SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 [No Fee Required]

                     For the period ended December 31, 1997

                           Commission File No. 33-8964

                           AM-PAC INTERNATIONAL, INC.
                 (Name of small business issuer in its charter)

            Nevada                                        16-1260971
--------------------------------                 -------------------------------
(State or other jurisdiction                     (I.R.S. Employer Identification
of incorporation or organization)                  Number)                 


                      431 East Central Boulevard, Ste. 900
                                Orlando, FL 32801
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Include Area Code:  (407) 841-1350

Securities Registered Pursuant to Section 12(b) of the Act:

      Title of Each Class              Name of Each Exchange on Which Registered
     ---------------------            ------------------------------------------
            None                                      None

Securities Registered Pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past twelve (12) months (or
for such shorter  period that the registrant was required to file such reports);
and (2) has been  subject to such filing  requirements  for the past ninety (90)
days. Yes  X  No
         -----  -----

     Check  if  disclosure  of  delinquent  filers  in  response  to Item 405 of
Regulation S-B is not contained in this form, and 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]

     The issuer's revenues for its most recent fiscal year were $533,902.
 
     As of October 31, 1998, 18,749,583 shares of common stock of the Registrant
were  outstanding.  As of such date,  the  aggregate  market value of the common
stock held by  non-affiliates,  based on the  average bid and asked price on the
NASD Bulletin Board, was approximately $2,975,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant's  definitive annual information statement to be
filed within 120 days of the  Registrant's  fiscal year ended  December 31, 1997
are incorporated by reference into Part III.

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

<PAGE>
                                TABLE OF CONTENTS

                                                                       Page
                                                                      ------
PART I

         ITEM 1.  DESCRIPTION OF BUSINESS..............................   1
         ITEM 2.  DESCRIPTION OF PROPERTIES............................   1
         ITEM 3.  LEGAL PROCEEDINGS ...................................   1
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE
                  OF SECURITY HOLDERS..................................   2

PART II

         ITEM 5.  MARKET FOR COMMON EQUITY AND
                  RELATED STOCKHOLDER MATTERS..........................   2
         ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS.................   2
         ITEM 7.  FINANCIAL STATEMENTS.................................   4
         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                  ON ACCOUNTING AND FINANCIAL DISCLOSURE...............   4

PART III

         ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                  AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION 16(a) OF THE EXCHANGE ACT....................   5
         ITEM 10. EXECUTIVE COMPENSATION...............................   5
         ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                  OWNERS AND MANAGEMENT................................   5
         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
                  TRANSACTIONS.........................................   6
         ITEM 13. EXHIBITS AND REPORTS OF FORM
                   8-K.................................................   7

SIGNATURES.............................................................   8
FINANCIAL STATEMENT.................................................... F-1

<PAGE>


                                     PART I


     This Form 10-KSB contains forward looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange Act of 1934. The Company's  actual result could differ  materially from
those set forth in the forward  looking  statements.  Certain factors that might
cause  such  a  difference   are  the   Company's   ability  to   capitalize  on
diversification   opportunities,   manage  its  growth  and  achieve   operating
efficiencies.  Although the Company believes that the forward looking statements
contained  herein are  reasonable,  it can give no assurance  that the Company's
expectations are correct. All forward looking statements are expressly qualified
in their entirety by this  cautionary  statement and the risks and other factors
detailed  in the  Company's  other  reports  as filed  with the  Securities  and
Exchange Commissions.

ITEM 1.  DESCRIPTION OF BUSINESS

     The Company was  originally  incorporated  in the State of New York of 1985
under the name of Captain Tony's Pizza,  Inc. The Company was originally  formed
to own, operate and franchise restaurants under the name of Captain Tony Pizza &
Pasta Emporium.  In 1996, the Company changed its name to Am-Pac  International,
Inc.  reincorporated in the State of Nevada, effected a 1:20 reverse stock split
and began efforts to acquire  various  operating  businesses.  During 1997,  the
Company acquired various  operations and subsequently  disposed of substantially
all of its  operations.  Effective  as of the close of business on December  31,
1997,  the  Company   acquired  all  of  the  outstanding   stock  of  Sun  East
International  Development  Limited,  a Cayman  Island  Company in exchange  for
15,349,583  shares of common  stock of the  Company  representing  approximately
81.87% ownership of the Company following the exchange.

     The  Company is  presently  engaged in two active  lines of  business:  the
franchising  of  Captain  Tony's  Pizza   operations  and  the  operation  of  a
restaurant/bar  in  Orlando,  Florida.  In  addition,  the  Company is  actively
exploring the development of U.S. fast food franchises in the People's  Republic
of China (PRC).

     The Company currently has eleven franchises  operating Captain Tony's Pizza
restaurants.  These restaurants are principally take out and delivery operations
and sell a variety of items including pasta, chicken wings, submarine sandwiches
and pizza.  Of the eleven  franchises,  one is located in the State of New York,
one  in  Pennsylvania,  one in  Arizona,  and  one in  Orlando.  There  are  two
franchises  in  California  and England.  There are three  franchises in Ohio. A
franchise  generally  pays a royalty for the use of the Captain  Tony's name and
recipes  ranging  from  $100-$400  per  week.   Franchisees  conduct  their  own
advertising  and  promotion  programs  and  therefore  do  not  pay  advertising
royalties. The restaurant located in Rochester, New York and owned by an officer
and director of the Company does not pay royalties.

     As of January 1, 1997,  the Company  took over the  operations  of the Frat
House,  a  restaurant/bar  located in Orlando,  Florida.  This  facility  caters
principally to college  students and features a full line of beer,  wine,  mixed
drinks and a short  order,  snack type menu.  The  restaurant  has various  game
tables, a dance floor and other  recreational  activities.  The Company plans to
re-do this  restaurant/bar  and make it the flag ship facility of a chain called
"Headlightz".

