SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-K
(Mark One)
    X             Annual Report Pursuant to Section 13 or 15(d) of the
                     Securities Exchange Act of 1934 [Fee Required]

                       For the fiscal year ended December 31, 1996

                                           or

                Transition Report Pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934 [No Fee Required]

                   For the Transition Period from ________ to ________

                        Commission file number 2-70345-NY

                               BUFFS-N-PUFFS LTD
             (Exact name of registrant as specified in its charter)
                    Former name of registrant - PUBCOA, INC.

          Nevada                                         88-0182534
    (State or other jurisdiction of                     (IRS Employer ID Number)
 incorporation of organization.)

    6500 South State Street, Murray, Utah                               84107
  (Address of principal executive offices)                           (Zip Code)

       Registrant's telephone number, including area code: (801) 268-9280

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

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

     State the aggregate market value of the voting stock held by non-affiliates
of the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold,  or the average  bid and asked  prices of
such  stock,  as of a  specified  date  within 60 days  prior to the date of the
filing.

       2,511,375 shares at $0.125 per share = $313,922 as of March 6, 1996

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

   8,354,900 shares common stock par value $0.0001, excluding Treasury Shares
                                (Title of Class)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(b) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 [XX] NO [ ]


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                                     PART I


ITEM 1. BUSINESS

     Buffs-N-Puffs  Ltd.,  formerly known as Pubcoa,  Inc.,  (the "Company") was
incorporated  under the laws of the State of Nevada on November 14, 1980. It has
engaged during the past sixteen (16) years in various business opportunities.

     In 1990, the Company entered the carwash business. On March 22nd, 1990, the
Company's  carwash  operations  started at 6500 South State,  Murray,  Utah. The
facilities  have  eight gas pumps and two  tunnels.  The first of these  tunnels
houses  carwash  equipment  which the  Company  believes  is the best  equipment
available in terms of cleaning the vehicles,  reliability,  and  durability.  In
this tunnel the Company offers a full range of services for automotive cleaning,
including the cleaning of the  undercarriage  and tires. The Company  operations
are known as a full service  carwash  because of the many services it offers and
because the customer performs no service.  The carwash  operations is not a self
service nor a single station roll over wash. The second tunnel houses automotive
interior  cleaning  equipment  which the Company has developed.  With its unique
auto  interior  cleaning  equipment  the Company  provides  auto carpet and seat
upholstery cleaning services. The carwash building also has a boutique, which is
also the  waiting  room  for  customers.  Windows  allow  customers  to view the
equipment in operation.  The boutique  offers a wide range of convenience  items
which include automotive products, convenience foods, and greeting cards.

     The  Company  presently  has  approximately  35 full  time and 30 part time
employees.

     The  carwash  tunnel  has the  following  equipment  which is listed in the
sequence of the cleaning cycle:

1.  Vacuums
2.  Prep
    - Chemical tire applicator (CTA) applies cleaning chemical to tires.
3.  Tunnel
    - Presoak Arch - applies cleaning  chemical for tough dirt and road grime. -
    Foamerator   -   Applies   cleansing   agent,   with   optical   brightners.
    Whippersnappers  -  Cleans  car  from  side  to side  with  soft  cloths.  -
    Wrap-arounds - Cleans car front to back and side to side with soft cloth.
    - Tire Brushes - Cleans tire sidewalls.
    - Neon Super Sudsers - Applies concentrated cleaning foam.
    - Whippersnappers - Cleans car from front to back with soft cloths.
    - Undercarriage Wash - Removes soil from undercarriage of car.
    - Set of 2x2's - Side wheel clothes to clean lower door panels.
    - Tri - Color Wax Arch - applies three clearcoat waxes.

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    - Wash Module - Whippersnappers  and side wheel clothes (2nd set) for polish
      wax.
    - Rust  Inhibitor  - High  pressure  water  with rust  inhibitor  applied to
      undercarriage.
    - Low volume rinse,  wax arch - Rinses car exterior and applies  sealer wax.
    Booster nozzles side dryers - Air jets dry sides of car. - Infrared  perform
    air dryer - Complete forced air drying system.
4.  Drying Area
    - Wipe and Windows - Car is hand dried  completely  and windows are finished
      off with a glass cleaning solution by hand.
    - At the end of the tunnel is a large four bay drying  area,  where the wash
      is completed and the customers pick up their cars.
5.  Quality Control
    - Manager  inspects  washed  vehicles to assure  that the service  meets the
      Company's standards.
    - The   Company   recycles   all  water  used  in  the  carwash  and  reuses
      approximately 80% of the water.
6.  Services
     The  Company  provides  a variety  of  services  ranging  from a basic wash
package to a complete interior detail package.

Carpet Express

     Carpet  Express is a unique  system  that the  Company  developed  to clean
automotive interiors, both carpeting and upholstery.  The Carpet Express process
uses a  combination  of hot water,  chemicals,  and  suction to wash,  clean and
shampoo  automotive  carpets  and  upholstery.  After the  cleaning  process the
interior is dry.  Management believes that the Carpet Express process offers the
best available  means,  on a commercial  scale, to clean  automotive  carpet and
upholstery.  Carpet Express offers to a full service carwash additional services
to market to customers thereby increasing sales dollars per vehicle.

     The carwash  has used the Carpet  Express  system and process for  cleaning
automotive  interior  carpeting and upholstery since the carwash facilities were
opened in March of 1990.  The Company's  experience  during fiscal 1995 was that
approximately 5% of the carwash  customers  purchased the Carpet Express service
and these services accounted for approximately 12% of revenues.

     The  equipment  used in the carpet and  upholstery  system is unique to the
Company and, in management's  opinion, is superior to any equipment available to
clean automotive interiors on a commercial scale in the carwash environment.

     During 1991 the Company introduced the Carpet Express system to the carwash
industry.  A  demonstration  unit  was  manufactured  and  shown  at the  annual
International Carwash Association show in Chicago.  Several leads were developed
although the Company was unable

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to sell any of the systems.  Due to continued  resistance from Carwash operators
over the cost of the system,  the Company  sought to revise the package.  During
late 1992 and early 1993  production  agreements  were reached with CFR Corp. to
manufacture  cleaning  machines for Carpet  Express.  Based upon continued price
resistance  the Company  received from  perspective  clients in early 1994,  the
agreement  with CFR  Corp.  to  manufacture  the  Carpet  Express  machines  was
terminated.  A new agreement  was reached with Century 400, Inc. to  manufacture
machines for the Company.  The new machine has a  significantly  reduced selling
price,  along with being easier to  maintain.  Blue Coral  Systems  supplies and
distributes  cleaning  solutions for the machines.  The Company is the exclusive
distributor of the machines for the Carwash and Detail industries.  During 1996,
the company and Blue Coral systems  terminated the  distribution  agreements for
the Carpet Express  System.  The company sold no new systems during 1996.  Sales
for the year consisted  entirely of replacement  parts. The company is no longer
actively marketing the Carpet Express system.

Lease and Facility

     The Company  leased,  from a company  controlled by Daniel  Pentelute,  the
majority shareholder of the Company, the land and buildings at 6500 South State,
Murray,  Utah,  until  March of 1996,  at which time the company  purchased  the
property.  Two buildings are located on the property,  each with a drive through
tunnel.  The buildings are attractive and are well  maintained.  The property is
well landscaped and the environment created seeks to project a positive,  clean,
and  professional  image.  In the full service  carwash  industry the  Company's
buildings and grounds have been shown as model  facilities and have been used in
advertising  by  those  firms  which  participated  in  the  development  of the
facilities.

     The larger of the two  buildings  houses the boutique,  carwash  tunnel and
offices.  Its dimensions are approximately 192 feet by 65 feet. The office space
on the second floor of the building is  comprised of  approximately  4000 square
feet.  There is a reception area, day room  facilities,  storage rooms,  and six
offices.   The  second  building   houses  Carpet  Express   operations  and  is
approximately  3500  square  feet.  Inside it are a drive  through  tunnel,  two
offices, and an equipment room.

     The property on which the two buildings sit is approximately 3.5 acres. The
facilities  are  visible  from the major  beltway in Salt Lake County and from a
major  thoroughfare  which  passes by the front of the  property.  The daily car
count for the major  thoroughfare at the front of the property is  approximately
37,000 cars per twenty-four hour period.

     The Company's  carwash targets the upper-middle  class market.  Most of the
cars washed are late model,  more  expensive  vehicles.  The  customer  ratio is
approximately  50-50 male and female.  The Company believes that a high ratio of
its customers  are women  because of the  aesthetic  appeal of the buildings and
grounds. At carwash conventions the Company's carwash

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has been shown as an example of the work product of some of the  participants in
the construction of the carwash facilities.

Competition

     In the Greater Salt Lake area there are approximately 160 carwashes,  known
as rollovers,  located at gas stations. A rollover is a system of three rotating
brushes that simultaneously wash the top and sides of the vehicle. The major gas
companies offer free carwashes with gas purchases.

     In the area are nine other full service washes, which compete directly with
the  Company.  It is  believed  the  Company  has a  better  location,  superior
equipment, more aesthetic facilities, and better services to offer its customers
than the  competition.  The Company has no meaningful data as to the size of the
carwash market or the Company's share in that market.

     In addition,  competition  comes from coin operated self service washes. In
the area there are  approximately  thirty-four  coin  operated  carwashes.  Also
locally there are two mechanical touchless rollover operations. The vehicles are
cleaned chemically without brushes.

