FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934  [FEE REQUIRED]  
 
     For the fiscal year ended June 30, 1996

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF1934  [NO FEE REQUIRED]

     for the transition period from _______________ to __________________

                         Commission file number 0-17449

                               PROCYON CORPORATION
             (Exact name of registrant as specified in its charter)

            Colorado                                          36-0732690
 (State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                         Identification Number)

                        1150 Cleveland Street, Suite 410
                            Clearwater, Florida 34615
          (Address of principal executive offices, including Zip Code)

          Issuer's telephone number, including area code (813) 447-2998

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

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

Check  whether  the  registrant  (1) 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 such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.      Yes  X    No
               ---      ---
Check if 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:  $308,668

As of September 1, 1996,  3,637,920 shares of the registrant's Common Stock were
outstanding  and the  aggregate  market  value  of the  287,920  shares  held by
non-affiliates  was  $-0-.  (Price  quotations  for the  Common  Stock  were not
published at any time during the 60 days prior to the filing of this report.)

                   (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING
                           DURING THE PAST FIVE YEARS)

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes      No  X
                                                  ---     ---

                      DOCUMENTS INCORPORATED BY REFERENCE:

The  information  required by Part III of this annual report is  incorporated by
reference to the registrant's  definitive proxy statement if filed with the with
the Commission on or before October 28, 1996 or, if such proxy  statement is not
filed, will be filed with the Commission as an amendment to this Form 10-K under
cover of Form 10-K/A, not later than October 28, 1996.

Transitional Small Business Disclosure Format:   Yes     No  X
                                                     ---    ---

<PAGE>

                                      INDEX


Title                                                                  Page



ITEM   I   BUSINESS.............................................         3

ITEM   2  PROPERTIES............................................         5

ITEM   3  LEGAL PROCEEDINGS.....................................         5

ITEM   4  SUBMISSION OF MATTERS TO A VOTE OF
             SECURITY HOLDERS...................................         5

ITEM   5  MARKET FOR COMPANY'S COMMON EQUITY AND
             RELATED STOCK MATTERS..............................         6

ITEM   6  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
             PLAN OF OPERATION..................................         6

ITEM   7  FINANCIAL STATEMENTS AND SUPPLEMENTARY
             DATA...............................................         8

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

ITEM   9  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
              AND CONTROL PERSONS; COMPLIANCE WITH
              SECTION 16(a) OF THE EXCHANGE ACT OF
              THE REGISTRANT....................................         9

ITEM 10  EXECUTIVE COMPENSATION.................................         9

ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
             OWNERS AND MANAGEMENT..............................         9

ITEM 12  CERTAIN RELATIONSHIPS AND RELATED
             TRANSACTIONS.......................................         9

ITEM 13  EXHIBITS AND REPORTS ON FORM 8-K.......................        10




<PAGE>

                                     Part I

ITEM     1.   BUSINESS

History and Organization

     Procyon  Corporation (the "Company") was incorporated under the laws of the
State of Colorado on March 19, 1987. The Company was formed in order to identify
and evaluate merger or acquisition candidates, and to structure and consummate a
merger with or acquisition of a selected  candidate.  Following such a merger or
acquisition,  it was intended that the shareholders of the Company would have an
opportunity  to  share  in  the  potential  growth  and   profitability  of  the
acquisition target.

     Upon its  inception,  the Company  issued and sold an  aggregate of 350,000
(post-split) Common Shares in a private offering for total cash consideration of
$1,750.  On December 9, 1988, the Company  commenced its initial public offering
pursuant to a Registration  Statement on Form S-1. The offering  covered a total
of 350,000  (post-split) Units, each Unit consisting of one Common Share, no par
value,  one series A Warrant  to  purchase  one  Common  Share and one series AA
Warrant to purchase one Common Share. The Units were offered at a price of $2.50
per Unit,  and the  offering  closed in  February  1989 upon the sale of 287,920
Units and receipt by the  Company of  approximately  $720,000 in gross  offering
proceeds.  Each  Series A Warrant  was  exercisable  until June 9, 1990 and each
Series AA Warrant was exercisable  until December 9, 1990. All Warrants  expired
without being exercised.

DHA Transaction

     After completing its public offering,  the Company's  activities focused on
the identification and evaluation of merger or acquisition  candidates.  In July
1989,  the Company and Dental Health of America,  Inc.  ("DHA")  entered into an
agreement  in  principle  which  contemplated  the  acquisition  of  all  of the
outstanding capital stock of the Company by DHA. In August 1989, the Company and
DHA executed an Agreement and Plan of Reorganization which provided, among other
things,  for the acquisition of all of the Company's  outstanding  stock through
the merger  (the  "Merger")  of the  Company  with and into a  newly-formed  and
wholly-owned subsidiary of DHA. Concurrently with the execution of the Agreement
and Plan of  Reorganization,  the Company loaned $525,000 to DHA pursuant to the
terms and conditions of a Promissory Note, Guarantee and Stock Pledge Agreement.
The note bore interest at 12% per annum and was payable on demand by the Company
at any time on or after  February 18, 1990. The note was secured by the personal
guarantees of the officers,  directors  and principal  shareholders  of DHA. The
guarantees  were in turn  secured  by a security  interest  in all of the Common
Shares of DHA owned by the  guarantors.  Beginning  in late  1989,  DHA began to
experience financial and operating  difficulties.  These difficulties ultimately
caused  DHA to  default  on many of its  financial  obligations,  including  its
obligations  under the note.  In April 1990,  DHA filed a  voluntary  bankruptcy
petition  under Chapter 11 of the United States  Bankruptcy  Code.  The case was
later converted to a liquidation case under Chapter 7 of the Bankruptcy Code. As
a result of the DHA bankruptcy,  the Company  established a reserve for bad debt
in the amount of $566,032, representing all principal and accrued interest under
the note.

Change in Control

     In November 1994, the Company's three principal  shareholders  sold a total
of 350,000  (post-split)  Common  Shares to John C.  Anderson.  Mr.  Anderson is
currently a director  and the  President  of the Company as well as its majority
shareholder.