ITEM 2. PROPERTIES

     The  Company's  executive  officers are located at 431 East Central  Blvd.,
Ste. 900, Orlando,  Florida 32801.  These premises consist of 3,000 square feet.
This space is provided to the Company by a related  party,  free of charge.  The
related party's lease expires on December 31, 1998.

     During 1997, the Company also owned approximately 8 acres of real estate in
Orlando,  Florida.  Part of this  property  is  occupied  by the Frat  House,  a
restaurant and bar, the operating assets of which have been leased for two years
by the Company.

ITEM 3.  LEGAL PROCEEDINGS

     None


                                       1
<PAGE>


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

     None

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

     The  Company's  shares of common stock are traded on the NASDAQ  Electronic
Bulletin  Board under the symbol AMPC. On October 31, 1998 the bid price for the
Company's  common stock was $.80 per share.  However,  the trading market in the
Company's  common stock is both limited and sporadic.  The following  table sets
forth the high and low bid price per  share of the  Company's  common  stock for
each  quarterly  period.  All prices  where  appropriate  have been  adjusted to
reflect the 1:20 reverse split following the Company's  redomicile to Nevada and
changing  its name on October 4, 1996.  These  quotations  reflect  inter dealer
prices  without retail  markup,  mark down or commissions  and may not represent
actual transactions.

                                  1997                   1996   
                                --------               --------
                            High        Low        High        Low   
                           ------      -----      ------      -----
First Quarter             $ 4.00       $ 3.50    $ 1.60      $  .60
Second Quarter            $ 3.50       $ 3.00    $ 1.40      $  .60
Third Quarter             $ 3.25       $ 2.25    $ 5.00      $  .60
Fourth Quarter            $ 3.25       $ 2.50    $ 4.00      $ 1.25


Record Holders

     As of October 31, 1998 there were  approximately  411 record  owners of the
common stock of the Company.

Dividends

     The Company has never  declared  or paid any cash  dividends  on its common
stock and does not expect to declare or pay dividends in the foreseeable future.

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

     This Form 10-KSB contains  forward  looking  statements with the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange Act of 1934. The Company's actual results could differ  materially from
those set forth in the forward  looking  statements.  Certain factors that might
cause such a difference  are  discussed in the section  entitled  "Certain  Risk
Factors  Affecting  Future Operating  Results"  beginning on page 5 of this Form
10-KSB.

     During  1997,  Am-Pac  International,  Inc.  (the  "Company")  through  its
subsidiaries  engaged in the  franchising  of pizza  restaurants  and operated a
restaurant and bar in Orlando, Florida.

     The Company is the successor to Captain Tony's Pizza, Inc. a franchisor and
operator of pizza  establishments.  During 1997, the Company had a total of nine
franchisees, seven operating Captain Tony's restaurants in the United States and
two in England.  The Company ha no company owned stores.  Revenue is earned from
both an initial  franchise  fee and an ongoing  royalty based on a percentage of
sales.


                                       2
<PAGE>

     During  1997,  the  Company,   leased  certain   operating  assets  of  T&P
Investments,  Inc. a Florida  corporation  which  operates a  restaurant/bar  in
Orlando,  Florida  under  the name  "The  Frat  House".  The land on which  this
facility is located was acquired by the Company and  accounted  for as a pooling
of interest  and  therefore,  the rental  income  expense  for this  property is
included in income.

Results of Operations

     The following table sets forth for the periods indicated certain items from
the Consolidated Statements of Income expressed as a percentage of net revenue.

                                                       Year Ended December 31,
                                                       ----------------------
                                                    1997                  1996  
                                                   ------                ------
Sales                                               75.5%                   .5%
Franchise fees                                      24.3%                 32.2%
Commissions and other rental property income          .2%                 67.3%
Net revenue                                        100.0%                100.0%


Cost of sales                                       27.5%                    0%
Rental property expenses                               0%                 50.8%
General and administrative expenses                208.2%                171.9%


Net income                                        (135.8)%              (222.7)%


Year Ended December 31, 1997 Compared to Year Ended December 31, 1996.

Revenues:  Revenues  for the year  ended  December  31,  1997  totaled  $533,902
compared to revenues of $150,136 for the corresponding period of the prior year.
This increase in revenue is attributable to sales from the restaurant  which did
not exist in the  corresponding  period of the prior year an $81,000 increase in
franchise  fees  which were  partially  offset by a $93,000  decrease  in rental
property income.

Cost of sales:  The cost of sales  the year  ended  December  31,  1997  totaled
$147,075  compared to $0 for the  corresponding  period of the prior year.  This
increase  resulted from the  acquisition of the  restaurant in Orlando,  Florida
during the current year.

Rental property  expenses:  Rental property expenses for the year ended December
31, 1997  totaled $0 compared  to $76,246  for the  corresponding  period of the
prior year.  This  decrease  resulted  from the  elimination  of rent during the
fourth quarter of the prior year as the Company acquired the property.

Operating,   general  and  administrative  expenses:   Operating,   general  and
administrative  expenses for the year ended December 31, 1997 totaled $1,111,691
compared  to  $258,100  for the  corresponding  period of the prior  year.  This
increase  resulted  principally  from the  increased  expenses  associated  with
operating the restaurant in Orlando, Florida.

Net  loss:  The net loss for the  year  ended  December  31,  1997 was  $724,864
compared to a net loss of  $184,210  for the  corresponding  period of the prior
year. This increase in net loss is attributable to higher operating, general and
administrative expenses.


                                       3
<PAGE>

Liquidity and Capital Resource

     At December 31, 1997, the Company had a working  capital deficit of $48,617
and a cash balance of $25,458 compared to working capital deficit of $95,628 and
a cash balance of $47,651 at December 31, 1997. The change in working capital is
attributable  to an increase in accounts  payable  resulting  from the loss from
operations.

