SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  FORM 10-KSB
(Mark One)
[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934
                  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 
        For the transition period from _______________ to ______________

                        Commission File Number : 0-19693

                       BIO FLUORESCENT TECHNOLOGIES, INC.
             ------------------------------------------------------
             (exact name of Registrant as specified in its charter)

          Nevada                                                87-0485320
-------------------------------                              ----------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

7373 North Scottsdale Road, Suite C228, Scottsdale, Arizona        85253
-----------------------------------------------------------      ----------
         (Address of Principal Executive Offices)                (Zip code)

        Registrant's telephone number, including area code: 602-596-0269

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

    Securities registered pursuant to Section 12(g) of the Act: Common Stock

     Check whether the Registrant (1) has filed all reports required to be filed
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding twelve (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 ninety (90) days. [X] Yes [ ] No

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B contained herein,  and will not 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. [X]

     State Registrant's revenues for its most recent fiscal year. $0.00

     As of April 24, 1997, 5,645,710.67 shares of the registrant's common stock,
$.001 par value,  were  outstanding.  The  aggregate  market value of the common
stock held by non-affiliates  of the registrant (i.e.,  excluding shares held by
executive  officers,  directors,  and control persons as defined in Rule 405) on
that date was $1,012,640.  Computed at the closing price on that date.  There is
only one class of common stock outstanding.

APPLICABLE  ONLY TO REGISTRANTS  INVOLVED IN BANKRUPTCY  PROCEEDINGS  DURING THE
PRECEDING FIVE (5) YEARS:

     Check whether the Registrant  has filed all documents and reports  required
to be filed by Section 12, 13 or 15(d) of the  Securities  Exchange  Act of 1934
subsequent to the  distribution of securities under a plan confirmed by a court.
[ ] Yes [ ] No
                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None.
<PAGE>

                               TABLE OF CONTENTS

                                                                        Page
                                                                        ----
ITEM 1.   BUSINESS......................................................  1

ITEM 2.   PROPERTIES....................................................  2

ITEM 3.   LEGAL PROCEEDINGS.............................................  2

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........  2

ITEM 5.   MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
          STOCKHOLDERS MATTERS..........................................  3

ITEM 6.   PLAN OF OPERATION.............................................  4

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...................  6

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE........................... 15

ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............ 16

ITEM 10.  EXECUTIVE COMPENSATION........................................ 17

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.................................................... 18

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................ 18

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.............................. 18

SIGNATURES.............................................................. 19

<PAGE>
                                     PART I

ITEM 1. BUSINESS

COMPANY BACKGROUND

         Bio  Fluorescent  Technologies,  Inc. (The  "Company") is a development
stage company  engaged  primarily in the medical and health care  industry.  The
Company  was  incorporated  on  February  15,  1990  under the laws of Nevada as
Partisan  Corporation.  On March 10, 1995, the Company's name was changed to Bio
Fluorescent  Technologies,  Inc. The Company was inactive through  approximately
January of 1995 and prior to such time the Company's only  activities  consisted
of capitalization activities.

         The Company's initial business plan was based on developing,  licensing
or  otherwise  acquiring   state-of-the-art   advanced  diagnostic  testing  and
screening  technology and equipment  capable of early  detection of human immune
system  disorders  such as HIV-1,  HIV-2 and  Hepatitis B. In February  1995 the
Company licensed a development  stage diagnostic  technology  designed to detect
AIDS, described as the Mehica GP120 system.

         In July 1996 the Company filed a complaint  against the licensor of the
technology.  The  defendants  filed a  counter-claim  and third party  complaint
seeking  declaratory  relief in  respect of the  agreements  and  damages.  This
litigation  matter is more fully described in Item 3 "Legal  Proceedings" and in
the notes to the Company's financial statements set forth herein.

         Development  activities  were suspended and the Company has written off
the unamortized cost of the Mehica GP120 project as of December 31, 1996, and is
treating this write-off as a recision of the license agreement.

         In May 1996 the Company reorganized its management team and revised its
business plan to include  expansion of the Company's  core market and technology
application  for the  screening  and  detection of a broader  range of viral and
infectious diseases.

         The Company is selecting  and engaging the services of  scientists  and
other  technical  advisors to assist in its search to acquire other  products or
businesses compatible with the Company's primary goal of becoming operational as
soon as possible.

         Since its management reorganization in May 1996, the Company's business
development plan has been focused on a "growth by acquisition"  strategy and the
Company has been actively pursuing acquisition possibilities.

         The Company's  agreement dated February 11, 1997, to acquire all of the
assets of Immune Network Research,  Ltd. ("INR") has since been terminated.  The
Company is exploring the  possibility  of licensing or otherwise  acquiring from
INR its rights as  licensee to an immune  system  disease  treatment  technology
currently in the  development  stage. As of the date of this filing no offer has
been  presented to INR by the Company.  There can be no assurance that an offer,
if presented, would be accepted by INR.

         The Company  plans to continue with its efforts to license or otherwise
acquire  products,  technology  or  businesses  compatible  with  its  corporate
strategies.
                                       1
<PAGE>

EMPLOYEES

         On March 3,  1997,  the  Company,  through  an office  support  service
agreement  with a related  party,  employed a total of six persons,  who provide
management,  administrative and secretarial services to the Company. No employee
is subject to a collective  bargaining  agreement.  The Company  believes it has
favorable relations with its employees.