Private Placement

     During  the fiscal  years  1995 and 1996,  the  Company  raised  $1,328,700
through the sale of 1,355,000 shares of Series A Preferred Stock (the "Preferred
Stock").  The shares of  Preferred  Stock were  offered  and sold in reliance on
exemptions from the registration requirements under state and federal securities
laws. The Preferred Stock (i) is entitled to receive,  when, as, and if declared
by the  Board of  Directors,  dividends  at a rate  equal  to $.10 per  share of
Preferred  Stock per annum,  (ii) is not subject to  redemption,  (iii)  carries
voting  rights,  with the number of votes  equal to the number of Common  Shares
into which such Preferred Stock is convertible,  (iv) has a liquidation value of
$1.00 per share  payable  before any  distribution  to the  shareholders  of the
Common  Shares  or any  other  class  of  capital  stock  ranking  junior  as to
liquidation preferences,  (v) is convertible,  at the option of the holder, into
an equal number of Common Shares, (vi) will convert automatically into one

                                       -3-

<PAGE>



Common Share  effective as of the close of a public  offering which provides the
Company with gross proceeds of at least  $1,000,000 and provides for an offering
price equal to or in excess of $1 per Common  Share,  (vii)  carries  piggy-back
rights  to  register  the  Common  Shares  into  which  the  Preferred  Stock is
convertible on any registration statement or notification pursuant to Regulation
A for any  offering  of any  debt or  equity  security  issued  by the  Company,
including an offering of Common  Shares  which would  effectuate  the  mandatory
conversion  provisions,  and (viii) has  anti-dilution  provisions  which  could
change  the  number  of  Common  Shares  into  which  the  Preferred   Stock  is
convertible.

Acquisition of Amerx

     On January 31, 1996,  the Company  entered  into an  Agreement  and Plan of
Exchange (the  "Agreement") with Amerx Health Care Corp., a corporation based in
Clearwater,  Florida which was wholly-owned by John C. Anderson  ("Amerx").  The
Agreement provided that the Company would acquire Amerx through a share exchange
in which all of the  issued  and  outstanding  Common  Shares of Amerx  would be
acquired by the Company for 3,000,000  (post-split)  shares of Common Stock (the
"Exchange").  The Agreement  provided  that as a condition to the Exchange,  the
Company  would  complete  a  five  for  one  reverse  split  of its  issued  and
outstanding Common Shares. The reverse stock split was approved by the Company's
shareholders  on April 15, 1996. The reverse stock split became  effective as of
May 8, 1996 and the Exchange was completed as of May 9, 1996.  As a result,  the
Company  now has a total of  3,637,920  Common  Shares and  1,355,000  Preferred
Shares issued and outstanding.

     As a result of completing the Exchange,  the Company's business  operations
are conducted through its wholly-owned subsidiary,  Amerx. Amerx was formed as a
Florida  corporation in 1993 to develop and market proprietary  medical products
which are used in the treatment of pressure  ulcers,  dermatitis,  inflammation,
and  various  other skin  problems.  Such  problems  are most  common  among the
elderly,   particularly   residents  of  long  term  healthcare  facilities  and
diabetics. If not treated promptly and effectively,  such problems can result in
amputations, particularly of lower extremities.

Products

     Amerx's  products  currently  consist of Amerigel  Preventive  Care Lotion,
Amerigel Topical Ointment and Amerigel Preventive Barrier Lotion. The Preventive
Care Lotion has emollients which restore  moisture to fragile skin;  protect the
skin against tears and chafing;  and assist in  prevention  of chronic  pressure
ulcers.  The Topical Ointment is more concentrated  than the Preventive  Lotion,
and it is typically  used as an adjunct in the treatment of ulcers or torn,  cut
or macerated skin. The Barrier Lotion provides barrier  protection to reduce the
harmful effects of urine and feces in incontinent patients.

     Management   believes  that  Amerx's  products  are  based  on  proprietary
formulations which the Company attempts to protect as trade secret  information.
Each product is registered  with the Food and Drug  Administration  and has been
granted a National Drug Code.  The Company  believes  that patients  using Amerx
products  are  generally  able to  obtain  reimbursement  under  private  health
insurance policies,  as well as Medicare  reimbursement upon review and approval
of claims.

Market for Skin Treatment Products

     The market for Amerx's products consists principally of hospitals,  nursing
homes,  and other health care  institutions  which provide wound care to a large
number of patients.  For example,  management  believes that based on a study of
the clinical and economic impact of diabetic neuropathy  published by the Health
Science  Institute,  approximately one out of five nursing home patients suffers
from chronic pressure ulcers,  that an estimated 5,000 amputations per month are
performed  due to chronic  skin  wounds.  The  Company  believes  that the Amerx
products  represent an  inexpensive,  yet  effective,  treatment and  prevention
program for chronic pressure ulcers and other skin problems.

Sales and Marketing

     Amerx markets its products to nursing  homes,  hospitals,  home health care
providers,  physicians  and  pharmacies.  Sales  and  marketing  activities  are
conducted  by  Company  employees  and  a  small  number  of  independent  sales
representatives  and  distributors.  Amerx's sales and marketing  activities are
supported by product literature,  advertising, limited participation in industry
trade  shows,  a full-time  pharmacist  and a full-time  M.D.  who serves as the
Company's Medical Director.


                                       -4-

<PAGE>

     To date, Amerx's sales have been made primarily in the Southeastern  United
States.  During  the year  ended  June 30,  1996,  sales to  Diabetic  Metabolic
Corporation, Gulf South Medical Supply and Beverly Enterprises, Inc. represented
approximately 16%, 11% and 10% of the Company's total revenues, respectively.

Manufacturing

     All manufacturing and packaging  activities are performed  pursuant to Good
Manufacturing Practices ("GMPs") at an FDA approved production facility operated
by an unrelated pharmaceuticals  manufacturer located near Clearwater,  Florida.
All  manufacturing  activities  are  required to comply  with the  manufacturing
practices developed by Amerx specifically for its products,  as well as the GMPs
which apply to all activities conducted by the manufacturer in the facility.  An
independent  lab performs tests on product  samples in order to confirm  quality
and performance of the products.

     Except for certain mixing kettles owned by the Company,  substantially  all
manufacturing  equipment  used to  produce  Amerx's  products  is  owned  by the
manufacturer.  An Amerx employee oversees quality control and ensures compliance
with Amerx's manufacturing  practices,  while all other manufacturing  personnel
are provided by the  manufacturer.  Raw  materials  are  purchased by Amerx from
various sources and are maintained at the manufacturing facility.