     At December 31, 1997,  the primary  obligation of the Company  consisted of
two  mortgage  notes  payable  totaling  $425,964  relating  to the real  estate
acquisition and three loans payable to a shareholder a shareholder owned company
of $438,261.  One mortgage note has $382,635 and is collateralized by land and a
commercial building.  This note has an adjustable interest rate currently stated
at 9.625%, requires monthly interest and principal payments of $3,666 and is due
in June,  2017. The second mortgage note has a $53,667  principal  balance as of
December 31, 1997, carries a fixed interest rate of 10% and is collateralized by
land  and a  residential  building.  The  notes  require  monthly  interest  and
principal payments of $657, and is due in June 2009.

     The  shareholder  loans had a principal  balance as of December 31, 1997 of
$214,345 and $1,772,  respectively.  The first loan carries an interest  rate of
8%, is  unsecured  and is  payable  upon  demand.  The  second  loan is  without
interest, is unsecured and is also payable upon demand.

     The loan payable to shareholder  owned companies had a principal balance of
$222,144 as of December 31, 1997.  The loan carries an interest  rate of 10%, is
unsecured and is payable upon demand.

Subsequent Events

     As of the close of business on December 31, 1997, the corporation  disposed
of all  of its  assets  in  exchange  for  all of its  liabilities.  Immediately
thereafter,  the  Company  acquired  all of the  outstanding  shares of Sun East
International  Development  Limited,  a Cayman Island  Company,  in exchange for
15,349,583  shares of common  stock of the  Company  representing  approximately
81.87% ownership of the Company following the exchange. Pursuant to the terms of
the  exchange,  the Company  assumed the  operations  of Sun East  International
Development  Limited and the  management  of SEIDL then  assumed  control of the
Company.

     SEIDL  was  formed  in July  1997 to  acquire  and  carry  on  through  its
subsidiaries  the  trading  operations  of Sun  East  International  Development
Limited, a Hong Kong Company,  and a 51% interest in the real estate development
operations as Sun East Shanghai Real Estate Development Company Limited. Because
these companies have substantial  operations,  the Company believes that it will
have  sufficient  cash to maintain and execute its business  operations  for the
next twelve months. However, in early 1999, the Company is planning to go to the
equity market to raise approximately 15 million dollars.

ITEM 7.  FINANCIAL STATEMENTS

     The  consolidated  financial  statements of the Company,  together with the
independent  auditors'  report thereon of H.J. Swart & Co. P.A. appears on pages
F-2 through F-17 of this report. See index to Financial  Statements on pages F-1
of this report.

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

     For the transitional period ended December 31, 1996, and as a result of the
change in control,  the Company  changed its  independent  auditors from Mengel,
Metzger Barr & Co., L.L.P. to H.J. Swart & Company P.A.

     There were no disagreements with the prior accountants.


                                       4
<PAGE>

                                    PART III

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

Information Regarding Present Directors and Executive Officers

     The  following  table  sets  forth  the  names,  and ages of the  executive
officers and directors of the Company and the current position held by each.

  Name                 Age        Title  
--------              -----      -------
Thomas L. Tedrow       47      President, Chief Executive Officer and Director
Sharron C. Martin      37      Secretary/Treasurer, Vice President and Director
                               (Principal Financial and Accounting Officer)
 
     Thomas L. Tedrow Mr. Tedrow has been employed as president, chief executive
officer and director since October, 1996. Mr. Tedrow is a best selling author of
over sixteen books,  the publisher of Financial  Discoveries  Magazine and since
1987 has been a  communications  and  marketing  consultant  for both public and
private companies.

     Sharron C.  Martin Ms.  Martin has been a  director  of the  Company  since
October,  1996.  For the past five  years Ms.  Martin  has been  employed  as an
officer and director of Martin Consulting,  Inc., a consulting firm specializing
in  Sino-foreign  joint  venture and merger and  acquisition  consulting  in the
United States.

ITEM 10. EXECUTIVE COMPENSATION

     The Company paid no salary or other  compensation  in excess of $100,000 to
any of its officers during 1997. The Company's  chief-executive officer received
no compensation of any nature from the Company since joining the Company.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following  table sets forth as of April 15, 1997,  the number of shares
of the  Company's  common stock held by executive  officers and  directors  both
individually and as a group, and by beneficial  owners of more than five percent
of the Company's common stock.

        Name & Address of                Amount & Nature               Percent
        Beneficial Owner             of Beneficial Ownership          of Class
     ----------------------          ------------------------        -----------
      Thomas L. Tedrow  (1)                 3,500,000                  44.07   %
      431 East Central Blvd.
      Suite 900
      Orlando, FL  32801

      Sharron C. Martin                     3,500,000                  44.07   %
      9025 South 700 West
      Sandy, UT  84070

      Executive Officers & Directors
      as a group                            7,000,000                  88.14   %

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

(1)  Thomas Tedrow holds 1,500,000  shares in his name following the acquisition
     of PFI.  Mr.  Tedrow  may  also be  deemed  to be the  beneficial  owner of
     2,000,000  shares held in the name of Shipright  Assets Limited.  Shipright
     Assets  Limited is a  corporation  organized  under the laws of the British
     Virgin Islands,  and is owned entirely by Lillian Wai, who holds the shares
     in trust for the benefit of Mr. Tedrow.


                                       5
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In July,  1996,  the Company  issued  10,000  shares of its common stock to
Robert Wood, a prior officer of CTP for services rendered.

     As of December 31, 1996,  the Company has one franchise  unit that is owned
and operated by a related  party.  The franchise is owned by a  stockholder  and
officer of the Company, and does not pay franchise fees on its sales.

     During  1997 the  Company  sold a master  franchise  to a  stockholder  for
$75,000. No franchise units were opened under this agreement during 1997.

