UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                                 Washington, D.C.

                                                    FORM 10-KSB
(Mark One)
[X]       ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
                                      For the fiscal year ended July 31, 1996



                                                        OR

[  ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the transition period from                                      to



Commission file number:                     1-12726



                                               WIZ TECHNOLOGY, INC.


                                  (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

     NEVADA                                                          33-0560855
STATE OR OTHER JURISDICTION OF INCORPORATION  IRS EMPLOYER IDENTIFICATION NUMBER



                                32951 Calle Perfecto,  San Juan  Capistrano,  CA
                                 92675    ADDRESS   OF    PRINCIPAL    EXECUTIVE
                                 OFFICES(ZIP CODE)



                                                  (714) 443-3000


                                  ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE

Securities Registered Under Section 12(b) of the Exchange Act:
Title of Each Class                    Name of Each Exchange on Which Registered
Common Stock, $.001 Par Value                            American Stock Exchange



Securities Registered Under Section 12(g) of the Exchange Act:
                                                       None


                                                 (Title of Class)



                                                 (Title of Class)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
section 13 or 15 (d) of the  Securities  Exchange Act of 1934 during the past 12
months (or for such  shorter  period that the  registrant  was  required to file
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. [ ]

State issuer's revenues for its most recent fiscal year:    $ 7,056,626 (NET)
                                                           ------------------

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days.  (See  definition  of  affiliate  in  Rule  12b-2  of the  Exchange  Act).
$10,788,305  based on closing  bid of $2.50 for the common  stock on January 31,
1997.




<PAGE>



Note:  If  determining  whether  a  person  is  an  affiliate  will  involve  an
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the common  equity held by  non-affiliates  on the basis of  reasonable
assumptions, if the assumptions are stated.

State the number of shares outstanding of each of the issuer's classes of common
 equity, as of the last
practicable date:   9,045,035 at January 31, 1997

                                        DOCUMENTS INCORPORATED BY REFERENCE
None

Transitional Small Business Disclosure Format (check one):
Yes:                    No:      X       .



<PAGE>







                                               WIZ TECHNOLOGY, INC.

                                               Index to Form 10-KSB

                                                   July 31, 1996

                                                      Part I

Item 1 - Description of Business

Item 2 - Description of Property

Item 3 - Legal Proceedings

Item 4 - Submission of Matters to a Vote of Security Holders

                                                      Part II

Item 5 - Market for Common Equity and Related Stockholder Matters

Item 6 - Management's Discussion and Analysis or Plan of Operation

Item 7 - Financial Statements

Item 8 -  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

                                                     Part III

Item 9 - Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16 (a)
         of the Exchange Act

Item 10- Executive Compensation

Item 11- Security Ownership of Certain Beneficial Owners and Management

Item 12 - Certain Relationships and Related Transactions

Item 13  -Exhibits and Reports on Form 8-K


<PAGE>







                                                      PART I

Item 1 - Description of Business
(a)  Business  Development:  WIZ  Technology,  Inc., a Nevada  corporation  (the
"Company") began operations in January,  1991 and markets low cost, high quality
computer  software,  including  licensed  commercial  software and  "shareware,"
through  portable  displays in computer  stores,  grocery  chains,  airport gift
shops, discount stores and other retailers for IBM PCs and compatibles. In March
1996, the Company acquired the net assets of Q & A Sales And Marketing ("Q & A")
in exchange for 299,994 shares of Company  common stock and 1,200,000  shares of
Series B  Preferred  stock.  Q & A was a  competing  company in the  inexpensive
software  business.  Its  software  titles  and  customers  were,  by and large,
different  from  those  of the  Company.  Additionally,  Q & A  held  a  license
agreement  with Digital  Systems  Research,  Inc.  ("DSR") which as modified was
acquired by the Company in the transaction which provides  worldwide,  exclusive
rights to sell an intranet sofware systems-application to retailers, wholesalers
and original  equipment  manufacturers  (Management wishes to point out that the
terms  "internet" and "intranet" are not exclusive to the Company in that no one
owns nor  controls  the  internet).  DSR retains the rights to sell the software
technology  to the US  government  and its agencies and has made sales to the US
Navy.  Although  management is very enthusiastic  about the possibilities of the
software acquired, at the present there can be no assurance it will develop into
revenues for the Company.  The Company formed a wholly owned  subsidiary  called
"Capotec Business Solutions, Inc." to market the intranet software.

(b)  Business of Issuer:  The Company has  historically  marketed  its  products
directly  and  through  distributors.  The  Company's  product  line of over 200
programs is designed for a wide range of personal  computer users,  particularly
small  business and home users who may have  limited  technical  expertise.  The
Company  selects  software  programs  which it believes  are most  suitable  for
general  public  use  in the  categories  of  games,  utilities,  education  and
business,  integrates  these  programs  with  user-friendly  menu  screens,  and
packages  the CD- ROMs in boxes or jewel  cases and the 3.5"  media in  colorful
diskette  envelopes.  These  software  programs  are  developed  by  independent
programmers who sell the marketing rights to the Company in exchange for royalty
payments.  The royalty  payments are typically  equal to 10% of the net sales of
the  software  and are  written  for a duration  of two years.  However,  in the
immediate  future the Company will be re-directing its primary emphasis from its
core business of software development and sales to selling intranet applications
as discussed above.

The Company intends to focus its business in two broad directions: 1) Continuing
its business of developing and selling  inexpensive  computer software,  and, 2)
develop a marketing  strategy of the intranet  software  acquired during the Q&A
acquisition.  With the  acquisition of Q&A, the Company's  customer base changed
radically from previous  years.  Prior to the acquisition the Company dealt with
many small  companies  for its  inexpensive  software and remained  diversified.
However, with the Q&A purchase, 86% of the Company's sales are vested with eight
major customers/distributors. This was because the sales force of Q&A dealt with
larger companies resulting in fewer, though larger,  sales invoices.  Management
intends to work toward better diversification of the customer base during fiscal
1997 and does not consider the  concentration  of sales a material  risk. In the
fiscal year ended July 31, 1996,  the following  customers  accounted for 10% or
more of the Company's net revenues: CompUSA, 31%, Ingram-Micro,  31%, Slash, 15%
and ADTI, 13%.

Research and Development
The  Company  incurred  no  research  and  development  expense  for fiscal 1996
compared to R&D expense of $29,342 in fiscal 1995.

Competition
The market for the Company's products,  although fragmented, is very competitive
and subject to rapid change and the Company  currently  competes  with  software
distributors and publishers. The Company believes that the principal competitive
factors affecting the market for its products include performance,  ease of use,
functionality,  quality  and  price.  The  Company  believes  that it  generally
competes favorably with respect to each of these factors.  Competitive pressures
could result in price  reductions,  which could affect the  Company's  operating
results.

The Company  also  competes for access to its chosen  channels of  distribution.
Because of relatively  low barriers to entry in the shareware  market,  numerous
shareware  authors  distribute  their products  through other  distributors  and
directly through electronic bulletin boards and advertising in industry oriented
publications.  The Company believes that its existing  infrastructure gives it a
competitive advantage over current and potential competitors.  However, should a
competitor which is larger and better financed than



<PAGE>



the Company choose to compete  directly  against the Company,  such  competition
could have an adverse  affect on the Company;  the Company has also  experienced
competition from other  distributors  utilizing  similar  marketing  displays as
those used by the Company.

Employees
As of July 31, 1996,  the Company had 48  employees,  42 of whom were full time.
The Company  considers its employee  relations to be good. None of the Company's
employees are subject to any collective bargaining agreement.  Certain employees
of Q&A were hired by the  Company on  closing  of the  acquisition.  At July 31,
1996, five of these employees remained,  however, subsequent to that date two of
these  employees  left the  Company.  All  remaining  are  involved in sales and
operations.  Two of these will be  directly  involved  in the  marketing  of the
rights  to the  licensing  agreement  which was  acquired  from DSR  during  the
purchase of Q&A.

Trademarks
 The  Company  believes  that the trade names and  trademarks  used by it in the
aggregate and specifically "$5 Computer Software Store",  "White Wolf",  "Silver
Coyote",  "Publishers  Diamond",  and "World of Multimedia" are important to its
business.  Applications  are  pending  with  the  U.S.  Office  of  Patents  and
Trademarks for the tradename "Wiz  Technology" and various other  trademarks and
trademarks  including "$5 Computer  Software  Store,"  "Cyberquest" and "Rainbow
Avenue  Educational  Software." The Company has been notified that an opposition
has been filed on the trademark  application for "Wiz  Technology," but believes
that the failure to obtain  proprietary  protection on "Wiz Technology" will not
materially  adversely  affect its business.  There can be no assurance  that any
federal trademarks will be granted, in which case the Company intends to rely on
common  law  trademark  protections,   to  the  extent  available.  The  Company
successfully sued a former  distributor for  misappropriation  of trademarks and
similar  causes of action,  and intends to pursue any other  infringing  parties
with vigor.  Litigation to enforce these rights can be protracted and expensive,
and the outcome of any litigation may be uncertain.  If the Company is unable to
defend  ownership of its  proprietary  rights,  its  operating  results could be
materially  adversely  affected  due to  consumer  confusion  and sales  lost to
infringing competitors.

Item 2 - Description of Property
The Company  leases 20,118  square feet of office and  warehouse  space at 32951
Calle Perfecto, San Juan Capistrano, California. The lease extends through March
31, 1998.  The Company  believes  that this space will be adequate for its needs
for the  foreseeable  future.  Additionally,  the  Company is liable for certain
leased  office  space  as a  result  of the Q&A  acquisition  which  extends  to
February,  1997. The space is currently  subleased to other tenants and presents
no material effect on the Company.

Item 3 - Legal Proceedings
Except as set forth  below,  no material  proceedings  to which the Company is a
party,  or to which any of its properties are subject,  are pending or are known
to be  contemplated,  and the Company  knows of no material  legal  proceedings,
pending or threatened,  or judgments  entered against any director or officer of
the Company in his capacity as such.

The Company has filed, on March 23, 1994, a lawsuit  against $5.99 Store,  Craig
Larson and Andrea Larson, former distributors of the Company (collectively,  the
"Defendants"),  in the Supreme Court of British Columbia,  Canada,  for the debt
owed by the $5.99 Store to the Company, and breach of the distribution agreement
entered  into by the Company and the  Defendants.  In the  lawsuit,  the Company
alleges  that  the  Defendants  continue  to use the  Company's  trademarks  and
represent themselves as the owners of such trademarks without the consent of the
Company.  Furthermore,  the Company  alleges the breach of an agreement with the
Defendants,  pursuant  to which  the  Company  agreed  to  extend  credit to the
Defendants. The Company seeks damages in the amount of $477,418.75 (Can) for the
price of goods  sold  and  delivered  to the  Defendants  and for the  financing
charges  associated  therewith.  The lawsuit further alleges that the Defendants
failed to conduct their business affairs in a professional  manner, in breach of
the distribution  agreement.  The Company terminated said distribution agreement
with the  Defendants on February 10, 1994.  The Company seeks also an injunction
restraining  and enjoining the Defendants  from selling and  distributing of the
Company's goods without the Company's  consent.  The Company obtained a judgment
in this  litigation  in the amount of  $364,000  (Can),  but  collection  of the
judgment  has been  stayed  pending  appeal and  resolution  of the  countersuit
described below.

On March 21, 1994, $5.99 Computer Software Store (Canada), Inc.(the "Plaintiff")
 filed a lawsuit in the
Supreme Court of British Columbia, Canada, against the Company in which it
alleges a breach of the



<PAGE>



distribution  agreement by the Company.  The Plaintiff seeks unspecified damages
and an  injunction  restraining  the Company from  distributing  its products in
Canada.  A trial date has been  tentatively  scheduled  for  September,  1998 to
resolve outstanding issues with respect to this matter.

Although the Company believes it has successfully challenged Plaintiff's claims,
in the event the Plaintiff was successful,  the Company believes that the impact
would  neither be material  nor have a material  adverse  impact on the Company.
There can be no assurance  that the  Plaintiff  and others will not bring claims
against the Company nor that the Company can  successfully  challenge  each such
claim.

On April 1, 1996,  the Company was served with a lawsuit  filed in Orange County
Superior  Court by the  underwriter of its 1994 public  offering,  Strausbourger
Pearson Tulcin Wolff Incorporated (the  "Underwriter").  The Underwriter alleges
that the  Company's  sale of a private  placement  in November  1995  violated a
covenant in the underwriting  agreement for the 1994 public offering not to sell
any of its securities until February 9, 1996 without the Underwriter's  consent.
The Company has  answered the  complaint  denying all  allegations  and has also
filed for arbitration with the NASD. The Company believes the lawsuit is without
merit.