     Management  believes its  operations  will mature with time as its facility
and services become better known and more recognized by the motoring public. The
overall market for the Company's services is imprecise. Management believes that
the single biggest determinant of sales volume is the weather. If the weather is
stormy or  overcast,  business  declines.  With  good  weather,  sales  increase
dramatically.

Inflation and Foreign Exchange.

     Management  believes  that  inflation  and foreign  exchange  rates have no
effect on its operations or profits.

ITEM 2. PROPERTIES

     The  Company  had a five (5) year lease on the  buildings  and real  estate
housing its carwash operations and corporate headquarters. The Lessor, Pentelute
Properties,  is an entity owned by Daniel F. Pentelute, the majority shareholder
of the Company.  The lease is what is referred to as a triple net lease,  as the
Company is  responsible  for all costs  associated  with the property as well as
rental  payments.  The monthly payments to the Lessor commenced on June 1, 1991,
and are on a percentage  basis.  Initially,  rent was four per cent of the gross
sales,  excluding fuel sales. On April 1, 1992, the monthly percentage increased
to seven per cent (7%) with a minimum amount of $5,000 per month.  In April 1992
the  lease was  amended  to  correct  a  provision  that had  mistakenly  placed
responsibility  for  property  taxes on the Lessor.  The Company  maintains  its
corporate  headquarters on the premises.  The two buildings  housing the carwash
and Carpet Express  tunnels sit on  approximately  3.5 acres of land.  Under the
lease the Company provides

                                        5

<PAGE>



two  offices to the  Lessor.  In  addition,  under the lease the  Company had an
option to renew the lease for an additional  five year term at a monthly  rental
of seven per cent (7%) of monthly  gross  proceeds  excluding  fuel sales with a
minimum rent of $5,000 monthly. Also, the lease granted the Company an option to
purchase the property  commencing at the end of the initial five year term.  The
Company could exercise the option any year on the anniversary  date of the lease
in the five year option term. The purchase  price was $2,330,000  capitalized at
four per cent (4%) per annum from April 1, 1990. This price was  renegotiated to
$2,075,000 in March 1996 when the property was purchased.

     On March  25,1995,  the Company  purchased  the  building  and the land the
carwash is located on for $2,075,000.The  purchase was financed through Bank One
of Utah and consists of the  following:  A one year  renewable line of credit of
$150,000 dollars at 8.25%, and a $1,800,000 note with a twenty year amortization
and five year call at 8.26%. In addition, the Company issued 2,000,000 shares of
common stock to Mr. Pentelute at a price of 1/8.

     On June 21, 1993, the Company  purchased  approximately  1.67 acres of land
located at  approximately  3750 West 4700 South,  West Valley  City,  Utah.  The
property was purchased for the specific purpose of building a second carwash for
the Company. This particular piece of property was purchased because of the high
traffic  counts  surrounding  it and its  location in an area which is not being
served by any other full service carwash.  To this point in time,  architectural
designs have been prepared but no construction has begun on said property.During
1996,  the Company  abandoned  plans to build a second carwash on this site. The
property is currently under contract to be sold. It is anticipated the sale will
close before April 30, 1997.

     The property was purchased  for $310,000 of which  $270,000 was financed at
7.5% interest.  The Company makes interest only payments on a monthly basis and,
pursuant to the trust deed securing the property,  principal  must be reduced by
$25,000 on March 1 and September 1 of each year through 1996.  The entire unpaid
balance, at that point in time, is due in full on or before September 1, 1998.

     During  September,  1994,  Daniel  Pentelute,  the major stockholder of the
Company,  purchased  21 acres of land in  Montana.  Three days later the Company
purchased a one half interest in this land from Mr.  Pentelute at his cost.  The
other  one half  interest  is owned  by  Desert  Land  Enterprises,  whose  sole
shareholder is Daniel  Pentelute.  The cost of the one half interest was $52,590
of which the  Company  still  owed  $17,356 as of  December  31,  1995.  Monthly
payments  on the land are  $1,162  and the loan is  secured  by the land.  It is
anticipated  by the Company  that it will be able to sell the land in the future
at a substantial profit.

ITEM 3. LEGAL PROCEEDINGS

     The Company is not currently involved in any litigation.



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

     During the year ended 1996, no matters were  submitted by the Company for a
vote to its security holders.

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK & RELATED SHAREHOLDERS MATTERS.

     The  Company's  common  stock is  traded  in the over the  counter  market.
Previously  the  Company's  common stock  traded on the NASDAQ  system under the
symbol BUFS. In March,  1992 the Company's  securities  were  de-listed from the
NASDAQ  system  because  of the  inability  to  comply  with new  criteria.  The
information  below,  since the end of the first quarter of 1992, was provided by
Alpine  Securities of Salt Lake City,  Utah and does not  necessarily  represent
prices of actual  sales of the  Company's  common  stock,  nor does it take into
account any brokerage discounts,  commissions, or fees. At the close of business
on March 7, 1996 the Company had approximately 645 stockholders of record.
<TABLE>
<CAPTION>

  QUARTER                  HIGH BID                  HIGH ASK                   LOW BID          LOW ASK
  -------                  --------                  --------                   -------          -------
<S>                        <C>                       <C>                        <C>              <C>
First 1996                    1/8                       1/2                       1/8              1/2
Second 1996                   1/8                       1/2                       1/8              1/2
Third 1996                    1/8                       1/2                       1/8              1/2
Fourth 1966                   1/8                       1/2                       1/8              1/2

First  1995                   3/4                         1/2                     1/64                1/8
Second 1995                   1/2                         1/2                     1/64               1/64
Third  1995                   1/2                         3/8                     1/64               1/64
Fourth 1995                   3/8                         3/8                      1/8                1/8

First  1994                   1/8                         3/8                      1/8                3/8
Second 1994                   1/8                         3/8                      1/8                3/8
Third  1994                   1/8                         3/8                      1/8                3/8
Fourth 1994                   1/8                         3/8                      1/8                3/8

First  1993                  3/32                        7/32                     3/32               7/32
Second 1993                   1/8                         3/8                      1/8                3/8
Third  1993                  3/16                       1/2                      3/16                1/2
Fourth 1993                   1/4                         3/4                      1/4                3/4
</TABLE>

No dividends have been paid nor are any anticipated in the foreseeable future.



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ITEM 6.           SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                       1996              1995              1994               1993                 1992
                 ---------------   ---------------   ---------------   ------------------   -----------
Total
<S>              <C>               <C>               <C>               <C>                  <C>
  Revenues       $     1,510,079   $     1,544,118   $     1,633,892   $        1,444,466   $      1,112,921(1)
Net
  Operating
  Revenues               142,531           195,957           117,704               83,748               39,754

Net Income
  from
  continuing
  operations             142,531           195,957           117,704               83,748               39,754

Net Income               107,831           133,857           109,604            281,648(2)  39,534

Total
  Assets               3,575,179         1,448,539         1,503,992            1,472,827              912,594

Total
  Stock-
  holders'
  Equity               1,459,410         1,193,768         1,108,863              950,307              668,659

Long Term
  Debt                 1,857,178           136,612           203,551              285,149              129,268
</TABLE>

NOTES

(1)  Because of certain  changes in 1993,  certain  revenues  for 1992 have been
     reclassified as other income rather than revenues,  thus  decreasing  total
     revenues for 1992. The income statements for 1992 have been reclassified to
     be consistent with the income statement of 1993.

(2)  In February,  1992 the Financial  Accounting  Standards Board adopted a new
     standard  which  requires that deferred tax balances be adjusted to reflect
     the tax rates in effect when those  amounts are expected to become  payable
     or  refundable.  This statement was required to be applied in the company's
     financial statements for the year 1993.

     The company was given the choice of either restating prior period financial
statements  or  recognizing  the  cumulative  effect of the change in 1993.  The
company chose to recognize the cumulative  effect of the change during 1993. Had
the company chose to make the  adjustments  in 1991 and 1992 rather than totally
in 1993, the net income of the company would have been

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$87,648 in 1993 rather than  $241,648,  earnings per share would have been $.01,
rather than $.05.  In  addition,  the net income in 1992 would have been $24,534
rather than $39,534.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS

     On March 22,  1990,  the Company  commenced  its carwash  operation at 6500
South  State  Street,  Salt Lake City,  Utah.  Previously,  the  Company had not
engaged in any  meaningful  business  operations and the Company had no revenues
generated from business operations.

                                    1996 to 1995

     As of December 31,1996 the Company had cash of $225,496 compared to cash of
$177,086 as of December  31,1995,  an increase of $48,410 (27%). The increase is
attributable to profits from stock sales.

     Current  assets as of December 31, 1996 were $654,363  compared to $462,012
as of December  31, 1995 an increase of $192,351  (42%).  Property,  plant,  and
equipment  were  $2,729,406  as of December 31, 1996  compared to $751,815 as of
December 31, 1995 an increase of 1,977,591 (263%). The increase of $1,977,591 is
attributable  to the  purchase  of the  buildings  and the land the  carwash  is
located on.

     Current  Liabilities  as of  December  31, 1996 were  $258,591  compared to
$118,159 as of December  31,1995,  an  increase  of $140,432  (118%).  Long term
liabilities  increased from $136,612 as of December 31, 1995 to $1,857,178 as of
December 31, 1996,  an increase of $1,720,566  (1,259%).  The increase is due to
loans for the  purchase  of the  carwash  facilities.  Total  liabilities  as of
December 31, 1996 were $2,115,768 compared to $254,771 as of December 31, 1995.

