SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB/A

 |X|   Annual report under Section 13 or 15(d) of the Securities Exchange Act of
       1934 For the fiscal year ended June 30, 1997

 |_|   Transition report under Section 13 or 15(d) of the Securities Exchange 
       Act of 1934

For the transition period from              to

Commission file number 000-22329

                                POWERTRADER, INC.
                 (Name of Small Business Issuer in Its Charter)

         Delaware                                             98-0163116
(State or Other Jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                           Identification No.)

101 South Hanley, St. Louis, MO                                  63105
(Address of Principal Executive Offices)                       (Zip Code)

                                 (604) 685-1529
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:
                                                     Name of Each Exchange
Title of Each Class                                   on Which Registered
 
None                                                           -

Securities registered under Section 12(g) of the Act:

                      Common Stock $.01 par value per share

                       Warrants expiring in the year 2002.

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

Yes   X    No

|_| Check if there is no disclosure of delinquent filers in response to Item 405
of  Regulation  S-B is not  contained in this form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

The issuer's revenues for its most recent fiscal year. $44,373


At September 26, 1997,  the aggregate  market value of the voting and non-voting
common equity held by  non-affiliates  of PowerTrader,  Inc. (the "Company") was
approximately  $18,196,260,  based on the last issue  price of the common  stock
reported by the Company on July 21st, 1997.

At September 19th, 1997, the Company had outstanding  7,883,115 shares of Common
Stock.

Transitional Small Business Disclosure Format:

Yes        No   X


<PAGE>
                                TABLE OF CONTENTS

                                     PART II

                                                                         Page


  ITEM 6.         Management's Discussion and Analysis

  ITEM 7.         Financial Statements


                                    PART III

  ITEM 13.        Exhibits and Reports on Form 8-K




                                        2

<PAGE>
                                     PART I

ITEM 6.  Management's Discussion and Analysis

         The  following  should  be  read  in  conjunction  with  the  Financial
Statements and Notes.  When used in this  Management's  Discussion and Analysis,
the words  "believes,"  "anticipates,"  "expects"  and similar  expressions  are
intended to identify forward-looking  statements. Such statements are subject to
certain  risks and  uncertainties  which  could cause  actual  results to differ
materially  from those  projected.  Readers  are  cautioned  not to place  undue
reliance on forward-looking statements,  which speak only as of the date hereof.
The Company  undertakes  no  obligation  to publicly  release the results of any
revisions  to these  forward-looking  statements  which  may be made to  reflect
events or  circumstances  after the date hereof or to reflect the  occurrence of
unanticipated events.

Overview

         PowerTrader,  Inc.  ("PowerTrader"  or the "Company") was  incorporated
under the laws of the State of  Delaware  on August 22,  1996 for the purpose of
acquiring the business of  PowerTrader  Software  Inc. in a merger,  exchange of
shares or other business combination. Its sole director, officer and shareholder
was Mr. Withrow. In January,  1997,  PowerTrader  consummated a transaction with
the  shareholders  of  PowerTrader  Software  Inc.  ("PSI")  pursuant  to  which
PowerTrader  became the holder of all of the  issued and  outstanding  shares of
PSI's capital stock, issued an aggregate of 4,174,597 to the former shareholders
of PSI (including  1,467,696 shares to a corporation  controlled by Mr. Withrow)
and assumed liabilities to issue an aggregate of 2,289,517 shares and options to
purchase an additional  149,999  shares of common stock to certain  creditors of
PSI.  Prior to such  transactions,  the Company had not engaged in any  business
activity,  other  than  with  respect  to  organizational  matters,  and  had no
predecessors.

         Through  its  wholly  owned  subsidiary,   PSI,  the  Company  designs,
develops,  markets and supports  informational  and analytical  desktop decision
support and risk management systems for both securities professionals (including
securities  brokerage  firms,  investment  advisors  and  trust  companies)  and
individual  investors.  Substantially  all of the Company's  sales have resulted
from the  distribution of Beta Products and product  development work continues;
accordingly, the Company remains a development stage company.

         Because of the  Company's  limited  operating  history,  the  Company's
results of operations to date are not necessarily indicative of future operating
results.  Moreover,  the Company believes that its  developmental  operations to
date render traditional accounting presentations meaningless.

                                        3
<PAGE>
Results of Operations

Sales.

         Sales  decreased 12.9% during the year ended 30 June 1997 from the same
period  in  1996.   Sales  during  each  of  the  periods   compared  have  been
significantly  impacted  by the limited  financial  resources  available  to the
Company for  allocation  to  advertising  and beta product  marketing.  Sales in
fiscal 1997  decreased  primarily due to  management's  decision to focus on new
market opportunities. Consequently, the marketing efforts were de-emphasized and
greater  importance was placed into  developing  products to capitalize on these
new opportunities resulting from the new network paradigm.

Cost of Sales.

         Cost of sales decreased by $12,655 (or 30.9%) from $40,910 (or 80.3% of
sales) in fiscal  1996 to  $28,255  (or  63.7% of  sales)  in fiscal  1997.  The
decrease in cost of sales from fiscal  1996 to fiscal  1997  resulted  primarily
from  improved  economies of scale and a continued  restriction  on resources to
market the company's products.

