________________________________________________________________________________


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                _________________

                                   FORM 10-KSB
                                _________________

[X]   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
      ACT OF 1934; For the Fiscal Year Ended: June 30, 1997

                                          OR

[ ]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 or 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

Commission File Number: 0-24682

                            WORLDWIDE PETROMOLY, INC.
             (Exact name of registrant as specified in its charter)

             Colorado                                            84-1125214
  (State or other jurisdiction                               (IRS Employer
 of incorporation or organization)                          Identification No.)

                       1300 Post Oak Boulevard, Suite 1985
                              Houston, Texas 77056
          (Address of principal executive offices, including zip code)

                                 (713) 892-5823
              (Registrant's telephone number, including area code)
                                _________________

      Securities registered under Section 12(b) of the Exchange Act:

                                                         Name of Each Exchange
       Title of Each Class                                on which Registered
       -------------------                                -------------------
               N/A                                               N/A

      Securities registered pursuant to 12(g) of the Exchange Act:

                               Title of Each Class
                               -------------------
                           Common Stock, no par value

      Indicate by check mark  whether the  registrant  (i) has filed all reports
required to be filed by Section 13 or 15(d) of the  Exchange Act during the past
12 months (or for such shorter  period that the  registrant was required to file
such  reports),  and (ii) has been subject to such filing  requirements  for the
past 90 days. Yes [x] No [ ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [x]

      Issuer's  revenues  for the year ended June 30,  1997 were  $216,887.  The
aggregate market value of Common Stock held by  non-affiliates of the registrant
at October 8, 1997,  based upon the last reported  sales prices on the OTCBB was
$7,433,125.  As of October 8, 1997, there were 16,747,500 shares of Common Stock
outstanding.
________________________________________________________________________________


<PAGE>

                                  TABLE OF CONTENTS
                                  -----------------
<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----


<S>   <C>         <C>                                                                     <C>
PART I

      Item 1.     Business............................................................     3 

      Item 2.     Properties..........................................................     5 

      Item 3.     Legal Proceedings...................................................     6 

      Item 4.     Submission of Matters to a Vote of Security Holders.................     6      


PART II

      Item 5.     Market for Registrant's Common Equity and Related Stockholder Matters    6


      Item 6.     Management's Discussion and Analysis of Financial Condition
                     and Results of Operations........................................     7    

      Item 7.     Financial Statements................................................    13 

      Item 8.     Changes in and Disagreements With Accountants on Accounting
                     and Financial Disclosure.........................................    13



PART III

      Item 9.     Directors, Executive Officers, Promoters and Control Persons; 
                     Compliance with Section 16(a) of The Exchange Act................    13

      Item 10.    Executive Compensation..............................................    16

      Item 11.    Security Ownership of Certain Beneficial Owners and Management......    18

      Item 12.    Certain Relationships and Related Transactions......................    19 

      Item 13.    Exhibits and Reports on Form 8-K....................................    20 
</TABLE>

















                                          2


<PAGE>
                                      PART I

ITEM 1.     BUSINESS

GENERAL

      Worldwide  Petromoly,  Inc.,  formerly known as Ogden,  McDonald & Company
(the  "Company")  was  incorporated  under the laws of the State of  Colorado on
October 13, 1989. The Company was originally  formed for the primary  purpose of
seeking  out  acquisitions  of  properties,  businesses,  or merger  candidates,
without  limitation  as to the nature of the business  operations  or geographic
area  of the  acquisition  candidate.  In  August  1994,  the  Company  filed  a
registration  statement  with the  Securities  and Exchange  Commission  on Form
10-SB,  wherein  it  registered  its common  stock  under  Section  12(g) of the
Securities  Exchange Act of 1934,  as amended (the "34 Act").  As a result,  the
Company  became a fully  reporting  company under the 34 Act,  which  management
believed  enhanced the Company's ability to attract a suitable private merger or
acquisition candidate.

      Until July 22, 1996,  when the Company  acquired  100% of the  outstanding
common stock of Worldwide Petromoly  Corporation,  the Company had no operations
other than issuing stock to its original shareholders.  As such, the Company was
a "shell"  company  whose sole purpose was to locate and  consummate a merger or
acquisition  with a private entity.  On July 22, 1996 the Company  effected a 3-
for-1 stock split which resulted in 1,500,000  being  outstanding.  Also on July
22, 1996, the Company completed a reverse acquisition of 100% of the outstanding
common  stock of Worldwide  Petromoly  Corporation  in exchange  for  14,507,500
shares of the  Company's  Common  Stock which  resulted in the  shareholders  of
Worldwide  Petromoly  Corporation  acquiring  approximately  90.6% of the shares
outstanding in the Company. The Company changed its name to Worldwide Petromoly,
Inc. Unless the context  otherwise  requires,  the term "Company" as used herein
refers to the  Company  and its  wholly-owned  subsidiary,  Worldwide  Petromoly
Corporation.

DESCRIPTION OF BUSINESS

      The Company is engaged in the  business of  manufacturing,  marketing  and
distributing  a  line  of  molybdenum   fortified   lubricant   products  called
Petromoly(R),  which is an extended drain, high performance  engine oil designed
to enhance and maintain all types of engines at their peak levels.  Prior to the
completion of the Company's  private  offering during July 1996, the Company had
focused its efforts on product development, field testing and the development of
a small customer base to acquire testimonial support for the product technology.
On August  1, 1996 the  Company  hired  James  Danner  who has been  elected  as
President  of the  Company  and Fred  Lehman  has been  elected to serve as Vice
President  of  Marketing.  The  Company's  immediate  focus  is  on  adding  new
commercial  and  industrial  customers.  This process  takes three to six months
because such customers typically want to test the Company's products for 90 days
before  making  any  decisions.  Some of the  Company's  current  customers  are
Continental  Airlines,  Enron,  Kyle Railroad,  Northcoast  Railroad and The Oil
Connection Lube Centers.

     Based on various tests which have been conducted the Company  believes that
its product line offers  several  competitive  advantages  over other  products.
These  benefits  include a significant  increase in fuel economy,  longer engine
life, and an ability to substantially  reduce harmful exhaust emissions,  engine
wear and friction.


                                         3

<PAGE>

ENGINE OIL AND OIL ADDITIVE PRODUCTS

      The  Company  currently  offers the  following  products  for the  markets
indicated:

      1.    Industrial Oil - HD SAE 40 Engine Oil - This was the Company's first
product and it is used as a general  purpose  industrial oil. It is available in
one quart containers, fifty-five gallon drums and in bulk shipments.

      2.    Railroads  - HD SAE 40 RR Engine Oil - The  railroad  industry  is a
major market for the Company.  The Company has received  favorable  test results
from Kyle Railroad,  North Coast Railroad and Washington Central Railroad.  This
product is available in fifty-five gallon drums up to rail car quantities.

      3.    Passenger Cars,  Light Duty Trucks,  Vans and Utility Vehicles - LDF
SAE 10W-30.

      4.    Natural Gas Compressor Applications - NGC SAE 30 or SAE 40.

      5.    Automotive  Additive - Moly Extra - This product is sold by the pint
or in eight ounce containers to be added at every oil change.

PATENTS, TRADEMARKS AND LICENSES

      During  November,  1994, the Company filed an application  with the United
States Patent and Trademark  Office for a patent on Petromoly.  During  December
1995, the Company  received a Notice of  Allowability  indicating  that a patent
would be granted for Petromoly  provided that certain  formalities  are met. The
Company has filed a continuance for three years to protect the disclosure in the
patent  application  from the public.  The Company  also holds the rights to the
registered trademark "Petromoly(R)."

COMPETITION

      Management believes that there is no other fully formulated motor oil like
Petromoly on the market. The major competitive  products are the synthetic oils,
however,  their additional expense is often not justified by actual benefits. In
many  industrial  applications  there are also  operational  limitations  to the
synthetic  oils.  Conventional  motor oils differ  according  to their  additive
packages.  Most general use oils are similar in their makeup. As a result, there
is heavy  competition  in the  consumer  oils  market due to  similarity  of the
products.  Pennzoil has been the market share leader in passenger car motor oils
for 12 years. It introduced its first synthetic motor oil,  Performax  5W-50, in
late 1992.  Pennzoil has a nationwide  distribution  system and they continue to
expand to the  international  market.  The Quaker State  Corporation  is another
major  competitor in the passenger car motor oil industry with  distribution and
products very similar to Pennzoil.  The industrial market has substantially less
competition  due to the  unique  operational  requirements  of  many  industrial
applications.  In these  applications  the customers  are less  sensitive to the
purchase price of the product and base their  purchasing  decisions on extensive
real-life  testing to  determine  operational  advantages  and cost savings from
prospective  products.  This  process is more time  consuming  than  traditional
consumer sales due to its one-on-one sales requirements.  The Company intends to
compete  both in the  industrial  and  consumer  motor oil markets by offering a
product which the Company believes provides  significant benefits over competing
products. The major focus will be in the commercial and industrial areas

                                        4

<PAGE>


MARKETING

      Currently nearly all of the Company's personnel,  including Directors, are
involved in marketing the Company's products.  The target markets are industrial
and commercial  users.  The Company also has begun to approach the direct retail
markets through the Company's sales personnel. The methodology used is primarily
personal sales contact and referral sales.

MANUFACTURING

      Fully formulated Petromoly is not a synthetic,  has no exotic ingredients,
and is relatively  inexpensive to produce.  The secret to Petromoly's success is
the  proprietary   blending  process  which  combines  common   components  with
high-grade  base oil stock.  To provide  rapid  response to market needs without
significant capital investment,  the Company has chosen to use existing contract
blending companies to produce the Company's  products.  The blending facility at
this point is Forsythe  Lubrication  Association,  Ltd.  in Canada.  Forsythe is
producing railroad products,  15W-40 and 10W-30. They are also producing the car
oil  additive.  LSC in  California  and South Coast  Terminals in Texas are also
under  contract  for  production  and will  expand  as the  market  grows.  Mega
Lubricants  is producing all of the Company's  packaged  goods (i.e.  quarts and
gallons) for the trucking and car oil markets.  With these three producers,  the
Company is able to produce and ship products economically to any locality in the
United States or Canada. Additional manufacturers will be selected as necessary.

RESEARCH AND DEVELOPMENT

      The Company  spent $23,000 on research and  development  during the fiscal
year.

EMPLOYEES

      The Company  presently has 14 employees,  of which eight are in management
positions,  including  corporate  and  administrative  operations,  and  six are
engaged in sales.

MAJOR CUSTOMERS

      During the year ended June 30, 1997,  approximately  77% of the  Company's
revenues were received from two customers.