     Stockholders'  Equity as of December  31, 1996 was  $1,459,410  compared to
$1,193,768 as of December 31,1995,  an increase of $265,642 (22%). This increase
is attributable to operating profits and purchase of common stock by present and
former offices of the Company.

     Total  revenues  for the year  ended  December  31,  1996  were  $1,510,079
compared to total revenues of $1,554,118 as of December 31, 1995. Total revenues
decreased  $44,039 (- 2.8%).  This  decrease is  attributable  to lower  express
detail service sales and slightly lower carwash volume.

     Total  costs  and  expenses  for the year  ended  December  31,  1996  were
$1,496,360  compared to $1,390,363 for the year ended  December 31, 1995.  Total
costs and expenses increased $105,997,  or approximately 7.6%. Interest expenses
were substantially  higher due to loans for the purchase of the carwash building
and land.  Salary Expenses  continue to rise due to the increase in minimum wage
and the extremely light labor market in Salt Lake,(around 3% unemployment). With
another raise in the minimum wage in 1997, and Utah's rapidly

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<PAGE>



expanding  economy,  management  expects  wages to continue to rise.  Net income
(before  income tax benefit) for the year ending  December 31, 1996 was $142,531
compared to $195,957 as of December  31, 1995, a decrease of $53,426 or 27%. The
net income per share of the Company's  common stock for 1996 was .01 compared to
a net income of .02 per share in 1995.  The  current  ratio of the Company as of
December 31, 1996 was 2.53 compared to 3.91 as of December 31,1995.

     Management  believes the carwash has reached a level of maturity,  in which
volume will be fairly stable at 100,000+ cars per year. Management also believes
it will  be  difficult  to  increase  per car  revenues  above  current  levels,
therefore the expenses of the operation must be reduced. As of December 31, 1996
the  Company  had on order  additional  drying  equipment,  to  further  dry the
vehicles on line, thereby reducing labor costs. In addition, the whip across and
wrap  arounds  were  being  replaced  with  updated  designs  which  clean  more
effectively.  It is anticipated  that a spot free rinse system will be installed
during the first half of 1997.  Spot free  rinse will  further  reduce the labor
costs by making the drying  equipment more  effective.  Management is discussing
raising prices to further offset labor costs.

                                  1995 to 1994

     As of December  31, 1995 the Company had cash of $177,086  compared to cash
of $183,741 as of December 31, 1994, a decrease of $6,655  (3.6%).  The decrease
is attributable to the Company's decreased revenue.

     Current assets as of December 31, 1995 were $462,012  compared to $382,718,
an increase of $79,294 (20.7%).  Property, plant, and equipment were $751,815 as
of December 31, 1995 compared to $834,024 as of December 31, 1994, a decrease of
$82,209  (9.8%).  The  decrease is mainly  attributable  to normal  depreciation
expense.

     Current  liabilities  as of  December  31, 1995 were  $118,159  compared to
$170,205 as of December 31, 1994,  or a decrease of $52,046  (30.6%).  Long term
liabilities  decreased  from  $203,551 as of December 31, 1994 to $136,612 as of
December  31 ,1995,  a decrease  of $66,939  (32.9%).  Total  liabilities  as of
December 31, 1995 were $254,771  compared to $373,756 as of December 31, 1994, a
decrease of $118,985 (31.8%).  Total liabilities decreased due to lower accounts
payable and continuing reduction of debt.

     Stockholders'  Equity as of December  31, 1995 was  $1,193,768  compared to
$1,059,911  as of December  31,  1994,  an increase  of $133,857  (12.6%).  This
increase is primarily attributable to profits from operations, and the dismissal
of the Murray City lawsuit.

     Total  revenues  for the year  ended  December  31,  1995  were  $1,554,118
compared to total  revenues for the year ended  December 31, 1994 of $1,633,892.
Total  revenues  decreased by $79,774,  or an  approximate  4.9%  decrease  when
compared  to the  previous  year.  The primary  reason for this  decrease is the
decrease in the number of cars being serviced at the carwash due

                                       10

<PAGE>



to weather  conditions,  and lower Carpet Express  equipment  sales. The drop in
carwash  volume was partially  offset by a price  increase in carwash  services.
Total costs and  expenses for the year ended  December 31, 1995 were  $1,390,363
compared to costs and  expenses of  $1,540,497  for the year ended  December 31,
1994. Total costs and expenses decreased by $150,134 or an approximate  decrease
of 9.8% when compared to the previous  year. The primary reason for the decrease
in costs and expenses  was the  decrease in labor due to equipment  upgrades and
changing  chemicals used in the carwash  process.  The net income (before income
tax benefit) for the year ended  December 31, 1995 was $195,957  compared to net
income for the year ended  December  31,  1994 of  $117,704,  or an  increase of
$78,253,  an  approximate  66.5%  increase.  The net  income  per  share  of the
Company's  common stock for 1995 was $.02 per share  compared to a net income of
 .02 per share in 1994.  The current ratio of the Company as of December 31, 1995
was 3.91 compared to the current ratio as of December 31, 1994 of 2.24.  This is
primarily the result of the profitability of the Company for the 1995 year.

     Management  intends to increase  revenues and volume by continuing to offer
the highest quality service in the carwash  business.  Further cost reduction is
anticipated  due to  continuing  updating  of  carwash  equipment  and  chemical
applications.  A price increase  instituted in March of 1995 appears to have had
little  effect  on  carwash  volumes,  while  increasing  profitability.  It  is
anticipated that  profitability will increase further with the price increase in
effect for the full year.

                                  1994 to 1993

     As of December 31, 1994, the Company had cash of $183,718  compared to cash
of $130,377 as of  December  31,  1993,  an  increase of $53,364  (40.9%).  This
increase in cash was primarily the result of the Company's increased revenue.

     Current assets as of December 31, 1994 were $382,718  compared to $312,458,
an increase  of $70,260  (22.5%),  again  primarily  due to the  increase in the
Company's revenues and net income.  Property,  plant and equipment were $834,024
as of  December  31, 1994  compared  to  $921,427  as of December  31, 1993 or a
decrease of $87,403  (9.5%).  This decrease is primarily  attributable to normal
depreciation expense.

     Current  liabilities  as of  December  31, 1994 were  $170,205  compared to
$167,046 as of December  31,  1993 or an  increase of $3,159  (1.9%).  Long-term
liabilities  also decreased from $285,149 as of December 31, 1993 to $203,551 as
of December 31, 1994.  Total  liabilities  as of December 31, 1994 were $373,756
compared to $452,195  as of December  31, 1993 or an decrease of  $78,439(17.3%)
The decrease in long-term  liabilities were primarily caused by the reduction of
long term debt.

     Stockholders'  equity as of December  31, 1994 was  $1,059,911  compared to
$950,307  as of  December  31,  1993  or  an  increase  of  $109,604,  which  is
approximately 11.5%. This increase is attributable to profits from operations.

                                       11

<PAGE>



     Total  revenues  for the year  ended  December  31,  1994  were  $1,633,892
compared to total  revenues of $1,444,466  for the year ended December 31, 1993.
Total revenues  increased by $189,426 or an approximate  thirteen  percent (13%)
increase  when  compared to the year  earlier.  Total costs and expenses for the
year ended December 31, 1994 were $1,540,497 compared to $1,379,336 for the year
ended December 31, 1993 or an increase of $161,161  (approximately  11.7%).  The
increase in revenues  primarily resulted from the increase in the number of cars
that were  serviced by the Company.  This results  from the  Company's  maturing
process,  the public becoming more acquainted with the Company and its location,
and  favorable  weather  factors.  The increase in costs and expenses  primarily
results from the Company's increase in revenues which requires additional labor,
additional percentage rent, and related expenses.  The net income (before income
tax  benefit) for 1994 was  $117,704  versus  $83,748 for the year of 1993 or an
increase of $33,956 (approximately 40.5% increase).  The net income per share of
the common stock for 1994 was $.02 per share,  including  the income tax benefit
described above,  versus a net income in 1993 of $.05 per share. As discussed in
Note D, in the financial  statements  attached  hereto,  in February,  1992, the
Financial  Accounting  Standards Board adopted a new standard numbered 109 which
required  that all  deferred tax balances be adjusted to reflect the tax base in
effect when those  amounts are expected to become  payable or  refundable.  This
statement was required to be applied in the Company's  financial  statements for
the calendar year commencing  January 1, 1993 and the Company chose to recognize
the  cumulative  effects of the change during the year of 1993.  Because of this
reason,  an adjustment was made to the 1993 income thereby  increasing it in the
amount of $197,900 and thereby  increasing the 1993 net income to $281,648.  Had
said  benefit  been  recognized  in 1991,  1992 and 1993 the net income for 1993
wouldhave been $.01 per share rather than $.05 per share.  This is primarily the
result in the increased  revenues of the Company and the  aforementioned  income
tax benefit.  The current  ratio of the Company as of December 31, 1994 was 2.24
versus the current  ratio as of December  31, 1993 of 1.87.  This is primarily a
result of the profitability of the Company for the 1994 year.

                                  1993 to 1992

     As of December 31, 1993, the Company had cash of $130,377  compared to cash
of $42,756 as of December 31, 1992, a increase of $87,621. This increase in cash
was primarily the result of the  Company's  increased  revenue and increased net
income.

     Current assets as of December 31, 1993 were $312,458  compared to $172,023,
a increase of $140,435  again  primarily  due to the  increase in the  Company's
revenues  and net income.  Property,  plant and  equipment  were  $921,427 as of
December 31, 1993  compared to $693,348 as of December 31, 1992 or a increase of
$228,079  primarily  due  to  the  acquisition  of  land,  during  1993,  for an
additional carwash.