On May 24, 1996, the Underwriter filed an additional  complaint in Orange County
Superior Court alleging that the Company had not complied with the Underwriter's
demand  to file a  registration  statement  with  the  Securities  and  Exchange
Commission  to  register  the  shares  underlying  the   Underwriter's   182,000
Underwriter  Warrants received in connection with the 1994 public offering.  The
complaint seeks damages of not less than  $1,000,000.  The Company  believes the
second lawsuit is without merit and has filed an answer denying all allegations.
The Company has filed a motion to disqualify the Underwriter's  legal counsel on
the basis of a conflict of interest.

The Company  has been named in a  respondent  action for breach of contract  and
other business-related torts brought by Daisy Software, Inc. The Company filed a
counter-claim  alleging  numerous  business-related  torts and seeking  punitive
damages.  In  October,   1996  an  arbitrator  with  the  American   Arbitration
Association  who presided over the hearing  awarded  $140,000 to Daisy Software.
This  amount has been  accrued as a  liability  in the July 31,  1996  financial
statements. The Company intends to appeal this judgment.

On October 29,  1996,  Platinum  Entertainment  Partners,  II, a Nevada  general
partnership,  filed in Clark County,  Nevada District Court a complaint  against
the  Company  asserting  three  causes of action  based on an alleged  breach of
contract.  The complaint seeks unspecified  damages, or specific  performance in
which the Company should  provide  240,000 units of the Company's  product.  The
Company intends to vigorously defend the allegations stated in the complaint, as
it believes such allegations are without merit.

See Note #13 in Notes to Consolidated Financial Statements.

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


<PAGE>







                                                      Part II

Item 5 - Market for Common Equity and Related  Stockholder Matters The Company's
Common Stock has been listed on the American  Stock  Exchange  Emerging  Company
Marketplace  ("ECM")  under the symbol "WIZ" since  February 3, 1994.  It is now
published with the "Full American" listing with the symbol "EC". From August 28,
1992 to February 2, 1994 the Company's Common Stock was quoted on the Electronic
Bulletin Board sponsored by the National Association of Securities Dealers, Inc.
The  following  table sets forth the high and low sales for each quarter  during
the last two fiscal years:
 <TABLE>
 <CAPTION>

         Oct-94           Jan-95            Apr-95           Jul-95           Oct-95           Jan-96           Apr-96      Jul-96
         ------
         <S>              <C>                  <C>             <C>           <C>             <C>                <C>        <C>    
         3 5/16           4 3/16               3 1/4          5 1/2          5 3/8           4 5/16              6         9 1/8
          2 5/8            2 3/8                 2           2 9/16          3 3/4           3 1/4              3 3/4      5
</TABLE>


At January 31, 1997 there were  approximately  443  shareholders  of record.  No
dividends have been declared and  management  does not foresee  dividends  being
paid in the near future.

On November 13, 1996,  trading of common  stock on the American  Stock  Exchange
(the  Exchange) was halted due to the Company's  failure to file SEC Form 10-KSB
for the year ended July 31, 1996 in a timely manner.  The Exchange  informed the
Company it has fallen below the Exchange's  listing  requirements and is at risk
of being de-listed. Management believes that with the filing of the Form 10- KSB
for the year ended July 31, 1996 the Company will be in full compliance with all
Exchange rules and will be operating within the Exchange guidelines.  Management
expects  the Company  will remain on the  American  Stock  Exchange  and trading
should resume in early February, 1997.

Item 6 - Management's  Discussion and Analysis or Plan of Operation Management's
Discussion and Analysis of Financial Condition and Results of Operation
Financial Condition:
Despite  reporting a loss in excess of $3.1  million for the year ended July 31,
1996 the Company's general financial condition remains good. Total stockholders'
equity is $6.3 million and total  liabilities of $3.2 million which results in a
ratio of  stockholders'  equity to total  debt of 2:1.  Working  capital of $1.2
million includes a cash position at July 31, 1996 of approximately $451,000. Net
sales for the year ended July 31, 1996  increased  to over $7 million  from $3.7
million for the year ended July 31,  1995.  This  increase in sales is primarily
attributed  to the customer base  acquired  with the Q&A  acquisition  discussed
earlier as well as increased sales to three existing customers. This increase in
sales also changed the  customer-mix  of the Company  from its past  operations.
Sales  and  accounts  receivable  at July  31,  1996 are  concentrated  with 86%
attributed  to fewer  than  eight  customers  (see  Footnote  #2 in the Notes to
Consolidated Financial Statements).  Management, however, does not consider this
an inordinate  risk due to the strength of the customers  involved which are all
credit-worthy  national  accounts  and because the Company is  re-directing  its
emphasis toward the sale of intranet software applications.  Accounts receivable
of $1.9  million  are shown  net of  allowances  of  $608,000  which  management
believes  is  adequate.  Inventories  of  $1.0  million  are  disclosed  net  of
allowances for slow moving/obsolescence of $478,000 which management believes is
also adequate.

Changes in Financial Condition
The two largest changes in balance sheet accounts at July 31, 1996 from July 31,
1995 are the additions of the "Covenant not to Compete" and "License  Agreement"
related to the Q&A  purchase  which are carried at a book value of $557,000  and
$3,368,753  respectively.  These amounts were recorded  primarily as a result of
the Q&A purchase, are disclosed net of allowance for amortization of $43,000 and
$131,247  respectively,  and both are  amortized  over five and ten year  lives,
respectively.  The  valuations  of both of these items were  established  by the
Company based upon the valuation  report  prepared by an  independent  financial
advisor.  The License Agreement  involves the rights of the Company to market an
intranet  software  application  which was developed by DSR. The Company has the
worldwide  exclusive  rights to market  applications  of the  product  to retail
customers  and the  public at  large.  Exclusive  rights  to sell to  government
entities remains with DSR only. It is the marketing of this software application
which  the  Company  believes  will  become  its core  business  in the  future.
Subsequent to July 31, 1996 the Company  entered into three contracts to develop
intranet  applications  for customers.  It is  management's  intention to either
develop  these  projects  directly,  or,  sell  the  contracts  to  third  party
developers for an up-front fee with  participation in future revenues  generated
from the contracts.  Management believes revenues derived from this concept will
be realized in fiscal 1997,  though no assurances  can be given at this time nor
is the Company relying on this source of revenues for its operations in the near
future.



<PAGE>




Management  believes  that  capital and  liquidity  are  sufficient  to meet the
on-going  operations of the Company for the foreseeable future.  Currently,  the
Company  is  seeking  an  accounts  receivable  credit  line with a local  bank.
Management  considers this credit line one of convenience and for  contingencies
rather  than one of  necessity  and  whether or not it is  approved,  management
believes liquidity is sufficient for the foreseeable  future.  Also, in October,
1996 the Company was  successful in completing  an offering  under  Regulation D
whereby it sold $1,250,000 of 7% convertible debentures due October, 1999.

The  Company has no plans for any major  capital  expenditures  in that  current
facilities are adequate for the  foreseeable  future.  The Company also does not
expect to increase the number of employees in the foreseeable future.

Results of Operations
Because  management  believes  the  Company's  future  will be  focused  more on
developing the intranet software  acquired with Q&A,  management chose to revise
its strategic direction. As a result,  management evaluated its product lines in
the fourth quarter of fiscal 1996 and  determined  that the marketing of certain
lines would be  discontinued.  This  resulted in the  write-off  of  significant
software  development costs. In addition,  management  evaluated a number of its
assets for continuing  significance  following the strategic  direction  change.
Write-offs  included charges to inventory,  accounts receivable and fixed assets
(See Footnote #15 of the Notes to Consolidated Financial Statements). Management
also chose to increase the allowance for obsolescence in inventory, and increase
the allowance  for doubtful  accounts  receivable to cover the exposure  created
with the bankruptcy of Neostar-  Babbages later in October,  1996. This customer
accounted for approximately  $300,000 in accounts  receivable for the Company at
July 31, 1996. Management believes these allowances applied to sales,  inventory
and accounts  receivable  are now  adequate  for the near future.  Additionally,
pre-paid advertising of approximately  $700,000 which was to have been amortized
over fiscal 1997 was completely expensed at July 31, 1996 due to a dispute which
arose subsequent to July 31, 1996.

Company  sales for the year ended July 31, 1996 almost  doubled  compared to the
year ended July31,  1995 from $3.7 million to $7.1 million partially as a result
of a change  in  software  sold from 3 1/2 inch  floppy  disks to  CD-Roms,  and
because the Company's  customer base expanded into larger retail operatons which
typically place larger orders.  Cost of revenues  increased from 53% of revenues
in fiscal 1995 to 78% in fiscal 1996 primarily due to increased  development and
packaging costs as it related to the change to CD-Roms,  and because  previously
capitalized  software development costs were expensed in the fourth quarter as a
result of  discontinued  items.  Selling,  general and  administrative  expenses
increased by 84% primarily as a result of the added expenses  related to the Q&A
acquisition.

Foreign  currency  fluctuations  have not had a material effect on the Company's
results of operations.

Item 7 - Financial Statements
The following  Consolidated  Financial  Statements of the Company required to be
included in Item 7 are listed below:

Independent   Accountant's   Report  of  Cacciamatta   Accountancy   Corporation
Independent Accountant's Report of Coopers & Lybrand L.L.P.
Consolidated Balance Sheet as of July 31, 1996
Consolidated Statements of Operations for the Years Ended July 31, 1996 and 1995
Consolidated  Statements  of  Stockholders'  Equity for the Years Ended July 31,
1996 and 1995 Consolidated Statements of Cash Flows for the Years Ended July 31,
1996 and 1995 Notes to Consolidated Financial Statements Item 8 - Changes In and
Disagreements with Accountants on Accounting and Financial
         Disclosure.
On June 26, 1995, Corbin & Wertz, the Company's former  independent  accountants
resigned.  The Company's Board of Directors approved such action.  Except as set
forth hereinbelow, there have been



<PAGE>



no  disagreements  between  the  Company  and  Corbin & Wertz on any  matter  of
accounting  principles or practices,  financial statement disclosure or auditing
scope or  procedure.  A  disagreement  between  the  Company  and Corbin & Wertz
occurred in connection  with the preparation of the Company's third quarter 1995
Form 10Q-SB  (the "Form  10Q-SB").  The Company  prepared a draft of Form 10Q-SB
which  was sent for a  limited  review  to  Corbin  & Wertz.  Included  in those
financial  statements  were costs  incurred  which the  Company  believed  to be
capitalizable   under  Statement  of  Financial   Accounting   Standard  No.  86
"Accounting for the Costs of Computer Software to be Sold, Licensed or Otherwise
Marketed"  (SFAS 86) with  respect to its new  product  line.  Those  costs were
included under the caption Other Assets in the draft document. After reading the
Form 10Q-SB and discussing its contents with management, Corbin & Wertz informed
the Company that the costs, in their opinion,  did not qualify as  capitalizable
costs under SFAS 86. Upon further  discussion,  Corbin & Wertz  indicated that a
portion of these costs might be inventoriable  costs and that executive salaries
could not be capitalized.  The Company  reclassified  an amount,  which together
with associated overhead,  constituted all of such costs in question,  including
executive  salaries,  to be included  under the caption  Inventory and filed the
Form 10Q-SB  without  further  review or advice  from  Corbin & Wertz.  Based on
discussion with Company  management and its previous  knowledge of the Company's
business from prior audits,  Corbin & Wertz informed the Company that it did not
agree that all of these costs are capitalizable.

On  June  29,  1995,  the  Company  engaged  Coopers  &  Lybrand  L.L.P.  as its
independent  accountants to audit the Registrant's  financial statements for the
fiscal year ended July 31, 1995.  Prior to the  engagement  of Coopers & Lybrand
L.L.P.  the Company did not consult with Coopers & Lybrand L.L.P.  regarding (i)
the application of accounting  procedures to a specified transaction or the type
of audit opinion that might be rendered on the Company's  financial  statements,
or (ii) any matter that was the subject of a  disagreement  with or a reportable
event regarding the Company's former independent public accountants.

As  reported  on Form 8-K dated  August  24,  1996,  the  Company's  independent
accountants,  Coopers & Lybrand L.L.P.  resigned.  Coopers & Lybrand L.L.P.  had
audited the Company's financial statements for the year ended July 31, 1995. The
Board of Directors  approved the  resignation of Coopers & Lybrand L.L.P.  There
were no  disagreements  with the former  accountant  on any matter of accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure  which would have caused it to make reference to the subject matter of
the disagreements.

The accountants'  reports on the consolidated  financial statements for the past
two years contained no adverse opinion nor disclaimer of opinion,  nor were they
modified as to uncertainty, audit scope, or accounting principles.

As reported on Form 8-K dated  September  23, 1996,  the Company  engaged  Grant
Thornton, L.L.P. as its new independent accountants.  Prior to the engagement of
Grant Thornton, L.L.P. the Company did not consult Grant Thornton, L.L.P. on the
application  of accounting  principles to a specific  completed or  contemplated
transaction  or type of audit  opinion that might be expressed on the  Company's
financial statements.