ITEM 2.     PROPERTIES

      The Company  maintains its corporate  offices at 1300 Post Oak  Boulevard,
Suite 1985,  Houston,  Texas 77056. The Company rents  approximately  932 square
feet at this location and pays approximately  $1,200 per month for rent pursuant
to a  lease  which  expires  on  December  14,  2001.  The  Company  also  rents
approximately 5,184 square feet at 757 Kenrick, Suite 112, Houston, Texas 77060,
pursuant to a lease which requires monthly payments of approximately  $2,330 and
which expires September 30, 1999. In addition,  the Company rents  approximately
1,400 square feet of warehouse  storage and facility  space at 1550 Latham Road,
Bay #5,  West Palm Beach,  Florida  33409.  Pursuant  to a lease which  requires
monthly  payments  of  approximately  $971 and which  expires  in May 1998.  The
Company  believes that its  properties are suitable and adequate for its present
and contemplated operations.


                                        5

<PAGE>

ITEM 3.     LEGAL PROCEEDINGS

      The Company is not currently a party to any pending litigation.


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

      During the fourth  quarter of 1997,  there were no matters  submitted to a
vote of the Security Holders, through solicitation of proxies or otherwise.


                                     PART II


Item  5.    MARKET  FOR   REGISTRANT'S  COMMON  EQUITY  AND RELATED  STOCKHOLDER
            MATTERS

                           PRICE RANGE OF COMMON STOCK

      The Company's Common Stock is traded on the OTCBB under the symbol "MOLY."
The following  table sets forth the quarterly  high and low bid prices per share
for the Common Stock, as reported by the OTCBB.

                                                   High Bid           Low Bid
                                                   --------           -------

1996
      First Quarter........................        $ (*)               $ (*)
      Second Quarter ......................        $ (*)               $ (*)
      Third Quarter........................        $ (*)               $ (*)
      Fourth Quarter.......................        $ (*)               $ (*)

1997
      First Quarter........................        $8.00               $6 1/4
      Second Quarter.......................        $6 1/4              $3 1/2
      Third Quarter........................        $4 7/8              $2 9/16
      Fourth Quarter.......................        $2 7/8              $1 7/16
____________________________
* The Company  believes that there were no bids on the  Company's  common shares
  during this period.

      On October 8, 1997,  the last bid for the Common  Stock as reported by the
OTCBB was $1 3/4 per share.  On  September  26, 1997,  there were  approximately
1,060 stockholders of record of the Common Stock.

      The Company has not paid, and the Company does not currently intend to pay
cash dividends on its common stock in the foreseeable future. The current policy
of the  Company's  Board of  Directors  is to retain all  earnings,  if any,  to
provide  funds for  operation  and  expansion  of the  Company's  business.  The
declaration of dividends, if any, will be subject to the discretion of the Board
of  Directors,  which may  consider  such  factors as the  Company's  results of
operations,  financial condition,  capital needs and acquisition strategy, among
others.

                                         6


<PAGE>


ITEM 6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL  CONDITION AND
            RESULTS OF OPERATIONS

      The following  discussion should be read in conjunction with the Company's
consolidated  financial statements and related notes. See Consolidated Financial
Statements.  Certain  statements  contained  herein are not based on  historical
facts, but are forward looking  statements that are based upon assumptions about
future  conditions  that  could  prove  not  to  be  accurate.   Actual  events,
transaction  and results may  materially  differ  from the  anticipated  events,
transactions or results  described in such statements.  The Company's ability to
consummate  such  transactions  and achieve such events or results is subject to
certain risks and uncertainties.  Such risks and uncertainties  include, but are
not limited to, the  existence  of demand for and  acceptance  of the  Company's
products  and  services,   regulatory   approvals  and  developments,   economic
conditions,  the impact of competition and pricing, results of financing efforts
and other factors affecting the Company's business that are beyond the Company's
control.  The Company  undertakes no  obligation  and does not intend to update,
revise or  otherwise  publicly  release  the  result of any  revisions  to these
forward-looking  statements  that  may be  made  to  reflect  future  events  or
circumstances.

      RESULTS OF OPERATIONS - GENERAL

      In July 1996,  the Company's  operating  subsidiary,  Worldwide  PetroMoly
Corporation,  was acquired  through a reverse  acquisition  by Ogden  McDonald &
Company (former symbol-OGDM) preceded by approximately  $4,000,000 of investment
capital to provide the Company adequate funding to build a foundation for growth
and industrial brand awareness of its new lubricating technology.  While keeping
in  perspective  the  acquisition  of  Worldwide  PetroMoly  Corporation,  now a
subsidiary,   by  the  Company  (name  changed  to  Worldwide   PetroMoly   Inc.
Symbol-MOLY),  the Company's structure has changed  significantly to reflect the
activities  of this  subsidiary.  The Company has  invested  in  recruiting  and
training   a  new  sales   force  and   further   establishing   the   Company's
infrastructure.   These  activities  included  the  hiring  of  experienced  and
qualified  personnel.  This includes  hiring a new  president,  James Danner,  a
former  Pennzoil vice  president  executive,  employed for 23 years,  as well as
other high-level  industry  executives to properly  administer the Company.  The
focus has also been on expanding and improving the product  lines,  and spending
the appropriate and necessary  amount of capital for product  certification  and
quality  control.  Product  development  successfully  focused on  applying  the
proprietary  technology  to new  products  such as cutting  oils for  threading,
armament oil to private label(presently being tested by the US Army), and a very
effective oil additive designed for automobiles and light trucks.

      Other  activities  include:  relocating  the  corporate  as  well  as  the
administrative  headquarters;  the  redesigning  and  upgrading of the corporate
image and sales support with a new logo,  website,  product  brochures,  product
labels and packaging;  the purchasing of additional new delivery and operational
equipment,  designing and printing investor  brochures,  and custom purchasing a
trade show booth  along with  related  marketing  materials.  Additionally,  the
Company  expanded  in the third  quarter by adding  new sales and  sales-support
personnel and equipment, at a satellite office and warehouse in south Florida.

                                       7

<PAGE>

      The Company has  continued  extensive  field  testing  and  objective  lab
testing while several major  multinational  customers were  undergoing  extended
final  evaluation  tests of the  PetroMoly  products on their  complex  high-end
machinery  and  fleet  vehicles.  These  tests  have been  complicated  and time
consuming, but all of the results have been excellent.  Management anticipates a
material  rise  in  revenue  in the  prospective  production  of  contracts  and
agreements,  giving a significant  rise to the  PetroMoly  revenues and customer
base within the next fiscal year. During the past year, sales  concentration was
targeting  various  industrial  leaders and massive fleet  operators.  For these
larger customers there are usually test periods that the PetroMoly  products are
subjected to which can last anywhere  from three months to a year,  depending on
each market and end-user. Railroad, bus and gas compressor engines, for example,
are  very  expensive  and  complex  machinery,  requiring  constant  monitoring.
Therefore,  the addition of PetroMoly's new lubrication  technology to an entire
line or fleet is gradual.

      The Company has enjoyed a  significant  amount of activity due to the test
results  that  PetroMoly   achieved  from  subjecting  its  product  to  various
independent  US  Environmental  Protection  Agency  sanctioned  lab  tests  that
documented  and  certified the superior  results of PetroMoly  engine oil on the
most  complex  machinery.  Although  these  tests  are  costly  as  well as time
consuming,  management  believes  they will have a high value to the Company and
further its ability to market a new name brand and a new technology in motor oil
and related products.

      This year's sales activities  included a test radio  advertising  campaign
with  Metro  Traffic  reports  for  brand  awareness.  The  international  sales
department has recently produced  distributorship  agreements in Europe, Mexico,
China,  and South  American  countries.  Domestically,  the Company  added a new
railroad customer, expanded its sales to customers such as Continental Airlines,
and is in various  stages of  development  with  customers such as Fluor Daniel,
Browning Ferris and Greyhound Bus.

      YEAR ENDED JUNE 30, 1997, COMPARED TO YEAR ENDED JUNE 30, 1996

      Total net sales for the year ended June 30, 1997 were $216,887 as compared
to $321,845 for the year ended June 30, 1996, a 33% decrease. The reason for the
decrease  is  Management's  decision  to  concentrate  the  sales  resources  on
procuring a few large  industrial  customers  that are known  industry  leaders.
Sales discounts,  selective  sampling of products,  together with long attentive
testing  periods were practiced to educate these elite  customers  about the new
lubricant  technology.  The potential of these  relationships  was deemed a much
stronger  investment than spreading the focus on a broader  customer reach.  The
Company did attract considerable publicity from its association with Continental
Airlines,  and this has lead to  discussions  and testing  with other very large
industry related companies.  Management  believes that the next fiscal year will
prove  that  the past  year's  sales  strategy  will  reward  the  Company  with
substantial revenues and fiscal commitments.

      Cost of sales as a percentage of net sales increased from 85% for the year
ended June 30, 1996,  to 88% for the year ended June 30, 1997.  Temporary  sales
discounts  and sampling out  inventory  were  factored into 1997's cost of sales


                                       8

<PAGE>

that  reduce  the sales  margins.  During  the last  fiscal  quarter of 1997 the
Company  negotiated lower costs of production with its suppliers as well as more
favorable freight rates for distribution.  The Company is currently interviewing
several  strategically  located  blending  facilities  throughout North America,
South America and Europe. Once these blending agreements are in place, proximity
will dictate lower freight cost thus reducing the cost of goods. A more material
drop in costs  should be realized due to the  economies of scale with  increased
volume production runs. The demand associated with the caliber of customers that
the Company has been  targeting  could qualify it for a dramatic drop in cost of
production runs with only a few, or in some cases one, consummated commitment.

      Selling,  general and administrative  expenses increased from $359,048 for
the year ended June 30, 1996,  to  $4,475,836  for the year ended June 30, 1997.
The large  elevation  in  expenses  was  mainly  due to  non-cash  transactional
payments  in  the  form  of  shares  and  options  granted  as  compensation  to
non-employees  totaling  $2,934,158  that must be calculated  and recorded as an
expense  on  the  Company's   profit  and  loss   statement   according  to  the
pronouncements of the generally accepted accounting principles. The other reason
for the large  increase  in expense was due to the  large-scale  increase in the
Company's  administrative  presence directly  associated with the Company's July
1996 (fiscal 1997) reverse  acquisition  and preceding  funding for such action.
These  operational  activities  are  described  in the  GENERAL  section of this
analysis.

      Interest income in 1997 of $151,539 was due to the interest  received from
the  investments  in  certificates  of  deposit  and  commercial  paper with the
Company's cash reserves. Miscellaneous income decreased from $29,018 in the year
ended June 30,  1996,  to $20,998 in the year ended June 30,  1997,  because the
Company had a subtenant  for some of its then  office  space  during part of the
1996 year. This sublease terminated during March 1996.