     The Company has made loans to a stockholder with balances totaling $237,847
at December 31, 1997 and $238,  398 at December  31, 1996.  The loans are due on
demand and are  non-interest  bearing.  These loans were acquired as part of the
pooling of interests in 1996 with Am-Pac Investments, Inc.

     During 1997 the Company  loaned  $41,629 to an entity managed but not owned
by certain of the Company's stockholders. The Company had agreed to acquire this
entity in 1997 in a pooling of interests but the agreement was terminated  prior
to closing. The loan is non interest bearing and is payable on demand.

     Rental  income   includes   rents  received  from  a  company  owned  by  a
stockholder.  The amounts  received  were and  $45,000 for the six months  ended
December 31, 1996.

     In six months ended  December 31, 1996 and the year ended December 31, 1997
the Company borrowed  $114,459 and $323,802  respectively from stockholder owned
entities. These loans have a stated interest rate of 8% and 10% respectively and
are due upon demand.

     During  the  first  quarter  of 1997 the  Company  borrowed  an  additional
$500,000 from stockholder  owned entities at an interest rate of 10%. To satisfy
this  obligation,  the  Company  completed  a  Regulation  S offering of 500,000
shares.  These  shares  were  issued to a single  subscriber,  who  assumed  the
$500,000 notes payable as full consideration for the stock.

                                       6
<PAGE>

                                     Part IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

2.1  Acquisition  Agreement  between the Shareholders of Pacific Foods, Ltd. and
     the Company *

2.2  Acquisition Agreement between Shareholders of T&P Investments, Inc. and the
     Company (1)

2.3  Acquisition Agreement between the Shareholders of Am-Pac Investments,  Inc.
     (1)

3.1  Articles of Incorporation *

3.2  Bylaws, as amended (1)

4.1  Certificate  of Designation  of Series A Cumulative  Convertible  Preferred
     Stock (1)

16.1 Letter  from  Mengal,  Metzger,  Barr  & Co.  LLP  relating  to  change  of
     certifying accountant (2)



(b)  Reports on Form 8-K

     None

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

*    Filed herewith

(1)  Incorporated  by  reference  to the  respective  Exhibits  files  with  the
     Company's Report on Form 8-K - December 31, 1996

(2)  Incorporated  by  reference  to the  respective  Exhibits  filed  with  the
     Company's Report on Form 8-K - September 18, 1996


                                       7
<PAGE>
                                   SIGNATURES


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


                                              AM-PAC INTERNATIONAL, INC.
 

                                              By: /s/ Thomas L. Tedrow
                                                 -------------------------------
                                                   Thomas L. Tedrow
                                                   Chief Executive Officer


Dated: November 20, 1998
               

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


    Signature                    Title                             Date
  -------------                --------                           ------


/s/ Thomas L. Tedrow   President, Chief Executive Officer and
--------------------   Chairman of the Board of Directors      November 20, 1997
Thomas L. Tedrow       (Principal Executive Officer)         
                         

/s/ Sharron C. Martin  Secretary/Treasurer, Vice President     November 20, 1997
---------------------  and Director (Principal Financial and
Sharron C. Martin      Accounting Officer)


 

                                       8
<PAGE>

                           AM-PAC INTERNATIONAL, INC.

                   Index to Consolidated Financial Statements


                                                                            Page

Report of Independent Public Accountants                                    F-2


Consolidated Balance Sheets as of December 31, 1997 and 1996                F-3


Consolidated Statements of Operations for the year ended December 
  31, 1997 and the six months ended December 31, 1996                       F-5

Consolidated Statements of Stockholders' Equity (Deficit) 
  For the year ended December 31, 1997 and the six months 
  ended December 31, 1996                                                   F-6

Consolidated Statements of Cash Flows for the year ended December 
  31, 1997 and the six months ended December 31, 1996                       F-7

Notes to Financial Statements                                               F-8


                                       F-1
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
Am-Pac International, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Am-Pac
International,   Inc.  as  of  December  31,  1997  and  1996  and  the  related
consolidated statements of operations,  stockholders' equity (deficit), and cash
flows for the year ended December 31, 1997 and the six months ended December 31,
1996. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,   in  all  material   respects,   the   financial   position  of  Am-Pac
International,  Inc.  as of  December  31,  1997 and 1996 and the results of its
operations  and its cash flows for the year ended  December 31, 1997 and the six
months ended December 31, 1996, in conformity with generally accepted accounting
principles.

Kissimmee, Florida                           /s/ Swart, Baumruk & Twohig, LLP
May 22, 1998


                                      F-2

<PAGE>

                           Am-Pac International, Inc.
                           Consolidated Balance Sheets
                           December 31, 1997 and 1996

                                     Assets
 
                                                  1997                 1996
                                                 ------               ------
Current assets
     Cash                                    $   25,458            $  47,651
     Inventory                                   23,736                  -0-
     Employee advance                                50                  -0-  
                                               --------            ---------
                                                 49,244              47,651
Property and equipment
   Buildings and improvements                   337,606             171,614
   Land and improvements                        204,841             204,841
   Furniture and equipment                      101,416               2,000
                                               --------            ---------
                                                643,863             378,455
   Less accumulated depreciation               (119,786)           (103,313)
                                               --------            ---------
     Net property and equipment                 524,077             275,142

Other assets
   Escrow deposits                                   -0-              6,228
   Loan receivable - stockholder                237,847             238,398
   Related party receivable                      41,629                  -0-
   Organizational costs - net                     1,417               1,837
                                               --------            ---------
         Total other assets                     280,893             246,463
                                               --------            ---------
                                             $  854,214          $  569,256
                                               ========            =========

    The accompanying notes are an integral part of these financial statements

                                      F-3

<PAGE>


                           Am-Pac International, Inc.
                          Consolidated Balance Sheets
                           December 31, 1997 and 1996

                 Liabilities and Stockholders' Equity (Deficit)
                 ----------------------------------------------
                                                     1997                1996
                                                    ------              ------