     Amerx does not have a written  production  contract with its  manufacturing
contractor or written  purchase  contracts  with the suppliers of raw materials.
Management  believes  that  alternative  manufacturers  and  suppliers  could be
secured if necessary. However, the Company would likely incur certain delays and
start-up  costs in the event it  becomes  necessary  to  secure  an  alternative
manufacturing contractor.

Employees

     As of September 15, 1996,  the Company had six full-time  employees and one
part-time employee,  including one sales manager, two management employees,  one
administrative  employee,  a medical doctor who serves as the Company's  Medical
Director, and a pharmacist.


ITEM     2.   PROPERTIES

     The Company currently maintains its offices at 1150 Cleveland Street, Suite
410,  Clearwater,  Florida 34615. The Company's offices consist of approximately
2,400  square  feet of space  which is  leased  from an  unrelated  party and is
renewable annually.  The office lease requires monthly payments of approximately
$2,100.  Management  believes the facility is adequate for the Company's current
needs.


ITEM     3.   LEGAL PROCEEDINGS

     No  material  legal  proceedings  to which the Company is party or to which
property of the Company is subject is pending and no such material proceeding is
known by management of the Company to be contemplated.


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

     A special meeting of shareholders was held on April 15, 1996, at which time
the reverse stock split described above was approved.  See "Item I -- Business."
Of the Company's  3,189,600  (pre-split)  Common Shares  entitled to vote at the
meeting,  approximately  1,750,000  shares voted in favor of the stock split,  0
shares voted against the stock split, and 0 shares abstained.

                                       -5-

<PAGE>
                                     Part II


ITEM     5.   MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCK MATTERS.

     The Company's  securities  were traded in the  over-the-counter  market and
were listed in the "pink  sheets"  published  by the National  Quotation  Bureau
Incorporated ("NQB") following the Company's public offering in December,  1988.
However,  since  approximately  June 1990, NQB has not published a quotation for
the  Company's  securities  and to the Company's  knowledge,  there is extremely
limited, if any, public trading in its securities.

     As of June 30,  1996  there  were  approximately  53 record  holders of the
Company's Common Shares.

     Holders of Common  Shares are entitled to receive such  dividends as may be
declared by the Company's Board of Directors.  No dividends on the Common Shares
have been paid by the Company,  nor does the Company  anticipate  that dividends
will be paid in the foreseeable future.


ITEM     6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

General

     From 1990  through May 1996,  the Company  had minimal  operations  and was
considered  to be a development  stage  company.  During such time,  the Company
incurred  nominal  expenses  and its  revenues  consisted  entirely  of interest
income.  In May 1996,  the  Company  completed  its  acquisition  of Amerx.  The
acquisition was accounted for in a manner similar to a pooling-of-interest since
both  companies  were under  common  control  and,  accordingly,  the  Company's
financial   statements  include  the  Amerx  operating  results  as  though  the
acquisition  was completed on July 1, 1994. The Company's  financial  statements
for fiscal  years 1995 and 1996  therefore  reflect  the  operating  results and
financial condition of Amerx.

Liquidity and Capital Resources

     As of June 30, 1996, the Company's  principal sources of liquidity included
cash and cash equivalents of approximately  $290,000 and net accounts receivable
of $14,679.  Also at June 30, 1996, the Company had subscription  receivables of
$96,700,  which have since been  received  by the  Company.  The Company had net
working capital of $450,424 and no long term debt at June 30, 1996.

     During fiscal 1996, cash and cash equivalents decreased from $314,355 as of
June 30, 1995 to $290,007 as of June 30, 1996. Operating activities used cash of
$483,530  during  fiscal 1996,  consisting  primarily of a net loss of $519,393.
Cash used in investing activities during fiscal 1996 was $14,211.  Cash provided
by financing  activities  during 1996 was  $473,393,  consisting  of $471,000 in
proceeds  from the sale of Preferred  Stock,  and $232,255 in  liquidation  of a
certificate  of deposit,  which  amounts were  partially  offset by repayment of
stockholder advances of $229,862.

     During fiscal 1995, cash and cash  equivalents  increased from $2,937 as of
June 30, 1994 to $314,355 as of June 30, 1995. Operating activities used cash of
$492,421 during fiscal 1995,  consisting primarily of a net loss of $441,503 and
an increase in inventories of $91,554.  Cash used in investing activities during
fiscal 1995 was $68,269,  which consisted primarily of the purchase of machinery
and equipment in the amount of $46,335.  Cash  provided by financing  activities
during fiscal 1995 was $872,108,  consisting primarily of proceeds from the sale
of  Preferred  Stock in the  amount  of  $755,000  and an  advance  from John C.
Anderson in the amount of $348,363,  which amounts were partially  offset by the
purchase of a certificate of deposit for $232,255.

     At June 30, 1996 the Company had no commitments for capital expenditures.

     The Company has deferred tax assets with a 100% valuation allowance at June
30, 1996. Management is not able to determine if it is more likely than not that
the deferred tax assets will be realized.


                                       -6-

<PAGE>

     The Company has incurred  losses since its inception and is dependent  upon
equity  financing to fund working  capital needs that raises  substantial  doubt
about its ability to continue as a going  concern.  Management's  plans  include
continuing  to  attempt  to  increase  sales  volumes  and  related   production
efficiencies to meet its overhead and cash flow  requirements as well as working
with vendors to maintain their continued support.  The ultimate results of these
efforts cannot be determined at the present time.

Results of Operations

     Comparison  of Fiscal  1996 and 1995.  Net sales  during  fiscal  1996 were
$308,668 as  compared to $61,751 in fiscal  1995,  an increase of  $246,917,  or
400%. The increase reflects broader product  distribution and the general growth
of Amerx's business operations, which commenced in fiscal 1994.

     Gross profit during fiscal 1996 was $218,070 as compared to $38,268  during
fiscal 1995,  an increase of $179,802,  or 475%.  As a percentage  of net sales,
gross  profit was 71% in fiscal  1996 as  compared  to 62% in fiscal  1995.  The
increase  reflects  certain  manufacturing  efficiencies  achieved during fiscal
1996.