As reported on Form 8-K dated December 17, 1996, Grant Thornton, L.L.P. resigned
as  independent   accountants  and  was  replaced  by  Cacciamatta   Accountancy
Corporation.  From the date of engagement of Grant Thornton  through the date of
resignation of Grant Thornton,  there were no disagreements  with Grant Thornton
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure,  or auditing scope or procedure,  except as follows:  Grant Thornton
advised the  Registrant  that Grant  Thornton had noted a pattern of events that
led Grant  Thornton to conclude that Grant  Thornton was no longer willing to be
associated with the financial statements prepared by the Registrant.  The events
which  were  mentioned  to  the  Registrant  by  Grant  Thornton   included  the
Registrant's  lack of preparation for the audit, the issuance of a press release
by the  Registrant on the results of operations for the year ended July 31, 1996
which required substantial revisions due to significant accounting  adjustments,
and the  Registrant's  lack of  understanding  of the  significance  of  certain
matters to the  preparation  of financial  statements  and the audit thereof and
timeliness of both internal and external  communication of those matters.  Grant
Thornton  also advised the  Registrant  that for the period  Grant  Thornton was
engaged to audit (the year ended July 31,1996) the  Registrant  did not have the
appropriate level of management or board oversight over the Company's accounting
policies, practices or other procedures.




<PAGE>



Prior to the engagement of Cacciamatta  Accountancy  Corporation the Company did
not consult Cacciamatta Accountancy Corporation on the application of accounting
principles to a specific completed or contemplated  transaction or type of audit
opinion that might be expressed on the Company's financial statements.


<PAGE>







                                                     Part III

Item 9 - Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section
         16 (a) of the Exchange Act
The members of the Board of  Directors  serve  until the next annual  meeting of
stockholders, or until their successors have been elected. The officers serve at
the pleasure of the Board of Directors.

                 Name                        Age                           Title
         Mar-Jeanne Tendler *                48 Chairman, Chief Executive
                                               Officer and Director
          Arthur S. Tendler *                49 President and Director
          Bruce Allen Gilgen                 49 Executive Vice President, Chief
                                                Operating Officer and   Director
              Gary Wolfe                     40 Executive Vice President-Sales
           Richard H. Nance                  48 Chief Financial Officer


(*)Arthur S. and Mar-Jeanne Tendler are husband and wife.
No directors are directors of any other reporting companies.

Mar-Jeanne Tendler has been Chairman,  Chief Executive Officer and a Director of
the Company's California subsidiary since its incorporation in September,  1991.
She has been  Chairman,  Chief  Executive  Officer and a Director of the Company
since August, 1992.

 Arthur S. Tendler has been  President  and a Director of the Company  since its
incorporation in September,  1991. He was Acting Chief Financial  Officer of the
Company's  California  subsidiary from August,  1994 to July,  1995. He has been
President,  Chief Operating  Officer and a Director of the Company since August,
1992 and was Chief Financial Officer from September 1991 to October 1993.

Bruce Allen Gilgen has been Executive Vice President,  Chief  Operating  Officer
and a Director of the Company's California subsidiary since September, 1991, and
has held the same position in the Company since August, 1992.

Gary Wolfe  joined the Company in March,  1996 as  Executive  Vice  President of
Sales from Q&A Sales and  Marketing.  Prior to joining the Company he was CEO of
Q&A from April, 1993 until the acquisition by the Company.  As CEO of Q&A he was
responsible   for  over  15  national   and   international   software   company
product-lines, involved in sales, distribution and product development. Prior to
Q&A he was Executive  Vice  President of Cosmi Software from May, 1987 to April,
1993. In his role he  established  one of the top software  lines in the "budget
category" of software.

Richard H. Nance  joined the Company as Chief  Financial  Officer in  September,
1996.  He has been involved in  accounting,  finance and banking for over twenty
years.  He has been senior vice  president and executive vice president in state
and nationally  chartered  banks and worked as a National Bank Examiner with the
Comptroller of the Currency. For the three years prior to joining the Company he
worked as a principal in Calspectre  Management  Consulting.  From July, 1989 to
October,  1993 he was chief  financial  officer of  Mortgage  BancFund  Inc.,  a
mortgage  banking  operation  in  Irvine,  CA. He holds a Bachelor  of  Business
Administration in Banking and Finance from North Texas State  University,  and a
Bachelor of Science in Accounting from Central State University of Oklahoma.  He
is a Certified  Public  Accountant  and a member of the AICPA and the California
Society of CPA's.

Compliance with Section 16(a) of the Exchange Act
Based solely on a review of Forms 3 and 4 and amendments  thereto,  furnished to
the  Company  during its most recent  fiscal  year,  and Forms 3 and  amendments
thereto,  furnished to the Company  with respect to its most recent  fiscal year
and certain written  representations,  each of Mar-Jeanne and Arthur Tendler and
Bruce Gilgen failed to file one Form 4 in June 1996.

Item 10- Executive Compensation
Employment Agreements
The Company  entered into three-year  employment  contracts with each of Messrs.
Gilgen and Tendler and Ms. Tendler  commencing on August 1,1993 and were renewed
for aone year term.
  The contracts
provide for annual compensation of $140,000 each to Mr. Tendler and Ms. Tendler
 and $100,000 to Mr.
Gilgen.  The annual compensation is subject to annual increase by the Board of
Directors and bonus based on profitability of the Company.




<PAGE>



The Company also entered into an  employment  contract in March,  1996 with Gary
Wolfe which  continues  through July,  1999.  This contract  provides for annual
compensation  of $180,000  which is base  salary and  commission  advances.  The
contract also provides for  commissions to be paid on sales relating to internet
revenues  generated  pursuant  to the  Company's  intranet  application  license
agreement with DSR.
 <TABLE>
 <CAPTION>


                                            Summary Compensation Table
--------------------------------------------------------------------------------------------------------------------------
                         ANNUAL COMPENSATION                                         LONG TERM COMPENSATION
                                                                       ---------------------------------------------------
                                                                                  -------------------------------------------------
                                                                                             AWARDS               PAYOUTS        All
                                                                                                                               Other

------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Name and Principal Position     Year        Salary          Bonus        Other       Restricted       Options        Payouts
                                               $                                        Stock
-----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>         <C>               <C>          <C>            <C>            <C>            <C>      <C>
Mar-Jeanne Tendler              1996        140,000           0            0              0              0              0         0
-----------------------------------------------------------------------------------------------------------------------------------
                                1995        140,000           0            0              0           100,000           0         0
------------------------------------------------------------------------------------------------------------------------------------
                                1994        140,000           0            0              0           100,000           0         0
-----------------------------------------------------------------------------------------------------------------------------------
Arthur S. Tendler               1996        140,000           0            0              0              0              0         0
-----------------------------------------------------------------------------------------------------------------------------------
                                1995        140,000           0            0              0           100,000           0         0
-----------------------------------------------------------------------------------------------------------------------------------
                                1994        140,000           0            0              0           100,000           0         0
------------------------------------------------------------------------------------------------------------------------------------
Bruce Allen Gilgen              1996        100,000           0            0              0              0              0         0
------------------------------------------------------------------------------------------------------------------------------------
                                1995        100,000           0            0              0           100,000           0         0
-----------------------------------------------------------------------------------------------------------------------------------
                                1994        100,000           0            0              0           100,000           0         0
-----------------------------------------------------------------------------------------------------------------------------------
Gary Wolfe (1)                  1996        100,000           0          80,000           0           100,000           0         0
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

---------------------------------------------------------------------------- 
   Gary Wolfe's  contract also provides for  commissions  on sales of software
     and revenues  derived from the licensing  arrangement with DSR with minimum
     annual payments of $80,000.
Directors receive no compensation to perform duties as directors.
<TABLE>
<CAPTION>

Options Granted in Fiscal 1996:
----------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                <C>                                 <C>                    <C>
                                                     Percentage of Total Options
Name                              Options Granted    Granted to Employees in 1996        Exercise Price         Expiration Date
----------------------------------------------------------------------------------------------------------------------------------
Gary Wolfe, EVP                        100,000                      83%                         5.4375            March, 2006
----------------------------------------------------------------------------------------------------------------------------------

Aggregated Option Exercises and Fiscal Year-End Option Value Table:
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   Value of
                                                                                                                Unexercised In-
                                                                                                                   the-Money
                                                                        Number of Unexercised Options and       Options at July
                                                                                     Warrants                      31, 1996
----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
                           Shares Acquired on
Name                            Exercise            Value Realized         Exercisable        Non-Exercisable       Exercisable
------------------------------------------------------------------------------------------------------------------------------------
Mar-Jeanne Tendler                -0-                    -0-                 300,000                -0-              $1,138,000
------------------------------------------------------------------------------------------------------------------------------------
Arthur S. Tendler                 -0-                    -0-                 300,000                -0-              $1,138,000
------------------------------------------------------------------------------------------------------------------------------------
Bruce Allen Gilgen               25,000                 37,500               275,000                -0-              $1,025,500
------------------------------------------------------------------------------------------------------------------------------------
Gary Wolfe                        -0-                    -0-                 100,000                -0-               $56,000
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Stock Option Plan
The Company adopted the 1992 Stock Option Plan (the "Plan") in August, 1992, and
amended  and  restated  the Plan to  increase  the number of  authorized  shares
issuable  thereunder from 500,000 shares to 800,000 shares in January,  1993 and
again in May, 1996 to 2,000,000 shares. The Plan enables the Company to offer an
incentive based compensation system to employees,  officers and directors and to
the  principal  employees of companies  who perform  consulting  services to the
Company provided such companies have a very limited number of employees.

Any shares  which are subject to an award but are not used because the terms and
conditions  of the  award  are  not  met,  or  any  shares  which  are  used  by
participants to pay all or part of the purchase price of any option may again be
used for awards  under the Plan.  However,  shares with respect to which a stock
appreciation right has been exercised may not again be made subject to an award.

In the  discretion  of a committee  comprised  of  non-employee  directors  (the
"Committee"),  directors,  officers,  and key  employees  of the Company and its
subsidiaries  or  employees of  companies  with which the Company does  business
become  participants  in the Plan  upon  receiving  grants  in the form of stock
options or restricted  stock.  The Board of Directors is currently acting as the
Committee.

Stock options may be granted as  non-qualified  stock options or incentive stock
options,  but  incentive  stock  options may not be granted at a price less than
100% of the fair market value of the stock as of the



<PAGE>



date  of  grant  (110%  as to  any  10%  shareholder  at  the  time  of  grant);
non-qualified  stock options may not be granted at a price less than 85% of fair
market value of the stock as of the date of grant.  Restricted  stock may not be
granted under the Plan in connection with incentive stock options.

Stock  options may be exercised  during a period of time fixed by the  Committee
except that no stock option may be exercised  more than ten years after the date
of grant or three years after death or  disability,  whichever is later.  In the
discretion  of the  Committee,  payment of the purchase  price for the shares of
stock  acquired  through  the  exercise  of a stock  option may be made in cash,
shares of the Company's Common Stock or by delivery or recourse promissory notes
or a combination  of notes,  cash and shares of the Company's  Common Stock or a
combination  thereof.  Incentive  stock options may only be issued to directors,
officers and employees of the Company.

Stock  options  granted  under the Plan  might  include  the right to acquire an
Accelerated  Ownership  on-Qualified Stock Option ("AO"). All options granted to
date have included the "AO" feature.  If an option grant contains the AO feature
and if a participant  pays all or part of the purchase  price of the option with
shares of the  Company's  Common  Stock,  then upon  exercise  of the option the
participant  is granted an AO to  purchase,  at the fair market  value as of the
date of the AO grant,  the number of shares of Common Stock of the Company equal
to the sum of the number of whole shares used by the  participant  in payment of
the  purchase  price and the number of whole  shares,  if any,  withheld  by the
Company as payment for  withholding  taxes.  An AO may be exercised  between the
date of grant and the date of expiration,  which will be the same as the date of
expiration  of  the  option  to  which  the  AO  is  related.  Under  the  Plan,
"fair-market  value" for purposes of  replacement AO options will be the average
of the  closing  bid and ask prices of the Common  stock if it is then  publicly
traded,  or if not traded,  the fair  market  value  determined  by the Board of
Directors.

Stock appreciation  rights and/or restricted stock may be granted in conjunction
with, or may be unrelated to stock options.  A stock appreciation right entitles
a  participant  to receive a payment,  in cash or Common Stock or a  combination
thereof,  in an amount equal to the excess of the fair market value of the stock
at the time of  exercise  over the fair  market  value as of the date of  grant.
Stock appreciation  rights may be exercised during a period of time which may be
fixed by the  Committee not to exceed ten years after the date of grant or three
years after death or disability,  whichever is later.  Restricted stock requires
the  recipient  to  continue  in service as an  officer,  director,  employee or
consultant  for a fixed  period of time,  as may be  determined  by the Board of
Directors,  for ownership of the shares to vest.  If restricted  shares or stock
appreciation  rights are issued in tandem with options,  the restricted stock or
stock  appreciation right is canceled upon exercise of the option and the option
will likewise terminate upon vesting of the restricted shares.