     Current  liabilities  as of  December  31, 1993 were  $167,046  compared to
$114,667  as  of  December  31,  1992  or  an  increase  of  $52,379.  Long-term
liabilities  also increased from $129,268 as of December 31, 1992 to $285,149 as
of December  31, 1993.  Total  liabilities  as of December 31, 1993  excluding a
contingent liability explained under Item III (Legal Proceedings),

                                       12

<PAGE>



were  $452,195  compared to  $243,935 as of December  31, 1992 or an increase of
$208,260.  The increases in current and  long-term  liabilities  were  primarily
caused  by the  acquisition  of  aforementioned  land  and the  debt  associated
therewith.

     Stockholders'  equity as of  December  31,  1993 was  $950,307  compared to
$668,659  as  of  December  31,  1992  or  an  increase  of  $281,648  which  is
approximately a forty two percent (42%) increase.  This increase is attributable
to profits from  operations,  as well as the Accounting  changes  referred to in
Note 2 above.

     Revenues for the year ended December 31, 1993 were  $1,444,466  compared to
total  revenues  of  $1,112,921  for the year ended  December  31,  1992.  Total
revenues  increased by $331,545 or a thirty percent (30%) increase when compared
to the year  earlier.  Total costs and expenses for the year ended  December 31,
1993 were $1,379,336 compared to $1,084,955 for the year ended December 31, 1992
an increase of $294,381.  The increase in revenues  primarily  resulted from the
increase in the number of cars that were  serviced by the Company.  This results
from the Company's  maturing  process,  the public becoming more acquainted with
the Company and its location,  and favorable  weather  factors.  The increase in
costs and  expenses  results  from the  Company's  increase  in carwash  volume,
leading to higher rent expense,  labor costs and chemical costs.  The net income
for 1993 was $83,748  versus  $39,754 for the year of 1992.  After the change in
accounting  rules to reflect the income tax  benefit  discussed  above,  the net
income in 1993 was $281,648  versus $39,534 for 1992 or an increase of $242,114.
Net income per share of the  common  stock for 1993 was $.05 per share  versus a
net  income  of .01 per  share in 1992.  This is  primarily  the  result  in the
increased  revenues  of the  Company.  The  current  ratio of the  Company as of
December  31, 1993 was 1.87 versus the current  ratio as of December 31, 1992 of
1.50. This is primarily caused by the  profitability of the Company for the 1993
year.

LIQUIDITY AND CAPITAL RESOURCES.

Operations.

     As of December 31, 1996,  the  Company's  working  capital was $593,103 and
included  cash and cash  equivalents  of $395,772 as compared  with  $343,853 in
working capital and $177,086 in cash and cash  equivalents at December 31, 1995.
During the three years ended  December 31, 1996,  the cash provided by operating
activities  more than offset the amount of cash used in the Company's  operating
activities. The net cash provided by operating activities in these three periods
were $297,540 in 1996,  $244,338 in 1995, $264,592 in 1994. The Company does not
anticipate any  significant  change from the positive cash provided by operating
activities during 1997.



                                       13

<PAGE>


Investing Activities.

     The net cash used by the  Company's  investing  activities  increased  from
$105,948 in 1994 to $141,632  in 1995,  to $187,070 in 1996.  The primary use of
cash for investing  activities has been  additional  purchase of publicly traded
stock, and purchase of property and equipment.

Financing Activities.

     The cash used by the Company's  financing  activities was $105,280 in 1994,
$109,361  in 1995 and $62,060 in 1996.  The  primary  use of cash for  financing
activities has been the reduction in the Company's long term debt.

Expansion Program.

     During 1993 the Company  acquired land in the western area of the Salt Lake
Valley to use for the  purpose of a second  carwash  location.  During  1996 the
Company decided to abandon plans for another facility,  due to high construction
costs and the difficulty of obtaining financing. The property is currently under
contract to be sold. It is anticipated  that this sale will be completed  during
the second quarter of 1997.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

         (On following pages)


                                       14

<PAGE>



                                 C O N T E N T S


(a) 1. Financial Statements

The following Financial Statements of BUFFS-N-PUFFS, LTD.
are included in PART II, ITEM 8:
                                                                         Page
INDEPENDENT AUDITOR'S REPORT..............................................16

FINANCIAL STATEMENTS:

BALANCE SHEETS -
December 31, 1996 and 1995 ...............................................17

STATEMENTS OF OPERATIONS -
years ended December 31, 1996, 1995 and 1994 .............................19

STATEMENTS OF STOCKHOLDERS' EQUITY -
years ended  December 31, 1996, 1995 and 1994 ............................20

STATEMENTS OF CASH FLOWS -
years ended  December 31, 1996, 1995 and 1994 ............................21

NOTES TO THE FINANCIAL STATEMENTS ........................................22

(a) 2. Financial Statement Schedules

The following financial statement schedules of BUFFS-N-PUFFS,
 LTD. are included in PART IV, ITEM 14(d) (3):

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 ON SUPPLEMENTARY FINANCIAL INFORMATION ..................................32

SCHEDULE I - MARKETABLE SECURITIES .......................................33

SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT ...............................34

SCHEDULE VI - ACCUMULATED DEPRECIATION AND
 AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT ...........................35


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

                                       15

<PAGE>


                                                  Smith & Company
                                           Certified Public Accountants
10 West 100 South, #700                               Telephone:  801-575-8297
Salt Lake City, UT 84101                              Facsimile:  801-575-8306
------------------------------------------------------------------------------


                          INDEPENDENT AUDITOR'S REPORT


Board of Directors and Shareholders
Buffs-N-Puffs, Ltd.
Salt Lake City, Utah

We have audited the  accompanying  balance sheets of  Buffs-N-Puffs,  Ltd. as of
December  31,  1996  and  1995  and  the  related   statements  of   operations,
stockholders'  equity and cash flows for the years ended December 31, 1996, 1995
and 1994.  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 audits.

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 Buffs-N-Puffs, Ltd. at December
31, 1996 and 1995 and the results of its  operations  and its cash flows for the
years ended  December  31,  1996,  1995 and 1994 in  conformity  with  generally
accepted accounting principles.



                                                             /s/ Smith & Company
                                                    CERTIFIED PUBLIC ACCOUNTANTS

Salt Lake City, Utah
March 11, 1997

                                       16

<PAGE>



                               BUFFS-N-PUFFS, LTD.

                                 BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                     December 31,
                                                                             1996                  1995
                                                                       -----------------     -----------------
       ASSETS
CURRENT ASSETS:
<S>                                                                    <C>                   <C>
     Cash                                                              $         225,496     $        177,086
     Accounts receivable - trade                                                  15,722                16,241
     Marketable securities, at market value (Note A
       and Schedule I)                                                           343,232               220,317
     Inventory (Note A)                                                           18,834                26,525
     Prepaid expenses and supplies                                                51,079                21,843
                                                                       -----------------     -----------------
                                              TOTAL CURRENT ASSETS               654,363               462,012

PROPERTY, PLANT AND EQUIPMENT (at cost) (Note A and Schedules V and VI):
     Building                                                                  1,494,000                     0
     Building improvements                                                       198,187               194,621
     Furniture, fixtures and equipment                                           877,402               855,952
     Land                                                                        891,185               310,185
                                                                       -----------------     -----------------
                                                                               3,460,774             1,360,758
     Less accumulated depreciation                                               731,368               608,943
                                                                       -----------------     -----------------
                                                                               2,729,406               751,815
OTHER ASSETS
     Start-up costs (Note D)                                                      43,987                49,757
     Deposit                                                                       1,433                 4,365
     Montana Land (Note F)                                                        52,590                52,590
     Deferred tax asset (Note C)                                                  93,400               128,000
                                                                       -----------------     -----------------
                                                                                 191,410               234,712
                                                                       -----------------     -----------------

                                                                       $       3,575,179     $       1,448,539
                                                                       =================     =================
</TABLE>



See notes to the financial statements.


                                       17

<PAGE>



                               BUFFS-N-PUFFS, LTD.

                                 BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                     December 31,
                                                                             1996                  1995
                                                                       -----------------     -----------------

       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
<S>                                                                    <C>                   <C>
     Accounts payable and payroll and sales taxes                      $          54,792     $          48,923
     Loans payable (Note B)                                                      203,636                55,087
     Loans payable - related parties (Note B)                                        163                14,149
                                                                       -----------------     -----------------
                                         TOTAL CURRENT LIABILITIES               258,591               118,159

LONG-TERM LIABILITIES:
     Loans payable (Note B)                                                    1,857,178               136,612
                                                                       -----------------     -----------------
                                                                               1,857,178               136,612
                                                                       -----------------     -----------------
                                                 TOTAL LIABILITIES             2,115,769               254,771

STOCKHOLDERS' EQUITY:
     Capital stock, common,  authorized 100,000,000 shares of $0.0001 par value;
       issued 8,463,900 shares, including 109,000 shares
       of treasury stock, outstanding 8,354,900                                      846                   611
     Additional paid-in capital                                                1,278,268             1,120,692
     Retained earnings                                                           229,248               121,417
                                                                       -----------------     -----------------
                                                                               1,508,362             1,242,720

     Less Treasury stock - at cost (109,000
       shares)                                                                   (48,952)              (48,952)
                                                                       -----------------     -----------------
                                        TOTAL STOCKHOLDERS' EQUITY             1,459,410             1,193,768
                                                                       -----------------     -----------------

                                                                       $       3,575,179     $       1,448,539
                                                                       =================     =================
</TABLE>

See notes to the financial statements.