Selling, General and Administrative Costs.

         Selling, General and Administrative Costs ("SGA") increased by $248,713
(or 61.4%) from $405,099 (or 794.8% of sales) in the year ending 30 June 1996 to
$653,812  (or  1,473.4%  of sales) in the same period  ended 30 June 1997.  Such
expenses were incurred to develop the necessary organizational infrastructure to
support the  implementation  of the Company's  business plan, and as a result of
expenses  incurred in relation to the Company's  proposed public  offering.  SGA
includes  salaries and benefits for  corporate  management,  administrative  and
sales personnel, as well as rent expense for PSI's offices. Because the level of
SGA  which  is  required  to  maintain  adequate  corporate   infrastructure  is
relatively  fixed in nature,  management  anticipates  that such  expenses  as a
percentage of sales will decline as total sales levels increase.


                                        4

<PAGE>
Development Costs.

         Development  Costs increased by $61,370 (or 30%) from $203,933 (or 400%
of sales) in the fiscal  period  ending 30 June 1996 to  $265,303  (or 597.9% of
sales) for the same period ended 30 June 1997.  Such  increases  in  development
expense were primarily  attributable to costs incurred to support  modifications
and error corrections  discovered during beta product testing of the PowerTrader
suite  of  products  and the  development  of a new  series  of  Internet  based
applications.

Net Loss

         As a result of the  foregoing,  the Company  experienced  a net loss of
$902,997 (or 2,035.% of sales) in fiscal 1997 compared to a net loss of $598,971
(or 1,175.1% of sales) in fiscal 1996.  Such losses may be offset in part by the
use of net loss tax  carry  forwards  in future  years.  Because  of  additional
research and development  expenses and the additional  personnel  expenses which
the Company  believes will be necessary to establish its  competitive and market
position  and  build  the  organizational  infrastructure  required  to  support
implementation  of the Company's growth  strategy,  the Company expects to incur
further losses in the future.  Such losses will likely have a negative impact on
the  Company's  results of  operation,  particularly  if sales of the  Company's
current products fall below expectation.

Liquidity and Capital Resources

         The  principal  source  of funds to the  Company  and PSI  since  their
respective  formation has been derived from the net proceeds of certain  private
offerings of securities  which,  together with the proceeds of sales,  have been
used to fund continued  research and  development  expenses as well as necessary
SGA costs.  Although the Company  believes that the proceeds of these  offerings
and, to a lesser extent,  cash generated from operations,  will be sufficient to
fund its  operations  and  planned  capital  expenditures  for at least the next
twelve  months,  there can be no  assurance  that the  Company  will not require
additional financing during that time or thereafter. The Company has no plans to
secure any such  additional  financing.  The  inability of the Company to obtain
additional financing,  if necessary,  on acceptable terms, could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.   If  additional  funds  were  raised  by  the  issuance  of  equity
securities, further dilution to existing stockholders could result.

         The  Company's  limited  capital  resources  have caused the  Company's
independent accountants to issue a report which indicates that substantial doubt
exists as to the Company's  ability to continue as a going concern.  The Company
believes that the potential  success in securing any  development  contracts for
work  currently in progress and tenders  under  negotiation  will  significantly
improve the capital  resources of the Company and thereby address certain of the
going concern  reservations.  Accordingly,  the Company considers the conditions
which resulted in questions  about the Company's  ability to continue as a going
concern will be substantially alleviated through this process.

                                       5
<PAGE>
Income Taxes

         The Company did not have any  material  current or deferred  income tax
liabilities  at June 30, 1997 or 1996.  However,  the Company did have available
tax benefits of loss  carry-forwards  for 1997 totaling  $1,778,400  including a
total in 1996 of  $1,012,000.  The Company did not record  these tax benefits in
the  Financial  Statements  because the Company  believes that it is more likely
than not that the tax  benefits  would  not be  realized.  Accordingly,  the tax
benefits  have been  reduced by a  valuation  allowance  of $899,300 in 1997 and
$455,400 in 1996.


ITEM 7.  Financial Statements

The  Company's  financial  statements  together  with the notes  thereto and the
reports of the  Company's  independent  auditors,  thereon,  are  included  as a
separate section of this report which begins on page F-1.


ITEM 13.          Exhibits and Reports on Form 8-K.

         (a)      Exhibits.

                  See Exhibit Index beginning on page E-1 of the original filing
                  of this Report.

         (b)      Reports on Form 8-K.

                  A report on Form 8-K was filed with the  Commission  dated May
                  2, 1997,  disclosing the  acquisition of certain  intellectual
                  properties  and, as part of the  acquisition,  the issuance of
                  125,000 shares of Common Stock in reliance on Regulation S.

                  A report on Form 8-K was filed with the  Commission  dated May
                  21,  1997,  disclosing  the  issuance of 100,000  units,  each
                  consisting  of one share of Common  Stock and one  warrant  to
                  purchase an additional  share of Common Stock,  in reliance on
                  Regulation S.

                                        6

<PAGE>
                                Auditors' Report


To The Shareholders
PowerTrader, Inc.