     Operating expenses during fiscal 1996 were $740,625, consisting of $315,415
in salaries and benefits  and  $425,210 in selling,  general and  administrative
expenses.  This compares to operating  expenses  during fiscal 1995 of $475,786,
consisting of $255,291 in salaries and benefits and $220,495 in selling, general
and administrative  expenses.  The increase in these expenses is consistent with
the overall  growth in Amerx's  operations,  including  the expansion of Amerx's
sales and marketing activities and the addition of one full-time employee.  As a
percentage  of net sales,  operating  expenses  during  fiscal 1996 were 240% as
compared to 770% during fiscal 1995.  The  improvement is due to the increase in
net sales.

     The  Company  incurred  an  operating  loss of  $522,555  in fiscal 1996 as
compared  to an  operating  loss of  $437,518 in fiscal  1995.  The  increase in
operating  loss  was  primarily  due  to  the  higher  operating  expense  level
experienced  during fiscal 1996 which more than offset the increase in net sales
achieved during fiscal 1996. Net loss (after dividend requirements for Preferred
Shares) was $590,139  during  fiscal 1996 as compared to $441,503  during fiscal
1995.

     Management  anticipates  that the Company  will  continue  to incur  losses
during at least the first six months of fiscal 1997 as the Company  continues to
develop and implement its product sales and distribution strategies.

Recent Accounting Pronouncements

     The Financial  Standards Board has recently  issued  Statement of Financial
Accounting  Standards  ("SFAS")  No.  121,  "Accounting  for the  Impairment  of
Long-Lived Assets" and SFAS No. 123, "Accounting for Stock-Based  Compensation."
SFAS  No.  121  requires  that  long-lived   assets  and  certain   identifiable
intangibles be reported at the lower of the carrying  amount or their  estimated
recoverable  amount and the  adoption  of this  statement  by the Company is not
expected to have an impact on the financial statements.  SFAS No. 123 encourages
the accounting for  stock-based  employee  compensation  programs to be reported
within the financial  statements on a fair-value based method. If the fair-value
based method is not adopted,  then the statement requires proforma disclosure of
net income and  earnings  per share as if the fair value  based  method had been
adopted. The Company has not yet determined how SFAS No. 123 will be adopted nor
its impact on the financial statements. Both statements are effective for fiscal
years beginning after December 15, 1995.




                                       -7-

<PAGE>

ITEM     7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Consolidated  Financial  Statements  as of June 30,  1996 and for the years
ended June 30, 1996 and 1995 appear at page F-1.


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

     The Company had a change of its  independent  auditors  during the two most
recent  fiscal  years or  subsequent  interim  period.  On January 1, 1996,  the
Company's auditors,  Mitchell (Diamond) Finley and Company, P.C., combined their
practice  with BDO  Seidman,  LLP.  Thereafter,  BDO  Seidman,  LLP  became  the
Company's independent  auditors.  The Company has not reported disagreement with
its auditors on any matter of  accounting  principles  or practices or financial
statement disclosure.



                                       -8-

<PAGE>

                               Procyon Corporation
                                 and Subsidiary





                        Consolidated Financial Statements
                       Years Ended June 30, 1996 and 1995




Report of Independent Certified Public Accountants                F-2

Consolidated Balance Sheet                                  F-3 - F-4

Consolidated Statements of Operations                             F-5

Consolidated Statements of Stockholders' Equity                   F-6

Consolidated Statements of Cash Flows                             F-7

Summary of Accounting Policies                             F-8 - F-10

Notes to Consolidated Financial Statements                F-11 - F-14

                                                                             F-1

<PAGE>


Report of Independent Certified Public Accountants


To the Board of Directors and Stockholders
Procyon Corporation
Clearwater, Florida

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Procyon
Corporation  and subsidiary (the "Company") as of June 30, 1996, and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
each  of  the  two  years  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 audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Procyon Corporation
and subsidiary at June 30, 1996,  and the results of their  operations and their
cash  flows for each of the two years then ended in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As more fully described in Note 1, the
Company has incurred  significant  operating losses and is dependent upon equity
financing to fund working  capital needs.  These  conditions  raise  substantial
doubt about the Company's  ability to continue as a going concern.  Management's
plans in  regard  to  these  matters  are  described  in Note 1.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


                                            /s/  BDO SEIDMAN, LLP
                                           ------------------------------------
                                            BDO Seidman, LLP

Denver, Colorado
August 21, 1996

              
                                                                             F-2
<PAGE>

                                                            Procyon Corporation
                                                                 and Subsidiary

                                                     Consolidated Balance Sheet
===============================================================================


June 30,                                                            1996
--------------------------------------------------------------------------

Assets

Current:
  Cash and cash equivalents                                $       290,007
  Accounts receivable, less allowance   
    of $500 for doubtful accounts                                   14,679
  Inventories (Note 3)                                             108,646
  Subscriptions receivable (Note 6)                                 96,700
--------------------------------------------------------------------------

Total current assets                                               510,032
--------------------------------------------------------------------------

Machinery and equipment, less accumulated
  depreciation of $11,548                                           36,551
--------------------------------------------------------------------------

Other assets:
  Deposits                                                           1,267
  Employee advances                                                 16,500
--------------------------------------------------------------------------

Total other assets                                                  17,767
--------------------------------------------------------------------------

                                                           $       564,350
==========================================================================



          See  accompanying  report  of  independent certied public accountants,
  summary of accounting policies and notes to consolidated financial statements.



                                                                             F-3

                                
<PAGE>
                                                           Procyon Corporation
                                                                 and Subsidiary

                                                     Consolidated Balance Sheet
                                                                     (continued)
===============================================================================

June 30,                                                            1996
--------------------------------------------------------------------------

Liabilities and Stockholders' Equity

Current liabilities -
  Accounts payable and accrued expenses                      $      59,608
--------------------------------------------------------------------------

Commitments and contingencies (Notes 1 and 5)

Stockholders' equity (Notes 2, 4, 6 and 8):
  Preferred stock, 496,000,000 shares authorized;
    none issued                                                          -
  Series A Cumulative Convertible Preferred stock,
    no par value; 4,000,000 shares authorized;
    1,355,000 shares issued and outstanding                      1,328,700
  Common stock, no par value, 80,000,000 shares
    authorized; 3,637,920 shares issued and outstanding            724,196
  Accumulated deficit                                           (1,548,154)
--------------------------------------------------------------------------

Total stockholders' equity                                         504,742
--------------------------------------------------------------------------

                                                             $     564,350
==========================================================================


            See accompanying report of independent certified public accountants,
  summary of accounting policies and notes to consolidated financial statements.