Current liabilities
   Accounts payable                               $ 78,896           $  111,287
   Other liabilities                                 9,227               22,915
   Current portion of long term debt                 9,738                9,075
                                                   --------            --------
     Total current liabilities                      97,861              143,277

Long term debt
   Mortgages payable                               425,964              435,719
   Loans payable - related parties                 438,261              114,459
                                                   --------            --------
    Total long term debt                           864,225              550,178
                                                   --------            --------
     Total liabilities                             962,086              693,455

Stockholders' equity (deficit)
   Common stock, $.001 par value,
     149,900,000 shares authorized,
     8,715,547 shares and 7,740,547
     shares issued and outstanding,
     respectively                                    8,715                7,740
   Additional paid in capital                    1,713,274              973,058
   Accumulated deficit                          (1,829,861)          (1,104,997)
                                                 ---------            ---------
     Total stockholders' equity (deficit)         (107,872)            (124,199)
                                                 ---------            ---------
                                               $   854,214          $   569,256
                                                 =========            =========

   The accompanying notes are an integral part of these financial statements

                                      F-4

<PAGE>

                           Am-Pac International, Inc.
                      Consolidated Statements of Operations
                      For the year ended December 31, 1997
                   and the six months ended December 31, 1996

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

Revenue
 Sales                                           $   402,850             $   -0-
   Franchise fees                                    129,570             15,468
   Commissions and other                               1,482                123
Rental property income                                    -0-            50,400
                                                    --------           ---------
      Total revenue                                  533,902             65,991

Costs and expenses
   Cost of sales                                     147,075                 -0-
   Rental property expenses                               -0-            37,850
   Marketing                                         161,154                600
   Labor costs                                       307,111             40,749
   Professional fees                                 178,570            124,006
   Consulting services                               110,156             42,000
   Interest expense                                   68,088             20,927
   Other expenses                                    286,612              4,890 
                                                    --------           ---------
     Total costs and expenses                      1,258,766            271,022
 
     Net loss                                   $   (724,864)        $ (205,031)
                                                    --------           ---------
     Net loss per share                         $       (.09)        $     (.03)
                                                    ========           =========

   The accompanying notes are an integral part of these financial statements


                                      F-5

<PAGE>


                           Am-Pac International, Inc.
            Consolidated Statements of Stockholders' Equity (Deficit)
                      For the year ended December 31, 1997
                   and the six months ended December 31, 1996
<TABLE>


                                                               Additional                     Total
                                             Common Stock       Paid in      Accumulated   Stockholders'
                                  Shares        Amount          Capital        Deficit        Equity
                                 --------    ------------     -----------    -----------     (Deficit)
                                                                                           -------------
<S>                              <C>         <C>              <C>            <C>            <C>    

Balance June 30, 1996            7,740,547    $  7,740         $ 973,058      $ (899,966)    $  80,832
Net loss six months
   ended December 31, 1996              -0-         -0-               -0-       (205,031)     (205,031)

Balance December 31, 1996        7,740,547       7,740           973,058      (1,104,997)     (124,199)

Issuance of common stock
   as final payment for
   acquisition of Am-Pac
   Investments, Inc.               200,000         200              (200)             -0-            -0-
Issuance of common stock
   as payment of debt              500,000         500           499,500              -0-       500,000
Issuance of common stock
   as payment for services         200,000         200            99,800              -0-       100,000
Issuance of common stock
   as payment for services          75,000          75           141,116              -0-       141,191
Net loss year ended
   December 31, 1997                    -0-         -0-               -0-       (724,864)      (724,864)

Balance December 31, 1997        8,715,547    $  8,715       $ 1,713,274     $(1,829,861)    $ (107,872)

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      F-6

<PAGE>


                           Am-Pac International, Inc.
                      Consolidated Statements of Cash Flows
                      For the year ended December 31, 1997
                   and the six months ended December 31, 1996

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

Cash flows from operating activities
   Net income (loss)                               $ (724,864)       $ (205,031)
   Adjustments to reconcile net
     cash provided (used) by
     operating activities
       Depreciation and amortization                   16,893             4,154
       Decrease in prepaids                             6,228                -0-
       Increase in inventory                          (23,736)               -0-
       Increase in receivable                             (50)               -0-
       Increase (decrease) in accounts payable        (32,391)          105,422
       Increase (decrease)in other current
         liabilities                                  (13,688)            8,801
       Decrease in other assets                            -0-            8,749
                                                     ---------         ---------
Net cash provided (used) by operating activities     (771,608)          (77,905)

Cash flows from investing activities
   Purchase of equipment and leasehold improvements  (265,408)          (21,446)
   Collection on related party receivable               7,259                -0-
   Loans to related parties                           (48,337)               -0-
   Loan to stockholder                                     -0-          (11,033)
                                                     ---------         ---------
Net cash provided (used) by investing activities     (306,486)          (32,479)

Cash flows from financing activities
   Stock issued in exchange for services              241,191                -0-
   Proceeds from related party borrowings             823,802           114,459
   Repayment of debt                                   (9,092)           (4,263)
                                                    ---------         ---------
Net cash provided (used) by financing activities    1,055,901           110,196
                                                    ---------         ---------
Net decrease in cash                                  (22,193)             (188)

Cash at beginning of period                            47,651            47,839
                                                    ---------         ---------
Cash at end of period                              $   25,458          $ 47,651
                                                    ---------         ---------

    The accompanying notes are an integral part of these financial statements

                                      F-7

<PAGE>

                    
                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

1.   Summary of Significant Accounting Policies
     ------------------------------------------
 
     Organization  and  consolidation  
     --------------------------------

     Am-Pac  International,  Inc., a Nevada  corporation,  (the  Company) is the
     surviving  corporation of a merger with Captain  Tony's Pizza,  Inc., a New
     York  corporation.  Am-Pac was formed on October 4, 1996 as a wholly  owned
     subsidiary of Captain Tony's Pizza,  Inc. for the purpose of effecting this
     merger. In conjunction with the merger,  the Company had a 1 for 20 reverse
     stock  split.  The  financial   statements  reflect  the  effects  of  this
     transaction.