ITEM 2. PROPERTIES

         The Company  maintains its principal  executive  office in 1,000 square
feet of a rented office facility in Scottsdale,  Arizona under an office support
services  agreement with a related party which expires  January 1998 at a rental
rate of $1,000 per month.  The Company  believes  that its current  leased space
will be sufficient for the Company's operations in the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

         The Company had secured  worldwide  rights to  manufacture,  market and
sell the Mehica  GP120  System  under an  exclusive  licensing  agreement  dated
February  1995.  On July 19, 1996,  the Company  filed a complaint in the United
States  District  Court for the  District  of  Maryland  (Civil  Action  No. CCB
96-2266)  against the licensor,  The Avriel Group,  and others  ("TAG")  seeking
declaratory  relief,  damages and other relief in respect to certain  agreements
relating to the rights to a  proprietary  automated  system for detection of the
HIV virus and for use in mass screening of individuals, the Packaged Antigen Kit
or "PAK" and the Mehica GP120 System.  On July 30, 1996, the defendants filed an
answer,  counter-claim and third party complaint,  seeking declaratory relief in
respect to the agreements and damages.

         The  Company  has made  attempts  to  resolve  this  matter  through  a
negotiated  settlement  without further  extensive  litigation and is cautiously
optimistic that this dispute can be resolved. If a settlement cannot be reached,
the   Company   intends   to   vigorously   press  its  claims  and  defend  the
counter-claims.

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

         No matter was submitted to a vote of the shareholders during the fourth
quarter of the year ended December 31, 1996.

                                       2
<PAGE>

                                    PART II

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

MARKET INFORMATION

         Trading  activity with respect to the  Company's  common stock has been
limited. A public trading market having the characteristics of depth,  liquidity
and  orderliness  depends  upon the  existence  of market  makers as well as the
presence of willing buyers and sellers,  which are circumstances  over which the
Company has no control.

         Prior to May 1,  1995,  there was no public  market  for the  Company's
common stock.  Since May 1, 1995, the Company's  common stock has been quoted in
the National Daily  Quotation  Service ("Pink  Sheets")  published  daily by the
National  Quotation  Bureau,  Inc. The Company's trading symbol was changed from
"BFTI" to "BFTK" in  connection  with  Company's  December 2, 1996 reverse stock
split.  Quotations  are also  available  through the  Electronic  Bulletin Board
operated by the National  Association  of  Securities  Dealers,  Inc.  Under the
symbol "BFTK".

         The  following  table  sets  forth the high and low bid  prices for the
Company's  common  stock  commencing  with the  second  fiscal  quarter  1995 as
reported  by  the  National  Quotation's  Bureau,  Inc.,  which  prices  reflect
inter-dealer prices without retail mark-up, mark-down or commission, and may not
necessarily represent actual transactions.

Quarter Ended                        BFTI, Before Split    BFTK, After Split
                                     ------------------    -----------------

BFTI before split and adjusted
as if reverse split had                High       Low        High        Low
occurred retroactively                 ----       ---        ----        ---
                                      
June 30, 1995                         $5,00     $1.00      $15.00      $3.00
September 30, 1995                    $4.00     $2.62      $12.00      $7.86
December 31, 1995                     $1.19     $1.06      $ 3.57      $3.18
March 31, 1996                        $1.47     $1.00      $ 4.41      $3.00
June 30, 1996                         $1.22     $0.50      $ 3.66      $1.50
September 30, 1996                    $0.91     $0.22      $ 2.73      $0.66
December 2, 1996                      $0.42     $0.22      $ 1.26      $0.66
BFTI after the reverse split
December 31, 1996                                          $ 0.72       $0.50

HOLDERS

         The  number of  stockholders  of  record  for the  common  stock of the
Company at the close of business on March 3, 1997, was 511, including  brokerage
houses holding stock for an unknown number of stockholders. The

                                       3
<PAGE>

Company  estimates that there are  approximately  700  beneficial  owners of the
Company's common stock.

DIVIDENDS

         The Company's  present policy is to apply available  working capital to
expansion and acquisition; consequently, the Company has not previously declared
or paid any  dividends on its common stock and does not expect to pay  dividends
on its common stock within the foreseeable future.

ITEM 6. PLAN OF OPERATION

         The  Company  is  presently   concentrating  its  efforts  on  becoming
operational  by  licensing  or  otherwise  acquiring   technologically  advanced
state-of-the-art  immunological  products  which respond to the critical  global
demands  within the  Company's  selected  market niche in the medical and health
care industry;  the diagnosis,  prevention and treatment of AIDS and other human
immune  system  disorders.  The Company is also  exploring  the  possibility  of
acquiring other technologies, products or businesses compatible with its goal to
become operational.

         The Company's  management team, which was re-organized on May 1996, has
been investigating and pursuing product and technology acquisition opportunities
compatible  within  corporate  strategies.  Although the Company  terminated its
agreement  dated  February  11,  1997,  to  acquire  all of the assets of Immune
Network Research, Ltd. ("INR") it plans to continue to pursue the possibility of
licensing  or otherwise  acquiring  from INR its rights as licensee to an immune
system disease treatment  technology  currently in the development  stage. There
can be no assurance that pursuit of this technology will be successful.