                               
                                                                             F-4
<PAGE>

                                                            Procyon Corporation
                                                                 and Subsidiary

                                          Consolidated Statements of Operations
===============================================================================

Years Ended June 30,                                     1996          1995
-------------------------------------------------------------------------------

Net sales (Note 8)                                   $   308,668     $   61,751

Cost of sales                                             90,598         23,483
-------------------------------------------------------------------------------

Gross profit                                             218,070         38,268
-------------------------------------------------------------------------------

Operating expenses:
  Salaries and benefits                                  315,415        255,291
  Selling, general and administrative                    425,210        220,495
-------------------------------------------------------------------------------

Total operating expenses                                 740,625        475,786
-------------------------------------------------------------------------------

Loss from operations                                    (522,555)      (437,518)
-------------------------------------------------------------------------------

Other income (expense):
  Interest expense                                        (3,469)             -
  Interest expense, stockholder                                -        (15,500)
  Interest income                                          6,631         11,515
-------------------------------------------------------------------------------

Total other income (expense)                               3,162         (3,985)
-------------------------------------------------------------------------------

Net loss                                                (519,393)      (441,503)
Dividend requirements on preferred stock                  70,746              -
-------------------------------------------------------------------------------

Loss applicable to common stock                      $  (590,139)     $(441,503
================================================================================

Net loss per common share                            $      (.16)     $    (.12)
================================================================================

Weighted average number of
  common shares outstanding                            3,637,920      3,637,920
================================================================================

     See  accompanying  report  of  independent  certified  public  accountants,
  summary of accounting policies and notes to consolidated financial statements.

                                                                             F-5

<PAGE>
<TABLE>
<CAPTION>

                                                                                                                Procyon Corporation
                                                                                                                     and Subsidiary

                                                                                    Consolidated Statements of Stockholders' Equity
===================================================================================================================================

                                                Preferred Stock                Common Stock
Years Ended June 30,                       ----------------------         -----------------------        Accumulated
1996 and 1995                              Shares          Amount           Shares         Amount          Deficit         Total
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                       <C>           <C>                <C>             <C>          <C>               <C>    
Balance, July 1, 1994 as previously    
 reported                                       -       $        -           637,920      $ 590,196     $    (587,258)   $    2,938

  Acquisition of commonly
    controlled company (Note 2)                 -                -         3,000,000        134,000                 -       134,000
-----------------------------------------------------------------------------------------------------------------------------------

Balance, July 1, 1994 as restated               -                -         3,637,920        724,196          (587,258)      136,938

  Stock issued in connection with
    private placements                    755,000          755,000                 -              -                 -       755,000

  Net loss                                      -                -                 -              -          (441,503)     (441,503)
-----------------------------------------------------------------------------------------------------------------------------------

Balance, June 30, 1995                    755,000          755,000         3,637,920        724,196        (1,028,761)      450,435

  Stock issued in connection with
    private placements, net of
    stock issuance costs                  594,000          567,700                 -              -               -         567,700

  Stock issued for services                 6,000            6,000                 -              -               -           6,000

  Net loss                                      -                -                 -              -        (519,393)       (519,393)
-----------------------------------------------------------------------------------------------------------------------------------

Balance, June 30, 1996                  1,355,000       $1,328,700         3,637,920      $  724,196     $(1,548,154)   $    504,742
====================================================================================================================================





                                                         See  accompanying  report  of  independent  certified  public  accountants,
                                                     summary of accounting policies and notes to consolidated financial statements.

                                                                                                                                 F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                                  Procyon Corporation
                                                                       and Subsidiary

                                                Consolidated Statements of Cash Flows
======================================================================================

Increase (Decrease) in Cash and Cash Equivalents     

Years Ended June 30,                                         1996              1995
--------------------------------------------------------------------------------------

<S>                                                      <C>                 <C>    
Operating activities:
  Net loss                                              $   (519,393)       $ (441,503)
  Adjustments to reconcile net loss to
    cash used in operating activities:
      Depreciation                                             9,399             2,149
      Stock issued for services                                6,000                 -
      Write-off of stockholder and
        employee advances                                     16,614                 -
  Changes in operating assets and liabilies
    Accounts receivable, trade                                 9,475           (24,154)
    Inventories                                              (17,092)          (91,554)
    Prepaid expenses                                           5,000            (5,000)
    Accounts payable and accrued expenses                      6,467            67,641
--------------------------------------------------------------------------------------

Cash used in operating activities                           (483,530)         (492,421)
--------------------------------------------------------------------------------------

Investing activities:
  Purchase of machinery and equipment                         (1,764)          (46,335)
  Advances to employees and stockholder                      (18,328)          (21,500)
  Repayments of advances to employees                          6,714                 -
  Payment for deposit                                           (833)             (434)
--------------------------------------------------------------------------------------

Cash used in investing activities                            (14,211)           (68,269)
---------------------------------------------------------------------------------------

Financing activities:
  Proceeds from issuance of preferred stock                  471,000            755,000
  Liquidation (purchase) of certificate of deposit           232,255           (232,255)
  Proceeds from (repayment of) advances
    from stockholder                                        (229,862)           348,363
  Proceeds from issuance of common stock in
    subsidiary                                                     -              1,000
---------------------------------------------------------------------------------------

Cash provided by financing activities                        473,393            872,108
---------------------------------------------------------------------------------------

Net increase (decrease) in cash and
  cash equivalents                                           (24,348)           311,418

Cash and cash equivalents, beginning of year                 314,355              2,937
---------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                  $    290,007        $   314,355
=======================================================================================



             See  accompanying  report  of  independent  certified  public  accountants,
          summary of accounting policies and notes to consolidated financial statements.

                                                                                    F-7
</TABLE>

<PAGE>

                                                            Procyon Corporation
                                                                 and Subsidiary

                                                 Summary of Accounting Policies
================================================================================

Organization        Procyon Corporation (the "Company"), a Colorado corporation,
and Business        was incorporated on March 19, 1987. Through May 9, 1996, the
                    Company had been  considered a development  stage company as
                    it continued to identify and evaluate  merger or acquisition
                    candidates   for   purposes  of  engaging  in  its  business
                    activity.  As a result of the  acquisition  of Amerx  Health
                    Care Corp.  ("Amerx") discussed in Note 2, the Company is no
                    longer considered to be in the development stage.