      Interest  expense  increased  from  $3,264 in the year June 30,  1996,  to
$9,211 in the year ended June 30, 1997, due to increased  borrowings  during the
year.

      LIQUIDITY AND CAPITAL RESOURCES.

      At June 30, 1997, the Company had a positive working capital in the amount
of $1,911,708,  including $864,555 unrestricted cash, $527,971 in investments in
certificates  of  deposits,  and $418,857  restricted  cash under line of credit
arrangements,  as compared to a working  capital of $(167,312) at June 30, 1996.
The  increase in working  capital  was  primarily  due to the July 1996  private
offering.

      Operating  activities  for the year ended June 30, 1997,  utilized cash of
$1,594,825  as  compared  to  $146,959  for the year  ended June 30,  1996.  The
increased utilization of cash resulted primarily from the fiscal 1997 net loss.

      Cash flow of $4,001,879  was provided from  financing  activities  for the
year ended June 30,  1997,  as compared to $144,080  for the year ended June 30,
1996.  During 1997 cash  financing  was accounted  from the  following  sources:





                                       9

<PAGE>

$3,900,115  was provided by the July 1996 private  offering;  $80,000 in options
exercised;  and $345,000 proceeds from notes  payable--compared to $123,236 from
1996.  $323,236 was used to repay notes payable and advances to  stockholders in
1997.

      Net  cash  used from investing  activities in 1997 was  $1,543,419.  These
activities involve $481,194 net of repayments in notes receivable, which include
related parties; and $527,971 in certificates on deposit. 

      As of June 30, 1997,  the Company had  revolving  lines of credit with two
banks, which expire in August 1998 with total balances outstanding of $265,000.

During the 1997 fiscal year, $108,000 was used to upgrade computer equipment and
move administrative offices.

      As of June 30, 1997, the Company had no material  commitments  for capital
expenditures.

      At June 30,  1997,  the Company has  recorded a full  valuation  allowance
against all deferred tax assets  because it could not  determine  whether it was
more likely or not that the deferred tax asset would be utilized.

      For the years  ended June 30,  1997 and 1996,  the  Company  incurred  net
losses totaling $4,287,123 and $284,221  respectively.  Those losses contributed
to net cash used in operating  activities of $1,594,825 and $146,959 for each of
the years ended June 30, 1997 and 1996,  respectively.  As of June 30, 1997, the
Company  has  unrestricted  cash of and cash  equivalents  and  investments  and
certificates of deposit balance of $1,392,526.  In the event that the Company is
unable to generate sufficient  revenues from operations,  or is unable to obtain
additional  financing,  it may be unable to  continue to develop and support its
present cost  levels  and  continue  as  a  going  concern.  However, Management
strongly believes,  the operational activities  that  the Company  invested  its
time and  resources  in will come to fruition in fiscal 1998.  Furthermore,  the
Company is presently  considering  raising additional equity through the sale of
its common  stock and/or the  contracting  with third  parties for  financing to
develop a direct-market  advertising  campaign, to expand it's marketing efforts
in  order  to generate  additional revenues.  No assurance can be given that the
Company  will  be  successful in  achieving its revenue growth strategy; or that
will obtain financing at terms that are acceptable to the Company.

      OUTLOOK

      The year ended June 30, 1997 was a year of  transition  for the Company as
its strategic focus lay on consummating relationships with a group of leaders in
the industrial markets,  which are known as opinion leaders of new technologies.
Management  foresees an ending in fiscal year 1998 of the "testing periods" that
the Company has  invested  with these  groups,  followed  by  qualified  revenue
producing  contracts,  and testimonials that will attract other companies in the
similar industries for a greater market share. As stated earlier, any one of the
substantial  customers that the Company is presently  working with is capable of
increasing  the volume  productions  to much greater  economies of scale.  These
savings  will  decrease  cost of sales,  and  possibly  decrease the cost to the
customers as well.

                                       10

<PAGE>

      Management is extremely anxious to begin marketing the newly developed oil
additive  that uses the same  proprietary  technology  to suspend  molybdenum in
motor oil for cars and light trucks. An advertising campaign is planned for this
particular  product  beginning with an infomercial to create consumer  awareness
and educate the general public about the Company's new technology. This exposure
will  possibly  facilitate  a demand for the other  PetroMoly  products as well.
During  this  campaign,  distribution  will be  maintained  through  fulfillment
houses.  Later a full-scale retail campaign is planned as the product is sold in
the auto after-market stores and retail chains.  Reports to management show this
oil  additive  product,  being a new  technology  in a  proven  direct  response
category, is projected to carry an enormous demand.

      With the  progressing  sales  relationships  maturing  and the new product
lines being  marketed,  the Company  expects  operating  margins and revenues to
improve appreciably during fiscal 1998.


      NEW ACCOUNTING PRONOUNCEMNETS

      In March 1997, the Financial  Accounting  Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share ("SFAS 128"). SFAS
128  provides  a  different  method of  calculating  earnings  per share than is
currently used in APB Opinion 15. SFAS 128 provides for the calculation of basic
and diluted  earnings per share.  Basic  earnings per share includes no dilution
and is computed by  dividing  income  available  to common  stockholders  by the
weighted  average number of common shares  outstanding for the period.  Dilutive
earnings per share  reflects the  potential  dilution of  securities  that could
share in the earnings of an entity,  similar to existing fully diluted  earnings
per share.

      The Company is required  to adopt this  standard in the fourth  quarter of
1997. Using the principles set forth in SFAS 128, basic and diluted earnings per
share would not be materially different from that presented.

      Statement  of  Financial  Accounting  Standards  No.  129,  Disclosure  of
Information  about Capital  Structure  ("SFAS 129") effective for periods ending
after December 15, 1997,  establishes standards for disclosing information about
an entity's  capital  structure.  SFAS 129 requires  disclosure of the pertinent
rights  and  privileges  of  various  securities  outstanding  (stock,  options,
warrants, preferred stock, debt and participation rights) including dividend and
liquidation  preferences,  participant rights, call prices and dates, conversion
or exercise prices and redemption  requirements.  Adoption of SFAS 129 will have
no effect on the Company as it currently discloses the information specified.

      In June 1997,  the  Financial  Accounting  Standards  Board issued two new
disclosure  standards.  Results of  operations  and  financial  position will be
unaffected by implementation of these new standards.

      Statement  of  Financial   Accounting  Standards  (SFAS)  130,  "Reporting
Comprehensive  Income",  establishes  standards  for  reporting  and  display of
comprehensive  income,  its components and accumulated  balances.  Comprehensive


                                       11

<PAGE>

income is defined to include all changes in equity except those  resulting  from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires  that all items that are required to be  recognized  under  current
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial statements.

      SFAS  131,   "Disclosure   about  Segments  of  a  Business   Enterprise",
establishes  standards for the way that public  enterprises  report  information
about operating  segments in annual financial  statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public.  It also establishes  standards for disclosures  regarding
products and services,  geographic areas and major  customers.  SFAS 131 defines
operating segments as components of an enterprise about which separate financial
information  is  available  that is evaluated  regularly by the chief  operating
decision  maker  in  deciding  how  to  allocate   resources  and  in  assessing
performance.

      Both of these new standards are  effective  for financial  statements  for
periods  beginning after December 15, 1997 and require  comparative  information
for earlier years to be restated. Due to the recent issuance of these standards,
management has been unable to fully  evaluate the impact,  if any, they may have
on future financial statement disclosures.





























                                       12

<PAGE>


ITEM 7.  FINANCIAL STATEMENTS

         The  information  required  hereunder is included in this report as set
forth in the "Index to Financial Statements" on page F-1.


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

               On September 19, 1996, the Company's former auditors resigned and
the  Company  engaged  BDO  Seidman,  LLP as its  independent  certified  public
accountants  for the fiscal year ended June 30, 1996. The details of this change
in  accountants  has been  previously  reported in the Company's  Form 8-K dated
September  19, 1996.  The  Company's  Board of  Director's  made the decision to
engage BDO  Seidman,  LLP  because  the  Company  relocated  its main  office to
Houston, Texas.


                                    PART III
                                    --------

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

     The directors and  executive  officers of the Company and its  wholly-owned
subsidiary, their ages and positions held in the Company are as follows:

   Name                 Age                     Positions Held
   ----                 ---                     --------------

Gilbert Gertner*        72          Chairman of the Board, Director
                                    and Chief Executive Officer of the Company

Robert Goldberg         47          President and Director of the Company

Fred Lehman             58          Vice President of Marketing Worldwide
                                    Petromoly Corporation

Lance Rosmarin*         35          Secretary and Director of the Company
                                    and Chief Financial and Accounting Officer

James Danner            48          President of Worldwide Petromoly Corporation
________________________

      *Gilbert Gertner is the step-father of Lance Rosmarin.  There is no family
      relationship between any other officer and director of the Company.









                                        13


<PAGE>

BUSINESS EXPERIENCE

      GILBERT  GERTNER  has served as the  Chairman  of the Board of the Company
since July 22, 1996,  and  Chairman of the Board and CEO of Worldwide  Petromoly
Corporation  since April 15,  1993.  Gilbert  Gertner was born and raised in New
York City and  entered  the real  estate  business in New York in 1946 as a real
estate  salesman.  He became a partner  in the firm,  with  holdings  in several
states   consisting  of  hospitals,   motels  and  office  buildings  and  other
businesses. In 1964, Mr. Gertner came to Houston where he had major holdings. In
1965 he entered the apartment  business with a purchase of 1,900 apartments.  He
became  involved  in  general  real  estate  and  specifically  in the  area  of
apartments,  motels, mobile home parks, restaurant  franchising,  nursing homes,
hospitals,  land  developments  and  businesses.  From 1977 to 1992,  he was the
senior  partner of Gertner,  Aron,  Ledet and Lewis  Investments,  an investment
company  which  was  involved  in  apartment   construction,   shopping   center
development,  mini-warehouse  development,  business  purchases,  financing  and
medical  investments.  In 1992,  Mr.  Gertner  formed his own  company,  Gertner
Investments.  He serves on the Board of Directors of one of his  companies,  CXR
Telecom Communications, located in San Jose, California. He has served, or still
serves  as  Chairman  of  the  Board  of  several   public  and  privately  held
corporations which include: DATA Systems Software,  Inc. (NASDAQ -- DSSI), which
provides sophisticated software services and products to commercial and military
customers (1990 - 1991); Citadel Computer Systems,  Inc. (NASDAQ -- NOFF), which
produces a line of network  security  computer  software (1992 to present);  GGR
Oil, Inc.,  which manages a chain of Texaco  Express Lube centers,  and Pennzoil
related  lube  centers,  located in Texas and  Florida,  which  employs over 100
people (1993 to present);  and National  Recycling  Group, an oil and oil filter
recycling  company (1994 to present).  He has owned and operated many hospitals,
including Pasadena General,  Medical Arts Hospital Building,  Southmore Hospital
and Peachtree Hospital (Atlanta), Villa Capri (Austin, Texas), and the Villa Inn
(Dallas,  Texas).  He has also owned and operated over 6,000  apartment units in
Houston and Pasadena,  Texas.  In 1990, Mr. Gertner was honored with the Zionist
Organization  of America  ("ZOA") "Man of the Year" award,  commending him has a
civic leader and  humanitarian.  Mr.  Gertner is a member of  Congregation  Beth
Yeshuran.  He has  served  in  numerous  communal  activities  in the UJA  Prime
Minister's  Mission.  Mr.  Gertner spends  approximately  80% of his time on the
Company's business.