We have  audited  the  Consolidated  Balance  Sheets  of  PowerTrader,  Inc.  (A
Development  Stage  Company) as at June 30,  1997 and 1996 and the  Consolidated
Statements of Loss, Cash Flow, and Changes in Shareholders' Equity (Deficit) for
each of the years in the three year  period  ended June 30,  1997.  We have also
audited  the  Consolidated   Statements  of  Loss,  Cash  Flow  and  Changes  in
Shareholders'  Equity (Deficit) for the period from December 29, 1988 (inception
of PowerTrader  Software Inc.) to June 30, 1997  (cumulative).  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
in the United States.  Those standards require that we plan and perform an 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,  these  consolidated  financial  statements  referred  to above
present fairly, in all material respects, the financial position of PowerTrader,
Inc. as at June 30, 1997 and 1996 and the results of its operations and its cash
flows for each of the years in the three year period ended June 30, 1997 and the
period from  December  29, 1988  (inception)  to June 30, 1997  (cumulative)  in
accordance  with the  generally  accepted  accounting  principles  in the United
States.

The  accompanying   financial   statements  have  been  prepared  assuming  that
PowerTrader,  Inc. will continue as a going  concern.  As described in Note 1 to
the financial statements,  PowerTrader,  Inc. has incurred recurring losses, has
an  accumulated  deficit  and  a  working  capital   deficiency,   which  raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described  in Note 1. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.



                                                 /s/ BDO Dunwoody
                                                 CHARTERED ACCOUNTANTS


Vancouver, British Columbia
August 15, 1997



                                       F-1


                                                    

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                           Consolidated Balance Sheets
                            (Expressed in US Dollars)
<TABLE>
<CAPTION>


June 30                                                                                1997                1996
-----------------------------------------------------------------------------------------------------------------

<S>                                                                            <C>                <C>
Assets

Current
Cash                                                                           $     99,986       $     127,077
Deposits and prepaids                                                                12,883               2,392
                                                                         ----------------------------------------
                                                                                    112,869             129,469

Fixed assets, note 3                                                                754,741              57,249
                                                                         ----------------------------------------
                                                                                $   867,610       $     186,718
-----------------------------------------------------------------------------------------------------------------

Liabilities

Current
Accounts payable and accrued liabilities, note 3                                $   362,520       $     168,655
Notes payable, note 4                                                                74,248                   -
Current portion of capital lease obligations, note 5                                  5,894               5,810
                                                                         ----------------------------------------
                                                                                    442,662             174,465

Capital lease obligations, note 5                                                     2,555               8,166
Share subscriptions, note 6                                                               -             408,089
                                                                         ----------------------------------------
                                                                                    445,217             590,720
                                                                         ----------------------------------------

Shareholders' Equity (Deficit)
Share capital, note 7
   Authorized
   The company is authorized to issue 23,000,000
   common shares and 2,000,000 preferred shares 
   with a $.01 par value per share

Issued and outstanding common shares                                                986,030             646,331
   7,633,115 Common shares (1996 - 4,174,597)
Capital surplus                                                                   1,389,693                  -
Accumulated deficit during development stage                                    (1,953,330)         (1,050,333)
                                                                         ----------------------------------------
                                                                                    422,393           (404,002)
                                                                         ----------------------------------------
                                                                              $     867,610      $      186,718
</TABLE>


The accompanying  summary of significant  accounting  policies and notes form an
integral part of these financial statements.



                                      F-2
<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                         Consolidated Statements of Loss
                            (Expressed in US Dollars)


<TABLE>
<CAPTION>
                                                                                                           December 29,
                                                                                                                   1988
                                                Year Ended        Year Ended        Year Ended           (inception) to
                                                  June 30,          June 30,          June 30,            June 30, 1997
                                                      1997              1996              1995             (cumulative)
                                                      ----              ----              ----             ------------

<S>                                                <C>               <C>               <C>              <C>            
Revenue                                            $44,373           $50,971           $44,026          $       139,370
Cost of Sales                                       28,255            40,910            17,411                   86,576
                                                    16,118            10,061            26,615                   52,794

Selling, general and                               653 812           405,099           369,910                1,428,821
   Administrative costs

Development costs                                  265,303           203,933           108,067                  577,303
Net loss                                      $  (902,997)      $  (598,971)       $ (451,362)            $ (1,953,330)
-------------------------------------------------------------------------------------------------------------------------

Loss per share                                   $  (0.16)         $  (0.14)         $  (0.11)
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying  summary of significant  accounting  policies and notes form an
integral part of these financial statements.