     The accompanying  consolidated financial statements include the accounts of
     the Company and its wholly-owned subsidiaries,  CTP Equipment, Inc. (CTPE),
     Pacific Foods Limited (PFL), Am-Pac Investments, Inc. (INV), Captain Tony's
     Pizza, Inc. (CTP), Leisureshare International Limited (LIL), and Headlightz
     of Orlando,  Inc. (HDL).  All  intercompany  transactions and balances have
     been eliminated in consolidation.

     As discussed  elsewhere in these  notes,  PFL and INV were  acquired by the
     Company in the fourth quarter of 1996, subsequent to the merger and reverse
     stock  split,  in  separate  transactions   accounted  for  as  pooling  of
     interests.  All financial statements presented have been reported as though
     the  combination  with INV had  taken  place  prior to July 1,  1995 and as
     though the combination with PFL had taken place on May 1, 1996, the date of
     PFL's inception.

     Estimates  
     ---------

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

     Concentration of credit risk
     ----------------------------

     The  Company  maintains  its  cash  balances  in  primarily  one  financial
     institution located in the State of Florida.  These balances are insured by
     the Federal Deposit Insurance Corporation up to $100,000.

     Cash
     ----

     For cash flow reporting  purposes,  the Company considers all highly liquid
     investments  with a maturity of three  months or less when  purchased to be
     cash equivalents.

                                      F-8

<PAGE>

                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

1.   Summary of Significant Accounting Policies (continued)
     ------------------------------------------------------

     Property and equipment 
     ----------------------

     Property and equipment is stated at cost.  Depreciation  is provided on the
     straight line method over the estimated useful lives of the various assets.
     Depreciation expense for the twelve months ended December 31, 1997, and the
     six months ended December 31, 1996 was $16,473 and $3,944 respectively.

     Preferred stock
     ---------------

     The  Company  has the  authority  to issue  100,000  shares  of  non-voting
     preferred  stock with terms to be  established  by the Board of  Directors,
     subject to certain limitations. No shares of this preferred stock have been
     issued,  nor does the Company  have any present  plans for the  issuance or
     sale of any such shares.

     Franchise fee revenues
     ----------------------

     The Company recognizes initial franchise fees when all material services or
     conditions  relating  to the  sale  are  substantially  performed.  This is
     normally  upon the  opening  of the  franchise  unit.  Services  consist of
     various  elective  services  including  facilities and equipment design and
     selection  and  training of the  franchisee's  management  and staff in the
     operations  and  management of a franchise.  The direct  incremental  costs
     associated with these services,  primarily  travel  expenses,  are deferred
     until the related revenue is recognized.  Franchise  royalty fees,  whether
     based on a percentage of sales  reported by  franchisees or a fixed amount,
     are recognized as revenue when cash payments are received.

     The Company may enter into master  franchise  agreements which grant master
     franchisees the exclusive right to develop and operate  specific numbers of
     Captain Tony's  locations  within  territories  for a fee. Fees from master
     franchises  are  recognized  based  on the  terms  and  conditions  of each
     agreement.  If initial  services  must be  performed by the Company and the
     master  franchise  fee  relates to the number of area  outlets,  the master
     franchise  fee is generally  deferred and  recognized  ratably as units are
     opened.  However, when there is no substantial  performance required of the
     Company and the fees are  non-refundable and do not relate to the number of
     area outlets, fees are generally recognized in income when the agreement is
     signed.

                                      F-9

<PAGE>

                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

1.   Summary of Significant Accounting Policies (continued)
     -----------------------------------------------------

     In certain instances involving individual or master franchises, the Company
     may  receive  a  portion  of  franchise  fees in  notes.  If the  notes are
     personally  guaranteed  by  individuals  whose  net  worth  exceed  Company
     requirements,  or the facts and circumstances support collectibility of the
     note,  the portion of the fees  represented  by notes also is recognized in
     income. Otherwise, fees are recognized as income on an installment basis as
     cash is received.

     Generally,  master  franchise  agreements  further  provide  for an initial
     franchise  fee for each  franchise  unit opened under the master  franchise
     agreement,  part of  which  is  payable  to the  Company.  These  fees  are
     non-refundable and recognized in income when all material services required
     of the Company, if any, are substantially performed, which is normally upon
     opening of the franchise unit.

     New business venture
     --------------------

     In 1997 the Company began  developing a sports bar and  restaurant  concept
     called HeadLightZ,  with the flagship unit located in Orlando, Florida. The
     Company owns all trademarks for franchising,  beer, magazines, and licensed
     products. Expansion is planned through acquisition of additional facilities
     and franchising.

     Advertising costs
     -----------------

     The  Company   expenses   advertising  and  promotion  costs  as  incurred.
     Advertising  and promotion  costs for the twelve months ended  December 31,
     1997 and the six months  ended  December  31, 1996 were  $161,154  and $600
     respectively.

     Income taxes
     ------------

     Deferred income tax assets and liabilities arise from temporary differences
     associated with differences  between the financial  statement and tax basis
     of assets and  liabilities,  as measured by the enacted tax rates which are
     expected  to be in effect  when these  differences  reverse.  Deferred  tax
     assets and liabilities  are classified as current or noncurrent,  depending
     on the  classification  of the assets and liabilities to which they relate.
     Deferred  tax assets and  liabilities  not related to an asset or liability
     are classified as current or non current  depending on the periods in which
     the temporary  differences  are expected to reverse.  The principal type of
     temporary   difference   between  assets  and   liabilities  for  financial
     statements and tax return purposes is net operating loss carryforwards.