                                       18

<PAGE>



                               BUFFS-N-PUFFS, LTD.

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                                         1996                 1995                 1994
                                                   -----------------    -----------------    -----------------
REVENUES:
<S>                                                <C>                  <C>                  <C>
     Carwash                                       $       1,470,372    $       1,514,958    $       1,588,853
     Boutique sales - net                                     32,565               30,005               25,202
     Fuel sales - net                                         16,907               18,687               17,798
     Carpet express equipment sales - net                        601                1,205               13,442
     Discounts                                               (10,366)             (10,737)             (11,403)
                                                   -----------------    -----------------    -----------------
                  TOTAL REVENUES                           1,510,079            1,554,118            1,633,892

COSTS AND EXPENSES:
     Salaries, labor and commissions                         679,071              648,770              737,315
     Taxes and benefits                                      111,455              113,251              120,081
     Interest and credit card fees                           193,049               76,661               73,958
     Travel, auto, promotional and
       advertising                                            28,457               39,293               26,812
     Office, telephone, printing and
       supplies                                              186,170              184,933              180,040
     Utilities, building maintenance,
       rent and insurance                                    141,964              177,714              256,954
     Depreciation and amortization                           133,508              105,420              110,002
     Professional fees and other                              22,686               44,321               35,335
                                                   -----------------    -----------------    -----------------
                       TOTAL COSTS AND EXPENSES            1,496,360            1,390,363            1,540,497
                                                   -----------------    -----------------    -----------------

NET INCOME BEFORE OTHER                                       13,719              163,755               93,395

OTHER INCOME (EXPENSE)
     Contract services and miscellaneous                       4,112                2,260               20,910
     Interest and dividends                                    7,436                7,218                5,162
     Loss on equipment sales                                  (2,277)              (4,978)                   0
     Gain (loss) on sale of securities (cost
       determined by specific identification)                151,090               17,495                7,903
     Adjustment of securities to market                      (31,549)              10,207               (9,666)
                                                   ------------------   -----------------    -----------------
                                                             128,812               32,202               24,309
                                                   -----------------    -----------------    -----------------
                                     NET INCOME
                                   BEFORE TAXES              142,531              195,957              117,704

INCOME TAXES (BENEFIT)
     (Notes A & C)                                            34,700               62,100                8,100
                                                   -----------------    -----------------    -----------------

NET INCOME                                         $         107,831    $         133,857    $         109,604
                                                   =================    =================    =================

NET INCOME PER SHARE OF
     COMMON STOCK (based on
     weighted average number
     of shares outstanding)                        $             .01    $             .02    $             .02
                                                   =================    =================    =================
Weighted average number of common
     shares used to compute net income
     per weighted average share                            7,811,609            6,113,900            6,113,900
                                                   =================    =================    =================
</TABLE>

See notes to the financial statements.


                                       19

<PAGE>



                       BUFFS-N-PUFFS, LTD. AND SUBSIDIARY

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                     Additional            Retained
                                                      Common Stock                     Paid-in             Earnings
                                              Shares               Amount              Capital             (Deficit)
                                        -----------------     ----------------    -----------------    -----------------

<S>                                     <C>                   <C>                 <C>                  <C>
Balances 12/31/93                               6,113,900     $            611    $       1,120,692    $        (122,044)

Net income for
        year ended 12/31/94                                                                                      109,604
                                        -----------------     ----------------    -----------------    -----------------

Balances 12/31/94                               6,113,900                  611            1,120,692              (12,440)

Net income for
        year ended 12/31/95                                                                                      133,857
                                        -----------------     ----------------    -----------------    -----------------

Balances 12/31/95                               6,113,900     $            611    $       1,120,692    $         121,417

Net income for
        year ended 12/31/96                                                                                      107,831
Stock issued for assets                         2,000,000                  200              124,800
Restricted stock issued
        to employees                              350,000                   35               32,776
                                        -----------------     ----------------    -----------------    -----------------

Balances 12/31/96                               8,463,900     $            846    $       1,278,268    $         229,248
                                        =================     ================    =================    =================
</TABLE>



See notes to the financial statements.


                                       20

<PAGE>



                               BUFFS-N-PUFFS, LTD.

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                 Years Ended December 31,
                                                                         1996              1995              1994
                                                                   ---------------    --------------    ---------------
OPERATING ACTIVITIES
<S>                                                                <C>                <C>               <C>
     Net income                                                    $       107,831    $      133,857    $       109,604
     Adjustments  to  reconcile  net income to net cash
       provided  by  operating activities:
           Depreciation and amortization                                   133,508           105,420            110,002
           Book value of assets sold                                         2,277             8,977                  0
           (Increase) decrease in deferred tax asset                        34,600            62,000              8,000
           Adjust securities to lower of cost or market                     31,549           (10,207)             9,666
     Changes in operating assets and liabilities:
           (Increase) decrease in receivables                                  519             9,927             28,875
           (Increase) decrease in prepaid expense, supplies
               and deposits                                                (26,304)           11,339                 96
           (Increase) decrease in inventory                                  7,691             2,974             (1,002)
           (Increase) decrease in contingent  liability                          0           (70,325)                 0
           Increase (decrease) in accounts payable and
               payroll taxes payable                                         5,869            (9,624)              (649)
                                                                   ---------------    --------------    ---------------
NET CASH PROVIDED BY
     OPERATING ACTIVITIES                                                  297,540           244,338            264,592

INVESTING ACTIVITIES
     Cost of securities sold                                               208,527            86,367             26,356
     Purchase of securities                                               (362,991)         (185,975)           (80,887)
     Purchase of land                                                            0                 0            (25,100)
     Increase in start-up costs                                                  0           (15,900)           (10,000)
     Purchase of property and equipment                                    (32,606)          (26,124)           (16,317)
                                                                   ---------------    --------------    ---------------
NET CASH (USED)
     BY INVESTING ACTIVITIES                                              (187,070)         (141,632)          (105,948)

FINANCING ACTIVITIES
     Sale of stock                                                          32,811                 0                  0
     Repayment of loans and leases                                         (94,871)         (109,361)          (105,280)
                                                                   ---------------    --------------    ---------------
NET CASH (REQUIRED) BY
     FINANCING ACTIVITIES                                                  (62,060)         (109,361)          (105,280)
                                                                   ---------------    --------------    ---------------

INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                                   48,410            (6,655)            53,364
Cash and cash equivalents at beginning of year                             177,086           183,741            130,377
                                                                   ---------------    --------------    ---------------

CASH AND CASH EQUIVALENTS
     AT END OF YEAR                                                $       225,496    $      177,086    $       183,741
                                                                   ===============    ==============    ===============
SUPPLEMENTAL INFORMATION
     Taxes paid                                                    $           100    $          100    $           100
     Interest paid                                                         193,049            76,661             73,958
</TABLE>

SUPPLEMENTAL INVESTING AND FINANCIAL ACTIVITIES:
During  1994,  the Company took out a mortgage of $27,490 to acquire land with a
cost of $52,590.  During 1996, the Company issued  2,000,000 shares of stock and
borrowed $1,950,000 to purchase land and buildings valued at $2,075,000.

See notes to the financial statements.


                                       21

<PAGE>


                               BUFFS-N-PUFFS, LTD.

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition:
Interest income is accrued as earned.  Gains or losses on the sale of securities
are recorded as of the trade date.

Depreciation:
Depreciation  on office  equipment  and furniture is provided over the estimated
useful life of five to ten years using an accelerated method,and depreciation on
the office and warehouse  building is being  provided over the estimated  useful
life of 30 to 31.5 years using the straight-line method.

Marketable Securities:
Marketable  securities,  as a group,  are carried at market value in  accordance
with FAS #115.  Prior to January 1, 1994,  the  securities  were  carried at the
lower of cost or market. At December 31, 1996, a decrease of $31,519 was made to
adjust to market  ($10,207  increase  was made for 1995 and $9,666  decrease was
made for 1994).

Income Taxes:
No federal  income  taxes  were due for the year ended  December  31,  1996.  At
December 31, 1996,  the Company had unused  general  business  credits of $7,844
which  expire in 1998  through  2000,  and  contributions  carryover of $32,524,
expiring in 1998  through  2001.  The Company has a capital  loss  carryover  of
$14,340 which expires in 1997. The Company also has a Federal net operating loss
carryover which, if not used, will expire as follows:

               Year Ended                Amount              Expiration Date
        ------------------------   ------------------    -------------------
        December 31, 1990          $          299,501    12/31/2005
        December 31, 1991                     123,837    12/31/2006
                                   ------------------

                                   $          423,338
                                   ==================

Inventory:
Inventory  consists of items for sale and use in the  operations of the carwash.
Inventory is recorded at the lower of cost or market,  on a first-in,  first-out
basis.

Cash and Cash Equivalents:
For  financial  statement  purposes,  the Company  considers  all highly  liquid
investments with an original  maturity of three months or less when purchased to
be cash equivalents.