                                      F-3
<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flow
                            (Expressed in US Dollars)
<TABLE>
<CAPTION>
                                                                                                           December 29,
                                                                                                                   1988
                                                Year Ended        Year Ended        Year Ended           (inception) to
                                                  June 30,          June 30,          June 30,            June 30, 1997
                                                      1997              1996              1995             (cumulative)
-------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>               <C>               <C>                    <C>

Cash provided (used) by:

Operating activities
Operations
Net loss                                        $ (902,997)      $  (598,971)      $  (451,362)           $  (1,953,330)
Item not involving cash
     Amortization                                   42,210            26,589            15,257                   84,056
Increase (decrease) from
     changes in:
Deposits and prepaids                             (10,491)             (620)           (1,772)                 (12,883)
Accounts payable and
     Accrued liabilities                           193,865            71,997            96,657                  362,519
                                         --------------------------------------------------------------------------------
                                                 (677,413)         (501,005)         (341,220)              (1,519,638)
                                         --------------------------------------------------------------------------------

Financing activities
Notes payable financing
     received                                       74,248                -                 -                   74,248
Lease financing received                                 -           11,074             7,716                   18,790
Repayment of obligations
     under capital leases                          (5,527)           (3,732)           (1,081)                 (10,340)
Shareholders' advances                                   -           253,917           392,305                  646,222
Issuance of share capital
     and subscriptions                             632,049           408,089                 -                1,040,247
                                         --------------------------------------------------------------------------------
                                                   700,770           669,348           398,940                1,769,167
                                         --------------------------------------------------------------------------------

Investing activity
   Net assets acquired on Reverse
    Acquisition                                    314,254                 -                 -                  314,254
   Investment in fixed assets                    (364,702)          (43,690)          (55,405)                (463,797)
                                         --------------------------------------------------------------------------------
                                                  (50,448)          (43,690)          (55,405)                (149,543)
                                         --------------------------------------------------------------------------------
Increase (decrease) in cash                       (27,091)           124,653             2,315                   99,986

Cash, beginning of period                          127,077             2,424               109                        -
                                         --------------------------------------------------------------------------------
Cash, end of period                              $  99,986          $127,077         $   2,424                $  99,986
-------------------------------------------------------------------------------------------------------------------------
Non-cash transactions
   Shares issued for debt                        $       -          $646,222         $       -                $ 646,222
Share issued for software  
   acquisition                                    $375,000         $      -          $       -                $ 375,000
Shares issued on Reverse
   Acquisition                                    $314,254         $      -          $       -                $ 314,254 
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying  summary of significant  accounting  policies and notes form an
integral part of these financial statements.



                                      F-4

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
      Consolidated Statements of Changes in Shareholders' Equity (Deficit)
                            (Expressed in US Dollars)

<TABLE>
<CAPTION>
                                                                                                                        Deficit
                                                                                                                        Accumulated
                                 Class "A"                Class "B"                                                     During the
                                   Common                  Common                 Common              Capital           Development
                              Shares    Amount       Shares      Amount      Shares      Amount       Surplus           Stage
------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C> <C>               <C> <C>                <C>     <C>         <C>              <C>          
Shares issued for cash   
 December 29, 1988                -   $      -           -  $       -          100     $     70    $            -   $           -

Shares redeemed and
 cancelled
 September 12, 1989               -           -          -            -      (100)          (70)                 -                -
Shares issued 
September 12, 1989              100          72        100           73            -            -                -                -
Shares redeemed and
 cancelled
 July 12, 1990                   35        (24)         16         (12)            -            -                -                -
                         -----------------------------------------------------------------------------------------------------------
Balance at
 July 1,1994                     65          48         84           61            -            -                -                -
Net loss                          -           -          -            -            -            -                -        (451,362)
                         -----------------------------------------------------------------------------------------------------------
Balance at
 July 30, 1995                   65          48         84           61            -            -                -        (451,362)
Shares issued             4,174,448     646,222          -            -            -            -                -                -
 for debt
Net loss                          -           -          -            -            -            -                -        (598,971)
                         -----------------------------------------------------------------------------------------------------------
Balance at
 June 30, 1996            4,174,513     646,270         84           51            -       646,331                -     (1,050,333)
Reverse acquisition
 January 1, 1997                  -           -          -            -    5,088,598       314,254                -               -
Shares issued for
 Software share
 subscriptions, note 6            -           -          -            -    2,319,517        23,195          691,943               -

 Computer software
 acquired, note 3                             -          -            -      125,000         1,250          373,750               -

 Cash                             -           -          -            -      100,000         1,000          324,000               -
Net loss                          -           -          -            -            -            -                -        (902,997)
                         -----------------------------------------------------------------------------------------------------------
Balance at
 June 30, 1997                    -           -          -            -    7,633,115      $986,030       $1,389,693    $(1,953,330)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying  summary of significant  accounting  policies and notes form an
integral part of these financial statements.


                                       F-5

                                                         

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                   Summary of Significant Accounting Policies

                                 June 30, 1997


Consolidation            These  financial  statements  include  the  accounts of
                         PowerTrader,   Inc.  and  its  wholly-owned  subsidiary
                         PowerTrader  Software Inc.  ("Software")  (collectively
                         "the  Company")   which  was  acquired  in  a  "Reverse
                         Acquisition".  Software (and not PowerTrader,  Inc.) is
                         treated as the "acquiring" or  "continuing"  entity for
                         financial  accounting  purposes,  notwithstanding  that
                         PowerTrader,  Inc. is the  continuing  entity for legal
                         purposes.  Accordingly,  the consolidated statements of
                         loss  are  a  continuation   of  Software's   financial
                         statements, and therefore reflect (i) the operations of
                         Software  from  inception  (December 29, 1988) and (ii)
                         the  operations of  PowerTrader,  Inc. after January 2,
                         1997, the date of acquisition.