                    As described in Note 2,  effective May 9, 1996,  the Company
                    acquired  100 percent of the issued and  outstanding  common
                    stock  of  Amerx,   a   commonly-controlled   company.   The
                    acquisition  was  accounted  for in a  manner  similar  to a
                    pooling-of-interest   and,   accordingly,    the   Company's
                    financial  statements  have been  presented  to include  the
                    results of Amerx as though the  acquisition  occurred  as of
                    July 1, 1994.


                    The Company  manufacturers  and  distributes a topical cream
                    and a  preventative  lotion  primarily in the United  States
                    which assists in healing and  preventing  certain  wounds on
                    humans.


Basis of            The consolidated  financial  statements include the accounts
Presentation and    of  Procyon  Corporation  and its wholly  owned  subsidiary,
Principles of       Amerx,  acquired  during  1996 as  discussed  in Note 2. All
Consolidation       material   intercompany   accounts  and   transactions   are
                    eliminated.

                    Effective May 9, 1996,  the Company  effected a five for one
                    reverse  split of its then  issued  and  outstanding  common
                    stock in anticipation of its acquisition of Amerx. All share
                    and per  share  information  in the  accompanying  financial
                    statements  has been  retroactively  restated to reflect the
                    reverse stock split.

                                                                             F-8
                                                                   

<PAGE>
                                                            Procyon Corporation
                                                                  and Subsidiary

                                                  Summary of Accounting Policies
================================================================================

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

Concentrations of   Financial  instruments which potentially subject the Company
Credit Risk         to  concentrations of credit risk consist primarily of cash,
                    cash equivalents and accounts receivable. The Company places
                    its cash and cash  equivalents  in what it  considers  to be
                    highly-rated  financial institutions and while at times such
                    amounts may exceed federally insured limits, the Company has
                    not experienced any losses from such amounts. Concentrations
                    of credit  risk with  respect  to  accounts  receivable  are
                    limited due to a broad  customer  base and  generally  short
                    payment terms.

Cash Equivalents    For the purpose of the Statements of Cash Flows, the Company
                    considers cash-on-hand,  demand deposits in banks and highly
                    liquid investments purchased with original maturity of three
                    months or less to be cash equivalents.

Inventories         Inventories are valued at lower of average cost or market.

Machinery and       Machinery and equipment are stated at cost.  Depreciation is
Equipment           computed on a straight-line  basis over the estimated useful
                    lives of the assets of five years.

Revenue             Revenue  is   recognized   upon  the  shipment  of  finished
Recognition         merchandise to customers.

Income Taxes        The Company  accounts  for income  taxes under  Statement of
                    Financial  Accounting  Standards  No. 109 ("SFAS No.  109").
                    Temporary  differences are differences between the tax basis
                    of assets and liabilities and their reported  amounts in the
                    financial   statements   that  will  result  in  taxable  or
                    deductible amounts in future years.


                                                                             F-9
 <PAGE>

                                                             Procyon Corporation
                                                                  and Subsidiary

                                                  Summary of Accounting Policies
================================================================================


Net Loss            Net loss per share is based on the weighted  average  number
Per Share           of  shares   outstanding   during  each  period   presented.
                    Outstanding  stock  rights  are  included  as  common  stock
                    equivalents, when dilutive.

Recent              The Financial  Standards Board has recently issued Statement
Accounting          of  Financial   Accounting   Standards   ("SFAS")  No.  121,
Pronouncements      "Accounting  for the  Impairment of  Long-Lived  Assets" and
                    SFAS No. 123,  "Accounting  for  Stock-Based  Compensation."
                    SFAS No. 121  requires  that  long-lived  assets and certain
                    identifiable  intangibles  be  reported  at the lower of the
                    carrying  amount or their estimated  recoverable  amount and
                    the  adoption  of  this  statement  by  the  Company  is not
                    expected to have an impact on the financial statements. SFAS
                    No. 123 encourages the accounting for  stock-based  employee
                    compensation  programs to be reported  within the  financial
                    statements on a fair-value  based method.  If the fair-value
                    based method is not  adopted,  then the  statement  requires
                    proforma  disclosure of net income and earnings per share as
                    if the fair value based method had been adopted. The Company
                    has not yet  determined how SFAS No. 123 will be adopted nor
                    its impact on the financial statements.  Both statements are
                    effective  for fiscal  years  beginning  after  December 15,
                    1995.


                                                                            F-10

<PAGE>
                                                             Procyon Corporation
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

1. Going Concern    As reflected in the accompanying  financial statements,  the
                    Company incurred net losses of $519,393 and $441,503 for the
                    years ended June 30, 1996 and 1995.  In  addition,  net cash
                    used in operations has exceeded $450,000 in each of the last
                    two years.  These conditions raise  substantial  doubt about
                    the Company's  ability to continue as a going concern.  Such
                    operating cash  deficiency has been funded through  proceeds
                    from private  preferred stock offerings,  the continuance of
                    which is uncertain.


                    Managements's   plans  include   continuing  to  attempt  to
                    increase sales volumes and related  production  efficiencies
                    to meet its overhead and cash flow  requirements  as well as
                    working with vendors to maintain  their  continued  support.
                    Additionally,   the   Company   is   intending   to  file  a
                    registration  statement  with the  Securities  and  Exchange
                    Commission  for a public  offering  of its  securities.  The
                    ultimate  results of these  efforts  cannot be determined at
                    the present time.

2. Acquisition      On January 31, 1996,  the Company  entered into an Agreement
                    and Plan of  Exchange  (the  "Agreement")  with  Amerx.  The
                    Agreement  provides that the Company acquire Amerx through a
                    share  exchange  in which all of the issued and  outstanding
                    common   stock  of  Amerx  was   exchanged   for   3,000,000
                    (post-split)  shares of  common  stock of the  Company  (the
                    "Exchange").  The Agreement provides,  as a condition of the
                    Exchange,  that the Company  complete a five for one reverse
                    split of its issued and outstanding  shares of common stock.
                    The  president and majority  stockholder  of the Company was
                    the sole  stockholder  of Amerx prior to the Exchange  which
                    was completed effective May 9, 1996.