                                       22

<PAGE>


                               BUFFS-N-PUFFS, LTD.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                December 31, 1996


NOTE B - LOANS PAYABLE

During  1990,  the former  President  of the Company and her husband  personally
borrowed $518,000 from three financial  institutions,  using their residence and
other personal assets as collateral.  $277,828  (including loan costs of $7,270)
of the money was used for the Company.  The Company has treated the  obligations
as being due to the  individuals  and is making the monthly loan payments to the
three institu tions. In early 1994, one obligation was paid in full, leaving two
loans.  Interest rates range from 8.75% to 11.25%. The following is a summary of
debt at December 31, 1996 and 1995: <TABLE> <CAPTION>

                                       Interest                  1996                                1995
                                        Rate %          Current         Long-term          Current         Long-term
                                      ----------   ---------------  ---------------    ---------------  ---------------
<S>                                   <C>          <C>              <C>                <C>              <C>
Bank Mortgage (4)                           8.26   $        40,879        1,732,579    $             0  $             0
G. Phillip Condie(1)                        7.50                 0          120,000             50,000          120,000
Bank line of credit (3)                     6.00           150,000                0                  0                0
Escrow Services                             9.50            12,757            4,599              5,087           16,612
Dan Pentelute                         8.75-11.25               163                0             14,149                0
                                                   ---------------  ---------------    ---------------  ---------------

                                                   $       203,799  $     1,857,178    $        69,236  $       136,612
                                                   ===============  ===============    ===============  ===============
</TABLE>


(1)  Monthly  payments  of  interest  only are $1,888  with the  balance  due by
     9/1/1998. This loan is secured by land with a cost of $310,185.
(2)  Monthly  payments  are  $1,155.  The loan is secured by land with a cost of
     $52,590.
(3)  Monthly payments of interest only with balance due 4/1/1997.
(4)  Monthly payments are $15,487 and the balance is due 3/25/2001.  The loan is
     secured by land and buildings with a cost of $2,075,000.

Scheduled principal reductions for the next five years are as follows:

            12/31/1997                                $     203,799
            12/31/1998                                      168,986
            12/31/1999                                       48,195
            12/31/2000                                       52,331
            12/31/2001                                    1,587,666
                                                      -------------

                                                      $   2,060,977
                                                      =============

NOTE C - DEFERRED TAX ASSET

In February, 1992, the Financial Accounting Standards Board adopted Statement of
Financial  Accounting  Standards No. 109,  Accounting  for Income  Taxes,  which
supersedes  substantially all existing  authoritative  literature for accounting
for income  taxes and  requires  deferred tax balances to be adjusted to reflect
the tax rates in effect  when those  amounts are  expected to become  payable or
refundable.  The Statement was applied in the Company's financial statements for
the calendar  year  commencing  January 1, 1993 by  recognizing  the  cumulative
effect of the change during 1993.

                                       23

<PAGE>


                               BUFFS-N-PUFFS, LTD.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                December 31, 1996


Components of income tax expense are as follows:
<TABLE>
<CAPTION>
                                                                                      Year ended
                                                                                     December 31,
                                                                             1996                     1995
                                                                     ------------------       -----------------
<S>         <C>                                                      <C>                      <C>
Current
            Federal..................................................$                0       $               0
            State....................................................             1,600                     100
                                                                     ------------------       -----------------

                                                                                  1,600                     100
                                                                     ------------------       -----------------
Deferred
            Federal..................................................            26,100                  60,100
            State....................................................             7,000                   1,900
                                                                     ------------------       -----------------

                                                                                 33,100                  62,000
                                                                     ------------------       -----------------
Income tax expense...................................................$           34,700       $          62,100
                                                                     ==================       =================
</TABLE>

Reconciliation  of income taxes  computed at the federal  statutory rate and the
income tax expense are as follows:
<TABLE>
<CAPTION>
                                                                                      Year ended
                                                                                     December 31,
                                                                            1996                     1995
                                                                     ------------------       -----------------
<S>                                                                  <C>                      <C>
Federal income taxes at statutory rate...............................$           58,000       $          60,700
State income taxes, net of federal benefit...........................             8,500                   3,000
Difference due to graduated federal rates............................           (31,800)                 (1,600)
                                                                     ------------------       -----------------
                                                                     $           34,700       $          62,100
                                                                     ==================       =================
</TABLE>

Deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
                                                                                      Year ended
                                                                                     December 31,
                                                                            1996                     1995
                                                                     ------------------       -----------------
<S>         <C>                                                      <C>                      <C>
            Net operating loss carryforward..........................$           68,000       $         113,400
            Additonal cost of marketable
              securities.............................................            25,400                  14,600
                                                                     ------------------       -----------------
            Net deferred tax assets..................................$           93,400       $         128,000
                                                                     ==================       =================
</TABLE>

NOTE D- START-UP COSTS

These are costs associated with development of the carwash.  The costs are being
amortized,  depreciated  or  expensed.  The costs  include  travel to view other
carwashes,  equipment,  inventory,  legal fees for patents and trademarks,  etc.
During 1995 and 1994, the Company spent $25,900 associated with property being

                                       24
<PAGE>
                               BUFFS-N-PUFFS, LTD.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                December 31, 1996


held for development into a second carwash operation. The cost will be amortized
when  the  carwash  begins  operations  or  added to the cost of the land if the
carwash is not developed.

NOTE E - RELATED PARTY TRANSACTIONS

During 1990,  Donna  Anderson and Daniel  Pentelute  arranged for three loans by
pledging their personal assets.  Some of the proceeds from these loans were made
available  to the  Company.  The Company has been making the  payments for these
loans and the  interest  and  principal  have been  amortized  according  to the
portion of the proceeds each party received.

On April 19,  1991,  the  Company  entered  into a five year lease  with  Daniel
Pentelute,  the major shareholder of the Company. Under the lease, Mr. Pentelute
received,  as rent, four per cent of the gross proceeds excluding gasoline sales
commencing on July 1, 1991, and continuing until April 1, 1992. At that time and
thereafter,  Mr.  Pentelute was to receive seven per cent of the gross  proceeds
from the carwash facility. On May 21, 1991, an addendum to the lease was entered
into  providing  for a five year option term at the end of the initial five year
term.  The terms  require a rent  payment  equal to 7% of monthly  gross  sales,
excluding  gasoline sales with a minimum rent of $5,000 per month.  In 1996, the
Company  exercised  its option to purchase the land and  buildings at a price of
$2,075,000. Also see Note F.

NOTE F - MONTANA LAND

During 1994, Daniel Pentelute,  the major shareholder of the Company,  purchased
21 acres of land in Montana and three (3) days later sold a one-half interest to
the  Company at his cost.  The other  one-half  interest is owned by Desert Land
Enterprises,  whose sole shareholder is Daniel Pentelute. It is anticipated that
the Company will be able to sell the land during 1997 at a substantial profit.

NOTE G - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents,  accounts payable, and accrued
expenses  approximate  fair  value due to the short  maturity  periods  of these
instruments.  The fair value of the  Company's  long-  term  debt,  based on the
present value of the debt, is $1,355,867.


                                       25

<PAGE>




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

      None.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     (a)  Identification of Officers and Directors

          (1)  Andrew A. Chudd, President and Director

          (2)  Alan Theis, Secretary/Treasurer and Director

          (3)  W. Sterling Mason, Jr., Director

          (4)  Craig Celantano, Director

          (5)  Richard Castellow, Director

     All directors  serve until the next annual meeting of stockholders or until
their successors have been duly qualified and elected.

     (c)  Identification of certain significant employees.

          Their business backgrounds are set forth in (e) hereinafter.

     (d)  Family relationships.

               The  Company's  majority  stockholder  is Daniel  Pentelute.  Mr.
          Pentelute is also the owner of the real  property on which the carwash
          is  located.  There are no  family  relationships  between  any of the
          directors or officers.

     (e)  Business experience.

          (1)  Background

     ANDREW A. CHUDD,  46,  President  and Director of the Company  since August
1992, has been involved in the carwash industry for approximately 5 1/2 years in
both management and carwash  equipment  sales. Mr. Chudd graduated from Hamilton
High School in California  in 1968.  He has attended LA Pierce  College and West
Los Angles College,  but has received no degree. Since October of 1985 Mr. Chudd
has  been  an  independent  business  consultant  to  various  corporations  and
businesses.  Mr. Chudd worked,  from 1974 until 1985,  primarily as an Insurance
Agent and has had limited experience in publicly-held companies.


     Mr. Chudd was  President and Director of Discovery  Systems,  Ltd., a blind
pool/blank  check  company until  February,  1988 at which time new officers and
directors were elected at a shareholders'  meeting.  Mr. Chudd was President and
Director, until the fall of 1989, of Celebrity Limousine, Ltd., a Utah Public

                                       26

<PAGE>




Company which operated a limousine  service in Northern Utah under a permit from
the Utah Public  Service  Commission.  Mr. Chudd was  President  and Director Of
Verazzana Ventures Ltd., a blind pool/blank check company until January 1, 1995,
at which  time new  officers  and  directors  were  elected  at a  shareholders'
meeting.

     ALAN THEIS,  37, in 1982 received a bachelor of sciences degree in Business
Economics and Public Policy from Indiana  University.  Since July 1991 Mr. Theis
has been the Secretary and  Treasurer of the Company.  In March 1990,  Mr. Theis
became the assistant  accountant  for the Company.  From June 1988 to March 1990
Mr. Theis worked as a construction  worker for Pentelute  Properties,  a company
controlled by Daniel Pentelute,  the Company's major  stockholder.  From 1985 to
1987 Mr. Theis was an employee for the Park City Ski Corporation.