         Based on the  litigation  relating to the Mehica GP120  System  license
agreement  (see  Item  3,  "Legal   Proceedings")   the  Company  suspended  its
development  efforts on the Mehica GP120 System  technology  and has written off
the unamortized license fee as a recision of the agreement.

         The Company plans to continue to aggressively pursue the acquisition of
other products and technology through licensing and/or acquiring businesses with
market ready products and/or  development stage technology with market potential
that is compatible with corporate strategies to become operational.

         To date, the Company's  operations have consisted primarily of pursuing
various product opportunities, assembling a management team and raising capital.
From the  Company's  inception  to December  31, 1996,  the  Company's  business
development costs have totaled approximately $2,729,000. These expenditures have
been funded  primarily with the proceeds from the private sales of the Company's
equity  securities  as well as with the issuance of its common stock in exchange
for services and assets.
                                       4
<PAGE>

         During the year ended  December 31,  1996,  the  Company's  development
stage activities  resulted in a deficit in cash flow of approximately  $682,535.
This deficit was primarily the result of the net operating loss of approximately
$1,343,000   offset  by  noncash  charges   totaling   approximately   $614,000.
Additionally the deficit in cash flow from operating activities was offset by an
increase in accounts payable and accrued  liabilities of approximately  $45,400.
The Company's financing activities provided cash flow of approximately  $670,030
during the year ended December 31, 1996,  primarily as the result of the private
placement of 2,011,321 shares of the Company's common stock.

         The Company has raised  approximately  $1,281,010 of operating  capital
since  inception and plans to continue its efforts to raise  additional  capital
needed to fund  operating  expenses of the business  through  various  financing
methods  including  private  placements of its common  stock.  Funding of future
operations is dependent on  management's  ability to raise  additional  capital.
Failure by the  Company  to obtain  additional  financing  would have a material
adverse effect on the Company.

                                       5
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                       BIO FLUORESCENT TECHNOLOGIES, INC.
                         (A Development Stage Company)

                                 BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1995

                                                     December 31,   December 31,
                                                        1996            1995    
                                                        ----            ----    
                                     ASSETS
CURRENT ASSETS:
Cash                                               $     6,327    $    18,832
Trade exchange receivable - barter (Note 2)             49,767         50,000
Media products and services receivable -
  current portion (Note 3)                             250,000        250,000

Prepaid expenses                                            --          1,875
                                                   -----------    -----------
         Total current assets                          306,094        320,707

MEDIA PRODUCTS AND SERVICES - net of current
 portion (Note 3)                                      250,000        250,000

LICENSE, net of accumulated amortization
 of $85,000 (Note 4)                                        --        935,000
                                                   -----------    -----------
                                                   $   556,094    $ 1,505,707
                                                   ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable -
  Trade                                            $   158,823    $     8,437
  Related party (Note 6)                                27,090        157,542
Accrued expenses                                        55,056         27,563
                                                   -----------    -----------
         Total Current liabilities                     240,969        183,542
                                                   -----------    -----------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 6) 
 STOCKHOLDERS' EQUITY (Note 5):

Common stock, $.001 par value, 8,333,334
  shares authorized; 5,645,710 (1996) and
  3,790,750 (1995) issued and outstanding                5,646          3,791
Common stock to be issued (186,333 shares)                   9            186
Additional paid-in capital                           3,178,370      2,703,751
Stock subscription receivable                         (128,000)            --
Deficit accumulated during the development stage    (2,740,900)    (1,385,563)
                                                   -----------    -----------
         Total stockholders' equity                    315,125      1,322,165
                                                   -----------    -----------
                                                   $   556,094    $ 1,505,707
                                                   ===========    ===========

       The accompanying notes are an integral part of this balance sheet.

                                       6
<PAGE>
                       BIO FLUORESCENT TECHNOLOGIES, INC.
                         (A Development Stage Company)

                             STATEMENT OF OPERATIONS
             FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 AND FOR
        THE PERIOD FROM INCEPTION OF DEVELOPMENT STATE (FEBRUARY 15,1990
                              TO DECEMBER 31, 1996)

                                                                   Cumulative
                                                                    from the
                                                                   Inception of
                                                                   Development
                                                                      Stage
                                                                  (February 15,
                                                                    1990) to
                                                                   December 31,
                                        1996            1995           1996
                                        ----            ----           ----
NET SALES                            $        --    $        --    $        --
SELLING, GENERAL AND ADMINISTRATIVE 
  EXPENSES                             1,358,266      1,381,741      2,741,007
                                     -----------    -----------    -----------
     Loss from operations             (1,358,266)    (1,381,741)    (2,741,007)

INTEREST EXPENSE                           2,929         (2,822)           107
                                     -----------    -----------    -----------

LOSS BEFORE PROVISION FOR INCOME 
  TAXES                               (1,355,337)    (1,384,563)    (2,740,900)

PROVISION FOR INCOME TAXES                    --             --             --
                                     -----------    -----------    -----------
NET LOSS                             $(1,355,337)   $(1,384,563)   $(2,740,900)
                                     ===========    ===========    =========== 