                                      F-10

<PAGE>

                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

1.   Summary of Significant Accounting Policies (continued)
     ------------------------------------------------------

     Per share data
     --------------

     Per share data is based on the  weighted  average  number of common  shares
     outstanding  during the periods,  giving retroactive effect to the 1 for 20
     reverse stock split.

     Fiscal-year change
     ------------------     

     In October 1996, the Board of Directors  approved a change in the Company's
     fiscal year end from June 30 to December 31,  effective  the calendar  year
     beginning  January 1, 1997. A six-month fiscal  transition period from July
     1,  1996  through   December  31,  1996  preceded  the  start  of  the  new
     calendar-year cycle.

2.   Franchise Operations
     --------------------

     There were no changes to the number of franchise  units or their  ownership
     during the twelve  months ended  December 31, 1997. A master  franchise was
     sold to a stockholder  for $75,000;  however no new units opened  leaving a
     total of ten units.

     There were no changes in the number of franchise  units or their  ownership
     during the six months ended December 31, 1996.

3.   Income Taxes
     ------------

     The  Company  has  net  operating  loss   carryforwards   of  approximately
     $1,575,000 that are available to offset future taxable income and expire at
     various dates through the year 2017.

     No  related  deferred  tax  asset  has  been  recognized  in the  financial
     statements since the valuation allowance is equal to any such tax benefit.

4.   Related Party Transactions
     --------------------------

     As of December 31, 1996,  the Company has one franchise  unit that is owned
     and operated by a related  party.  The  franchise is owned by a stockholder
     and officer of the Company, and does not pay franchise fees on its sales.

     During  1997 the  Company  sold a master  franchise  to a  stockholder  for
     $75,000. No franchise units were opened under this agreement during 1997.

                                      F-11

<PAGE>

                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

4.   Related Party Transactions (continued)
     -------------------------------------

     The Company has made loans to a stockholder with balances totaling $237,847
     at December 31, 1997 and  $238,398 at December 31, 1996.  The loans are due
     on demand and are non-interest  bearing.  These loans were acquired as part
     of the pooling of interests in 1996 with Am-Pac Investments, Inc.

     During 1997 the Company  loaned  $41,629 to an entity managed but not owned
     by certain of the Company's stockholders. The Company had agreed to acquire
     this  entity  in 1997 in a  pooling  of  interests  but the  agreement  was
     terminated  prior to  closing.  The  loan is non  interest  bearing  and is
     payable on demand.

     Rental  income   includes   rents  received  from  a  company  owned  by  a
     stockholder. The amounts received were and $45,000 for the six months ended
     December 31, 1996.

     In the six months ended  December 31, 1996 and the year ended  December 31,
     1997  the  Company  borrowed   $114,459  and  $323,802   respectively  from
     stockholder  owned entities.  These loans have a stated interest rate of 8%
     and 10% respectively and are due upon demand.

     During  the  first  quarter  of 1997 the  Company  borrowed  an  additional
     $500,000  from  stockholder  owned  entities at an interest rate of 10%. To
     satisfy this obligation,  the Company  completed a Regulation S offering of
     500,000  shares.  These  shares  were  issued to a single  subscriber,  who
     assumed the $500,000 notes payable as full consideration for the stock.

5.   Long Term Debt
     --------------

     Long term debt consists of the following:

<TABLE>
                                                      December 31, 1997      December 31, 1996
                                                      -----------------      -----------------
<S>                                                    <C>                      <C>

     Mortgage payable to bank at an adjustable
     interest rate, currently stated at 9.625%,
     collateralized by land and commercial building,
     with current principal and interest payments of
     $3,666 per month, due June 2017                       $382,635               $389,331

     Mortgage payable to mortgage company at an
     interest rate of 10%, collateralized by land
     and residential building, with payments of
     principal and interest of $657 per month,
     due June 2009                                           53,067                 55,463

</TABLE>
                                      F-12

<PAGE>

                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

5.   Long Term Debt (continued)
     --------------------------
<TABLE>

                                                        December 31, 1997          December 31, 1996
                                                        -----------------          -----------------
<S>                                                       <C>                           <C>

     Loans payable to stockholder owned companies
     at an interest rate of 8%, due upon demand                 214,345                  114,459

     Loans payable to  stockholder owned companies
     at an interest rate of 10%, due upon demand                222,144                       -0-

     Loan payable to a stockholder without interest,
     due upon demand                                              1,772                       -0-            
                                                               --------                 ---------
     Total long term debt                                       873,963                  559,253

     Less current portion                                         9,738                    9,075
                                                               --------                 ---------
                                                              $ 864,225                $ 550,178
                                                               ========                 =========
</TABLE>

     Current maturities of long term debt are as follows:

                           1998                               $  9,738
                           1999                                 10,954
                           2000                                 12,035
                           2001                                 13,223
                           2002 and thereafter                 828,013
                                                             ---------
                                                              $873,963

6.   Supplemental Cash Flow Information
     ----------------------------------

     There were no cash  payments for income  taxes for the twelve  months ended
     December 31, 1997 and the six months ended December 31, 1996. Interest paid
     for the twelve  months  ended  December  31, 1997 and the six months  ended
     December 31, 1996 was $68,088 and $20,927 respectively.

     Supplemental schedule of non cash investing and financing activities:

     1997
     ----

     The Company issued 500,000 shares of common stock valued at $1.00 per share
     in satisfaction of debt owed to certain related parties.

     The  Company  issued  75,000  shares  of  common  stock  as  payment  of an
     outstanding  obligation  to the  Company's  legal  counsel in the amount of
     $141,191.

     The Company issued 200,000 shares of common stock as payment for consulting
     services with a value of $100,000.

                                      F-13

<PAGE>


                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

7.   Segment and Major Customer Information
     --------------------------------------

     The Company  operates in generally  three industry  segments:  franchising,
     food  service  and real estate  rental.  The assets used in the real estate
     rental segment in 1996 were converted to operating  assets used in the food
     service segment in 1997.