                         All significant intercompany  transactions and balances
                         are eliminated on consolidation.

Basis of 
Presentation             The   consolidated   financial   statements  have  been
                         prepared  in   accordance   with   generally   accepted
                         accounting principles in the United States.

Foreign                            
Currency Translation     Foreign  monetary assets and liabilities are translated
                         into US dollars at the rates of  exchange  in effect at
                         the balance sheet dates. Monetary assets are translated
                         at  historical  rates.  Revenue and  expense  items are
                         translated at average exchange rates prevailing  during
                         the period, except for amortization which is translated
                         at the same rate as the assets to which it applies.

                         Foreign currency  translation  adjustments are included
                         in income.

                         Exchange  ratios between the Canadian and US dollar for
                         periods  presented in these  financial  statements with
                         bracketed  figures  reflecting the average rate for the
                         period are:


                         June 30, 1997     US$1.00       $1.3805 (1.3663)
                         June 30, 1996     US$1.00       $1.3836 (1.3600)
                         June 30, 1995     US$1.00       $1.3725 (1.3793)


Fixed Assets             Fixed  assets are  recorded  at cost.  Amortization  is
                         provided at the following annual rates:

                         Computer equipment              30%  declining balance
                         Computer software              100%  declining balance
                         Furniture and equipment         20%  declining balance


                         One half the normal  amortization  is  recorded  in the
                         period in which the assets become available for use.


                                      F-6                            

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
             Summary of Significant Accounting Policies - Continued


                                 June 30, 1997




Revenue Recognition      The Company  records  revenue from the sale of computer
                         software upon shipment of products.

Research and             Research and  development  costs are charged to expense
Development Costs        as incurred.


Capitalized Software     Certain  software  development and production costs are
Costs                    capitalized  upon a  product's  reaching  technological
                         feasibility.  The  capitalization  of these  costs will
                         stop  when a product  is ready for sale.  Technological
                         feasibility  is  considered  to be  attained  when  the
                         company has completed all planning,  designing,  coding
                         and testing  activities that are necessary to establish
                         that the  product  can be  produced  to meet its design
                         specifications   including   functions,   features  and
                         technical  performance  requirements.  The  Company has
                         attained technological feasibility on certain products,
                         however,  it has not incurred any  capitalizable  costs
                         with respect to these products.

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

Fair Value of Financial  The  respective  carrying  value of  certain on balance
Instruments              sheet  financial  instruments  approximated  their fair
                         values.  These  financial   instruments  include  cash,
                         accounts  receivable,   accounts  payable  and  accrued
                         liabilities,    notes   payable   and   capital   lease
                         obligations.  Fair values were  assumed to  approximate
                         carrying values for these financial  instruments  since
                         they are short term in nature,  their carrying  amounts
                         approximate  fair  values  or they  are  receivable  or
                         payable on demand.

Loss Per Share           Loss per  share  is  calculated  based on the  weighted
                         average number of shares outstanding.



                                      F-7

                         
<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
             Summary of Significant Accounting Policies - Continued


                                 June 30, 1997



New Accounting           
Pronouncements           Statement of Financial  Accounting  Standards  No. 123,
                         "Accounting  for stock  based  compensation"  (SFAS No.
                         123).  SFAS No. 123  encourages  entities  to adopt the
                         fair  value  method  in  place  of  the  provisions  of
                         Accounting Principles Board Opinion No. 25, "Accounting
                         for stock  issued to  employees"  (APB No.  25) for all
                         arrangements  under which  employees  receive shares of
                         stock or other  equity  instruments  of the employer or
                         the employer incurs liabilities to employees in amounts
                         based  on the  price  of its  stock.  The  Company  has
                         elected to continue accounting for stock options issued
                         to  employees  in  accordance  with APB No. 25 but will
                         disclose  the  effects of stock  options in  accordance
                         with SFAS No. 123. The adoption did not have a material
                         effect on the Company's  financial  position or results
                         of operations.

                         Statement of Financial  Accounting  Standards  No. 128,
                         "Earnings  Per Share  ("SFAS  No.  128")  issued by the
                         Financial  Accounting  Standards Board is effective for
                         financial  statements with fiscal years beginning after
                         December   15,  1997.   The  new  standard   simplifies
                         guidelines  regarding the calculation and  presentation
                         of  earnings  per share.  The  Company  does not expect
                         adoption to have a material effect on the  presentation
                         of its results of operations.

                         In June 1997, the Financial  Accounting Standards Board
                         issued Statement of Financial  Accounting Standards No.
                         130, Reporting Comprehensive Income ("SFAS 130"), which
                         establishes  standards  for  reporting  and  display of
                         comprehensive  income,  its components and  accumulated
                         balances.  Comprehensive  income is  defined to include
                         all  changes  in equity  except  those  resulting  from
                         investments  by owners  and  distributions  to  owners.
                         Among other  disclosures,  SFAS 130  requires  that all
                         items that are required to be recognized  under current
                         accounting  standards as  components  of  comprehensive
                         income be  reported in a  financial  statement  that is
                         displayed with the same  prominence as other  financial
                         statements.