Item 11- Security Ownership of Certain Beneficial Owners and Management
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------------
<S>          <C>                                                                        <C>                        <C>
Title of                                                                                Amount and Nature of        Percent
Class                        Name/Address of Beneficial Owner(1)(2)                       Beneficial Owner         of Class
-------------------------------------------------------------------------------------------------------------------------------
Common        Mar-Jeanne Tendler, 32951 Calle Perfecto, San Juan Capistrano, CA 92675      1,788,000(3)(4)           18.8
-------------------------------------------------------------------------------------------------------------------------------
Common        Arthur S.Tendler, 32951 Calle Perfecto, San Juan Capistrano, CA 92675         1,682,800(3)             17.6
-------------------------------------------------------------------------------------------------------------------------------
Common        Bruce Allen Gilgen, 32951 Calle Perfecto, San Juan Capistrano, CA 92675       1,375,000(3)             14.5
-------------------------------------------------------------------------------------------------------------------------------
Common        Willie Woods, 4301 N. Fairfax Dr., Ste 725, Arlington, VA 22203(6)            1,099,201(5)             12.7
-------------------------------------------------------------------------------------------------------------------------------
Common        Gary Wolfe, 32951 Calle Perfecto, San Juan Capistrano, CA 92675                446,623 (5)              4.8
-------------------------------------------------------------------------------------------------------------------------------
Common        Gerson Lacoff, Trustee, The Red Net Trust, 32951 Calle Perfecto, SJC(7)       1,000,000(6)             11.6
-------------------------------------------------------------------------------------------------------------------------------
Common        All executive officers as a group                                          5,292,423 (2)(3)(4)         48.8
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)      The address of each individual is 32951 Calle Perfecto, San Juan
Capistrano, California  92675,
         unless otherwise noted.
(2)      Unless  otherwise  indicated,  the persons named in the table have sole
         voting  and  sole   investment   power  with   respect  to  all  shares
         beneficially   owned,   subject  to  community   property   laws  where
         applicable.
(3)      Included  500,000  shares of Common  Stock  issuable  upon  exercise of
         options held by each of Mar-Jeanne  and Arthur  Tendler and Mr. Gilgen,
         but not an  additional  400,000  shares of Common Stock  issuable  upon
         exercise  of options  which are not yet vested.  Mar-Jeanne  and Arthur
         Tendler,  husband and wife, disclaim beneficial ownership of the shares
         held by the other.
1        Includes 13,000 shares held by Mar-Jeanne Tendler as trustee for minor
relatives.
1        Includes 281,194 shares issuable upon conversion of 281,194 shares of
 Series B preferred
         stock,  and  options to  purchase  100,000  shares of common  stock (6)
Includes  891,717 shares  issuable upon conversion of 891,717 shares of Series B
Preferred
         Stock owned by DSR.  Mr. Woods is the controlling shareholder of DSR
and is deemed to
         beneficially own all of the shares of common stock owned by DSR.
(7)           Includes 1,000,000 shares held by a family trust of which Gerson
Lacoff is trustee.



<PAGE>



Item 12 - Certain Relationships and Related Transactions
During  1991 and 1992,  the  parents of  Mar-Jeanne  Tendler,  Gerson and Elaine
Lacoff, entered into a series of transactions whereby they loaned the Company an
aggregate  amount  of  $80,000.  For  this  they are  paid  interest  quarterly.
Additionally,  the Lacoff's  received 10,000 shares of Company common stock, and
have the  option of  converting  the  entire  debt,  principal  and  outstanding
interest,  to common stock computed at a stock price of $1.50 per share. To date
they have not exercised  this option and the principal  outstanding  debt to the
Lacoff's at July 31, 1996 is $80,000.

In August 1992, the Company adopted the 1992 Stock Option Plan, under which plan
three year  non-qualified  options to purchase 100,000 shares at $1.50 per share
were granted to each of Mar-Jeanne  Tendler,  Arthur Tendler,  and Bruce Gilgen.
These  options were  extended  until August  1997.  In fiscal 1994,  the Company
granted, under the 1992 Stock Option Plan options, to purchase 100,000 shares at
a price of $2.125 per share,  to each of Mar-Jeanne  Tendler,  Art Tendler,  and
Bruce Allen Gilgen. In fiscal 1995, the Company granted,  outside the 1992 Stock
Option Plan,  three-year  options to each of these  persons to purchase  100,000
shares at a price of $3.00 per share.  Mr. Gilgen  exercised  25,000  options at
$1.50 per share during  fiscal  1996.  No other  options have been  exercised to
date.

On August 8, 1994, the Company  loaned to James M. Duarte,  former legal counsel
to the Company,  $150,000 (the "Loan"),  payable at a rate of $25,000 per month,
with no  interest,  commencing  30 days from the date of  registration  with the
Securities  and Exchange  Commission of Mr.  Duarte's  186,364  shares of Common
Stock,  provided such registration  occurred not later than October 31, 1994. As
consideration  for the Loan and subsequent loans in the amount of $175,000 for a
total of $325,000,  Mr.  Duarte  agreed to sell not more than 50,000  shares per
month unless otherwise  consented by the Company.  Said limitation on the number
of shares  sold by Mr.  Duarte  was not to apply,  however,  if the price of the
Company's  Common  Stock  increased to $5.00 per share or decreased to $1.50 per
share or if the stock was not  registered  and freely  tradeable  by October 31,
1994.  The  shares  were  not  registered  by  October  31,  1994.  The Loan was
collateralized  by Mr. Duarte's pledge of 100,000 shares of the Company's common
stock and was repaid by December  1995 by an unrelated  third party who acquired
the shares from Mr. Duarte.

The Company has a $100,000  certificate  of deposit at El Dorado Bank  (formerly
Mariners  Bank) which  collateralizes  a personal  obligation of Mar-Jeanne  and
Arthur S. Tendler in the amount of $100,000. The outstanding balance of the loan
at July 31, 1996 was approximately $97,000.

Management  believes  the  terms  of the  foregoing  transactions  were  no less
favorable to the Company than would have been  obtained from  independent  third
parties for similar transactions.

Item 13 - Exhibits and Reports on Form 8-K



                                                      PART IV


Item 13.  Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

         (a)      The following documents are filed as a part of this
Report:

                  (1)      Financial Statements.  The  consolidated
                           financial statements of the Company are included in
                           Part II, Item 8, herein.
 Exhibit
 Number                                 Description

2.   Plan of acquisition, reorganization, arrangement, liquidation
     or succession.

     2.1     Agreement and Plan of Reorganization, dated February 14,1996,
             between the Company, Q&A Sales Marketing, Inc. and Q&A
             Acquisition Company(5)

3.   Certificate of Incorporation and Bylaws

     3.1     Articles of Incorporation(2)
     3.2     Bylaws(2)
     3.3     Certificate of Amendment to Articles of Incorporation for
             change in name of registrant to "WIZ Technology, Inc."(1)
     3.4     Certificate of Designation for Series A Convertible
             Preferred Stock(8)
     3.5     Certificate of Designation for Series B Convertible
             Preferred Stock(8)

4.   Instruments defining rights of holders, including indentures.

     4.1     Warrant Agreement between the Company and Strasbourger
             Pearson Tulcin Wolff(1)

     4.2     Form of the Company's 7% Convertible Debenture(8)
     4.3     Form of Warrant granted to Cameron Capital Management as to
             62,500 shares and DJ Ltd. as to 78,750 shares(8)
     4.4     Form of Warrant granted to First Bermuda Securities, Ltd.
             with Schedule of Details(8)



<PAGE>



10.      Material Contracts

     10.1    1992 Stock Option Plan, as amended(2)
     10.2    Form of Stock Option Agreement with Mar-Jeanne Tendler,
                  Arthur S. Tendler and Bruce Allen "Gil" Gilgen(2)
     10.3    Demand Promissory Note in favor of Elaine & Gerson
             Lacoff(2)
     10.5 Consulting  Agreement with Dale Kostman (1) 10.7 Employment  Agreement
     between the Company and Arthur S.
             Tendler(1)
     10.8    Employment Agreement between the Company and Mar-Jeanne
             Tendler(1)
     10.9    Employment Agreement between the Company and Bruce Allen
             Gilgen(1)
     10.10        Registration rights agreements and schedule of
                  beneficiaries(1)
     10.12        Consulting Agreement between the Company and Strasbourger
                  Pearson Tulcin Wolff(1)
     10.13        Promissory Note from Company in favor of Mar-Jeanne and
                  Arthur Tendler(1)
     10.14        Extension and amendment of Promissory Note from Company
                  in favor of Mar-Jeanne and Arthur Tendler(1)
     10.15        Lease for the Company's executive offices(3)
     10.16        Consulting Agreement between the Company and Stuart
                  Wertzberger(3)
     10.17        Trust Agreement between Stuart Wertzberger and the
                  Company(3)
     10.19        Consulting Agreement between the Company and Jensen
                  Consultants, Inc.(4)
     10.20        Promissory note from Arthur Tendler dated July 31, 1995(4)
     10.21        Form of Convertible Promissory Notes and schedule of
                  details(4)
     10.22        Software Development and License Agreement between the
                  Company and Digital Systems Research, Inc. dated March 8,
                  1996(6)(P)
     10.23        Employment Agreement with Gary Wolfe(6)(P)
     10.24        Covenant Not-to-Compete(6)

16.      Letter on change in certifying accountant
     16.1    Letter from Corbin & Wertz(4)
     16.2    Letter from Coopers & Lybrand L.L.P.(7)
     16.3    Letter from Grant Thornton LLP (8)
21.      Subsidiaries of the small business issuer(6)



(1)      Incorporated by reference to the Company's Registration
         Statement on Form SB-2, filed on November 1, 1993
(2)      Incorporated by reference to the Company's Registration
         Statement on Form 10-SB, File No. 0-20910 (the "Form 10")
(3)      Incorporated by reference to the Company's Annual Report on
         Form 10K-SB for the year ended July 31. 1994.


<PAGE>



(4)      Incorporated by reference to the Company's Annual Report on Form 10K-SB
         for the year ended July 31, 1995.
(5)      Incorporated by reference to the Company's Current Report on
         Form 8-K dated March 12, 1996.
(6)      Incorporated by reference to the Company's Registration
         Statement on Form S-3, file no. 333-6423, filed on June 20,
         1996.
(7)      Incorporated by reference to the Company's Current Report on
         Form 8-K dated August 21, 1996.
(8)      Incorporated by reference to the Company's Current Report on
         Form 8-K dated December 12, 1996.
     


          All other  Exhibits  called for by Rule 601 of Regulation  S-B are not
applicable to this filing.


(b).      Reports on Form 8-K

          A report on Form 8-K dated June 26, 1995 was filed as
          disclosed in Item 8, to report a change in auditors.  See Item
          8.



<PAGE>





<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.

WIZ TECHNOLOGY, INC.



By


Mar-Jeanne Tendler, Chairman of the Board and Chief Executive Officer

Date



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.

By


Arthur S. Tendler, President

Date:



By


Bruce Allen Gilgen, Executive Vice President, Chief Operating Officer

Date:



By:


Richard H. Nance, Chief Financial Officer

Date:





                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARY
                                                    ----------




                            REPORT ON AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                              As Of July 31, 1996 And
                                    For The Years Ended July 31, 1996 And 1995
                                                    ----------


<PAGE>



                              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                                                    ----------



To the Stockholders and
    Board of Directors of
    WIZ Technology, Inc.

We have audited the accompanying  consolidated  balance sheet of WIZ Technology,
Inc.  and  Subsidiaries  as of  July  31,  1996,  and the  related  consolidated
statements of operations,  stockholders' equity and cash flows for the year then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of WIZ Technology,
Inc. and Subsidiaries as of July 31, 1996, and the results of their consolidated
operations  and  their  consolidated  cash  flows for the year  then  ended,  in
conformity with generally accepted accounting principles.






Cacciamatta Accountancy Corporation
Irvine, California
January 28, 1997

<PAGE>
            REPORT OF INDEPENDENT ACCOUNTANTS


To the Stockholders and Board of Directors of
  WIZ Technology, Inc. and Subsidiary


We  have  audited  the  accompanying   consolidated  statements  of  operations,
stockholders'  equity and cash  flows for the year  ended  July 31,  1995 of WIZ
Technology, Inc. and Subsidiary. These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the results of operations and cash flows of
WIZ  Technology,  Inc.  and  Subsidiary  for the year  ended  July  31,  1995 in
conformity with generally accepted accounting principles.