      ROBERT  GOLDBERG  has served as  President  and a Director  of the Company
since July 22, 1996, as President of Worldwide Petromoly  Corporation from April
15,  1993,  until  September 3, 1996,  and as a Director of Worldwide  Petromoly
Corporation  since April 15, 1993.  From 1986 until 1988,  Mr.  Goldberg was the
General  Manager of Gregg  Bingham's Ten Minute Oil'R Change,  a small two store
operation  in  the  quick  lube  industry  in  Houston.  He  joined  Jiffy  Lube
International  as Director of  Operations  for 37 Houston  area centers in 1988.
During this period,  Jiffy Lube  decided to sell all the company  stores and Bob
moved into  franchise  sales for Jiffy Lube and became their  leading  salesman.
After  Jiffy Lube was  acquired  by  Pennzoil  in 1990,  Mr.  Goldberg  left the
company.  From 1990 until June 1992,  he consulted  in the quick lube  business,
becoming known in the Houston area for his expertise.  In June 1992, G.G.R. Oil,
Inc. was formed, with Mr. Goldberg as President and a director,  to purchase two
stores  in  the  Houston  market  which  Texaco  had  been  trying  to  operate,
unsuccessfully.  From this base,  G.G.R .Oil, Inc. has expanded to a total of 15
stores in Houston and West Palm Beach, Florida. In the Houston market the stores
operate  under the name  Texaco  Express  Lube,  while the stores in Florida are
known as the Oil  Connection.  Mr.  Goldberg  continues to serve as President of
G.G.R. Oil, Inc. Mr. Goldberg received an Engineering Degree from the University
of Michigan in 1972. Mr.  Goldberg spends  approximately  15% of his time on the
Company's business.






                                        14


<PAGE>



      LANCE  ROSMARIN has served as Secretary,  Chief  Financial and  Accounting
Officer and a Director of the Company  since July 22,  1996,  and as  Secretary,
Treasurer  and a Director of  Worldwide  Petromoly  Corporation  since April 15,
1993.  Since 1993, he has been a partner in Gertner  Investments,  an investment
company with  investments in real estate and other  businesses.  From 1990 until
1993, Mr. Rosmarin was employed by Gertner,  Aron, Ledet and Lewis  Investments.
He has served as Secretary, Vice President and a director of GGR Oil, Inc. since
1993,  and as Vice  President and a director of National  Recycling  Group since
1994.  He also served as  Secretary,  Vice  President  and a director of Citadel
Computer  Systems,  Inc.,  a public  company,  from 1993 until March  1996.  Mr.
Rosmarin received a Bachelor of Science Degree in Finance and Marketing from the
University of Texas in 1985, and an MBA Degree in Finance from the University of
Texas  in  1988.  Mr.  Rosmarin  spends  approximately  80% of his  time  on the
Company's business.

      FRED LEHMAN was elected Vice President of Marketing of Worldwide Petromoly
Corporation  on  September  3,  1996,  and he has  been  employed  by  Worldwide
Petromoly Corporation since March 1994. Mr. Lehman was employed by Pennzoil from
1962 until his retirement in 1990.  During his last eight years at Pennzoil,  he
was the national sales manager for their  commercial  and  industrial  division.
During his eight year tenure,  commercial  and  industrial  sales grew from $3.7
million to $88 million.

      JAMES DANNER was elected President of Worldwide  Petromoly  Corporation on
September 3, 1996, and he has been employed by Worldwide  Petromoly  Corporation
since August 1, 1996.  Mr. Danner  graduated  from the University of Colorado in
1970 with a B.S. degree in Business.  He was an executive with Pennzoil Products
from  1971  until  July  1996.  He  served as Vice  President  of the  Installed
Marketing  Division  from 1994 until July 1996,  and prior thereto he served for
approximately  fifteen years as the Division Manager for the Northeastern United
States.  During Mr. Danner's term, Pennzoil attained the number one market share
in both the DIY and  installed  market  segments of the  Passenger Car Motor Oil
business.  Mr. Danner's  Northeastern  division was responsible for in excess of
$250 million in annual sales.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

      No person who was either a director,  officer or beneficial  owner of more
than 10% of the Company's Common Stock, failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act during the most recent fiscal year
except for Lance  Rosmarin,  who failed to timely file one Form 4 which has been
filed.









                                        15


<PAGE>

ITEM 10.    EXECUTIVE COMPENSATION

      The following table reflects all forms of compensation for services to the
Company  for the fiscal  years ended June 30,  1997,  1996 and 1995 of the Chief
Executive  Officers of the Company.  No executive officer of the Company,  other
than Gilbert  Gertner and James Danner,  received  compensation  which  exceeded
$100,000 during the fiscal year ended June 30, 1997.

                            SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                               Long-Term
                                                Annual Compensation          Compensation
                                             -------------------------   --------------------       
                                                                                                 All
                                                                         Restricted    Stock     Other
                                                                           Stock       Options   Compen-
Name & Principal Position             Year   Salary   Bonus   Other (1)    Awards     (Shares)   sation
-------------------------             ----   ------   -----   ------     ----------   --------   ------
<S>                                   <C>   <C>       <C>       <C>        <C>      <C>             <C>
Gilbert Gertner                       1997  $110,000  $6,000    $9,900      -0-      540,000 (2)    -0-
 Chief Executive Officer              1996       -0-     -0-       -0-      -0-          -0-        -0-
 of Worldwide Petromoly, Inc.         1995       -0-     -0-       -0-      -0-          -0-        -0-


James Danner                          1997  $ 94,416  $5,200    $7,700      -0-      300,000 (3)    -0-
 President                            1996       -0-     -0-       -0-      -0-          -0-        -0-
 of Worldwide Petromoly Corporation   1995       -0-     -0-       -0-      -0-          -0-        -0-
_________________________________________

(1)   Automobile allowance.
(2)   All options vested in August 1996, and expire in July 2001.
(3)   100,000  options vested in August 1996.  65,000 options vested in August 1997.  65,000 options do
      not vest until August 1998.  70,000  options do not vest until August 1999. All options expire in
      August 2001.
</TABLE>

DIRECTOR COMPENSATION

       The Company does not currently pay any cash directors'  fees, but it pays
the expenses of its directors in attending board meetings.

EMPLOYMENT AGREEMENTS

       Effective August 1, 1996,  Worldwide  Petromoly  Corporation entered into
five year employment agreements with its four executive officers.  The following
table sets forth the name and title of each  person and their  compensation  for
the first year of their employment agreement.

                                                 Annual      Automobile
Name               Title in Petromoly            Salary      Allowance
----               ------------------            ------      ---------

Gilbert Gertner    Chairman of the Board         $120,000    $950/month
                   and Chief Executive Officer

James Danner       President                     $103,000    $655/month

       Mr. Gertner's  agreement provides that his annual salary will increase to
$144,000  in the second  year and to  $180,000  in the  third,  fourth and fifth
years. All four officers may receive bonuses or other extraordinary compensation
as determined in the discretion of the Worldwide Petromoly  Corporation Board of
Directors.

                                      16

<PAGE>

       All four agreements include a covenant not to engage in any business that
uses any of Worldwide Petromoly Corporation's  proprietary information regarding
MSO2 or Molydisulfide, that competes with Worldwide Petromoly Corporation during
the  term  of the  agreement  and  for a  period  of five  years  following  the
termination of the agreement.

STOCK OPTION PLAN

       During July 1996, the Board of Directors adopted a Stock Option Plan (the
"Plan"),  and in July 1996,  the Company's  shareholders  approved the Plan. The
Plan as amended  authorizes  the issuance of options to purchase up to 3,500,000
shares of the Company's  Common Stock.  The Plan allows the Board to grant stock
options from time to time to employees,  officers,  directors and consultants of
the Company. The Board has the power to determine at the time that the option is
granted  whether the option will be an  Incentive  Stock Option (an option which
qualifies  under Section 422 of the Internal  Revenue Code of 1986) or an option
which is not an Incentive Stock Option. Vesting provisions are determined by the
Board at the time options are  granted.  The option price for any option will be
no less than the fair market value of the Common Stock on the date the option is
granted.

       Since all options  granted under the Plan must have an exercise  price no
less than the fair  market  value on the date of  grant,  the  Company  will not
record any expense upon the grant of options,  regardless of whether or not they
are incentive  stock  options.  Generally,  there will be no federal  income tax
consequences  to the Company in connection  with Incentive Stock Options granted
under the Plan. With regard to options that are not Incentive Stock Options, the
Company will ordinarily be entitled to deductions for income tax purposes of the
amount that option holders  report as ordinary  income upon the exercise of such
options, in the year such income is reported.

       As of June 30, 1997, 2,875,000  stock  options had been granted under the
Plan, 40,000 of which have been exercised.  Neither Mr.  Gertner nor Mr.  Danner
received any stock options during the fiscal year ended June 30, 1997.





















                                       17


<PAGE>




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

       The  following  table sets forth,  as of September  19,  1997,  the stock
ownership of each person known by the Company to be the beneficial owner of five
percent  or more of the  Company's  Common  Stock,  each  officer  and  director
individually,  and all officers and  directors as a group.  Each person has sole
voting and investment power over the shares except as noted.