LOSS PER COMMON SHARE (Note 1)       $     (0.27)   $     (0.44)
                                     ===========    =========== 
WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING                   5,028,685      3,141,124
                                     ===========    ===========







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

                                       7
<PAGE>

                       BIO FLUORESCENT TECHNOLOGIES, INC.
                          (A Development Stage Company)

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
               For the Period From Inception of Development Stage
                    (February 15, 1990 to December 31, 1996)
<TABLE>
<CAPTION>
                                                                                Deficit
                                           Common                             Accumulated
                           Common Stock    Stock   Additional   Common Stock   During the
                      ------------------   to Be    Paid-in     Subscription  Development
                       Shares     Amount   Issued   Capital      Receivable      State         Total
                       ------     ------   ------   -------      ----------      -----         -----
<S>                <C>         <C>         <C>      <C>           <C>            <C>           <C>
Inception 2/15/90     333,333   $  1,000  $        $             $            $              $   1,000

Net loss                                                                          (1,000)       (1,000)
                    ---------   --------  -----    ----------    ---------   -----------   -----------
Balance 12/31/94      333,333      1,000                                          (1,000)

Sale of common
stock, net          1,333,333      4,000               76,000                                   80,000

Common stock
issued              2,124,083      6,372            2,090,376                                2,096,748

Common shares
subscribed                                  559       529,421                                  529,980

Net loss                                                                      (1,384,563)   (1,384,563)
                    ---------   --------  -----    ----------    ---------   -----------   -----------
Balance:12/31/95    3,790,749     11,372    559     2,695,797                 (1,385,563)    1,322,165

Sale of common
stock, net          1,001,834      3,006              794,791     (128,000)                    669,797

Common Stock
issued, net         1,186,461      3,559   (550)      559,491                                  562,500

Recision of
license agreement    (333,333)    (1,000)            (883,000)                                (884,000)

Reverse 1 for 3
split                            (11,291)              11,291

Net loss                                                                      (1,355,337)   (1,355,337)
                    ---------   --------  -----    ----------    ---------   -----------   -----------
Balance:12/31/96    5,645,711   $  5,646  $   9    $3,178,370    $(128,000)  $(2,740,900)  $   315,125
                    =========   ========  =====    ==========    =========   ===========   ===========
</TABLE>


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

                                       8
<PAGE>

                       BIO FLUORESCENT TECHNOLOGIES, INC.
                         (A Development Stage Company)

                            STATEMENT OF CASH FLOWS

For the Years Ended December 31, 1996 and 1995 and For the Period From Inception
of Development Stage (February 15, 1990 to December 31, 1996)

                                                                     Cumulative
                                                                    Amount From
                                                                    February 15,
                                                                        1990
                                                                    (Inception)
                                                                    to December
                                            1996          1995       31, 1996
                                            ----          ----         -----
Net loss                                $(1,355,337)  $(1,384,563)  $(2,740,900)

Adjustments to reconcile net loss to 
  net cash used in operating activities:
Write down of artwork                                     400,000       400,000
Amortization                                 51,000        85,000       136,000
Common stock issued for services            562,500       126,748       689,248

Change in assets and liabilities:
(Increase)decrease in trade accounts
  receivable                                    233                         233
(Increase) decrease in prepaid expenses       1,875        (1,875)
Increase (decrease) in accounts payable      57,427       183,542       240,969
                                         ----------    ----------    ----------

Net cash used in operating activities      (682,302)     (591,148)   (1,274,450)
                                         ----------    ----------    ----------
Cash flows from financing activities:
Proceeds from issuance of common
 stock,net                                  669,797       609,980     1,280,777
                                         ----------    ----------    ----------
Net increase(decrease) in cash              (12,505)       18,832         6,327

Cash, beginning of period                    18,832
                                         ----------    ----------    ----------

Cash, end of period                     $     6,327   $    18,832   $     6,327
                                        ===========   ===========   ===========


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

                                       9
<PAGE>
                       BIO FLUORESCENT TECHNOLOGIES, INC.
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1996

(1)  THE COMPANY AND ITS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     HISTORY AND REPORTING ENTITY

     Bio  Fluorescent  Technologies,  Inc. (the Company) is a development  stage
     company  that was  incorporated  under  the laws of the  state of Nevada in
     February  1990 as Partisan  Corporation.  On March 10, 1995,  the company's
     name was changed from Partisan Corporation to Bio Fluorescent Technologies,
     Inc. The Company was inactive  through February 1995 and prior to such time
     the Company's only  activities  consisted of the sale or transfer of shares
     of its common stock in private placements.

     DEVELOPMENT STAGE ACTIVITY AND MANAGEMENT'S PLANS

     The Company's  initial business plan was based on developing,  licensing or
     otherwise  acquiring   state-of-the-art  advanced  diagnostic  testing  and
     screening  technology  and  equipment  capable of early  detection of human
     immune system  disorders such as HIV- 1, HIV-2 and Hepatitis B. In February
     1995  the  Company  licensed  a  development  stage  diagnostic  technology
     designed to detect AIDS, described as the Mehica GP120 system.