COOPERS & LYBRAND L.L.P.
Newport Beach, California
November 8, 1995




<PAGE>

<TABLE>

<CAPTION>


                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                              CONSOLIDATED BALANCE SHEET
                                                 As Of July 31, 1996
                                                      ----------
----------------------------------------------------------------------------------------------------------------------------

                                                       A S S E T S


<S>                                                                                                             <C>
Current assets:
   Cash and cash equivalents                                                                                    $  450,971
   Accounts receivable, net of allowance for doubtful accounts of $ 607,653                                      1,903,999
   Notes receivable                                                                                               127,415
   Notes receivable from stockholders                                                                              103,596
   Prepaid expenses and other current assets                                                                       505,681
   Inventories                                                                                                     998,814
   Employee advances                                                                                                48,909


              Total current assets                                                                               4,139,385



Property and equipment, net                                                                                        874,701

License agreement, net of accumulated amortization of $ 131,247                                                  3,368,753

Software development costs                                                                                         199,181

Certificate of deposit                                                                                             100,000

Covenants not to compete, net of accumulated amortization of $ 352,161                                             637,214
Other assets                                                                                                       204,969

             Total assets                                                                                      $9,524,203


                                          LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
   Obligations under capital leases, current                                                                      $101,109
   Accounts payable                                                                                              1,443,558

   Accrued expenses                                                                                                463,084

   Accrued salaries and wages                                                                                      257,770
    Notes payable                                                                                                  500,000
    Accrued settlement expense                                                                                     140,000
   Convertible debt to related party                                                                                80,000
              Total current liabilities                                                                          2,985,521



Obligations under capital leases, noncurrent                                                                       216,719
              Total liabilities                                                                                  3,202,240

Commitments and contingencies




Stockholders' equity:
    Preferred stock, $.001 par value, 10,000,000 shares authorized
         Series A, 1,050 shares issued and outstanding                                                                  1
          Series B, 1,200,000 shares issued and outstanding                                                          1,200


   Common stock, $.001 par value, 50,000,000 shares authorized, 8,935,581 shares
            issued and outstanding                                                                                   8,936
    Additional paid-in capital-preferred                                                                         3,762,799

   Additional paid-in capital-common                                                                             8,671,553

   Services receivable for common stock issued                                                                    (28,350)

    Note receivable from stockholder                                                                             (157,500)

   Accumulated deficit                                                                                         (5,936,676)




              Total stockholders' equity
                                                                                                                 6,321,963

                     Total liabilities and stockholders' equity                                                 $9,524,203
</TABLE>


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

<TABLE>
<CAPTION>


                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES

                                        CONSOLIDATED  STATEMENTS  OF  OPERATIONS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


--------------------------------------------------------------------------------------------------------------------------------
                                                                                              1996                1995
                                                                                              ----                ----




<S>                                                                                           <C>               <C>                
Net revenues                                                                                  $7,056,626        $        $3,680,634
                                                                                                



Costs and expenses:
   Cost of revenues                                                                             5,539,431                 1,932,746

   Selling, general and administrative expenses                                                 4,381,249                 2,387,436
                                                                                                
   Research and development                                                                     ---                    29,342



                 Total costs and expenses                                                       9,920,680              4,349,524



                 Loss from operations                                                                               
                                                                                              (2,864,054)             (668,890)
-
Nonoperating expenses (income):
   Interest income                                                                                (68,970)            (74,792)
                                                                                                

   Interest expense                                                                                129,553             41,160
                                                                                                  
   Other                                                                                           202,100            (73,347)


                 Total nonoperating expenses (income)                                             262,683            (106,979)
                                                                                                  



                 Loss before provision for income taxes                                         (3,126,737)         (561,911)
                                                                                              


Provision for income taxes                                                                            800               800





                 Net loss                                                                      ($3,127,537)          ($562,711)
                                                                                                      
Net loss per share                                                                                
                                                                                                    ($0.37)            ($0.07)


Weighted average number of common shares outstanding                                              8,352,183         7,944,034

</TABLE>

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


                                                        F-8
<TABLE>
<CAPTION>

                                                    WIZ TECHNOLOGY, INC. AND SUBSIDIARY

                                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                                For The Years Ended July 31, 1996 and 1995

                                                                                               Note
                                                                       Addi-                  Receiv-    Note
                                                                       tional      Addi-       able     Receiv-
                                                                       Paid-in    tional       For      able                Total
                     Series A       Series B                           Capital    Paid-in     Common     From     Accum-    Stock-
                  Preferred Stock Preferred Stock   Common Stock        Pre-      Capital      Stock    Stock-    ulated   holders'
                 Shares  Amount   Shares  Amount   Shares Amount        ferred    Common       Issued    holder    Deficit   Equity


<S>             <C>    <C>      <C>        <C>   <C>        <C>       <C>      <C>        <C>        <C>         <C>      <C>  
Balances at
July 31,1994                                     7,851,768  $   7,852          $5,359,715 $ (73,962)$(150,000)$(2,246,428)$2,897,177

Stock issued
  for services
rendered                                            30,034         30              94,240                                     94,270
Stock issued
  for services
to be rendered                                     109,432        109             233,641  (233,750)
Stock issued
  for covenant
not to compete                                      25,000         25              39,350                                     39,375
Stock issued
  for exercise
of options                                           2,555          3               4,606                                      4,609
Stock issued
  to employees
for bonuses                                          1,740          2               5,129                                      5,131
Services rendered
  for stock
  previously
issued                                                                                      106,716                          106,716
Reclassification
  of services and
  notes receivables
from stockholders                                                                            69,596   150,000                219,596
Net loss                                                                                                          (562,711)(562,711)


Balances at
July 31, 1995                                    8,020,529  $   8,021            5,736,681 (131,400)            (2,809,139)2,804,163

Stock issued
  for services
rendered                                            88,199         88             415,124                                    415,212
Services
  rendered for
  stock previously
issued                                                                                      103,050                          103,050
Note receivable 
from stockholder                                    45,000         45             157,455            (157,500)
Stock issued
  in private
  offering -less
issuance cost   2,000 $      2                                        $1,799,998                                           1,800,000
Conversion of
  preferred stock
to common stock  (950)       (1)                    299,564        300  (854,999)   854,700
Record charge
on cheap options                                                                    169,081                                  169,081
Exercise of
stock options                                        99,018         99              244,906                                  245,005


<PAGE>


Stock issued
  for purchase
of Q&A                          1,200,000  1,200     299,994        300 2,817,800   779,700                                3,599,000
Stock issued
  for legal
settlement                                            10,000         10              41,240                                   41,250
Stock issued
  to employees
for bonuses                                            4,602          4              29,042                                   29,046
Exercise of
warrants                                              68,675         69             243,624                                  243,693
Net loss                                                                                                      (3,127,537)(3,127,537)



Balances at
July 31, 1996  1,050  $      1  1,200,000  $  1,200 8,935,581 $   8,936 $3,762,799 $8,671,553$(28,350)$(157,500)(5,936,676)6,321,963



</TABLE>

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











<PAGE>



<TABLE>
<CAPTION>

                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                        CONSOLIDATED  STATEMENTS  OF CASH  FLOWS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


-----------------------------------------------------------------------------------------------------------------------------

                                                                                                                     1995
                                                                                       1996

<S>                                                                                        <C>                    <C>   
Cash flows from operating activities:
   Net loss                                                                                ($3,127,537)          ($562,711)
   Adjustments to reconcile net loss to net cash used by operating activities:

     Depreciation and amortization                                                              513,061             278,522
     Amortization of capitalized software development costs                                     260,909              19,727
    Write off of software development costs                                                     558,808               -----

     Provision for allowance for doubtful accounts, sales returns and discounts                 526,700             125,652

     Provision for allowance for slow-moving inventory                                          418,021              50,000

  Loss on disposal of property and equipment                                                     89,954               -----
  Stock issued for services rendered                                                            415,212              94,270
      Stock issued for bonuses                                                                   29,046
                                                                                                                      5,131
      Charge to adjust for stock options issued below market value                              169,081               -----

        Stock issued in settlement of a lawsuit                                                  41,250               -----

     Services rendered for stock previously issued                                              103,050             106,716
        Changes in operating assets and liabilities:

           Accounts receivable                                                              (1,001,299)         (1,076,203)


       Inventories                                                                             (19,131)           (566,770)

      Prepaid expenses and other assets                                                      (436,088)            (21,135)

       Accounts payable                                                                       (462,680)             380,537

       Accrued expenses                                                                         371,132            (42,453)

       Accrued salaries and wages                                                                54,983             (2,839)

       Accrued interest to stockholders                                                        -----                 6,447
                                                                                        ---------------     --------------
                  Net cash used by operating activities                                     (1,495,528)         (1,205,109)
                                                                                            -----------          ---------



Cash flows from investing activities:

   Proceeds from sales of available-for-sale securities                                           -----             908,183

   Purchases of property and equipment, net                                                   (260,715)           (305,546)

   Proceeds from settlement of stockholder notes, net                                        -----                   28,189

   Increase in notes receivable                                                               (127,415)         -----

   Collections on notes receivable from stockholders, net                                       325,135           (325,000)
   Collections on note receivable                                                                26,129
                                                                                                                      2,640

   Increase in employee advances                                                               (41,294)
                                                                                                                    (7,615)
   Increase in other assets                                                                   (171,477)               4,289

   Capitalized software development costs                                                     (621,143)           (417,482)
                                                                                              ---------           ---------
                  Net cash used by investing activities                                       (870,780)           (112,342)
                                                                                              ---------           ---------




Cash flows from financing activities:
   Proceeds from issuance of Series A Convertible Preferred stock, net                        1,800,000               -----
   Proceeds from exercise of common stock options and warrants                                  488,698               4,609

   Principal payments on obligations under capital leases                                      (73,413)            (29,499)

Proceeds from notes payable                                                                    500,000           -----
                                                                                             ----------     ----------



                  Net cash provided (used) by financing activities                            2,715,285            (24,890)
                                                                                              ---------            --------




                  Net increase (decrease) in cash and cash equivalents                          348,977         (1,342,341)
                                                                                                                

Cash and cash equivalents at beginning of year                                                  101,994           1,444,335
                                                                                               --------           ---------

Cash and cash equivalents at end of year                                                       $450,971           $101,994
                                                                                              =========           ========

</TABLE>


Continued

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


                                                       
<PAGE>
<TABLE>
<CAPTION>


                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                   CONSOLIDATED   STATEMENTS   OF  CASH   FLOWS,
                                      Continued  For The  Years  Ended  July 31,
                                      1996 And 1995
                                                      ----------

Supplemental disclosure of cash flow information:

    <S>                                                                                <C>                      <C>  
   Cash paid during the year for:

     Interest                                                                           $    55,388              $40,493

     Income taxes                                                                       $       -----             $1,600
</TABLE>

                            During 1996,  the Company  completed  the  following
transactions:

+                             Issuance  of  299,994  shares of Common  Stock and
                              1,200,000 shares of Series B Convertible Preferred
                              Stock  in  exchange  for the net  assets  of Q & A
                              Sales & Marketing, Inc.


+                Conversion of 950 shares of Series A Convertible 
Preferred Stock at a value of $855,000 for 299,564 shares of Common Stock.


+  Issuance of 45,000 shares of Common Stock with a value of $157,500 
   in exchange for a note receivable.


+                    Issuance of 92,801 shares of Common Stock with a value of
            $444,258 in exchange for services.


+                         Automobiles valued at $141,535 received in exchange
      for capital lease obligations.


+                 Issuance of 10,000 shares of Common Stock with a value of
   $41,250 in settlement of a legal matter.

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


                                                       


<PAGE>





                         A charge of $169,081 to adjust for stock options issued
below market value.


                            During 1995,  the Company  completed  the  following
transactions:


+ Issued 109,432 shares of common stock with a value of $233,750 for services
to be rendered.


+ Issued 25,000 shares of common stock with a value of $39,375 for a covenant
 not to compete.



+             Exchanged $69,596 of services receivable for common stock for a
note receivable from an officer.

+             Acquired property and equipment with a value of $141,335 through
 the issuance of long-term debt.

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


                                                        


<PAGE>






                                          WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------



1.       Summary Of Significant Accounting Policies:


         Principles Of Consolidation:


         The  consolidated  financial  statements  include  the  accounts of WIZ
         Technology,  Inc. and its  wholly-owned  subsidiaries,  Wiz Technology,
         Inc. (a  California  corporation),  Q & A Software  Company and CAPOTEC
         Intranet Business Solutions ("CAPOTEC"). (collectively, the "Company").
         Intercompany   balances  and  transactions   have  been  eliminated  in
         consolidation.  The Company  develops  and  markets  low cost  computer
         software,  including licensed  commercial  software and "shareware." In
         April  1996,   CAPOTEC  was  established  to  conduct  intranet  system
         marketing and sales.