                         SFAS 130 is  effective  for  financial  statements  for
                         periods  beginning after December 15, 1997 and requires
                         comparative   information   for  earlier  years  to  be
                         restated.  Because  of  the  recent  issuance  of  this
                         standard,  management has been unable to fully evaluate
                         the  impact,  if  any,  SFAS  130 may  have  on  future
                         financial statement disclosures.  Results of operations
                         and financial position,  however, will be unaffected by
                         implementation of this standard.

                         In June 1997, the Financial  Accounting Standards Board
                         issued SFAS No.  131,  Disclosures  and  Segments of an
                         Enterprise and Related  Information  ("SFAS 131") which
                         supersedes  SFAS  No.  14,   Financial   Reporting  for
                         Segments of a Business Enterprise. SFAS 131 establishes
                         standards  for the way  that  public  companies  report
                         information   about   operating   segments   in  annual
                         financial statements and requires reporting of selected
                         information   about   operating   segments  in  interim
                         financial  statements  issued  to the  public.  It also
                         establishes standards for disclosures regarding


                                      F-8

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
             Summary of Significant Accounting Policies - Continued

                                 June 30, 1997



New Accounting 
Pronouncements           products  and  services,  geographic  areas  and  major
continued                customers.  SFAS  131  defines  operating  segments  as
                         components of a company about which separate  financial
                         information  is continued  available  that is regularly
                         used by the chief operating  decision maker in deciding
                         how to allocate resources and in assessing performance.

                         SFAS 131 is  effective  for  financial  statements  for
                         periods  beginning after December 15, 1997 and requires
                         comparative   information   for  earlier  years  to  be
                         restated.  Because of the recent  issuance of SFAS 131,
                         management  has  been  unable  to  fully  evaluate  the
                         impact,  if  any,  it  may  have  on  future  financial
                         statement   disclosures.   Results  of  operations  and
                         financial  position,  however,  will be  unaffected  by
                         implementation of this standard.


                                       F-9

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                            (Expressed in US Dollars)


                                 June 30, 1997



1.       Nature of Business and Continued Operations

         PowerTrader,  Inc. and  Software  design,  develop,  market and support
         informational   and  analytical   desktop  decision  support  and  risk
         management  systems.  Software was originally  incorporated on December
         29, 1988 under the name Corporate Media Solutions,  Inc. On November 6,
         1989, it changed its name to Precision Investment Services and on April
         16, 1996, changed its name from Precision Investment Services,  Inc. to
         PowerTrader Software Inc. Software was inactive until July 1994 when it
         commenced  development  of its current suite of software  products.  On
         January 2, 1997, PowerTrader Inc. was acquired in a Reverse Acquisition
         by PowerTrader Software, Inc. (Note 2).

         To date,  since the  Company  has only sold Beta  product  and  support
         services,  major product development work continues and the Company has
         not yet recorded significant sales, accordingly, the Company is still a
         development  stage  company with its  principal  business and assets in
         Canada and its revenue earned in Canada.

         These  financial  statements  are  stated in US  dollars  and have been
         prepared in accordance with United States generally accepted accounting
         principles,  on a going concern basis.  As reflected in these financial
         statements,  the Company has at June 30, 1997 an accumulated deficit of
         $1,953,330 and a working capital  deficiency of $329,793.  In addition,
         the Company  has  incurred  operating  losses in each of the last three
         years.  These factors among others,  raise  substantial doubt about the
         Company's  ability  to be able to  continue  as a  going  concern.  The
         ability of the Company to continue as a going  concern is  dependent on
         the Company  obtaining  additional  financing through private or public
         share  offerings or debt.  The financial  statements do not include any
         adjustments   related  to  the  recoverability  and  classification  of
         recorded asset amounts or the amounts and classification of liabilities
         that may be  necessary  should the  Company be unable to  continue as a
         going concern.  However, it is reasonably  possible,  based on existing
         knowledge,  that  changes in future  conditions  in the near term could
         require a material change in the recognized  amounts for the assets and
         liabilities.

         Management's  plans in this regard are to obtain financing from private
         or public  share  offerings  or debt  until  such time that  sufficient
         revenue can be generated to sustain continuing operations.


2.       Acquisition

         On January 2, 1997,  PowerTrader,  Inc.  entered into an agreement with
         the shareholders of Software whereby it acquired all of the outstanding
         shares of  Software  in  exchange  for  4,174,597  common  shares.  The
         transaction  was  accounted  for as a  Reverse  Acquisition,  utilizing
         historical costs. Software is in the same business as PowerTrader, Inc.
         The financial  position of  PowerTrader,  Inc. as of January 2, 1997 is
         summarized as follows:

                         Tangible assets                      $ 314,468
                         Liabilities                              (214)
                                                          -------------
                         Shareholders' equity                 $ 314,254
                                                              =========



                                      F-10

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                            (Expressed in US Dollars)

                                 June 30, 1997



         The following is a summary of pro-forma  sales,  pro-forma net loss and
         pro-forma loss per share for the Company under the assumption  that the
         Reverse Acquisition was completed on July 1, 1996.