     In July 1996 the  Company  filed a complaint  against  the  licensor of the
     technology.  The defendants filed an answer,  counter-claim and third party
     complaint  seeking  declaratory  relief in  respect of the  agreements  and
     damages. This litigation matter is more fully described in Note 4.

     Development  activities  were suspended and the Company has written off the
     unamortized  cost of the Mehica GP120 project as of December 31, 1996,  and
     is  treating  this write off as a  discontinued  research  and  development
     project.

     In May 1996 the Company  reorganized  its  management  team and revised its
     business  plan to  include  expansion  of the  Company's  core  market  and
     technology  application  for the screening and detection of a broader range
     of viral and infectious diseases.

     The Company is selecting and engaging the services of scientists  and other
     technical  advisors to assist in its search to acquire  infectious  disease
     technologies and other products or businesses compatible with the Company's
     primary goal of becoming operational as soon as possible.

     Since its management  reorganization  in May 1996,  the Company's  business
     development plan has been focused on a "growth by acquisition" strategy and
     the Company has been actively pursuing acquisition possibilities.

     The  Company's  agreement  dated  February 11, 1997,  to acquire all of the
     assets of Immune Network Research,  Ltd. ("INR") has since been terminated.
     The  Company  is  exploring  the  possibility  of  licensing  or  otherwise
     acquiring  from INR its  rights as  licensee  to an immune  system  disease
     treatment  technology currently in the development stage. As of the date of
     this filing no offer has been presented to INR by the Company. There can be
     no assurance that an offer, if presented, would be accepted by INR.

     The  Company  plans to continue  with its  efforts to license or  otherwise
     acquire  products,  technology or businesses  compatible with its corporate
     strategies.
                                       10
<PAGE>

(1)  THE COMPANY AND ITS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

     From the  Company's  inception  through  December 31, 1996,  the  Company's
     business  development costs have totaled  approximately  $2,700,000.  These
     expenditures  have been funded  primarily  with  proceeds  from the private
     sales of its equity  securities  as well as with the issuance of its common
     stock in exchange for services.

     The  Company  will  need  to  raise  additional   capital  to  satisfy  its
     obligations and to fund other operating expenses. The Company will continue
     its efforts to raise capital,  including  private  placements of its common
     stock. However, there is no assurance that such efforts will be successful.

     STOCK REVERSE SPLIT

     On December 2, 1996,  the Company made effective an one for three (1 for 3)
     reverse stock split, whereby for three shares of the Company's common stock
     was exchanged for one share of the Company's  common stock.  The amounts in
     the  respective  common  stock  accounts  were  divided  by  three  and the
     difference  adjusted to Additional Paid in Capital.  The December 31, 1995,
     year end balances were restated to reflect the effect of this reverse split
     as if it was in effect at that  date.  The  amount of this  adjustment  for
     1995's restatement was $7,954.  Without the restatement the adjustment made
     on December 2, 1996, was $11,291.

     USE OF ESTIMATES

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

     LOSS PER COMMON SHARE

     Loss per common  share is computed by dividing the net loss by the weighted
     average  number of common  shares  outstanding  during  the  period.  Fully
     diluted  loss per common  share is  considered  equal to  primary  loss per
     common share for all periods presented.

(2)  TRADE EXCHANGE RECEIVABLE - BARTER

     In August  1995,  the Company  issued  14,814  shares  (4,938  shares after
     reverse  split  effect) of its common stock in exchange  for $50,000  worth
     barter  credit on the ITEX Retail Trade  Exchange.  Management  is pursuing
     opportunities  to  utilize  the  barter  credit  for the cost of hotels and
     travel over the next year.

(3)  MEDIA PRODUCTS AND SERVICES RECEIVABLE

     In October 1995, the Company issued 200,000 shares  (66,666.67 shares after
     reverse split  effect) of its common stock in exchange for script  writing,
     music scoring, radio commercial production and radio advertising time to be
     received  in  the  future  valued  at  approximately  $500,000.  Management
     believes that they will be able to successfully  utilize the entire balance
     during 1997 and 1998.
                                       11
<PAGE>

(4)  LEGAL PROCEEDINGS

     The Company had secured  worldwide  rights to manufacture,  market and sell
     the Mehica GP120  System in February  1995.  On July 19, 1996,  the Company
     filed a complaint in the United States  District  Court for the District of
     Maryland  (Civil Action No. CCB 96-2266)  against the licensor,  The Avriel
     Group and others ("TAG"),  seeking  declaratory  relief,  damages and other
     relief  in  respect  to  certain  agreements  relating  to the  rights to a
     proprietary  automated system for detection of the HIV virus and for use in
     mass screening of  individuals,  the Packaged  Antigen Kit or "PAK" and the
     Mehica GP120  System.  On July 30, 1996,  the  defendants  filed an answer,
     counter-claim  and third  part  complaint,  seeking  declaratory  relief in
     respect to the agreements and damages.

     The Company has made  attempts to resolve this matter  through a negotiated
     settlement and is cautiously  optimistic  that this dispute can be resolved
     without further  extensive  litigation.  If a settlement cannot be reached,
     the  Company  intends  to  vigorously  press  its  claims  and  defend  the
     counter-claims.