     W. STERLING MASON, JR., 50, is a Director of the Company and has been since
January 1989,  except for a short time at the beginning of 1991.  Mr. Mason,  is
presently  involved in real estate  investments  and business  opportunities  in
Mexico.  Mr. Mason was engaged in the private practice of law in Salt Lake City,
Utah since 1975. His law practice  focused on the business and securities  areas
of law.  Mr.  Mason  graduated  from the  University  of Utah Law School in 1975
receiving a Juris Doctor  Degree.  In addition,  Mr. Mason received a Masters in
Business  Administration  from the University of Utah in 1974 and has a Bachelor
of Science Degree in Finance which he received in 1972.  Prior to that time, Mr.
Mason was a stockbroker  with various stock brokerage  firms,  both in Salt Lake
City, Utah and San Francisco, California.

     CRAIG CELANTANO,  39, has been involved in the carwash industry since 1967.
Mr.   Celantano  has  experience  in  carwash   design  and  layout,   equipment
installations  and  operations.  He has owned and operated both self service and
full service carwashes. Mr. Celantano currently owns and operates a self service
location  in  Tucson,  Arizona.  He has been a  distributor  for  Hanna  carwash
equipment for 15 years. Mr. Celantano is currently  Vice-President of Blue Coral
Systems,  a leading  manufacturer  of carwash  chemicals.  He oversees the North
American  sales  force,  as  well  as   responsibilities  in  equipment  design,
application, research and development.

     RICHARD CASTELLOW, 47, received a bachelor of arts degree in economics from
the  University  of Washington  in 1975.  Since 1990 Mr.  Castellow has been the
Northwest  distributor  for  Belanger,  Inc.,  a major  manufacturer  of carwash
equipment.  During  the last four years he has  consulted  and done work for the
majority  of the  largest  carwashes  in the  northwest.  From  1986 to 1989 Mr.
Castellow  worked as a carwash  consultant  and an installer  of  equipment  for
carwashes. In 1983 he became co-owner and operator of three Chevron gas stations
that included three exterior tunnel carwashes and seven self-serve carwash bays.
He operated the washes for three and a half years, at which time the partnership
was dissolved and the washes were sold.

          (2)  Directorships.

      None of the officers and directors serve on the Board of any other company
whose  securities  are  registered  pursuant  to  Section  12 or  subject to the
requirements  of Section 15 (d) of the  Exchange  Act or any company  registered
under the  Investment  Company Act of 1940,  with the exception of Mr. Chudd who
was a director and officer of Verazzana  Ventures,  Ltd.,  which files  periodic
reports under Section 15(d) of the exchange Act, until January, 1995.

     (f)  Involvement in certain legal proceedings.

     None of the officers or  directors  have any  disability  as defined in (1)
through (6) of this item.

                                       27

<PAGE>




     (g)  Promoters and control persons.

     Daniel  Pentelute,  although not an officer or director of the Company,  is
the Company's largest and majority shareholder and, in addition, has been (until
March 96) the Company's landlord. Mr. Pentelute,  age 47, attended Brigham Young
University  and the  University of Utah between the years of 1967 and 1970.  Mr.
Pentelute  was the President and a Director of the Company from 1980 to 1985. He
has been a consultant  to the Company and  developed the Buffs 'N' Puffs carwash
concept.  Since 1986 Mr. Pentelute has engaged in the development and management
of real  property  located  in the  states  of  Nevada,  Utah and  Montana.  Mr.
Pentelute  is also a  private  investor  in  various  business  enterprises  and
ventures.

ITEM 11. EXECUTIVE COMPENSATION

     None of the officers and directors of the Company received  remuneration in
excess of $60,000 (Sixty thousand dollars) for the year ended December 31, 1995.

                               REMUNERATION TABLE

                                                      1996          1997
         NAME              SERVING AS             REMUNERATION    PROPOSAL
---------------------   ---------------------    --------------  ------------
Andrew A. Chudd          President, Director
                          since August 1992      $      40,125   $     41,000

W. Sterling Mason Jr.         Director                       0*             0*
Craig Celantano               Director                       0              0

Richard Castellow             Director                       0              0

Alan Theis               Secretary, Director     $      36,451   $     37,000
                                                 -------------    -----------
                           TOTALS                $      76,576   $     78,000
                                                 =============   ============

     Aggregate remuneration for fiscal year 1996 totaled $76,576. At the present
time  no  remuneration  is paid  to any  director  for  attendance  at  director
meetings.  Expenses  incurred to attend any board meetings may be paid. Mr. Alan
Theis and Mr. Andrew A. Chudd are full-time employees of the Company. Mr. Mason,
Mr Castellow and Mr. Celantano are solely directors of the Company and, as such,
only devote as much time as needed in that position.

     *Mr.  Mason  will be  compensated  for any  legal  work  performed  for the
Company.  During 1996 Mr. Mason received $2,975 as legal fees and  reimbursement
for expenses for the Company.

                           Employee Stock Option Plan

      NONE.


                                       28

<PAGE>




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT

     (a)  (b) Security ownership of certain beneficial owners and management.

<TABLE>
<CAPTION>

                                           Name and Address                 Amount and Nature
                                             Of Beneficial                    of Beneficial               Percent of
      Title of Class                             Owner                          Ownership                   Class**
-----------------------------      -------------------------------   ------------------------------   -------------
<S>                                <C>                               <C>                              <C>
Common Stock                       Daniel F. Pentelute                                    5,293,525*              54.85%
                                   6500 South State St.
                                   Murray, Utah 84107

                                   Andrew A. Chudd                                          400,000                   4%

                                   Alan Theis                                                50,000                   0%
</TABLE>

     *    Includes 168,625 shares held by Penex,  Inc., a Nevada Corporation and
          44,000 shares held by Desert Land, Inc., a Nevada  Corporation both of
          which Mr. Pentelute is the sole shareholder.

     **   Based upon  8,354,900  shares  outstanding  without  reduction  of the
          treasury shares held by the Company.

     (c)  Changes in Control

     In 1991 Daniel F.  Pentelute  beneficially  owned  2,428,825  shares of the
Company's common stock or approximately 40% of the total outstanding  shares. In
addition,  Donna M. Anderson,  Mr. Pentelute's wife at the time, owned 1,143,625
shares or approximately  19% of the total  outstanding  shares. At that time Mr.
Pentelute and Ms. Anderson were involved in divorce proceedings.  As a result of
said divorce  proceedings,  Mr. Pentelute received almost all of the shares held
by Ms.  Anderson.  Therefore his percentage  ownership of the total  outstanding
shares of the Company increased in 1992 from approximately 40% to 54.85%.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a)  Transactions with management and others.

Related Party Transactions.

     In  April  1990  the  former  President  of the  Company  and  her  husband
personally  borrowed  $518,000 from three  financial  institutions,  using their
residence and other personal  assets as  collateral.  $277,328  (including  loan
costs of $7,270) of the money was used for the Company.  The Company has treated
the  obligation as being due to these  individuals  and has been making  monthly
loan payments to the three  institutions.  In early 1994 one obligation was paid
in full,  leaving two loans with interest rates ranging from 8.75% to 10.5%. The
Company is not an obligor or a guarantor on any of the three obligations.  As of
December  1, 1993,  the  company is also paying Mr.  Pentelute  directly  $3,018
monthly. The entire $3,018 applies to principal due. As of December 31, 1996 the
Company's total share for all these loans was approximately $0.


                                       29

<PAGE>




The  Following  table  shows a list of the loans for which the  Company has made
payments.

                          Original
       Lender             Principal      Interest         Term
--------------------     ------------   -----------  -----------------
 Zions Bank*             $    250,000   Prime + 2%   5yrs with balloon.
     *Paid off as
     of Jan 1, 1994

 Valley Mortgage         $    234,000   11.05%             30yrs

 Great Western           $     34,000   Prime + 2.5%       15yrs

 Other Information.

     For the year ended  December 31, 1996,  the Company paid rent of $15,452 to
Pentelute  Properties,  a company  controlled by Daniel Pentelute,  the majority
shareholder  of the  Company  who owns  approximately  54.85% of the  issued and
outstanding  stock of the Company.  The rent was paid  pursuant to a lease which
had a five year term with a five year  renewal  option and an option to purchase
the property.The property was purchased in March,1996.

     (b)  Certain Business Relationships.

     Business  entities in which directors of the Company had an interest during
the last fiscal year have not had any  transactions  with the Company.  However,
Director W. Sterling Mason, Jr. is an Attorney at Law. Mr. Mason was paid $2,975
in 1996.


     (c)  Indebtedness of Management.

               NONE.

     (d)  Transaction with promoters.

     The Company had a five (5) year lease on the property and buildings for its
carwash. The Company leased the land and buildings from Pentelute Properties,  a
d/b/a of Daniel F. Pentelute,  a major shareholder of the Company. Mr. Pentelute
owns  approximately  54.85% of the issued and outstanding shares of the Company.
Monthly  payments  commenced on June 1, 1991,  and were based on a percentage of
monthly gross sales  excluding  fuel sales.  Initially  rental was four per cent
(4%) of the gross  sales  excluding  fuel sales.  On April 1, 1992,  the monthly
percentage  increased  to seven per cent (7%).  The Company also  maintains  its
corporate headquarters on the premises. Under the lease the Company provides two
offices to the Lessor. In addition, under the terms of the lease the Company had
an option to renew  the  lease for an  additional  five year term at a rental of
seven per cent (7%) of gross sales  excluding  fuel sales with a minimum rent of
$5,000  monthly.  Also,  the  Company  had an option to  purchase  the  property
commencing at the end of the initial five year term which option was exercisable
on the anniversary date of the lease each year in the five year option term. The
Company  exercised  its  option to  purchase  the  property  and  buildings  for
$2,075,000 in March,  1996.  For the year ended  December 31, 1996,  the Company
paid rent of $15,452 to Pentelute Properties.