                                             1997             1996
                                         (Unaudited)       (Unaudited)

          Pro-forma sales                    $ 44,373         $ 50,971

          Pro-forma net loss              $ 1,164,029         $598,971

          Pro-forma loss per share           $ (0.20)          $(0.14)


3.       Fixed Assets

                                          Accumulated       1997           1996
                              Cost        Amortization      Net            Net
                              ----        ------------      ---            ---

Computer equipment          $186,666       $52,443        $139,224       $54,606
Computer software            626,211        29,635         596,576         2,643
Furniture and equipment       25,921         1,979          23,942             -
                            ----------------------------------------------------
                            $838,798       $84,057        $754,741       $57,249
                            ----------------------------------------------------

         Source code related to the  acquisition of $592,312 in software  during
         1997 is being held in escrow pending the Company's  payment of $170,228
         which is  presently  included in  accounts  payable,  representing  the
         balance of the software purchase price owing.

         The estimated  useful life of the fixed assets  varies  between 1 and 5
         years.


4.       Notes Payable

         The notes  payable bear interest at 10% per annum and are due on May 5,
         1997. Subsequent to year-end, $36,219 in notes payable were repaid.


5.       Capital Lease Obligations

         The company  has two  capital  leases for  computer  equipment.  Future
         minimum lease payments are as follows:
 
                           1998              $ 5,894
                           1999                3,447
                                            --------
                                               9,341
                      Interest Component       (892)
                                            --------
                                             $ 8,449
                                            ========



                                      F-11
<PAGE>
                               PowerTrader, Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                            (Expressed in US Dollars)

                                 June 30, 1997



6.       Share Subscriptions

         As at June 30, 1996,  Software  had  received a total of $408,089  with
         respect to  subscriptions  for  1,599,880  Class "A" common  shares and
         received a further $307,049 with respect to  subscriptions  for 689,637
         Class "A" common shares during 1997.  Software shares were never issued
         for these share subscriptions, accordingly the amounts were recorded as
         a liability at June 30, 1996.  On the date of the Reverse  Acquisition,
         and shortly  thereafter,  these  liabilities  were settled  through the
         issuance of 2,319,517 PowerTrader, Inc. shares.

7.       Share Capital

         Restricted Shares

         As at June 30, 1997 all but 125,000 of the  outstanding  common  shares
         are  restricted  shares  and  may  not be  sold  in the  absence  of an
         exemption under the Securities Act of 1933 (United States).

         Prospectus

         The Company is registered  under the  Securities  Acts of 1933 and 1934
         (United  States) and has filed a  prospectus  with the  Securities  and
         Exchange  Commission  for the issuance of a minimum of 1,000,000  Units
         and a maximum of  1,700,000  Units,  with each Unit  consisting  of one
         share of the Company's Common Stock, $0.01 par value per share, and one
         Warrant to purchase one additional share of common stock at an exercise
         price of $3.50  per  share for a five year  period.  The  Warrants  are
         subject to  redemption by the Company,  at a redemption  price of $0.01
         per Warrant on 30 days prior written  notice to the  registered  holder
         thereof  if the  average  closing  bid  price  of the  Common  Stock as
         reported by the  principal  market on which the Common  Stock is traded
         equals or  exceeds  $4.50 per share for any 20  trading  days  within a
         period of 30  consecutive  trading days ending on the fifth trading day
         prior to the notice of redemption.

         Warrants

         100,000 warrants are outstanding at June 30, 1997.

         Shares Issued to Director

         350,000 shares issued to a Director are subject to an agreement,  which
         contains certain  restrictions on transfer over a three year period and
         provisions for forfeiture upon the occurrence of certain events.

         Vesting of these shares occurs as follows:

           Number of Shares                   Date

              100,000                    24 October 1997
              150,000                    24 October 1998
              100,000                    24 October 1999
              -------
              350,000
              =======


                                      F-12
<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                            (Expressed in US Dollars)

                                 June 30, 1997

8.       Stock Options and Stock Compensation Plans

         At June 30,  1997,  all of the  Company's  common  stock  options  were
         exercisable. The following options, which are not part of the Company's
         1996 Stock Option  Plan,  were  outstanding  at the date of the Reverse
         Acquisition and June 30, 1997.

            Number              Exercise Price                  Expiry Date

            149,999             $ 0.37                            Dec 1998
            100,000               1.00                            Feb 1999
            100,000               3.00                            Feb 1999
            -------
            349,999


         Stock Option Plan

         Pursuant  to  the  Company's  1996  Stock  Option  Plan  ("the  Plan"),
         officers, key employees,  advisers and consultants,  of the Company may
         receive stock options to purchase up to an aggregate of 750,000  shares
         of the Company's  Common Stock.  Under the Plan,  stock options awarded
         under the Plan may not have a term of more than 10 years or provide for
         an  exercise  price of less than the fair  market  value of the  Common
         Stock on the date of grant.  During 1997, the Company granted under the
         Plan 300,000 options, exercisable at $2.00 per share and expiring April
         16, 2000.

         1996 Share for Debt Agreements

         The number of shares issued in connection  with the 1996 Share for Debt
         Agreements was determined  based on  management's  estimate of value of
         the Company at the date the agreements were entered into.