(5)  STOCKHOLDERS' EQUITY

     On December 2, 1996,  the Company  authorized a 3 for 1 reverse stock split
     of all the common stock. The stockholders'  equity and related earnings per
     share  amounts  for all of 1996 have been stated in shares  reflecting  the
     reverse split.  The 1995 shares issued and outstanding and related earnings
     per share have been restated to reflect the reverse  split for  comparative
     purposes.

(6)  RELATED PARTY TRANSACTIONS

     The Company paid a related party $316,139,  including $132,000 compensation
     for the acting  president  of the  Company,  and  $211,561  for  management
     services  and  expenses  for the  year  ended  December  31,  1996 and 1995
     respectfully.  At December 31, 1996 and 1995,  the Company owed $27,090 and
     $134,297, respectfully, to this related party which is included in accounts
     payable-related party in the accompanying financial statements.

     Effective  May  1,  1996  the  Company  entered  into  an  chief  executive
     compensation agreement wherein a company controlled by the president of the
     Company  would bill and be  compensated  for the salary of the president of
     the Company.  This  compensation  amounted to $132,000.00 for the year 1996
     and common stock valued at $120,000.00 was exchanged for $120,000.00 of the
     billing.

(7)  INCOME TAXES

     The  Company  provides  for  income  taxes  under  Statement  of  Financial
     Accounting  Standards No. 109 (SFAS No. 109),  Accounting for Income Taxes.
     SFAS  No.  109  requires  the use of an asset  and  liability  approach  in
     accounting  for income  taxes.  Deferred  tax assets  and  liabilities  are
     recorded based on the differences  between the financial  statement and tax
     bases of assets  and  liabilities  and the tax rates in effect  when  these
     differences are expected to reverse.

                                       12
<PAGE>

(7)  INCOME TAXES - continued

     The  components  of deferred  taxes are as follows at December 31, 1996 and
     1995, respectfully:
                                              1996               1995
                                              ----               ----
     Tax effect of net operating loss 
      carry forward                       $ 1,069,660        $ 554,400
      
     Valuation allowance                   (1,069,660)        (554.500)

                                          $        --        $      --

     SFAS No. 109 requires  the  reduction of deferred tax assets by a valuation
     allowance if, based on the weight of available evidence,  it is more likely
     than not that some or all of the  deferred tax assets will not be realized.
     In  management's  opinion,  there can be no assurance that the Company will
     generate  sufficient  taxable income in the future to fully utilize the net
     deferred tax asset  recorded at December  31, 1996 and 1995,  respectfully;
     therefore, a valuation allowance has been provided for the entire balance.

     Net operating  loss carry  forwards  totaled  approximately  $2,729,000 and
     $1,386,000 at December 31, 1996 and 1995, respectfully.

(8)  STOCK COMPENSATION PLANS:

     On August 29, 1996, the Company adopted fixed and  performance  based stock
     compensation plans, which are described below. The Company accounts for the
     fair  value of its  grants  under  those  plans  in  accordance  with  FASB
     Statement 123,  Accounting for Stock Based  Compensation.  The compensation
     cost that has been charged  against  income for those plans was $12,600 for
     the year ended December 31, 1996.

     FIXED STOCK OPTION PLAN

     Under the 1996  incentive  Stock Option Plan, the Company may grant options
     to its  employees,  directors,  consultants  and advisors for up to 866,667
     shares of its $0.001 par value common stock.  The exercise  price for stock
     granted  pursuant to a  tax-qualified  option plan is to be greater than or
     equal to the market price of the Company's stock on the date of grant.  The
     exercise price of stock granted  pursuant to a  non-qualified  stock option
     plan is to be  greater  than or  equal  to 85% of the  market  price of the
     Company's stock on the date of grant. The maximum term for an option is ten
     years. Options are granted at the discretion of the board of directors.

     The fair market value of the options  granted  during 1996 is considered to
     be zero. It is the opinion of  management  that the options are not capable
     of  valuation  due to the  inability  of the Company to  establish a viable
     business  operation at this point during the current  development stage and
     the  uncertainty  surrounding the likelihood that the Company will generate
     significant profits in the future.

                                       13
<PAGE>

(8) STOCK COMPENSATION PLANS - continued

     A summary of the status of the  Company's  fixed  stock  option  plan as of
     December  31,  1996 and  changes  during the year then  ended is  presented
     below:
                                                            Weighted
                                                            Average
                                                            Exercise
                                            Shares           Price
                                            ------           -----
Outstanding at beginning of year                --           $  --
Granted                                    663,334            1.65
Exercised                                       --              --
Forfeited                                       --              --
Outstanding at end of year                 663,334           $1.65


     The  following  table  summarized  information  about fixed  stock  options
     outstanding at December 31, 1996:

                                        Weighted Average
                 Options Outstanding  Remaining Contractual  Options Exercisable
Exercise Price        12/31/96                Life                12/31/96
--------------   -------------------  ---------------------  -------------------
   $1.34              388,333             3.99 years              388,333

   $1.80              241,668             1.67 years              241,668

   $3.75               16,666             0.25 years               16,666

   $4.50               16,667             3.33 years               16,667

                      663,334                                     663,334


     PERFORMANCE BASED STOCK PLAN

     The Company grants selected  executives and other key individuals  deferred
     stock awards whose vesting is  contingent  upon the future  performance  of
     services  under terms and  conditions  specified by the board of directors.
     The number of shares  subject to grant  under this plan  together  with the
     number of shares  subject to option  under the fixed stock option under the
     fixed stock option plan cannot exceed 866,667 shares. The grant, which will
     completely  vest on August 29, 1997,  is valued at the fair market value of
     the stock on the date of the grant.

