, the Company plans to devote all resources required to resolve
any significant Year 2000 issues in a timely manner.

PART II: OTHER INFORMATION

Item 1: Legal Proceedings - None

Item 2: Changes in Securities and Use of Proceeds - None

Item 3: Defaults Upon Senior Securities - None


                                       9





<PAGE>

<PAGE>



Item 4: Submission of Matters to a Vote of Security Holders - None

Item 5: Other Information - None

Item 6: Exhibits and Reports on Form 8-K

a)      27)    Financial Data Schedule
b)      None


                                       10




<PAGE>

<PAGE>


                                   SIGNATURES

Pursuant to 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.

Date:   January 14, 1999

                                    EchoCath, Inc.
                                    ----------------------
                                    (Registrant)

                                By:  /s/ Frank DeBernardis
                                    -----------------------
                                         Frank DeBernardis
                                         President, Chief Executive Officer,
                                         Principal Financial and Accounting
                                         Officer

                                       11


                            STATEMENT OF DIFFERENCES


The registered trademark symbol shall be expressed as ...................'r'


<PAGE>