         Effective March 8, 1996, the Company  acquired all of the net assets of
         Q & A Sales &  Marketing  ("Q & A") by the merger of Q & A into a newly
         formed Nevada subsidiary of the Company. In connection with the merger,
         Q & A's name was changed to Q & A Software Company.  The Company issued
         1,200,000  shares of Series B Convertible  Stock and 299,994  shares of
         Common  Stock  in  exchange  for all of the net  assets  of Q & A.  The
         acquisition was accounted for as a purchase.


         The purchase price related to the Q & A acquisition is as follows:


                           Issuance of stock                          $3,599,000
                           Liabilities assumed                         1,402,627


                                                                     $5,001,627


         The  purchase  price  was  allocated  to the  assets  approximately  as
follows:




                                                        F-8


<PAGE>




                           Cash                                $    ---
                           Trade accounts receivable               350,000
                           Inventory                               450,000
                           Property and equipment                  100,000
                           License agreement                     3,500,000
                           Covenant not to compete                 600,000





















                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995




1.                       Summary Of Significant Accounting Policies, Continued


         Principles Of Consolidation, Continued


         The Company has  consolidated  the results of Q & A since the effective
         date of the merger.





                                                        F-9


<PAGE>



         The license agreement acquired in this transaction provides the Company
         the worldwide,  exclusive rights to sell intranet systems to the public
         at  large  or  to  retailers,  wholesalers,  distributors  or  original
         equipment manufacturers. These systems are based on internet technology
         and use a relational  database to create dynamic and  interactive  home
         pages and numerous other applications.

         The covenant not to compete acquired in this transaction  restricts the
         former parent of Q & A and two of its officers from  competing with the
         business of developing,  marketing and selling boxed  software,  CD-Rom
         software or budget consumer software to consumers  throughout the world
         at  manufacturer's  suggested  retail prices of less than $50 per unit.
         This covenant became  effective on the date of the merger and continues
         for a period of five years.

         The following unaudited pro forma consolidated results of operations of
         the  Company for the years ended July 31, 1996 and 1995 assume that the
         acquisition  of Q & A occurred on August 1, 1994. The pro forma results
         presented below are not necessarily indicative of the actual results of
         operations had Q & A been acquired as of the earlier date, nor are they
         necessarily indicative of future results of operations.



                                                     1996              1995
                                                  (unaudited)       (unaudited)
                           Revenues               $7,705,495        $6,893,000
                           Net loss               (3,291,262)       (1,105,000)
                           Net loss per common share    (.37)        (.13)



                                               


<PAGE>



                                          WIZ TECHNOLOGY , INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      For The Years Ended July 31, 1996 And 1995


1.                        Summary Of Significant Accounting Policies, Continued


         Revenue Recognition:


         Revenues  and costs of revenues  for  computer  software  products  are
         recognized  at the time of  product  shipment.  Revenues  for  intranet
         system  sales are  recognized  when all  obligations  under the related
         contracts have been performed by the Company and collections of related
         receivable  are  reasonably   assured.   Provisions  are  recorded  for
         estimated   future  product  returns  and  for  advertising  and  other
         allowances.


         Cash And Cash Equivalents:


         The Company considers all highly liquid  investments with a maturity at
         acquisition of 90 days or less to be cash equivalents.

         Inventories:


         Inventories  are  stated  at the  lower  of  cost  or  market.  Cost is
         determined  under the first-in,  first-out  method.  Periodically,  the
         Company  analyzes its  inventories,  based on historical  and projected
         usage,  and provides  reserves for obsolete,  slow-moving  or otherwise
         nonsalable inventories.


         Property And Equipment:


         Property and equipment,  including  certain assets under capital lease,
         are stated at cost, less  accumulated  depreciation  and  amortization.
         Depreciation  is  calculated  using the  straight-line  method over the
         estimated  useful lives of the related assets or over the lesser of the
         term  of  the  lease  or  the  estimated   useful  life  for  leasehold
         improvements and assets under capital leases.




                                                    


<PAGE>




         The estimated useful lives are:


                           Equipment                 5 years
                           Automobiles               3-5 years
                           Furniture and fixtures  5-7 years
                           Leasehold improvements
                                           Lesser of useful life or lease term
                           Displays                  1-3 years


          Maintenance  and repairs are expensed as incurred  while  renewals and
betterments  are  capitalized.  Upon  the sale or  retirement  of  property  and
equipment,  the accounts  are  relieved of the cost and the related  accumulated
depreciation  and  amortization,  and any resulting  gain or loss is included in
operations.






                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


1.        Summary Of Significant Accounting Policies, Continued


         License Agreement:


         License  agreement is stated at a value  independently  determined by a
         third party evaluator and is amortized using the  straight-line  method
         over a ten year  period.  Amortization  expense for the year ended July
         31, 1996 was  $131,247.  The Company  will  periodically  evaluate  the
         recoverability  of this license  agreement  by  comparing  the carrying
         value to estimated cash flows from the license agreement.


         Covenants Not To Compete:





                                              


<PAGE>



         Covenants not to compete are stated at cost and are amortized using the
         straight-line   method  over  the  terms  of  the  related  agreements.
         Amortization  expense  for the years  ended July 31,  1996 and 1995 was
         $172,789 and $121,039, respectively.

         Software Development Costs:


         The  Company  capitalizes   internal  software   development  costs  in
         accordance with Statement of Financial Accounting Standards No. 86. The
         capitalization  of these costs  begins  when a product's  technological
         feasibility has been established and ends when the product is available
         for general  release to  customers.  The Company uses the working model
         approach  to  establish  technological  feasibility.   Amortization  is
         computed on an  individual  product  group basis and is the greater of:
         (a) the ratio of  current  gross  revenues  for a product  group to the
         total current and anticipated future gross revenues for the product, or
         (b) the  straight-line  method over the estimated  economic life of the
         product.  Currently, the Company is using an estimated economic life of
         three years for all capitalized  software costs.  Amortization  expense
         was  $260,909  and  $19,727 for the years ended July 31, 1996 and 1995,
         respectively.  During the fourth  quarter of 1996, the Company chose to
         discontinue  several products as a result of its strategic  redirection
         due to the merger with Q & A. As a result,  software  development costs
         of $558,808 were written off through a charge to cost of revenues.


         Research And Development Costs:


         Research and development costs are charged to operations as incurred.
















<PAGE>

                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


1.       Summary Of Significant Accounting Policies, Continued


         Income Taxes:


         The Company follows the Statement of Financial Accounting Standards No.
         109,  Accounting for Income Taxes ("SFAS No. 109").  Under this method,
         deferred income taxes are recognized for the tax consequences in future
         years of  differences  between the tax bases of assets and  liabilities
         and their financial reporting amounts at each year-end based on enacted
         tax laws and  statutory  rates  applicable  to the periods in which the
         differences are expected to affect taxable income. Valuation allowances
         are established,  when necessary,  to reduce deferred tax assets to the
         amount  expected  to  be  realized.  The  provision  for  income  taxes
         represents  the tax  payable  for the period and the change  during the
         period in deferred tax assets and liabilities.


         Fair Value of Financial Instruments:


         Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures
         About Fair  Value of  Financial  Instruments,  requires  management  to
         disclose the  estimated  fair value of certain  assets and  liabilities
         defined by SFAS No. 107 as financial instruments. Financial instruments
         are  generally  defined by SFAS No. 107 as cash,  evidence of ownership
         interest in equity,  or a contractual  obligation  that both conveys to
         one entity a right to receive cash or other financial  instruments from
         another  entity and  imposes  on the other  entity  the  obligation  to
         deliver cash or other  financial  instruments  to the first entity.  At
         July 31, 1996  management  believes that the carrying  amounts of cash,
         certificate  of  deposits,  notes  and  accounts  receivable,  accounts
         payable and other current  liabilities,  approximate fair value because
         of the short maturity of these financial instruments.


         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



                                                        F-14


<PAGE>



         revenues and expenses during the reporting period.  Actual results 
could differ from those
         estimates.


         New Accounting Pronouncement:


         The Financial  Accounting Standards Board has recently issued Statement
         of Financial  Accounting  Standard No. 123,  Accounting for Stock-Based
         Compensation,  which  requires  the  determination  and  disclosure  of
         compensation  costs  implicit  in stock  option  grants or other  stock
         rights.  The Company was required to adopt  certain  provisions of this
         standard for nonemployee  transactions  entered into after December 15,
         1995.





                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


1.       Summary Of Significant Accounting Policies, Continued

         New Accounting Pronouncement: continued


         The Company has adopted the required  provisions during fiscal 1996 for
         all  nonemployee  transactions  occurring  after December 15, 1995. The
         remaining provisions must be adopted in fiscal 1997. Under the employee
         transaction provisions,  companies are encouraged, but not required, to
         adopt  the  fair  value  of   accounting   for   employee   stock-based
         transactions.  Companies are also  permitted to continue to account for
         such transactions under Accounting Principles Board Opinion No. 25 (APB
         25), Accounting for Stock Issued to Employees, but would be required to
         disclose, in a note to the financial statements, pro forma net earnings
         and,  if  presented,  earnings  per share as if the Company had adopted
         SFAS No.  123.  The  Company  will  continue  to account  for  employee
         stock-based compensation under APB No. 25.


2.       Concentration Of Credit Risk And Significant Customers:

         The Company has cash deposits at financial  institutions  in amounts in
         excess of  federally-insured  limits.  The Company believes that credit
         risk related to its cash deposits



                                                        F-15


<PAGE>



         is limited due to the  quality of the  institutions  and the  Company's
         policy which limits credit exposure to any one financial institution.

         The  Company's  customers  are located in several  geographic  markets,
         primarily in the United States and Canada.  Short-term unsecured credit
         is granted to its customers,  substantially  all of whom are engaged in
         business activity within the retail distribution industry. Net revenues
         by geographic markets for the years ended July 31, 1996 and 1995 are as
         follows:
                                                                 1996      1995


         United States                                           74%        72%
         Canada                                                   9%        15%
         Australia                                               10%
         Other                                                    7%        13%
             


                                                                100%       100%


         Net accounts  receivable by geographic  markets as of July 31, 1996 are
as follows:


         United States                                                      68%
         Canada                                                             17%
         Australia                                                          14%
         Others                                                              1%
                                                                         ------
                                                                           100%




                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995




2.       Concentration Of Credit Risk And Significant Customers:  continued






         As of July 31, 1996, four customers had balances each  representing 10%
         or more of total net  accounts  receivable,  with the sum of these four
         customers   representing   approximately  80%  of  total  net  accounts
         receivable.


         During the year ended July 31,  1995,  six of the  Company's  customers
         accounted for 47.2% of total net revenues. One customer represented 14%
         of total  net  revenues  for the year  ended  July 31,  1996.  No other
         customers  represented  10% or more of total net revenues for the years
         ended July 31, 1996 and 1995.

3.       Notes Receivable:

         At July 31, 1996, the Company had 6 notes receivable  totaling $127,415
from an individual.  The notes are non interest bearing, and are due and payable
within 30 days of the  issuance of the  Company's  stock as payment for software
design services.

4.       Prepaid Expenses And Other Assets:


         Prepaid expenses and other assets consists of the following at July 31,
1996:


-------------------------------------------------------------------------------
Advance royalties                                                      $110,831

------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prepaid advertising                                                      75,000

Prepaid shelfspace                                                      144,000

Advanced commissions                                                     40,000

Legal retainers                                                          40,000

Other                                                                    95,850



                                                                       $505,681

5.       Inventories:

         Inventories consist of the following at July 31, 1996:



Raw materials                                                           $566,510
Finished goods                                                           910,325
                                                                       1,476,835

Allowance for obsolescence                                             (478,021)


                                                                        $998,814






                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


6.       Property And Equipment:


         Property and equipment consists of the following at July 31, 1996:



         Equipment                                                      $571,663

Automobiles                                                              329,220

Furniture and fixtures                                                    66,236


Leasehold improvements                                                    37,267

Displays                                                                 342,599
                                                                       1,346,985

     Less, Accumulated depreciation and                                (472,284)
amortization


                                                                        $874,701



         Certain   equipment  and  automobiles  under  capital  leases  totaling
         $441,120 with related amortization of $116,413 are included in property
         and equipment as of July 31, 1996.


         Depreciation  and  amortization  for the years  ended July 31, 1996 and
         1995 was $243,348 and $157,483, respectively.


7.       Certificate Of Deposit:


         The  Company  maintains  a $100,000  certificate  of  deposit  which is
         collateral  for a personal  obligation of two officers  which is due in
         February 1997.