                                       14
<PAGE>

ITEM 8. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE

         Effective March 18, 1997, the Company engaged J. Paul Kenote, CPA, P.C.
as its  independent  auditors  for the fiscal  year ended  December  31, 1996 to
replace the firm of Arthur  Andersen  LLP, who were  dismissed at the same time.
The decision to change accountants was approved by the Board of Directors of the
Company.

         The  reports  of  Arthur  Andersen  LLP  on  the  Company's   financial
statements  for the  fiscal  year ended  December  31,  1995 did not  contain an
adverse opinion or a disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope, or accounting principles.

         In connection with the audit of the Company's financial  statements for
the fiscal year ended  December  31, 1995 and the  subsequent  interim  periods,
there  were  no  disagreements  with  Arthur  Andersen  LLP  on any  matters  of
accounting principles or practices, financial statement disclosures, or auditing
scope and  procedures  which,  if not  resolved  to the  satisfaction  of Arthur
Andersen  LLP would have caused  Arthur  Andersen  LLP to make  reference of the
matter in their report.

         The prior two fiscal years, years ended December 31, 1994 and 1993 were
audited and  reported  on by Smith & Company.  The reports of Smith & Company on
the Company's financial  statements for the fiscal years ended December 31, 1994
and 1993 did not contain an adverse  opinion or a disclaimer of opinion and were
not  qualified  or  modified  as to  uncertainty,  audit  scope,  or  accounting
principles.

         In connection with the audits of the Company's financial statements for
each of the two  fiscal  years  ended  December  31,  1994  and  1993 and in the
subsequent  interim periods ending March 15, 1996,  there were no  disagreements
with  Smith & Company on any  matters of  accounting  principles  or  practices,
financial  statement  disclosures or auditing scope and procedures which, if not
resolved  to the  satisfaction  of Smith & Company  would  have  caused  Smith &
Company to make reference to the matter in their report.

         The Company has  authorized  its prior auditors to respond fully to any
inquires from their successors.

                                       15
<PAGE>

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS.

         The  following  table sets forth the names,  ages and  positions of the
directors and executive  officers of the Company as of March 18, 1997. A summary
of the background and experience of each of these individuals is set forth after
the table.

     Name                 Age             Position
     ----                 ---             --------
Jan J. Olivier            56        President; Chief Executive
                                    Officer; Director

A. Richard Bullock        48        Secretary/Treasurer (Principal
                                    Financial and Accounting
                                    Officer); Director

Ray A. Triphahn           58        Vice President; Assistant
                                    Secretary; Director

         JAN J.  OLIVIER  has  been a  Director  and  the  President  and  Chief
Executive  Officer of the Company  since April 1996 and has served as a business
consultant to the Company since March 1995.  Since 1989 and 1993,  respectively,
Mr.  Olivier has owned Your Choice  International,  Inc. a marketing  consulting
company,  and Cactus  Consultants  International,  Inc., a financial  consulting
firm.  From April 1983 until July 1987, Mr. Olivier was the President of Olivier
Management Corp., a Nasdaq listed company that conducted  international merchant
banking activities and had offices in New York, Zurich,  Miami and Seattle.  Mr.
Olivier has over 30 years of national and international  business experience and
has served on the boards of directors of several companies.

         A. RICHARD BULLOCK has been a Director and the  Secretary/Treasurer  of
the  Company  since  February  1995.  In  addition  to his  responsibilities  as
Secretary/Treasurer  of  the  Company,  Mr.  Bullock  has  been  an  independent
management  consultant since 1979 with the Quidquida Management  Corporation and
has over ten years experience providing corporate and administrative services to
a wide variety of start-up and development  stage  companies.  He has five years
experience as an  independent  transportation  consultant  for both national and
international corporations and governments.

         RAY A. TRIPHAHN has been a Director, the Vice President and Assistant
Secretary of the Company since February 1995.  Mr. Triphahn is a retired
businessman.  Prior to his retirement, Mr. Triphahn held various offices with
entities engaged in various aspects of the construction industry.

MANAGEMENT CONSULTANTS

         The Company has retained John G. Charles to assist it with managing the
technical  aspects  of  the  Company's   product   acquisitions  and  technology
development  plan.  Mr.  Charles is a medical  technologist  who was  previously
employed by Providence Hospital in Seattle,  Washington where he was responsible
for testing  hematology,  virology and  microbiology.  His  experience  includes
seventeen years at the American  Optical  Corporation  with  responsibility  for
sales of technical products in the Pacific Northwest.  He also served as Western
Regional  Sales  Manager  for  the  Warner  Lambert  Division   responsible  for
microscopes,   microtome,   and  clinical  chemistry  systems.   His  management

                                       16
<PAGE>

responsibilities  with Warner  Lambert  Division  included sales and service for
eleven western states, including Washington and Alaska. For the past nine years,
Mr.  Charles  has  participated  in the  development  of early  stage  companies
specializing in marketing and exporting medical  instrumentation  and diagnostic
products  to the  laboratory  field,  including  clinical  chemistry  equipment,
automated semen analyzers and products for microbiology.