                    Considering  the  nature  of the  relationship  between  the
                    Company and Amerx,  the  transaction  is considered to be an
                    exchange  between   enterprises  under  common  control  and
                    accordingly, it has been accounted for at historical cost in
                    a manner similar to that in pooling-of-interests  accounting
                    with the  accompanying  financial  statements  presented  to
                    include the accounts and operations of the acquired  company
                    as though the acquisition had occurred as of July 1, 1994.


                                                                            F-11
<PAGE>
                                                             Procyon Corporation
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================


3.  Inventories      Inventories consisted of the following:

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

                     Finished goods                            $  42,216
                     Raw materials                                66,430
                    ------------------------------------------------------------

                                                               $ 108,646
                    ============================================================


4. Related Party    During fiscal 1995, the majority  stockholder of the Company
   Transactions     advanced  $348,363  to the  Company  which  was used to fund
                    operations  and an investment  in a certificate  of deposit.
                    Effective July 1, 1995, the stockholder contributed $117,500
                    of the advance plus accrued interest of $15,500 into capital
                    which was accounted for as part of the Exchange discussed in
                    Note 2. The  remainder  of the advances  were repaid  during
                    fiscal 1996.

5. Commitments      Operating Leases
   and
   Contingencies    The Company leases office space and certain  equipment under
                    operating  leases  expiring at various  dates  through 2001.
                    Rent  expense  under  these  agreements  was   approximately
                    $32,600  and  $22,500  for the years ended June 30, 1996 and
                    1995.  Future minimum rentals under the operating leases are
                    as follows:

                    Year Ending June 30,
                    ------------------------------------------------------------

                    1997                           $ 34,500
                    1998                              9,100
                    1999                              4,700
                    2000                              4,300
                    2001                              4,300
                    ------------------------------------------------------------

                                                    $ 56,900
                    ===========================================================


                                                                            F-12

                                                                         

<PAGE>

                                                             Procyon Corporation
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

                    Product Liability Insurance

                    The Company  does not  maintain  general  product  liability
                    insurance coverage,  however,  the Company is in the process
                    of acquiring  such.  The Company has not received  notice of
                    any claim and has not  experienced any losses as a result of
                    not having such insurance coverage.

6. Stockholder's    During  January  1995,  the  Company's  Board  of  Directors
   Equity           authorized the issuance of up to 4,000,000  shares of Series
                    A  Cumulative   Convertible   Preferred   Stock  ("Series  A
                    Preferred  Stock").  As of June 30,  1996,  the  Company had
                    raised a total of  $1,328,700 in proceeds at $1 per share of
                    which  $96,700 was received by the Company in July 1996.  In
                    addition,  the  Company  issued  26,300  shares  of Series A
                    Preferred  Stock  valued  at $1 per  share  for  commissions
                    relating to the  offering.  The preferred  stockholders  are
                    entitled  to  receive,  as and if  declared  by the board of
                    directors, quarterly dividends at an annual rate of $.10 per
                    share of Series A Preferred Stock per annum.  Dividends will
                    accrue without interest and will be cumulative from the date
                    of  issuance  of the  Series A  Preferred  Stock and will be
                    payable  quarterly  in  arrears in cash or  publicly  traded
                    common stock when and if declared by the board of directors.
                    As of June  30,  1996,  no  dividends  have  been  declared.
                    Dividends  in arrears on the  outstanding  preferred  shares
                    total   $70,746  as  of  June  30,   1996.   The   preferred
                    stockholders  have the right to convert each share of Series
                    A  Preferred  Stock into one share of the  company's  common
                    stock at any time without additional consideration. However,
                    each  share  of  Series A  Preferred  Stock  is  subject  to
                    mandatory  conversion  into one share of common stock of the
                    Company,  effective as of the close of a public  offering of
                    the  Company's  common  stock  provided,  however,  that the
                    offering  must  provide a  minimum  of $1  million  in gross
                    proceeds to the Company  and the initial  offering  price of
                    such common stock must be at least $1 per share. In addition
                    to the rights  described  above, the holders of the Series A
                    Preferred  Stock will have equal voting rights as the common
                    stockholders based upon the number of shares of common stock
                    into which the Series A Preferred Stock is convertible.  The
                    Company is obligated to reserve an adequate number of shares
                    of its common stock to satisfy the  conversion of all of the
                    outstanding Series A Preferred Stock.

                                                                            F-13

<PAGE>
                                                             Procyon Corporation
                                                                  and Subsidiary

                                      Notes to Consolidated Financial Statements
================================================================================

7. Income Taxes     The  Company's  deferred tax asset at June 30, 1996 consists
   and Available    of net  operating  loss  carryforwards  which  after the tax
   Carryforwards    effect  amount to  approximately  $190,000.  The Company has
                    recorded a valuation  allowance  equal to 100 percent of the
                    deferred  tax asset as the Company  was unable to  determine
                    that it is more likely than not that the  deferred tax asset
                    will be realized.

                    At June 30, 1996,  for income tax purposes,  the Company had
                    net operating loss  carryforwards of approximately  $950,000
                    which expire through 2011. The utilization of certain of the
                    loss  carryforwards  are  limited  under  Section 382 of the
                    Internal Revenue Code.

8. Major            During  the year  ended  June  30,  1996,  three  individual
   Customers        customers  accounted  for 16%, 11% and 10% of the  Company's
   and Supplier     net  sales.  During  the  year  ended  June  30,  1995,  two
                    individual  customers  accounted  for  11%  and  10%  of the
                    Company's net sales.

                    The Company's  manufacturing  and packaging  activities  are
                    performed at a production  facility  owned and operated by a
                    non-affiliated   pharmaceutical   manufacturer   under   the
                    supervision of Company personnel.  The Company does not have
                    written contracts with the manufacturer or with suppliers of
                    raw   materials.   Management   believes  that   alternative
                    manufacturers and suppliers could be obtained if necessary.