                                       30

<PAGE>




PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

                                                                                                           Page
<S>                                                                                                        <C>
(a) 1.  Financial Statements

The following Financial Statements of BUFFS-N-PUFFS, LTD. are
included in PART II, ITEM 8:

See page 16 for table of contents

(a) 2.  Financial Statement Schedules

The following financial statement schedules of BUFF-N-PUFFS, LTD. are included
in PART IV, ITEM 14(d) (3):

Report of Independent Certified Public Accountants on Supplementary
  Financial Information.................................................................................... 32

Schedule I  -  Marketable Securities....................................................................... 33

Schedule V  -  Property, Plant and Equipment............................................................... 34

Schedule VI  -  Accumulated Depreciation and Amortization of Property,
  Plant and Equipment...................................................................................... 35



All  other  schedules  are  omitted  because  they  are not  applicable,  or not
required,  or because the required  information is included in the  consolidated
financial statements or notes thereto.

                                       31

<PAGE>


                                 Smith & Company
                          Certified Public Accountants
10 West 100 South, #700                                Telephone:  801-575-8297
Salt Lake City, UT 84101                               Facsimile:  801-575-8306
--------------------------------------------------------------------------------




Board of Directors and Shareholders
Buffs-N-Puffs, Ltd.
Salt Lake City, Utah


Our audit of the basic financial  statements  presented in the preceding section
of  this  report  was  made  primarily  to  form an  opinion  on such  financial
statements  taken as a  whole.  The  additional  information,  contained  in the
following  pages, is not considered  essential for the fair  presentation of the
financial position of Buffs-N-Puffs, Ltd., the results of its operations or cash
flows in conformity with generally accepted accounting principles. The following
information  consisting of Schedule I, Schedule V and Schedule VI is included to
comply with reporting  requirements  of the Securities and Exchange  Commission.
Such data was  subjected  to the audit  procedures  applied  in the audit of the
basic  financial  statements  and,  in our  opinion,  are  fairly  stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.



                                                            /s/ Smith & Company
                                                   CERTIFIED PUBLIC ACCOUNTANTS




Salt Lake City, Utah
March 11, 1997

                                       32

<PAGE>



                       BUFFS-N-PUFFS, LTD. AND SUBSIDIARY

                       SCHEDULE I - MARKETABLE SECURITIES

</TABLE>
<TABLE>
<CAPTION>

                                                                                                               Market
                                                                     Number              Original               Value
Name of Issuer                                                      of Shares              Cost               12/31/96
---------------                                                ------------------   -----------------    -----------------
<S>                                                            <C>                  <C>                  <C>
Novell Inc.                                                                   100   $           1,522    $             946
KMS Industries                                                              2,750              33,438                    0
Cirtech                                                                    50,000               1,000                    0
Agri-world                                                                  4,000                  25                    0
Fast Eddies Racing Stables                                                  5,000               5,000                    0
Dimedix                                                                     1,334                 200                    0
NVF Company                                                                10,000               4,202                    0
Berkey, Inc.                                                                1,000               5,930                    0
Interpac Alliance                                                           5,000                  50                    0
Fredericks of Hollywood A                                                   1,000               5,869                4,125
Fredericks of Hollywood B                                                     500               2,404                2,063
Alliance Gaming Common                                                         38                 163                  166
Alliance Gaming                                                                23               1,621                2,182
Shaw Industries Inc.                                                       14,000             170,422              166,250
Station Casinos                                                            15,000             174,167              151,875
Data Broadcasting                                                             500               4,175                3,500
Engineering Asimtn                                                            500              12,441               12,125
                                                                                    -----------------    -----------------

                                                     Totals*                        $         422,629    $         343,232
                                                                                    =================    =================

                                                                                                               Market
                                                                     Number              Original               Value
Name of Issuer                                                      of Shares              Cost               12/31/95
---------------                                                ------------------   -----------------    -----------------

Interpac Alliance                                                           5,000   $              50    $               0
KMS Industries                                                              2,750              33,438                  343
Cirtech                                                                    50,000               1,000                    0
Agri-world                                                                  4,000                  25                    0
Fast Eddies Racing Stables                                                  5,000               5,000                    0
Dimedix                                                                     1,334                 200                    0
NVF Company                                                                10,000               4,202                    0
Alfin Fragrances                                                            5,000               8,809                6,374
Berkey, Inc.                                                                1,000               5,930                    0
Bally Gaming International                                                    500               5,924                4,063
Fredericks of Hollywood A                                                   1,000               5,869                4,250
Fredericks of Hollywood B                                                     500               2,404                1,937
Westinghouse Electric                                                         200               2,596                3,275
Maytag Corp.                                                                4,600              76,627               93,150
Minimed Inc.                                                                5,000              58,052               62,500
International Game Technology                                               4,000              56,518               43,000
Novell Inc.                                                                   100               1,522                1,425
                                                                                    -----------------    -----------------

                                                     Totals*                        $         268,166    $         220,317
                                                                                    =================    =================
</TABLE>

*Marketable securities are carried on the balance sheets as current assets.

                                       33

<PAGE>



                       BUFFS-N-PUFFS, LTD. AND SUBSIDIARY

                   SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>


                                               Balance at                                                      Balance
                                                Beginning           Additions                                  at End
                                                of Period            At Cost            Retirement            of Period
                                            -----------------  ------------------   -------------------  -----------------
<S>         <C>                             <C>                <C>                  <C>                  <C>
Year        ended December 31, 1994:
               Land & buildings             $         310,185  $                0   $                 0  $         310,185
               Leasehold
                  improvements                        194,044                   0                     0            194,044
               Fixtures &
                  equipment                           840,006              16,317                 7,650            848,673
                                            -----------------  ------------------   -------------------  -----------------

                                            $       1,344,235  $           16,317   $             7,650  $       1,352,902
                                            =================  ==================   ===================  =================

Year        ended December 31, 1995:
               Land & buildings             $         310,185  $                0   $                 0  $         310,185
               Leasehold
                  improvements                        194,044                 577                     0            194,621
               Fixtures &
                  equipment                           848,673              25,547                18,268            855,952
                                            -----------------  ------------------   -------------------  -----------------

                                            $       1,352,902  $           26,124   $            18,268  $       1,360,758
                                            =================  ==================   ===================  =================

Year        ended December 31, 1996:
               Land & buildings             $         310,185  $        2,075,000   $                 0  $       2,385,185
               Leasehold
                  improvements                        194,621               3,566                     0            198,187
               Fixtures &
                  equipment                           855,952              29,040                 7,590            877,402
                                            -----------------  ------------------   -------------------  -----------------

                                            $       1,360,758  $        2,107,606   $             7,590  $       3,460,774
                                            =================  ==================   ===================  =================
</TABLE>



                                       34

<PAGE>



                       BUFFS-N-PUFFS, LTD. AND SUBSIDIARY

                    SCHEDULE VI - ACCUMULATED DEPRECIATION OF
                          PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>


                                                                    Additions
                                               Balance at      Charged to                                      Balance
                                                Beginning           Costs and                                  at End
                                                of Period           Expenses            Retirement            of Period
                                            -----------------  ------------------   -------------------  -----------------
<S>                                         <C>                <C>                  <C>                  <C>
Year        ended December 31, 1994:
               Land & buildings             $               0  $                0   $                 0  $               0
               Leasehold
                  improvements                         56,433              15,144                     0             71,577
               Fixtures &
                  equipment                           366,375              88,576                 7,650            447,301
                                            -----------------  ------------------   -------------------  -----------------
                                            $         422,808  $          103,720   $             7,650  $         518,878
                                            =================  ==================   ===================  =================

Year        ended December 31, 1995:
               Land & buildings             $               0  $                0   $                 0  $               0
               Leasehold
                  improvements                         71,577              15,203                     0             86,780
               Fixtures &
                  equipment                           447,301              84,153                 9,291            522,163
                                            -----------------  ------------------   -------------------  -----------------

                                            $         518,878  $           99,356   $             9,291  $         608,943
                                            =================  ==================   ===================  =================

Year        ended December 31, 1996:
               Land & buildings             $               0  $           27,176   $                 0  $          27,176
               Leasehold
                  improvements                         86,780              15,758                     0            102,538
               Fixtures &
                  equipment                           522,163              84,804                 5,313            601,654
                                            -----------------  ------------------   -------------------  -----------------

                                            $         608,943  $          127,738   $             5,313  $         731,368
                                            =================  ==================   ===================  =================



Depreciation for year                       $         127,738
Amortization for year                                   5,770
                                            -----------------

                                            $         133,508
                                            =================
</TABLE>




                                       35

<PAGE>


                                   SIGNATURES


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

Dated this ____ day of March, 1996.


                                   BUFFS-N-PUFFS, LTD.



                                   By         /s/ ANDREW A. CHUDD
                                              Andrew A. Chudd
                           President, Chief Executive
                                              Officer, and Director


     Pursuant to the  requirements of the Securities  Exchange 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.


         Signatures                         Title                  Date

President, Chief Executive
         /s/ ANDREW A. CHUDD        Officer and Director
----------------------------                                ----------
         Andrew A. Chudd

Secretary/Treasurer,
Chief Financial
         /s/ ALAN R. THEIS          Officer and Director
----------------------------                                ----------
         Alan R. Theis



/s/ W. STERLING MASON, JR.           Director
----------------------------                                ----------
         W. Sterling Mason, Jr.




                                       36