                                     Amount and Nature
Name and Address                     of Beneficial Ownership    Percent of Class
----------------                     -----------------------    ----------------

Gilbert Gertner                       11,790,000 (1)                    68%
1300 Post Oak Boulevard, Suite 1985
Houston, Texas  77056

Robert Goldberg                        1,310,000 (2)                     8%
15010 Falling Creek
Houston, Texas  77068

James Danner                             300,000 (3)                     2%
1300 Post Oak Boulevard, Suite 1985
Houston, Texas  77056


Fred Lehman                              150,000 (4)                     1%
1300 Post Oak Boulevard, Suite 1985
Houston, Texas  77056

Lance Rosmarin                            50,000 (5)                   0.3%
1300 Post Oak Boulevard, Suite 1985
Houston, Texas  77056

All Directors and Officers             13,600,000                       76%
as a Group (5 Persons)
______________________

(1)  Includes 540,000 shares underlying  currently  exercisable  options held by
     Mr. Gertner.
(2)  Includes 60,000 shares underlying currently exercisable options held by Mr.
     Goldberg.
(3)  Includes 300,000 shares underlying  currently  exercisable  options held by
     Mr. Danner.
(4)  Includes 150,000 shares underlying  currently  exercisable  options held by
     Mr. Lehman.
(5)  Includes 50,000 shares underlying currently exercisable options held by Mr.
     Rosmarin.

       The Company knows of no  arrangement or  understanding,  the operation of
which may at a subsequent date result in a change of control of the Company.




                                      18

<PAGE>

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ACQUISITION OF WORLDWIDE PETROMOLY CORPORATION

       On July 22, 1996,  the Company  completed the  acquisition of 100% of the
outstanding  common stock of  Worldwide  Petromoly  Corporation  in exchange for
14,507,500  shares of the  Company's  Common Stock  (approximately  90.6% of the
shares now outstanding). The stock issuances were made pursuant to the Agreement
("Agreement") between the Company and Worldwide Petromoly Corporation. The terms
of the Agreement were the result of negotiations  between the managements of the
Company and Worldwide Petromoly Corporation. However, the Board of Directors did
not obtain any independent  "fairness" opinion or other evaluation regarding the
terms  of  the  Agreement,  due  to the  cost  of  obtaining  such  opinions  or
evaluations.  A total of 12,500,000 of the shares issued in connection  with the
acquisition of Worldwide Petromoly  Corporation were issued to Petromoly Capital
Partners,  which is a Texas  general  partnership.  Gilbert  Gertner  and Robert
Goldberg  are  the  two  general  partners  and  Mr.  Gertner  owns  90%  of the
partnership and Mr. Goldberg owns 10% of the partnership.

TRANSACTIONS INVOLVING WORLDWIDE PETROMOLY CORPORATION

       On January 1, 1996,  Worldwide Petromoly  Corporation  accepted a capital
contribution  from its sole shareholder,  Petromoly  Capital  Partners,  a Texas
general  partnership (the  "Partnership"),  of assets previously licensed to and
utilized in Worldwide Petromoly Corporation's  business,  which assets the Board
of  Directors  valued at  $1,500,000.  The assets  were  conveyed  to  Worldwide
Petromoly  Corporation under a Quitclaim Bill of Sale and Assumption  Agreement,
which included a provision obligating  Worldwide Petromoly  Corporation to pay a
certain obligation of the Partnership to Gilbert Gertner, when due, in an amount
not to exceed $90,000. This obligation has subsequently been paid in full by the
Company for $52,000.  The assets contributed by the Partnership will be recorded
on the Company's  financial  statements at zero value because generally accepted
accounting  principles require that such assets may not be recorded in excess of
their original cost basis.  The assets  contributed by the  Partnership  will be
recorded on the Company's financial  statements at zero value, because generally
accepted  accounting  principles require that such assets may not be recorded in
excess of their original cost basis.

       In  December,   1996  the  Company   loaned  Citadel   Computer   Systems
Incorporated ("Citadel"), a company of which Mr. Gertner is a director, $500,000
pursuant to a short term  promissory note which bore interest at the rate of 10%
per annum and was due in January,  1997 (the "Citadel  Note").  The Citadel Note
was secured by 733,000  shares of common  stock of Citadel.  As part of the loan
transaction,  the Company received warrants to purchase 150,000 shares of common
stock of Citadel at an  exercise  price of $.59 per share.  In  February,  1997,
Citadel paid the Company $250,000 as a principal  reduction payment.  As of June
30, 1997, the outstanding balance on the Citadel Note, which was in default, was
$267,289.

       In partial consideration for not foreclosing on the Citadel Note, on June
30, 1997,  Commercial  Capital Trading  Corporation  ("Commercial  Capital"),  a
company  in which Mr.  Gertner  is a  stockholder,  agreed  to enter  into a new
promissory  note  with  the  Company  in  the  amount  of the  then  outstanding
obligation  of  Citadel  (the  "Commercial  Capital  Note").  The  agreement  by
Commercial  Capital to execute  this new note and to assume the  obligations  of
Citadel to the Company was part of a transaction  between Citadel and Commercial
Capital,  in which the  Company was not a party.  The  Commercial  Capital  Note

                                      19

<PAGE>


provided for the payment to the Company of $5,000 per month and bore interest at
the rate of 10% per  annum.  The  Commercial  Capital  Note was  secured  by the
accounts  receivable of Commercial  Capital.  In October,  1997, the Company and
Commercial Capital agreed to restructure and modify the Commercial Capital Note,
which had a then  outstanding  balance of $204,000 to provide for an increase in
the  monthly  installment  payments to the Company of the greater of (i) $10,000
per month or (ii) 15% of the proceeds  received from the  collection of accounts
receivable up to $100,000 and 50% of the  collection of any accounts  receivable
thereafter,  for 12 months, with a final payment to the Company of the remaining
outstanding  principal  and interest,  if any, due in the 13th month.  The first
installment  payment  under the  modified  note is due  October  20,  1997.  The
Commercial  Capital Note is secured by the  accounts  receivable  of  Commercial
Capital and the personnel  guarantee of Mr.  Gertner and another  stockholder of
Commercial Capital.

       From time to time, the Company's principal stockholder,  Gilbert Gertner,
has made unsecured,  non-interest  bearing  advances of working capital funds to
the  Company.  The  outstanding  balance of the advances as of June 30, 1997 and
June 30, 1996 were $312,573 and $432,573,  respectively.  Mr. Gertner has agreed
to defer  repayment of the advances  through June 30, 1998,  unless  excess cash
flow of the Company allows the repayment of the advances prior to that date.

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

(a)    Exhibits

Exhibit No.  Identification of Exhibit
             -------------------------

21.1         Subsidiaries
27.1         Financial Data Schedule
_______________________________

(b)    Reports on Form 8-K.

             None

















                                       20



<PAGE>



                                   SIGNATURES

       In  accordance  with  the  requirements  of  Section  13 of  15(d) of the
Exchange Act, the  Registrant  has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 13th day of October 1997.

                                     Worldwide Petromoly, Inc.


                                     By:  /s/ Gilbert Gertner
                                        ----------------------------------------
                                         Gilbert Gertner, Chairman of the Board



Pursuant to the  requirements  of the Exchange  Act, this report has been signed
below by the following persons in the capacities and on the dates indicated:

Signature                            Title                         Date


 /s/ Gilbert Gertner            Director                      October 13, 1997
----------------------------    and Chairman of the Board 
     Gilbert Gertner            


----------------------------    Director and                  October ___, 1997
     Robert Goldberg            President


 /s/ Lance Rosmarin             Director, Secretary and       October 13, 1997
----------------------------    Chief Financial and  
     Lance Rosmarin             Accounting Officer  
                                

















                                       21

<PAGE>







                          INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                   PAGE
                                                                                   ----
<S>    <C>                                                                         <C>
Worldwide Petromoly, Inc. Consolidated Financial Statements:

       Report of Independent Certified Public Accountants..........................F-2

       Balance Sheet as of June 30, 1997...........................................F-3

       Statements of Loss for the Years Ended June 30, 1997 and 1996...............F-4

       Statements of Stockholders' Equity for the Years Ended June 30,
           1997 and 1996...........................................................F-5

       Statements of Cash Flows for the Years Ended June 30, 1997 and 1996.........F-6

       Notes to Financial Statements...............................................F-7 to F-17

</TABLE>





































                                       F-1


<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors of
  Worldwide Petromoly, Inc.



We have  audited  the  accompanying  consolidated  balance  sheet  of  Worldwide
Petromoly,  Inc. (formerly Ogden, McDonald & Company - the "Company") as of June
30, 1997, and the related consolidated statements of loss,  stockholders' equity
and cash  flows for the years  ended  June 30,  1997 and 1996.  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.

As described in Notes 2 and 3, the Company executed a reverse merger on July 22,
1996, and acquired all of the  outstanding  common stock of Worldwide  Petromoly
Corporation,  a privately-held  Texas  corporation  engaged in the marketing and
sale of engine  lubrication  products.  The Company  then  changed its name from
Ogden, McDonald & Company to Worldwide Petromoly, Inc.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Worldwide  Petromoly,  Inc. at June 30, 1997,  and the results of its operations
and its cash flows for the years  ended June 30,  1997 and 1996,  in  conformity
with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated  financial  statements,   the  Company  has  incurred  losses  from
operations  since  inception and at June 30, 1997 had an accumulated  deficit of
$5,003,244. These conditions raise substantial doubt about the Company's ability
to continue as a going concern.  Management plans in regard to these matters are
also described in Note 1. The accompanying  consolidated financial statements do
not  include  any  adjustments  that  might  result  from the  outcome  of these
uncertainties.




                                                   BDO SEIDMAN, LLP


October 1, 1997
Houston, Texas

                                       F-2

<PAGE>
                            WORLDWIDE PETROMOLY, INC.

                           CONSOLIDATED BALANCE SHEET

                                                                       June 30,
                                                                           1997
                                                                    -----------
Assets

Current:
    Cash and cash equivalents ...................................   $   864,555
    Investments in certificates of deposit ......................       527,971
    Restricted investments in certificates of deposit (Note 6) ..       418,857
    Accounts receivable:
       Trade ....................................................        61,761
       Related parties (Note 7) .................................        29,536
    Notes receivable - related parties, current portion (Note 7)        277,347
    Inventories (Note 4) ........................................       128,651
    Prepaid expenses and other ..................................        18,139
                                                                    -----------

Total current assets ............................................     2,326,817

Property and equipment, net (Note 5) ............................       108,547

Notes receivable - related parties, noncurrent portion (Note 7) .       203,847
                                                                    -----------

                                                                    $ 2,639,211
                                                                    ===========

Liabilities and Stockholders' Equity

Current Liabilities:
    Accounts payable and accrued expenses .......................   $   150,109
    Notes payable (Note 6) ......................................       265,000
                                                                    -----------

Total current liabilities .......................................       415,109

Advances from stockholder (Note 7) ..............................       312,573
                                                                    -----------

Total liabilities ...............................................       727,682
                                                                    -----------

Commitments (Notes 9 and 10)

Stockholders' equity (Notes 3, 10 and 11):
    Preferred stock, no par value, 10,000,000 shares
       authorized, none issued ..................................          --
    Common stock, no par value, 800,000,000 shares
       authorized; 16,747,500 shares issued and outstanding;
       2,835,000 shares reserved for stock options ..............     6,914,773
    Accumulated deficit .........................................    (5,003,244)
                                                                    -----------

Total stockholders' equity ......................................     1,911,529
                                                                    -----------

                                                                    $ 2,639,211
                                                                    ===========


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

                                       F-3


<PAGE>



                            WORLDWIDE PETROMOLY, INC.