9. Supplemental     Cash paid for interest for the years ended June 30, 1996 and
   Disclosures of   1995 was $3,469 and $0.
   Cash Flow
   Information      Non-cash investing and financing activities consisted of the
                    following:

                    Years Ended June 30,              1996             1995
                    ------------------------------------------------------------


                    Preferred stock issued for
                    subscription receivable         $ 96,700              -

                    Preferred stock issued for
                    commissions relating to
                    offering                        $ 26,300              -

                                                                      
                                                                           F-14
<PAGE>

                                    PART III


ITEM  9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
           COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT OF THE REGISTRANT.


ITEM  10.  EXECUTIVE COMPENSATION.


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


ITEM  12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The Company will file a definitive  Proxy Statement  pursuant to Regulation
14A for its annual meeting of  shareholders.  The information  called for by the
above  Items 9 through 12 will be included in such  definitive  Proxy  Statement
under  "Election  of  Directors,"   "Management   and   Directors,"   "Executive
Compensation and Other Remuneration,"  "Security Ownership of Certain Beneficial
Owners and Management"  and "Certain  Relationships  and Related  Transactions,"
which is incorporated herein by reference. If such definitive Proxy Statement is
not filed with the  Commission  within 120 days after the end of the fiscal year
covered by this report, then the information described above will be filed as an
amendment to this report before the end of such 120-day period.



                                       -9-

<PAGE>

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

(a)      Exhibits

     1. The  financial  statements  filed  herewith  are  listed in the Index to
Financial Statements included in Item 7.

     2. The Financial Data Schedule is filed herewith.  The remaining  documents
set forth below have been  included as  exhibits  to previous  filings  with the
Securities  and  Exchange   Commission  and  are  incorporated  herein  by  this
reference:

<TABLE>
<CAPTION>
                                                                                         Reg. S-K
Exhibit No.             Document                                                          Item No.
-----------             --------                                                          --------

<S>   <C>      <C>                                                                         <C>      
  *   3.1      Articles of Incorporation                                                      3

  +   3.1.1    Articles of Amendment to Articles of Incorporation                             3

  *   3.2      Bylaws                                                                         3

  +   4.1      Designation of Series A Preferred Stock                                        4

  *   10.1     Incentive Stock Option Plan, authorizing 1,000,000 Common Shares for
               issuance pursuant to the Plan                                                 10

 **   10.2     Agreement and Plan of Merger, dated July 19, 1989, by and between
               the Company and Dental Health of America, Inc. ("DHA").                       10

 **   10.3     Promissory Note, Guarantee and Stock Pledge Agreement, dated July 19,
               1989, by and between the Company, DHA and certain affiliates of DHA.          10

  +   10.4     Loan and Security Agreement, dated as of January 1, 1995, by and between
               the Company and Amerx Health Care Corp., including Promissory Notes
               issued thereunder.                                                            10

  o   10.4     Agreement and Plan of Exchange, dated January 31, 1996, by and
               between the Company and Amerx.                                                10

      27.1     Financial Data Schedule                                                       27
</TABLE>

----------
*    Incorporated by reference to the Company's  Registration  Statement on Form
     S-1, S.E.C. File No. 33-13273.

**   Incorporated  by reference to the Company's Form 10-KSB for the fiscal year
     ended June 30, 1989.

+    Incorporated  by reference to the Company's Form 10-KSB for the fiscal year
     ended June 30, 1995.

o    Incorporated  by  reference  to the  Company's  Form 8-K  filed on or about
     February 2, 1996.
----------

(b)  Reports on Form 8-K

     The  Company  filed  Form  8-K on or about  May 21,  1996 to  disclose  the
acquisition of Amerx pursuant to Item 2 of Form 8-K.

                                      -10-

<PAGE>



                                   SIGNATURES

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

                          PROCYON CORPORATION


                          By:   /s/ John C. Anderson
                                ------------------------------------------------
                                John C. Anderson, President and acting Principal
                                Executive, Financial and Accounting Officer

Date:    October 11, 1996

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>


       Signature                      Title                                   Date
       ---------                      -----                                   ----
<S>                                 <C>                                    <C>   
                                    President and Acting
                                    Principal Executive, Financial
  /s/ John C. Anderson              and Accounting Officer               October 11, 1996
-------------------------------
John C. Anderson


  /s/ Chester L. Wallack            Director                             October 11, 1996
-------------------------------
Chester L. Wallack


  /s/ Fred W. Suggs, Jr.            Director                             October 11, 1996
-------------------------------
Fred W. Suggs, Jr.


  /s/ Alan B. Crane                 Director                             October 11, 1996
-------------------------------
Alan B. Crane

</TABLE>


                                                        -11-

<PAGE>

                                  EXHIBIT INDEX
                                  -------------
<TABLE>
<CAPTION>


Exhibit No.                                Document                                                  Item No.
-----------                                --------                                                  --------


<S>   <C>      <C>                                                                                    <C>  
  *   3.1      Articles of Incorporation                                                                 3

  +   3.1.1    Articles of Amendment to Articles of Incorporation                                        3

  *   3.2      Bylaws                                                                                    3

  +   4.1      Designation of Series A Preferred Stock                                                   4

  *   10.1     Incentive Stock Option Plan, authorizing 1,000,000 Common Shares for
               issuance pursuant to the Plan                                                            10

 **   10.2     Agreement and Plan of Merger, dated July 19, 1989, by and between
               the Company and Dental Health of America, Inc. ("DHA").                                  10

 **   10.3     Promissory Note, Guarantee and Stock Pledge Agreement, dated July 19,
               1989, by and between the Company, DHA and certain affiliates of DHA.                     10

  +   10.4     Loan and Security Agreement, dated as of January 1, 1995, by and between
               the Company and Amerx Health Care Corp., including Promissory Notes
               issued thereunder.                                                                       10

  o   10.4     Agreement and Plan of Exchange, dated January 31, 1996, by and
               between the Company and Amerx.                                                           10

      27.1     Financial  Data Schedule                                                                 27
</TABLE>

 ----------

*    Incorporated by reference to the Company's  Registration  Statement on Form
     S-1, S.E.C. File No. 33-13273.

**   Incorporated  by reference to the Company's Form 10-KSB for the fiscal year
     ended June 30, 1989.

+    Incorporated  by reference to the Company's Form 10-KSB for the fiscal year
     ended June 30, 1995.

o    Incorporated  by  reference  to the  Company's  Form 8-K  filed on or about
     February 2, 1996.
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