         Stock Based Compensation

         The Company has elected to provide pro-forma  information regarding net
         income and earnings per share as if compensation cost for the Company's
         stock options  granted had been  determined in accordance with the fair
         value  based  method  prescribed  in FASB  Statement  123.  The Company
         estimates  the fair  value of each  stock  option at the grant  date by
         using  the  Black-Scholes   option-pricing  model  with  the  following
         weighted-average assumptions used for grants in 1997: dividend yield of
         Nil - 1996; expected volatility of Nil - 1996; risk-free interest rates
         of 6.25% (1996 - 5.02% to 5.70%)  based on US Treasury  Bill yields and
         the expected life of two years. (1996 - two years).

         Under the  accounting  provisions of FASB  Statement 123, the Company's
         net loss and loss per share  would have been  reduced to the  pro-forma
         amounts indicated below:


                                      F-13

<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                            (Expressed in US Dollars)

                                 June 30, 1997


                                                     1997            1996
               Net loss
               As reported                     $  (902,997)    $  (598,971)
               Pro-forma                       $  (956,792)    $  (598,971)

               Loss per share
               As reported                     $    ( 0.16)    $     (0.14)
               Pro-forma                       $     (0.16)    $     (0.14)


         The  weighted  average  fair value of options  granted  during 1997 was
         $0.24 per share and to the date of the  Reverse  Acquisition  was $0.65
         per share.

9.       Related Party Transactions

         During 1997,  the Company  paid  consulting  and leasing fees  totaling
         approximately  $171,600  (1996 - $11,800 and 1995 - nil) to  directors,
         shareholders  and a company  controlled  by a director of the  Company.
         During  1997,  the  Company  also  acquired  from  a  director,  office
         equipment for $ 7,100. As of 30 June 1997,  there was nil owing (1996 -
         $3,491) to directors.

10.      Income Taxes

         The  Company  has  income  tax  loss  carry-forwards  of  approximately
         $1,778,400 available to reduce future taxable income, the tax effect of
         which has not been recorded in these financial statements. These losses
         will expire between 2002 and 2004.

         Deferred tax liabilities at June 30, 1997 and 1996 were not material.

         A summary of deferred tax assets and  liabilities  at June 30, 1997 and
         1996 is as follows:

<TABLE>
<CAPTION>
                                                                                                       Deferred
                                                         Tax                          Valuation        Tax
                                                         Rate            Amount       Allowance        Asset
<S>                              <C>                       <C>         <C>           <C>            <C>    

1997
Tax benefit of loss
carry forward                    $  1,778,400             .45          $899,300      $ (899,300)    $          -
                           ---------------------------------------------------------------------------------------

1996
Tax benefit of loss
carry forward                    $  1,012,000             .45      $    455,400      $ (455,400)    $          -
                           ---------------------------------------------------------------------------------------

</TABLE>

         Since in management's  opinion, it is more likely than not that the tax
         benefits  would not be realized,  they have been reduced by a valuation
         allowance of $899,300 (1996 - $455,400).


                                      F-14
<PAGE>
                                PowerTrader, Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                            (Expressed in US Dollars)

                                 June 30, 1997



11.      Commitments

         The  Company  has  entered  compensation  contracts  requiring  minimum
         payments as follows:

               1998                               $  117,391
               1999                                   55,554
               2000                                   19,323
                                                ------------
                                                  $  192,268


         The  Company  has  entered  into a Lease  Agreement  for  its  premises
         requiring total minimum lease payments of $71,245,  with required lease
         payments as follows:
 
               1998                               $  38,861
               1999                                  32,384
                                                 ----------
                                                  $  71,245


         During  1997,  1996 and 1995,  the  Company had rent  expenses  for its
         premises of $27,536, $23,795 and $8,770, respectively.


12.      Subsequent Events.

         Subsequent  to year-end  the Company  paid $ 50,000 to enter a one-year
         license agreement to publish Financial World Magazine electronically.

         Subsequent to year-end the Company  issued 250,000 units for total cash
         consideration  of  $812,500.  Each unit  consisted of one share and two
         warrants,  each warrant  entitles the holder to purchase one additional
         share of  common  stock at an  exercise  price of $3.50 per share for a
         five year period.  These shares and warrants are restricted for 40 days
         from the July 21, 1997 date of issue.

         Subsequent  to  the  year-end   100,000  shares  and  warrants   became
         unrestricted  after a 40 day  restricted  period  from the May 21, 1997
         date of issue.

                                      F-15

<PAGE>
                                   SIGNATURES

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

                                       POWERTRADER, INC.



                                       By: /s/ Michael C. Withrow
                                           Michael C. Withrow
                                           Chairman and President

                                       Date:    October 14, 1997

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.

            Signature        Title                                Date



/s/ Michael C. Withrow      Director, Chairman               October 14, 1997
Michael C. Withrow          and President
                            (principal executive
                            officer)



/s/ David C. Furlonger      Director, Secretary              October 14, 1997
David C. Furlonger          and Vice-President
                            (principal financial
                            and accounting officer)



/s/ George E. McCord        Director,
George E. McCord            Chief Information Officer        October 14, 1997




                                      F-16