                         CONSOLIDATED STATEMENTS OF LOSS




                                                        Year Ended June 30,
                                                  -----------------------------

                                                       1997            1996
                                                  ------------     ------------


Net sales ....................................    $    216,887     $    321,845


Cost of sales ................................         191,500          272,772
                                                  ------------     ------------

Gross profit .................................          25,387           49,073

Selling, general and administrative
    expenses (Notes 10 and 11) ...............       4,475,836          359,048
                                                  ------------     ------------

Loss from operations .........................      (4,450,449)        (309,975)
                                                  ------------     ------------

Other income (expense):
   Interest income ...........................         151,539             --
   Interest expense ..........................          (9,211)          (3,264)
   Miscellaneous income, net .................          20,998           29,018
                                                  ------------     ------------

Total other income, net ......................         163,326           25,754
                                                  ------------     ------------

Net loss .....................................    $ (4,287,123)    $   (284,221)
                                                  ============     ============

Loss per common share ........................    $       (.27)    $       (.19)
                                                  ============     ============

Weighted average common shares outstanding ...      16,089,167        1,500,000
                                                  ============     ============
















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

                                       F-4


<PAGE>



                            WORLDWIDE PETROMOLY, INC.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


For the years ended
June 30, 1997 and 1996

<TABLE>
<CAPTION>


                                                Preferred Stock         Common Stock
                                                ---------------         ------------          Accumulated
                                               Shares      Amount    Shares      Amount         Deficit         Total
                                              --------   ---------  ---------  ------------  -------------      --------
<S>                                           <C>        <C>        <C>        <C>           <C>             <C>         
BALANCE, July 1, 1995 .......................        -   $       -  1,500,000  $        500  $    (431,900)  $  (431,400)

Net loss.....................................        -           -          -             -       (284,221)     (284,221)
                                              --------   ---------  ---------  ------------  -------------      --------

BALANCE, June 30, 1996 ......................        -           -  1,500,000           500       (716,121)     (715,621)

Reverse merger transactions (see Note 3):

  Issuance of common stock in
     connection with private
     offering net of offering
     costs...................................        -           -  2,007,500     3,900,115              -     3,900,115

  Issuance of common stock in connec-
    tion with reverse merger ................        -           -  12,500,000            -              -             -

Issuance of common stock to non-
  employees in exchange for services
  rendered (Note 11).........................        -           -    700,000     1,344,700              -     1,344,700

Stock options granted to non-employees
  in exchange for services rendered
  (Note 10)..................................        -           -          -     1,589,458              -     1,589,458

Exercise of stock options....................        -           -     40,000        80,000              -        80,000

Net loss.....................................        -           -          -             -     (4,287,123)   (4,287,123)
                                              --------   ---------  ---------  ------------  -------------   -----------

BALANCE, June 30, 1997.......................        -   $       -  16,747,500 $  6,914,773  $  (5,003,244)  $ 1,911,529
                                              ========   =========  ========== ============  =============   ===========

</TABLE>






































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

                                       F-5


<PAGE>
                            WORLDWIDE PETROMOLY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                 Year Ended June 30,
                                                              --------------------------
 
                                                                  1997           1996
                                                                  ----           ----
<S>                                                           <C>            <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ................................................   $(4,287,123)   $  (284,221)
  Adjustments to reconcile net loss to net cash
     used in operating activities:
        Depreciation ......................................        14,350           --
        Common stock issued to non-employees for services .     1,344,700           --
        Stock options granted to non-employees for services     1,589,458           --
        Changes in assets and liabilities:
          Accounts receivable .............................       (67,196)        37,486
          Inventories .....................................      (106,887)       (21,764)
          Prepaid expenses and other assets ...............        43,641        (57,283)
          Accounts payable and accrued expenses ...........      (125,768)       178,823
                                                              -----------    -----------


  Net cash used in operating activities ...................    (1,594,825)      (146,959)
                                                              -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Certificates of deposit .................................      (527,971)          --
  Restricted investments in certificates of deposit .......      (418,857)          --
  Capital expenditures ....................................      (115,397)        (7,500)
  Loans to related parties ................................      (741,194)          --
  Repayments on loans to related parties ..................       260,000           --
                                                              -----------    -----------
  Net cash used in investing activities ...................    (1,543,419)        (7,500)
                                                              -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from private offering, net of offering costs ...     3,900,115           --
  Proceeds from options exercised .........................        80,000           --
  Proceeds from notes payable .............................       345,000        123,236
  Repayments of notes payable .............................      (203,236)       (65,837)
  Advances from stockholders ..............................      (120,000)        86,681
                                                              -----------    -----------

  Net cash provided by financing activities ...............     4,001,879        144,080
                                                              -----------    -----------

  Net increase (decrease) in cash .........................       863,635        (10,379)
  Cash and cash equivalents beginning of year .............           920         11,299
                                                              -----------    -----------

  Cash and cash equivalents at end of year ................   $   864,555    $       920
                                                              ===========    ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid ...........................................   $     9,211    $     3,264
                                                              ===========    ===========

  Non-cash, investing and financing activities:
     Issuance of common stock for services (Note 11) ......   $ 1,344,700    $      --
                                                              ===========    ===========
     Stock option granted for services (Note 10) ..........   $ 1,589,458    $      --
                                                              ===========    ===========

</TABLE>

                                       F-6

<PAGE>


                            WORLDWIDE PETROMOLY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


NOTE 1 - FINANCIAL CONDITION AND GOING CONCERN

      For each of the years ended June 30, 1997 and 1996,  the Company  incurred
net losses totalling $4,287,123 and $284,221, respectively, and at June 30, 1997
had an accumulated  deficit of $5,003,244.  These losses contributed to net cash
used in operating  activities of  $1,594,825  and $146,959 for each of the years
ended  June 30,  1997 and 1996,  respectively.  As a result  of these  recurring
losses and operating  cash flow  deficits,  the Company will require  additional
working  capital to develop and  support its  customer  base,  technologies  and
business until the Company either:  (1) achieves a level of revenues adequate to
generate  sufficient  cash  flows from  operations;  or (2)  receive  additional
financing necessary to support the Company's working capital requirements. These
conditions raise  substantial doubt about the Company's ability to continue as a
going concern.

      Concurrent  with the  reverse  merger in July  1996,  the  Company  raised
proceeds  in a private  offering  in the amount of  $3,900,115,  net of offering
costs.  As of June  30,  1997,  the  Company  has  unrestricted  cash  and  cash
equivalents  and  investments  in  certificates  of deposit  balances  totalling
$1,392,526.

      Currently, the Company's focus has been on developing its customer base by
creating brand awareness of its lubrication  technology  through  increasing its
marketing  efforts and quality  control.  The Company's  marketing  efforts have
included  the  recruiting  and  training  of a sales force and  advertising  and
promotion.  quality  control  developments  have  included  product  testing and
certification  and research and  development  with a focus toward  improving and
expanding its product lines.  Management's  plans include  raising the necessary
capital to continue this revenue growth strategy.

      There are no  assurances,  however,  that the Company  can:  (1) raise the
necessary  capital to enable it to continue the execution of its revenue  growth
strategy;  or  (2)  generate  sufficient  revenue  growth  and  improvements  in
operating  margins to meet its working  capital  requirements if such capital is
obtained.  To the extent that funds generated from operations are  insufficient,
the Company will have to raise additional  working capital.  No assurance can be
given that additional financing will be available,  or if available,  will be on
terms  acceptable to the Company.  If adequate  working capital is not available
the Company may be required to curtail its operations.

      The  accompanying  consolidated  financial  statements  do not include any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and  classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.


NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

      Worldwide  Petromoly,  Inc.  (the  "Company"),  a  publicly-held  Delaware
corporation,  is engaged in the marketing and  distribution  of a line of engine
lubrication products under the tradename "Petromoly".  The Company was formed as
a result  of a reverse  merger  (see Note 3) on July 22,  1996,  between  Ogden,
McDonald & Company  ("Ogden  McDonald" - the former name of the Registrant  with
the  Securities and Exchange  Commission)  and Worldwide  Petromoly  Corporation
("WPC"). Ogden McDonald was incorporated in the state of Delaware on October 13,
1989,  and  became a public  "shell"  company  for the  purpose of  engaging  in
selected mergers and acquisitions. WPC was incorporated in the state of Texas on
April 1, 1993, and prior to the reverse merger,  was engaged in the same line of

                                     F-7


<PAGE>
                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


business as the Company.  In connection with the reverse merger,  Ogden McDonald
acquired all of the outstanding common stock of WPC and subsequently changed its
name to Worldwide  Petromoly,  Inc. WPC is now a wholly-owned  subsidiary of the
Company.

      The Company  contracts  with  independent  parties for the blending of its
lubricant products.

BASIS OF PRESENTATION

      The Company has  retained  the June 30 fiscal year end of the former Ogden
McDonald.   Accordingly,  the  accompanying  consolidated  financial  statements
reflect the consolidated  results of operations and cash flows of Ogden McDonald
and its wholly-owned subsidiary,  WPC, as if the reverse merger occurred on July
1, 1995.  All  significant  intercompany  accounts  and  transactions  have been
eliminated.  Prior to the reverse  merger,  WPC reported on a December 31 fiscal
year end as a private company.

REVENUE RECOGNITION

      Revenue is recognized when the product is shipped to the customer.

INVENTORIES

      Inventories  are valued at the lower of cost  (weighted  average  cost) or
market.

PROPERTY AND EQUIPMENT

      Property and equipment are stated at cost. Depreciation is computed on the
straight line method for financial  reporting purposes over the estimated useful
lives of the assets ranging from 5 to 7 years.

      The Company reviews its property and equipment  whenever events or changes
in  circumstances  indicate  the  carrying  value of an  asset  may not be fully
recoverable.

RESEARCH AND DEVELOPMENT

      Research and  development  expenses are charged to operations as incurred.
During the year ended June 30, 1997 and 1996,  research  and  development  costs
were $23,000 and $9,000, respectively.

ADVERTISING

      Advertising  costs  are  expensed  as  incurred.  The  amount  charged  to
advertising  expenses  was $108,000 and $6,000 for the years ended June 30, 1997
and 1996.