         The  Company  has also  retained  Coast  Northwest,  Inc.,  a  business
consulting  firm, to assist it in managing its general  business,  financial and
accounting matters and to lead the professional  search for qualified  personnel
to direct the Company's growth. The two principals of Coast Northwest, Inc. each
have over thirty years of business management experience,  including having held
senior positions with a "Big Six" international accounting firm.

         The Company has contracted with Cactus Consultants International, Inc.
("CCI") for the management services of Mr. Olivier as President, Chief Executive
Officer and Manager of the Company.  It has also contracted the public relation,
investor relations, activities with CCI.

ITEM 10. EXECUTIVE COMPENSATION

         The following table summarizes all compensation paid to the persons who
served in the capacity of  president  during the three most  recently  completed
fiscal years. The Company did not have any executive officers whose total annual
salary and bonus  exceeded  $100,000 for services  rendered in all capacities to
the Company during the fiscal years ended December 31, 1996, 1995, 1994 and 1993
except for its president in 1996.

    Name and                  Fiscal                              Other Annual
Principal Position             year      Salary       Bonus      Compensation(1)
------------------             ----      ------       -----      ---------------
Jan J. Olivier,                1996   $132,000.00     $0.00          $0.00
President; Chief Executive
Officer Director (1)(2)

Clayton M. Hardman,            1995   $      0.00     $0.00          $0.00
President; Chairman of the
Board (1)

Matthew M. Zuckermann,         1995   $      0.00     $0.00          $0.00
President; Director (1)

Krista Castleton,              1995   $      0.00     $0.00          $0.00
President; Director (1)        1994   $      0.00     $0.00          $0.00
                               1993   $      0.00     $0.00          $0.00
----------
(1)  Krista  Castleton  served as the President (The Chief Executive  Officer of
     the Company) from its inception  until her  resignation in February 1995 in
     connection  with the Company's  acquisition of the licensing  rights to the
     Mehica GP120 System.  In February 1995,  Matthew M.  Zuckermann  became the
     President  of the Company  and he resigned in December of 1995.  Clayton M.
     Hardman was appointed President and Chairman of the Board in December 1995.
     In April 1996, Mr. Hardman  resigned as President and Chairman of the Board
     and Mr. Olivier was appointed to the office of President,  Chief  Executive
     Officer and Director.
(2)  Compensation for being President and Chief Executive Officer by Mr. Olivier
     was billed and paid to Cactus Consultants International, Inc.

                                       17
<PAGE>

COMPENSATION OF DIRECTORS

         Directors  do not  receive  compensation  for  service  on the Board of
Directors.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following  table sets forth the  beneficial  ownership of shares of
common  stock of the  Company on March 3, 1997 by each  director  and  executive
officer,  by all directors and executive  officers as a group and by all persons
known by the Company to be the beneficial  owners of more than five percent (5%)
of the Company's common stock.
                                                Shares of Common Stock
                                                  Beneficially owned

                                                      Common Stock
                                        --------------------------------------
                                        Number of Shares            Percent of
Name and Address                        Beneficially Held           Ownership
----------------                        -----------------           ---------
A. Richard Bullock                          100,000                    .7%
19930 48 A Avenue
Langley, BC V3A 6Z7

Ray A. Triphahn                             115,000                    .8%
5200 South Lake Shore Drive #207
Tempe, Arizona 85283

Wendover Securities Corporation           3,100,000                  20.8%
Charlotte house
Charlotte Street
P.O. Box N-8318
Nassau, Bahamas

All directors and executive officers        215,000                   1.5%
  as a group

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Cactus Consulting  International,  Inc. ("CCI") provided  substantially
all of the Company's corporate management and administrative services during the
years  ended  December  31,  1996 and 1995,  for which the  Company  paid to CCI
$404,395 and  $211,561,  respectfully.  The Company  paid CCI 200,000  shares of
Common Stock for settlement of $120,000 in accumulated payables during 1996. The
payments  represent  payment for services rendered and expenses advanced by CCI.
The Company  owed an  additional  $27,090 and  $134,297 on December 31, 1996 and
1995,  respectfully,  for  services  and or  expenses  advanced  by CCI  for the
Company. The Company's President, Jan J. Olivier, owns CCI.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS

          27 - Financial Data Schedule

     (b) REPORTS ON FORM 8-K

          There was one Current Report on Form 8-K filed December 11, 1996.

                                       18
<PAGE>

                                   SIGNATURES

Pursuant to the  regulation  requirements  of the Securities and Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

Date: March 30, 1998                 Bio Fluorescent Technologies, Inc.
                                     (Registrant)


                                     By: /s/ Jan J. Olivier
                                        ---------------------------------
                                             Jan J. Olivier
                                             President, Director

                                     By: /s/ Wynn J. Bott
                                        ---------------------------------
                                             Wynn J. Bott
                                             Controller



                                       19