8.       Notes Payable:

         At July 31, 1996,  the Company had four  convertible  notes  payable of
         $125,000  each  payable  to four  individuals.  The notes  provide  for
         interest  payable  on a  quarterly  basis  at Bank of  America's  prime
         lending rate plus 2% (10.25% at July  31,1996).  These  notes,  due and
         payable on August 22,  1996,  are in default  and are in the process of
         being renegotiated.  With each note, warrants to purchase 30,000 shares
         of common stock were  granted to each note holder at an exercise  price
         of $2.50 per share. These warrants expire in August,  2000. The Company
         charged interest  expense for the difference  between the fair value of
         its common  stock (less a discount of 25%) on the date of grant and the
         exercise  price.  The total of this  charge for the year ended July 31,
         1996 was $67,081.




                                                 


<PAGE>














                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------




9.       Stockholders' Equity:


         Preferred Stock:


Series A Convertible Preferred Stock- In November 1995, the Company issued 2,000
shares of Series A Convertible  Preferred Stock ("Series A Preferred") for 
$2,000,000,              net of
$200,000 for an aggregate of $1,800,000.  During 1996, 950 shares of Series A   
       Preferred
were converted into 299,564 shares of common stock.  In the event of any
liquidation, dissolution, or winding up of the Company, whether voluntary or
 involuntary, the Series A Preferred   carries a
preference of $1,000 per share.  Each share of Series          A Preferred is
convertible, at the option of its holder, into the number of common  shares at
 the initial
conversion rate, subject to certain adjustments in the event of 
             reclassification,   exchange
or substitution of shares or reorganization, merger,
consolidation or sale of assets.  The initial conversion rate is the number of
shares of            common
stock equal to $1,000 divided by the lower of 80% of the market price or       
                  $3.4375.
The Series A Preferred carries no voting rights and is not redeemable.  The   
                    holders
are entitled to dividends when and as declared by the Board of Directors at the
                    rate of
$80 per year, payable semi-annually.  No dividends were declared during the  
                         year
ended July 31,1996.  In conjunction with the issuance of Series A Preferred,
warrants to purchase 100,000 shares of the Company's Common Stock were issued at
          an
exercise price of $3.4375 per share and another 25,000 warrants were issued at 
an       exercise
price of $4.00 per share.  These warrants expire on November 1, 2000.





                                               


<PAGE>



         Series B Convertible Preferred Stock - In connection with the
 acquisition of Q & A, the
Company issued 1,200,000 shares of Series B Convertible Preferred Stock
 ("Series B
Preferred").  In the event of any liquidation, dissolution or winding up of the 
Company,           whether
voluntary or involuntary, the Series B Preferred carries a preference of $1.00
 per share.  Each   share of
Series B Preferred is convertible, at the option of the holder
,               into one share of     common
stock according to an established timetable until May 1998.                   
   Each holder of   Series B
Preferred is entitled to cast the number of votes as if the     
             Series B Preferred   had been
converted to common shares.  The holders are entitled to
         receive dividends, when and as declared by the Board of Directors.



         No dividends were declared during the year ended July 31, 1996. As long
as at least 100,000 shares of Series B Preferred are  outstanding or until March
15,  1999,  the  holders  of  Series  B  Preferred  have the  right to  purchase
antidilution  shares  of  common  stock in the event of a  "trigger  event",  as
defined, at the same price as such shares are offered in the trigger event.








                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


9.       Stockholders' Equity: Continued

         Common Stock:


         During the year ended July 31, 1995,  the Company  issued 30,034 shares
         of common stock for professional  services provided to the Company. The
         stock was issued at prices ranging from $2.50 to $3.50 per share, which
         approximated fair market value on the dates of issuance.


         During the year ended July 31, 1995,  the Company issued 109,432 shares
         of its common stock,  100,000 of which were  unregistered  shares,  for
         professional services to be



                                                   


<PAGE>



         rendered  under  various  consulting  agreements  (see  Note  13).  The
         registered shares were issued at their approximate fair market value on
         the dates of issuance.  The unregistered shares were discounted 30% due
         to the shares  being  subject to future  registration.  Total  services
         rendered under all stock-for-services  agreements during the year ended
         July 31, 1995 was $106,716 and was charged to operations. The remaining
         amount of services not yet rendered  under these  agreements as of July
         31, 1995 was  $131,400  and was  recorded as  services  receivable  for
         common  stock  issued  in  the  accompanying   consolidated   financial
         statements as of that date.


         On April 7, 1995,  the Company  issued  25,000  shares of  unregistered
         common  stock to a  consultant  under a covenant  not to  compete.  The
         Company  discounted  the value of the  shares by 30% due to the  shares
         being subject to future registration.

                During the year ended July 31, 1996, the Company issued 88,199
shares of common                            stock in
exchange for services provided to the Company.  The stock was issued at prices
 ranging from $3.82 to $8.06 per share, which approximated fair market value 
           on the
dates of issuance.

         On December 15, 1995,  the Company issued 45,000 shares in exchange for
a note  receivable  from a stockholder of the Company in the amount of $157,500.
The note carries interest, payable quarterly, at the rate of 8% per annum.

         Various  individuals  exercised  options to purchase  99,018  shares of
         common stock at a value of $245,005.  Exercise prices ranged from $1.50
         to $3.67 per share.

         In February 1996,  10,000 shares of common stock valued at $41,250 were
         issued in settlement of a legal dispute.

         In May 1996,  warrants  to  purchase  68,675  shares  of  common  stock
         originally  granted  in  conjunction  with  the  issuance  of  Series A
         Preferred were exercised in exchange for $243,693.





                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


9.       Stockholders' Equity: Continued




                                                        


<PAGE>




         Stock Options:


         The  Company's  1992  Stock  Option  Plan  (the  "Plan"),  as  amended,
         authorizes  the issuance of up to  2,000,000  shares of common stock to
         employees,  officers and directors and to employees of companies who do
         business with the Company.


         Any shares  which are subject to an award but are not used  because the
         terms and  conditions of the award are not met, or any shares which are
         used by  participants  to pay all or part of the purchase  price of any
         option may again be used for  awards  under the Plan.  However,  shares
         with respect to which a stock appreciation right has been exercised may
         not again be made subject to an award.


         Stock options may be granted as incentive stock options or nonqualified
         stock  options.  Incentive  stock options may not be granted at a price
         less than 100% of the fair market  value of the stock as of the date of
         grant  (110%  as to any  10%  stockholder  at the  time of  grant)  and
         nonqualified  stock options may not be granted at a price less than 85%
         of fair market  value of the stock as of the date of grant.  Restricted
         stock may not be granted  under the Plan in connection  with  incentive
         stock options.


         Stock  options  granted under the Plan may include the right to acquire
         an Accelerated Ownership  Nonqualified Stock Option ("AO"). All options
         granted  to date have  included  the AO  feature.  If an  option  grant
         contains  the AO feature and if a  participant  pays all or part of the
         purchase price of the option with shares of the Company's common stock,
         then upon exercise of the option,  the  participant is granted an AO to
         purchase,  at the fair market value as of the date of the AO grant, the
         number of shares of common stock of the Company equal to the sum of the
         number  of whole  shares  used by the  participant  in  payment  of the
         purchase price and the number of whole shares,  if any, withheld by the
         Company  as  payment  for  withholding  taxes.  An AO may be  exercised
         between the date of grant and the date of expiration, which will be the
         same  as the  date of  expiration  of the  option  to  which  the AO is
         related.


         Stock  appreciation  rights and/or  restricted  stock may be granted in
         conjunction  with,  or may be  unrelated  to,  stock  options.  A stock
         appreciation right entitles a participant to receive a payment, in cash
         or common  stock or a  combination  thereof,  in an amount equal to the
         excess of fair market  value of the stock at the time of exercise  over
         the fair market value of the date of grant. Stock  appreciation  rights
         may be exercised  during a period of time fixed by the Committee not to
         exceed ten years  after the date of grant or three years after death or
         disability, whichever is later. There were no stock appreciation rights
         outstanding at July 31, 1996 or 1995.





                                                        


<PAGE>







                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


9.       Stockholders' Equity: Continued


         Stock Options: continued


         Restricted  stock  requires the  recipient to continue in service as an
         officer,  director,  employee or consultant  for a fixed period of time
         for  ownership  of the shares to vest.  If  restricted  shares or stock
         appreciation  rights are issued in tandem with options,  the restricted
         stock or stock  appreciation  right is  canceled  upon  exercise of the
         option and the  option  will  likewise  terminate  upon  vesting of the
         restricted shares.

         In addition to options  granted under the Plan, the Company has granted
         20,000  options to a former  officer,  and  400,000  options to current
         officer/stockholders, which options do not come under the provisions of
         the Plan.


         The following table summarizes  shares under option,  including options
         both under the Plan and outside the Plan,  for the years ended July 31,
         1996 and 1995:

<TABLE>
<CAPTION>

                                                       1996                                 1995
                                                  ----------                           ----------

                                          Number Of             Price         Number Of             Price
                                             Shares         Per Share            Shares         Per Share

<S>                                            <C>          <C>                    <C>          <C>  
         Beginning of year                     936,772      $1.50-$3.50            627,843      $1.50-$2.50

         Granted                               292,373      $2.50-$4.69            311,484      $3.00-$3.50
         Exercised                             (99,018)     $1.50-$3.67             (2,555)     $1.50-$2.25
         Canceled                               (1,191)     $3.50                  ---                   ---
                                                                             -------------      ------------
         End of year                         1,128,936      $1.50-$4.69            936,772      $1.50-$3.50
                                             ==========================            =======      ===========
         Exercisable                         1,075,508                             927,022
                                             =========                             =======

</TABLE>



                                                       


<PAGE>



         Warrants:


         See Notes 8, 14 and 16 for a  description  of  outstanding  warrants to
         purchase common stock.


10.      Net Loss Per Common Share:


         Net loss per common share is computed by dividing  reported net loss by
         the  weighted  average  number of shares  of common  stock  outstanding
         during the respective  periods.  Common stock equivalents were excluded
         from the  computations  of net loss per  share  because  the  effect of
         including  such   equivalents  in  the  computation   would  have  been
         anti-dilutive.


         Primary and fully-diluted loss per share amounts do not differ.






                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


11.      Income Taxes:

         The income tax provision for the years ended July 31 consists of:


                                                             1996        1995 
 Current:
             Federal                                         $  -        $  -

             State                                            800         800
                                                                ---------------
                                                              800         800
         Deferred:
             Federal                                             -           -
             State                                              -           -
                                                                 ---------------

         Provision for income taxes                             $800        $800
                                                                 ===         ===


         Deferred income taxes are recorded based upon the  differences  between
         the  financial  statement  and tax  bases of  assets  and  liabilities.
         Temporary differences which give rise to deferred income tax assets and
         liabilities are as follows:


                                                                          1996
         Deferred tax assets:
             Allowance for doubtful accounts                         $   215,274
             Inventory obsolescence reserve                              191,209
             Net operating loss carryforwards                          1,969,505
             Covenants not to compete                                     47,866
             Accrued vacation                                             25,356
                                                                  -------------


             Total gross deferred tax assets                           2,449,210


         Deferred tax liabilities:
           Software development                                         (75,754)
             Property and equipment                                     (93,743)

             Total gross deferred tax liabilities                      (169,497)

                            Subtotal                                   2,279,713

         Valuation allowance                                         (2,279,713)


                            Net deferred taxes                       $        0
                                                                     ===========









                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES




                                                  


<PAGE>




                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


11.      Income Taxes: continued


         The net  change  during  the  year  ended  July 31,  1996 in the  total
         valuation allowance was an increase of $1,135,683.


         The  provision  (benefit) for income taxes differs from the amount that
         would result from applying the federal statutory rate as follows:
<TABLE>
<CAPTION>

                                                                                     1996              1995
                                                                                     ----------------------

<S>                                                                           <C>                      <C>     
         Tax provision at the federal statutory rate                         (34.00%)              (34.00%)
---------
         State income taxes, net of federal income tax benefit                  .03%                 0.17%
         Accounting losses for which deferred federal income
             tax benefits could not be recognized                             35.90%                           39.31%
         Miscellaneous                                                         (1.90%)              (1.27%)
         Federal tax refund                                                       0                 (4.04%)
                                 ------------                                 -------

                                                                                0.03%                0.17%
</TABLE>


         At July 31, 1996, the Company has net operating loss  carryforwards for
         federal and state income tax  purposes in the amounts of  approximately
         $5,071,000 and $2,638,000,  respectively.  These carryforwards begin to
         expire in 2009 and 1999, respectively.


         The  utilization  of net operating  loss  carryforwards  may be limited
         under the provisions of Internal Revenue Code Section 382.


12.      Other Related Party Transactions:


         Convertible  debt to a related  party  bears  interest at 10% per annum
         payable quarterly, is due on demand, and may be converted at the option
         of the lender into shares of the Company's  common stock at the rate of
         $1.50 per share. Interest expense to the related party during the years
         ended  July  31,   1996  and  1995   amounted  to  $8,004  and  $8,667,
         respectively.