INCOME TAXES

      Deferred  income taxes result from the temporary  differences  between the
financial  statement  and  income tax basis of assets  and  liabilities  and are
measured  using the  enacted  tax  rates  and laws  that will be in effect  when
differences are expected to reverse.

LOSS PER COMMON SHARE

      The loss per common  share is  computed  by  dividing  the net loss by the
weighted   average  number  of  common  shares   outstanding  and  common  stock
equivalents,  if dilutive. Common stock equivalents include the effect of common
shares contingently issuable from exercise of stock options only when the effect
would be dilutive.


                                     F-8

<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


CONCENTRATIONS OF CREDIT RISK

      The Company is required by FASB Statement 105,  "Disclosure of Information
about  Financial  Instruments  with  Concentrations  of Credit Risk" to disclose
concentrations  of credit risk.  The Company's  financial  instruments  that are
exposed to  concentrations  of credit risk  consist  primarily  of cash and cash
equivalents,  restricted  cash  and  certificates  of  deposit,  trade  accounts
receivable and notes  receivable with related  parties.  The Company places cash
and temporary cash investments, which exceed FDIC insurance limits in the amount
of $911,358,  in financial  institutions with strong credit ratings. The Company
extends  credit in the normal course of business to a number of customers in the
transportation  industry.  As of June 30, 1997, the Company had uncollateralized
receivables with three customers  approximating $79,000, which represents 87% of
the Company's trade account balance,  including the related party. During fiscal
1997,  sales  to three  customers  amounted  to  approximately  $166,000,  which
represents  35%,  21% and 20%,  respectively  of the  Company's  revenues.  With
respect to notes receivable with related parties, management believes that there
is sufficient collateral underlying the note agreements to protect the Company's
credit risk in the event of default (see Note 7).

OTHER RISKS AND UNCERTAINTIES

      The Company is subject to the  business  risks  inherent in the  petroleum
industry.  These  risks  include,  but are not  limited  to,  a high  degree  of
competition within the petroleum industry and continuous technological advances.
Future  technological  advances  in the  petroleum  industry  may  result in the
availability  of new services or products  that could  compete with the products
currently provided by the Company.

FAIR VALUE OF FINANCIAL INSTRUMENTS

      The  carrying  amounts  of cash and  cash  equivalents,  restricted  cash,
investments  in  certificates  of deposit,  accounts  and notes  receivable  and
long-term debt reported on the balance sheet  approximate  their fair value. The
Company  estimated  the fair value of long-term  debt by comparing  the carrying
amount  to the  future  cash  flows of the  instruments,  discounted  using  the
Company's incremental rate of borrowing for similar instruments.

MANAGEMENT'S ESTIMATES AND ASSUMPTIONS

      The  accompanying  financial  statements  are prepared in conformity  with
generally  accepted  accounting  principles  which  requires  management to make
estimates  and  assumptions  that  effect  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.  The  actual  results  could  differ  from those
estimates.

PRODUCT WARRANTY

      The Company  maintains  product  liability  insurance for claims,  if any,
resulting from the use of the "Petromoly" product.

STATEMENT OF CASH FLOWS

      For the  purpose of the  statement  of cash flows,  the Company  considers
demand deposits and highly liquid debt  instruments  with an initial maturity of
three months or less to be cash equivalents.





                                     F-9

<PAGE>
                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


STOCK BASED COMPENSATION

      In October 1995,  Statement of Financial  Accounting  Standards (SFAS) No.
123,  "Accounting for Stock- Based  Compensation"  was issued which  establishes
financial   accounting  and  reporting   standards  for   stock-based   employee
compensation  plans,  effective for fiscal years  beginning  after  December 15,
1995. Those plans include all arrangements by which employees  receive shares of
the employer or the employer incurs liabilities to employees in amounts based on
the price of the employer's stock. The Statement also applies to transactions in
which an entity  issues its equity  securities  or other equity  investments  to
acquire goods or services from  non-employees.  As of June 30, 1997, the Company
has stock options outstanding under its 1996 Stock Option Plan (see Note 10).

      SFAS No. 123 also requires that equity instruments issued to non-employees
be accounted for based on fair value.  The Statement  encourages all entities to
adopt the fair  value  based  method  for  employee  stock  compensation  plans.
However, it allows an entity to continue to measure  compensation cost for those
plans using the  intrinsic  value based method of  accounting  prescribed by APB
Opinion No. 25, ("APB No.  25"),  "Accounting  for Stock  Issued to  Employees".
Entities  electing  to remain  with the  accounting  in APB No. 25 must make pro
forma  disclosures  of net income and earnings  per share,  as if the fair value
based method of accounting  had been applied.  At June 30, 1997, the Company has
elected to remain with the accounting under APB No. 25 and has made the required
pro forma disclosures in Note 10.

NEW ACCOUNTING PRONOUNCEMENTS

      In March 1997, the Financial  Accounting  Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS
128  provides  a  different  method of  calculating  earnings  per share than is
currently used in APB Opinion 15. SFAS 128 provides for the calculation of basic
and diluted  earnings per share.  Basic  earnings per share includes no dilution
and is computed by  dividing  income  available  to common  stockholders  by the
weighted  average number of common shares  outstanding for the period.  Dilutive
earnings per share  reflects the  potential  dilution of  securities  that could
share in the earnings of an entity,  similar to existing fully diluted  earnings
per share.

      The Company is required  to adopt this  standard in the fourth  quarter of
1997. Using the principles set forth in SFAS 128, basic and diluted earnings per
share would not be materially different from that presented.

      Statement  of  Financial  Accounting  Standards  No.  129,  Disclosure  of
Information  about Capital  Structure  ("SFAS 129") effective for periods ending
after December 15, 1997,  establishes standards for disclosing information about
an entity's  capital  structure.  SFAS 129 requires  disclosure of the pertinent
rights  and  privileges  of  various  securities  outstanding  (stock,  options,
warrants, preferred stock, debt and participating rights) including dividend and
liquidations preferences,  participant rights, call prices and dates, conversion
or exercise prices and redemption  requirements.  Adoption of SFAS 129 will have
no effect on the Company as it currently discloses the information specified.

      In June 1997,  the  Financial  Accounting  Standards  Board issued two new
disclosure  standards.  Results of  operations  and  financial  position will be
unaffected by implementation of these new standards.

      Statement  of  Financial   Accounting  Standards  (SFAS)  130,  "Reporting
Comprehensive  Income",  establishes  standards  for  reporting  and  display of
comprehensive  income,  its components and accumulated  balances.  Comprehensive
income is defined to include all changes in equity except those  resulting  from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires  that all items that are required to be  recognized  under  current
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial statements.

                                     F-10

<PAGE>
                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




      SFAS  131,   "Disclosure   about  Segments  of  a  Business   Enterprise",
establishes  standards for the way that public  enterprises  report  information
about operating  segments in annual financial  statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public.  It also establishes  standards for disclosures  regarding
products and services,  geographic areas and major  customers.  SFAS 131 defines
operating segments as components of an enterprise about which separate financial
information  is  available  that is evaluated  regularly by the chief  operating
decision  maker  in  deciding  how  to  allocate   resources  and  in  assessing
performance.

      Both of these new standards are  effective  for financial  statements  for
period beginning after December 15, 1997 and require comparative information for
earlier  years to be restated.  Due to the recent  issuance of these  standards,
management has been unable to fully  evaluate the impact,  if any, they may have
on future financial statement disclosures.


NOTE 3 - REVERSE MERGER

      On July 22, 1996, a reverse merger was consummated, whereby Ogden McDonald
offered  one  share of its  common  stock  for each  share of WPC's  issued  and
outstanding common stock, or a total of 14,507,500 restricted shares. WPC became
a wholly-owned  subsidiary of, and WPC stockholders  assumed 90.6% ownership in,
Ogden  McDonald as of that date.  In  anticipation  of the reverse  merger,  the
following equity transactions occurred:

      On July 15,  1996,  WPC amended  its  Articles  of  Incorporation  to: (1)
increase its authorized  common stock from 1,000,000 to 20,000,000  shares;  (2)
change  the  par  value  from  $.10 to  $.001  per  share;  (3)  reclassify  and
automatically  exchange  each share of issued  stock  from one  share,  $.10 par
value, for 1,250 shares, $.001 par value.

      Between July 15-22, 1996, WPC sold 2,007,500 shares of its common stock at
$2.00  per share in a  private  offering  to  non-U.S.  investors  for total net
proceeds of  $3,900,115.  These  shares were  exchanged  for  2,007,500 of Ogden
McDonald's shares as part of the exchange.

      On July 22,  1996,  Ogden  McDonald  effected a 3 for 1 stock  split which
increased its issued and outstanding common stock to 1,500,000 shares.

      In  accordance  with  the  exchange  agreement,  on July 22,  1996,  Ogden
McDonald  offered one share of its common  stock for each share of WPC's  common
stock issued and outstanding,  or a total of 14,507,000 restricted shares (after
the 3-for-1 stock split).

      In  connection  with  the  reverse  merger,   1,500,000  shares  of  Ogden
McDonald's  common stock were  reserved for issuance  pursuant to the 1996 Stock
Option Plan  (subsequently  amended to 3,000,000 shares) which includes officers
of the Company.










                                     F-11


<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 4 - INVENTORIES

      The major components of inventories as of June 30, 1997 are as follows:

      Finished goods...............................................   $111,962
      Raw materials and packaging..................................     13,625
      Work in progress.............................................      3,064
                                                                      --------
                                                                      $128,651
                                                                      ========


NOTE 5 - PROPERTY AND EQUIPMENT

      Property and equipment consist of the following as of June 30, 1997:

      Office furnishings and equipment.............................   $103,858
      Machinery and equipment......................................      6,977
      Vehicles.....................................................     12,062
                                                                      --------
                                                                       122,897
      Less accumulated depreciation................................    (14,350)
                                                                      --------

                                                                      $108,547
                                                                      ========

NOTE 6 - NOTES PAYABLE

      At June 30,  1997,  the  Company has a $250,000  revolving  line of credit
facility with a bank which  expired in July 1997,  and was renewed to July 1998.
At June 30, 1997, the Company had drawn $170,000 under this agreement.  Interest
is payable monthly (8.1% at June 30, 1997) and principal is due on demand, or if
no demand,  at its scheduled  maturity.  The borrowings under the line of credit
are collateralized by a certificate of deposit in the amount of $262,996.

      At June 30, 1997, the Company had drawn $95,000 under a $100,000 revolving
line of credit  facility with another bank.  Principal and interest  (7.09%) are
due on demand,  or if no demand,  in August 1997  (renewed to August 1998, at an
interest  rate of 7.77%  payable  quarterly).  This  borrowing  is  secured by a
certificate of deposit in the amount of $155,861.


NOTE 7 - RELATED PARTY TRANSACTIONS

ACCOUNTS RECEIVABLE - RELATED PARTY

      The  Company  sells  products  to an  entity  that  is  controlled  by the
Company's majority stockholder. Sales and the amount due from the entity at June
30, 1997 were approximately $45,000 and $29,536, respectively.

NOTES RECEIVABLE - RELATED PARTIES

      On  December  12,  1996,  the  Company  executed a note  agreement  with a
publicly-held  corporation in the amount of $500,000, in which a Company officer
serves in a similar  capacity for both  companies.  Principal  and interest (10%
annual rate) was due on January 17, 1997, and was secured by 1,000,000 shares of
the  borrower's  common  stock.  On  February  19,  1997,  a portion of the note

                                     F-12


<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

receivable  balance in the amount of $250,000 was paid.  On June 30,  1997,  the
note agreement was assigned to a privately-held  corporation  controlled by this
Company officer and an individual  Company  stockholder.  The note,  which had a
principal  balance of $267,289 at June 30, 1997,  was  refinanced  on October 1,
1997 in the  amount  of  $204,950  (reflecting  payments  and  accrued  interest
thereon).  Principal and interest at 10% interest per annum are payable  monthly
in consecutive  installments  commencing November 5, 1997, at the greater of: a)
$10,000;  or b) 15% of the funds received by the borrower from the collection of
accounts  receivable for the previous month on the first $100,000 of collections
and 50% of such funds after the first $100,000 of collections  until the note is
collected in full. The note is secured by the borrower's accounts receivable and
personal guarantees of the individuals referred to above.

      On  June  30,  1997,  the  Company  refinanced  a  note  agreement  with a
stockholder in the amount of $210,945.  The note agreement was again  refinanced
on October 1, 1997, in the amount of $202,182  (reflecting  payments and accrued
interest  thereon).  Principal  and  interest  are  payable  monthly in thirteen
consecutive  installments  ranging between $5,000 and $60,000 commencing October
20,  1997,  at 10% per annum.  The note is  secured by 40,000  shares of Company
common  stock  and  200,000  shares  of  common  stock  of the  publicly  traded
corporation referred to above.

      As of June 30,  1997,  the  Company had a demand  note  receivable  in the
amount   of   $12,960,   due  from  the   entity   referred   to  in   "Accounts
receivable-related party" above which was subsequently paid in July 1997.

      As of June 30, 1997, notes receivable maturities were as follows:


                                                                    Amount
                                                                 ----------

      1998.....................................................  $  277,347
      1999.....................................................     203,847
                                                                 ----------
                                                                    481,194
      Less current portion.....................................     277,347
                                                                 ----------
      Long-term portion........................................  $  203,847

ADVANCES FROM STOCKHOLDER

      Prior to the reverse merger,  the principal  stockholder of WPC who is now
an officer  and  majority  stockholder  of the  Company,  advanced  funds to WPC
resulting in a balance of $432,573 at June 30, 1996.  During the year ended June
30,  1997,  such balance has been reduced by two draws:  1) the  utilization  of
$95,000  proceeds on the Company's note payable with a bank (see Note 6); and 2)
the  application  of a $25,000  advance by the  Company to an officer  which was
released in exchange for the draw against the advances from stockholder.


NOTE 8 - INCOME TAXES

      Deferred taxes are determined based on temporary  differences  between the
financial  statement and income tax basis of assets and  liabilities as measured
by the enacted tax rates which will be in effect when these differences reverse.





                                      F-13


<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


      Deferred tax assets are comprised of the following at June 30, 1997:

      Net operating loss carryforwards........................... $ 1,112,500
      Stock options granted to non-employees.....................     540,500
      Amortization expense.......................................      25,500
      Bad debt expense...........................................       7,000
                                                                  -----------
      Gross deferred tax asset...................................   1,685,500
                                                                  -----------
      Valuation allowance........................................  (1,685,500)
                                                                  -----------
      Net deferred tax asset..................................... $         -
                                                                  ===========


      The Company has recorded a full valuation  allowance  against all deferred
tax assets  because it could not  determine  whether it was more likely than not
that the deferred tax asset would be realized.

      At June  30,  1997,  the  Company  had net  operating  loss  carryforwards
totalling  approximately  $3,272,000  available to reduce future  taxable income
through the year 2012. The net operating loss carryforwards expire as follows:

      Year ended December 31,                                        Amount
      -----------------------                                    -----------
                                                              
         2008................................................... $    72,000
         2009...................................................     266,000
         2010...................................................     206,000
         Eighteen months ended June 30, 2012....................   2,728,000
                                                                 -----------
                                                              
                                                                 $ 3,272,000
                                                                 ===========
                                                          
NOTE 9 - COMMITMENTS

      The  Company  leases its office  space  under  long-term  operating  lease
agreements.  At June  30,  1997,  future  minimum  lease  payments  under  these
operating leases were as follows:

      1998...................................................... $    63,000
      1999......................................................      50,000
      2000......................................................      22,000
      2001......................................................      14,000
      2002......................................................       7,000
                                                                 -----------
                                                                 $   156,000
                                                                 ===========

      Rent  expense for the years ended June 30, 1997 and 1996 were  $54,000 and
$29,000, respectively.

      In August 1996, the Company entered into five year  employment  agreements
with  four  officers  at a  combined  annual  salary  of  $361,000  (subject  to
escalation ranging from $385,000 in fiscal 1998 to $432,000 in fiscal 2001) plus
a combined annual automobile allowance of $33,600.






                                      F-14

<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


NOTE 10 - STOCK OPTIONS

      On July 22, 1996 the  Company  approved  the 1996 Stock  Option Plan which
authorizes  the Company's  Board of Directors to grant options to purchase up to
3,500,000 shares of Common Stock (as amended),  to eligible employees,  officers
and directors of the Company,  and consultants to the Company.  The terms of the
options are generally  over five years with immediate  vesting.  The Plan is not
qualified  under Section 401(a) of the Internal  Revenue Code of 1986, nor is it
subject to any provision of the Employee Retirement Income Security Act of 1974.

      The Company has elected to continue to account for stock options issued to
employees in  accordance  with APB No. 25.  During the year ended June 30, 1997,
all  1,095,000  options  issued to officers  and  employees  were  granted at an
exercise price, which equaled or exceeded the market price per share at the date
of grant and accordingly, no compensation was recorded.

      Effective  for the year ended June 30,  1997,  the Company was required to
adopt the  disclosure  portion of SFAS No.  123.  This  statement  requires  the
Company to provide proforma information  regarding net loss applicable to common
stockholders and loss per share as if compensation  cost for the Company's stock
options  granted had been  determined  in  accordance  with the fair value based
method  prescribed in SFAS No. 123. The Company estimates the fair value of each
stock option at the grant date by using the  Black-Scholes  option pricing model
with  the  following  weight  average  assumptions  used for  grants  in 1997 as
follows:

      1. Dividend yield of 0%

      2. Expected  volatility of 0% for options granted in August 1996 due to no
         trading  activity;  expected  volatility of 52% for options  granted in
         June 1997.

      3. Risk-free interest rates ranging from 6.49% to 6.60%

      4. Expected term of 5 years.

      Under the  accounting  provisions  of SFAS No. 123, the Company's net loss
applicable to common stockholders and loss per share for the year ended June 30,
1997 would have been increased to the proforma amounts indicated below:

                                                                     1997

      Net loss applicable to common stockholders:
        As reported                                                 $(4,287,123)
                                                                    =========== 
        Proforma                                                    $(4,884,123)
                                                                    =========== 

      Loss per share:
        As reported                                                      $ (.27)
                                                                         =======
        Proforma                                                         $ (.30)
                                                                         =======

      For the year ended June 30,  1997,  in  accordance  with SFAS No. 123, the
Company  accounted for options  issued to  non-employees  for services  rendered
using the fair  value  method  of their  vesting  period.  The  Company  granted
1,780,000  options to purchase an equal  number of shares of common  stock at an
exercise  price of $2.00 per share to  consultants  during the year. The options

                                     F-15


<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


vest within 0-1 year and expire 5 years from the date of grant. The options were
granted for services  rendered  during the year ended June 30, 1997. The Company
recorded  compensation  expense in the amount of $1,589,458 in the  accompanying
consolidated  statements of loss for the year ended June 30, 1997,  based on the
fair  value of the  options on the grant  date  using the  Black-Scholes  option
pricing model.

      There was no  granting of stock  options to  employees  and  non-employees
prior to June 30, 1996,  and  accordingly,  there was no effect on the Company's
net loss applicable to common  stockholders and loss per share for the year then
ended.

      A summary of the status of the Company's stock options as of June 30, 1997
and changes during the year then ending is presented below.
                                                                    Weighted
                                                                     Average
                                                      Shares  Exercise Price
                                                      ------  --------------
                                                          
      Outstanding at beginning of year
        Granted                                    2,875,000         $ 2.00
        Exercised                                    (40,000)          2.00
        Forfeited                                          -              -
                                                   ---------         ------

      Outstanding at end of year                   2,835,000         $ 2.00
                                                   =========         ======

      Options exercisable at end of year           2,015,000         $ 2.00
                                                   =========         ======

      Weighted average fair value of
        options granted during the year                              $  .52
                                                                     ======

      The  following  table  summarizes  information  about fixed stock  options
outstanding at June 30, 1997:

        Number                           Weighted Average              Number
        Outstanding at  Exercise    Remaining Contractual      Exercisable at
        June 30, 1997      Price             Life (Years)       June 30, 1997

        2,835,000       $  2.00                      4.3            2,015,000
        =========       =======                      ===            =========


NOTE 11 - OTHER EQUITY TRANSACTIONS

      In June 1997, the Company issued common stock to four individuals totaling
700,000 shares for sales and marketing consulting services. Compensation expense
in  the  amount  of  $1,344,700  has  been  recorded  as  selling,  general  and
administrative expenses in the accompanying  consolidated statements of loss for
the year ended June 30, 1997, as a result of these stock issuances.







                                     F-16


<PAGE>


                           WORLDWIDE PETROMOLY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


NOTE 12 - LAWSUIT SETTLEMENT

      On formation of the Company, the Company agreed to indemnify the principal
stockholder for any payments made by such stockholder  resulting from or arising
out of a lawsuit settlement totaling $90,000, which lawsuit was filed by a third
party  against  the  former  distributor  of the  "Petromoly"  product,  and the
principal stockholder. Accordingly, this amount was included in accrued expenses
at June 30, 1996. The negotiated settlement in the amount of $53,000 was paid in
full during August 1996.  The  difference of $37,000  between the amount accrued
and paid was included in other income for the year ended June 30, 1997.

















































                                     F-17