                                                        


<PAGE>



         On July 31, 1994, the Company loaned $32,988 to an  officer/stockholder
         of the Company.  The note bears  interest at a rate of 5% per annum and
         is due on  demand.  As of July 31,  1996,  the  balance  due from  such
         stockholder,  under  a  promissory  note,  was  $34,000,  plus  accrued
         interest of $708.



                                                  


<PAGE>



                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


12.      Other Related Party Transactions: continued


         During fiscal 1995, the Company loaned an aggregate of $325,000 under a
         promissory note to its outside legal counsel  pending the  registration
         of 100,000 shares of common stock held by such individual. The loan was
         collateralized by a pledge of such shares. On July 31, 1995, the shares
         were  transferred  from the individual to an unrelated third party, who
         assumed the note  obligation.  The balance of $325,000 was collected in
         full during fiscal 1996.


         Also, in connection  with this  transaction,  as of July 31, 1995, such
         legal  counsel  owed the  Company  $69,596 in  services  prepaid by the
         Company  with stock  during the year ended July 31,  1994.  On July 31,
         1995, the rights to such services to be rendered were transferred to an
         officer/stockholder  in  exchange  for  a  promissory  note  from  such
         officer/stockholder  due on or  before  July 31,  1997 and  bearing  no
         interest.  The  balance of the note as of July 31,  1996 of $69,596 was
         included in notes  receivable  from  stockholders  in the  accompanying
         consolidated balance sheet.

13.      Commitments And Contingencies:


         Leases:

         The Company  leases  certain  office  equipment and  automobiles  under
         capital  leases which expire at various  dates  through July 2001.  The
         Company leases its office and warehouse space and certain equipment and
         automobiles  under  operating  leases  expiring  through July 2000. The
         office  and  warehouse   space  lease   requires  the  Company  to  pay
         maintenance, insurance, taxes and certain other expenses in addition to
         the base rent and expires in March 1998.


         Future minimum lease  payments  under capital and operating  leases for
         each of the years ending July 31 are as follows:


                                                         Capital      Operating
                                                          Leases         Leases

                   1997                               $ 128,379        $ 279,681
                   1998                                 116,051          197,381
                   1999                                  69,783           58,276
                   2000                                  18,273           4,607
                   2001                                  51,076        ---
                                                          ----------  ---------
                                                         383,562        $539,945
                   Less, amount representing interest     65,734
                                                        $317,828








                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------

13.      Commitments And Contingencies: continued


         Leases: continued


         In 1997 the Company is expected to receive  sublease income of $102,375
         against operating lease expense.


         Rent  expense for the years  ended July 31,  1996 and 1995  amounted to
$279,506 and $140,021, respectively.


         Employment Agreements:


         As of July 31, 1996,  the Company has employment  agreements  with four
         officers.  Three of the contracts originated at the time of the initial
         public  offering,  expired in August 1996 and have been  extended for a
         one year term. The fourth  agreement was entered into in March 1996 and
         expires in July 1999. The agreements require aggregate annual base



                                                       


<PAGE>



         salaries  of  approximately  $560,000,  with  annual  increases  at the
         discretion of the Board of Directors for three of the  agreements and a
         five percent annual increase for the fourth. The Board of Directors may
         also,  at its  discretion,  award  annual  or  other  bonuses  based on
         profitability  of the  Company,  performance,  or  other  criteria.  No
         bonuses were paid to the officers  during the years ended July 31, 1996
         and 1995.


         Consulting Agreements:


         Effective April 1, 1994, the Company entered into a two-part  agreement
         with an unrelated third party to provide financial and reporting advice
         to the Company.  The agreement  required the Company to pay $100,000 at
         the inception of the agreement

         for consulting  services to be provided over a period of 24 months. The
         consulting  portion of the  agreement  can be  terminated by either the
         consultant or the Company with thirty days notice, and does not require
         the  consultant  to repay the Company  any  amounts.  Accordingly,  the
         Company considered it appropriate to expense the entire $100,000 during
         the year ended July 31, 1994. Under the requirements of the second part
         of the agreement, the consultant agreed not to provide similar services
         to current and  prospective  competitors of the Company for a period of
         three years, effective April 1, 1994, in exchange for 200,000 shares of
         the Company's  common stock.  The Company's  stock has been placed in a
         trust and cannot be accessed by the consultant until March 1997. Due to
         the  restrictions on the access and salability of the common stock, the
         Company  discounted  the value of the common stock by 30%. The covenant
         not to compete is being amortized using the  straight-line  method over
         the three-year term of the agreement.  Amortization  expense related to
         this covenant was $116,664 for the years ended July 31, 1996 and 1995.






                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995
                                                      ----------


13.      Commitments And Contingencies: continued


         Consulting Agreements: continued



                                                    


<PAGE>





         Effective April 1, 1995, the Company entered into a two-part  agreement
         with an  unrelated  third  party  to  provide  financial  and  investor
         relations  advice to the Company in exchange  for 75,000  shares of the
         Company's  unregistered  common stock.  Due to the  restrictions on the
         access and salability of the shares,  the Company  discounted the value
         of the  shares by 30%.  Under the first part of the  agreement,  50,000
         shares represented  compensation for services to be rendered from April
         1, 1995 to April 30, 1997. As of July 31, 1996, $28,350 of services not
         yet  rendered  was  included in services  receivable  for common  stock
         issued in the accompanying balance sheet.


         Under the  second  part of the  agreement,  25,000  shares  represented
consideration  under a covenant not to compete for the three-year  period ending
March 31, 1997.
         These  shares will  remain  restricted  until the end of the term.  The
covenant not to compete is being amortized using the  straight-line  method over
the  three-year  term of the  agreement.  Amortization  expense  related to this
covenant  for the years  ended July 31,  1996 and 1995 was  $13,125  and $4,375,
respectively.


         Effective August 1, 1994, the Company entered into an agreement with an
         unrelated party to provide  marketing and  promotional  services to the
         Company for the two-year  period ended July 31, 1996.  As  compensation
         under  the   agreement,   the  Company  issued  50,000  shares  of  its
         unregistered  common  stock.  Due to the shares being subject to future
         registration,  the Company discounted the value of the stock by 30%. As
         of July 31,1996, all services have been rendered under this agreement.


         As described in Note 1, a covenant not to compete was entered into as a
         result  of the Q & A  merger.  Amortization  expense  related  to  this
         covenant was $43,000 for the year ended July 31, 1996.



         Litigation:


         The Company was awarded a judgment of approximately $364,000 (Canadian)
         with  respect  to its claim  against a former  distributor.  The former
         distributor  appealed  the  decision,  but the  appeal  was  abandoned.
         Collection  of the  judgment was stayed and the  Company's  counsel has
         prepared an  application to remove the stay.  However,  the Company has
         not recognized any gain with respect to this judgment. A trial date has
         been  tentatively  scheduled for September 1998 to resolve  outstanding
         issues with respect to this matter.





                                                        


<PAGE>



         On April 1, 1996 and May 24, 1996, the underwriter of the Company's
 initial public
         offering, Strausbourger, Pearson Tulchin, Wolff, Inc., filed a lawsuit 
against the Company
         alleging breach of contract and for failing to register certain
warrants.  The that the Company will be successful in its defense.


         On  October  3,  1996,  an  arbitrator  with the  American  Arbitration
         Association  awarded Daisy Software,  Inc., a former distributor of the
         Company's product,  compensatory damages of approximately  $140,000 for
         breach of  contract.  An accrual  has been  recorded  in the  financial
         statements as of July 31, 1996 in the amount of $140,000.


         On October 29, 1996,  a Nevada  general  partnership  filed a complaint
         against  the  Company  asserting  three  causes of  action  based on an
         alleged  breach  of  contract.  The  complaint  prays  for  damages  to
         reimburse the plaintiff for the reasonable value of services  allegedly
         provided  to  the  Company  plus  interest  and  attorney   fees,   or,
         alternatively,  240,000 units of the Company's product.  The Company is
         preparing its response as well as a counter claim.  The Company intends
         to vigorously  defend the  allegations  stated in the complaint,  as it
         believes such allegations to be without merit.


         The Company is involved in various other legal matters  resulting  from
         the normal  course of business.  Such legal  matters,  when  ultimately
         determined,  will not,  in the opinion of  management,  have a material
         effect on the  financial  position or the results of  operations of the
         Company.

14.      Public Offering:



                                                        


<PAGE>




         On February 9, 1994, the Company issued  2,000,000 shares of its common
         stock for  $4,146,269,  net of  offering  costs of  $853,731  through a
         public  offering.  As part of such offering,  the Company agreed to the
         following:


    (Diamond)     The  Company  granted  the  Underwriter  warrants  to purchase
                  182,000  shares of the  Company's  common  stock at a price of
                  $3.00 per share.  The warrants are  outstanding as of July 31,
                  1996 and are  exercisable for a period of three years from the
                  date of closing.
         (Diamond)         The Company  entered into  employment  contracts with
                           its  principal  executive  officers  for a period  of
                           three years from the date of closing (see Note 13).








                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995





14.      Public Offering: Continued

         (Diamond)         For a period of three  years  from the  closing,  the
                           Underwriter  shall  have the right to  designate  one
                           nominee for election to the Board of Directors of the
                           Company.


         (Diamond)         The  Company  will not,  without  the  consent of the
                           Underwriter,  sell any shares of the Company's common
                           stock or warrants  or options to  purchase  shares of
                           the  Company's  stock for a period of two years  from
                           the closing.



15.      Fourth Fiscal Quarter Adjustments:




                                        

<PAGE>



         During the fourth  quarter of the fiscal year ended July 31, 1996,  the
         Company recorded adjustments,  aggregating  approximately $3.4 million,
         that increased the net loss for such quarter were as follows:

         (Diamond)The write off of advertising credits of approximately
 $700,000, which have been                  disputed.

                  (Diamond)An increase to the allowance for doubtful accounts of
                           approximately  $527,000  to reserve  for  significant
                           customers'  balances.  One of the customers filed for
                           bankruptcy protection in August 1996.


         (Diamond)An accrual to provide for the settlement of an arbitration 
matter in the amount of               $140,000.


         (Diamond)A write off of  software  development  costs in the  amount of
                  $560,000  as a result of a  decision  to  discontinue  certain
                  product lines in fiscal 1997.


         (Diamond)An increase to the allowance for obsolete inventory to reserve
                  for slow-moving inventory items of $330,000.

         (Diamond)         A reversal of fourth quarter sales due to product
 returns subsequent to year end of approximately $350,000.


         (Diamond)A charge for returned inventory deemed to be unsaleable in the
                  amount of approximately $300,000.


         (Diamond)       Write off of certain property and equipment of $52,000.


         (Diamond)An increase to accrued expenses for fourth quarter legal fees 
of approximately                   $85,000.


         (Diamond)        Other write downs aggregating approximately $380,000.


                                        WIZ TECHNOLOGY, INC. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      For The Years Ended July 31, 1996 And 1995





                                                 


<PAGE>






16.      Subsequent Events (Unaudited):

         On October 14,1996, the Company issued 7% Convertible Debentures in the
         principal  sum of  $1,250,000  which  mature on October 14,  1999.  The
         interest  compounds  annually  and is  payable on a  semi-annual  basis
         commencing six months after the date of the Debentures.  The Debentures
         may  be  converted,  at  the  holder's  option,  up to 33  1/3 % of the
         aggregate  original  principal  amount  beginning  after  the  90th day
         following  the date of the  issuance;  66 2/3% after the 125th day; and
         100% after the 170th day. The  conversion  price shall be equal to the:
         1) lesser of 110% of the average  closing bid price (as reported on the
         American  Stock  Exchange)  of the  Company's  common  stock  for the 5
         consecutive   trading  days  ending  on  the  trading  day  immediately
         preceding the date of the agreement,  or, 2) 82% of the average closing
         bid price of the Company's  common stock for the 5 consecutive  trading
         days ending on the trading day immediately preceding a Conversion Date,
         as defined.  In conjunction  with the issuance of the  Debentures,  the
         Company  granted  warrants to purchase 37,500 shares of common stock at
         an exercise price of $5 per share. These warrants expire on October 14,
         1999.

         On November  13,1996,  trading of common  stock on the  American  Stock
         Exchange  was  halted  due to the  Company's  failure  to file SEC Form
         10-KSB  for the year  ended  July  31,  1996 in a  timely  manner.  The
         Exchange informed the Company it has fallen below the Exchanges listing
         requirements  and is at risk of being  de-listed.  Management  believes
         that with the  filing of the Form  10-KSB  for the year  ended July 31,
         1996 the Company will be in full compliance with all Exchange rules and
         will be operating within the Exchange quidelines.