     Financial information by industry segment is as follows:
 
                                            Year                   Six Months
                                            ended                    ended
                                       December 31, 1997       December 31, 1996
                                       -----------------       -----------------
     Revenues:
       Franchising                       $  129,570               $    15,468
       Food service                         402,850                        -0-
       Real estate rental                        -0-                   50,400
                                          ----------                -----------
                                         $  532,420               $    65,868
                                          ==========                ===========
     Income (loss) from operations:
       Franchising                       $    7,792               $   (41,498)
       Food service                          30,466                        -0-
       Real estate rental                        -0-                   33,448
                                          ----------                -----------
                                         $   38,258               $    (8,050)
                                          ==========                ===========
     Identifiable assets:
       Franchising                       $       -0-              $        -0-
       Food service                         547,813                        -0-
       Real estate rental                        -0-                  259,924
                                          ----------                -----------
                                        $   547,813               $   259,924
                                          ==========                ===========

     Only cash cannot be identified with a particular segment.  All other assets
     are identified with the franchising  segment,  food service segment or real
     estate rental segment.

     During  the  twelve  months  ended  December  31,  1997 the  Company  had a
     franchisee from whom it derived more than 10% of its consolidated revenues.
     Franchise fees received from this  franchisee  represented 58% of franchise
     revenues or 14% of consolidated revenues.

                                      F-14

<PAGE>

                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

7.   Segment and Major Customer Information (continued)
     -------------------------------------------------

     During the six months ended December 31, 1996 the Company had a lessee from
     whom it derived more than 10% of its consolidated revenues.  Rents received
     from this lessee  represented  89% of rental income or 68% of  consolidated
     revenues.

8.   Acquisitions
     ------------
 
     On October 15,  1996 the Company  acquired  all of the  outstanding  common
     stock of Pacific Foods Limited, a British Virgin Islands  corporation (PFL)
     in exchange for 7,000,000 post reverse split shares of the Company's common
     stock.  The  acquisition  has been  accounted for as a pooling of interests
     and, accordingly,  the accompanying  consolidated  financial statements for
     periods  prior  to  the  date  of  acquisition  reflect  the  accounts  and
     operations of PFL.

     On December  31, 1996 the Company  acquired all of the  outstanding  common
     stock of Am-Pac Investments,  Inc., (INV) in exchange for 533,939 shares of
     the Company's  common stock.  The  acquisition  has been accounted for as a
     pooling  of  interests  and  accordingly,   the  accompanying  consolidated
     financial  statements for periods prior to the date of acquisition  reflect
     the accounts and operations of INV.

9.   Subsequent Events
     -----------------

     Effective  after the close of  business  on  December  31, 1997 the Company
     transferred  ownership  of 100%  of the  outstanding  shares  of all of its
     subsidiaries to Forbes Investments,  Ltd., a British Virgin Islands company
     owned by a controlling  stockholder of the Company, in exchange for 800,000
     shares of the Company's common stock owned by Forbes.

     Of the $854,214 of the Company's  consolidated assets at December 31, 1997,
     $810,385 are owned by the  subsidiaries;  of the $962,086 of the  Company's
     consolidated  liabilities at December 31, 1997, $830,442 are obligations of
     the  subsidiaries.  Consequently,  the  effect  of this  transaction  is to
     increase the Company's net worth by $20,057.  No  independent  valuation of
     the assets transferred was obtained by the Company.

     In May, 1998,  effective after the close of business December 31, 1997, the
     Company agreed to acquire 100% of the outstanding  common stock of Sun East
     International  Holdings,  Ltd.,  a  Caymen  Islands  corporation  with  its
     headquarters in Hong Kong.


                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996

9.   Subsequent Events (continued)
     ----------------------------

     Under the terms of the agreement, the Company will issue between 12,500,000
     shares and 15,000,000  shares of common stock for 100% of Sun East's common
     stock.  The number of shares  issued will depend upon Sun East's net income
     for the year ended December 31, 1997 as reported in Sun East's 1997 audited
     financial statements.

     At the time of closing,  the Company will have no assets or liabilities and
     will have  reduced its issued and  outstanding  common  stock to  3,000,000
     shares. To achieve this, the Company's controlling stockholders will return
     5,715,547  shares to the Company and will receive the  Company's  remaining
     assets ($43,829,  primarily a related party receivable) and will assume the
     Company's remaining liabilities ($131,644, primarily loans from stockholder
    owned entities).

                                      F-15

<PAGE>
                           Am-Pac International, Inc.
                   Notes to Consolidated Financial Statements
                           December 31, 1997 and 1996


10.  Supplemental Information
     ------------------------

The following  unaudited  Consolidated  Statement of Operations and Consolidated
Statement  of Cash Flows for the year ended  December  31, 1996 are  provided as
supplementary information only.

<PAGE>
                           Am-Pac International, Inc.
                      Consolidated Statement of Operations
                      For the year ended December 31, 1996
                                   (Unaudited)

                                                       1996
                                                       ----
Revenue                                      
Sales
     Franchise fees                                $    720
     Commissions and other                           48,372  
     Rental property income                           7,456
     Interest income                                 93,300  
                                                        288
                                                   --------
         Total revenue                              150,136

Costs and expenses
     Rental property expenses                        76,246
     Marketing                                          600
     Labor costs                                     40,749
     Professional fees                              124,006
     Consulting services                             42,000
     Interest expense                                20,927
     Other expenses                                  29,818
                                                   ---------
         Total costs and expenses                   334,346 
                                                   ---------
         Net loss                                $ (184,210)
                                                   =========
         Net loss per share                      $     (.02)
                                                   =========
                                      F-16

<PAGE>

                           Am-Pac International, Inc.
                      Consolidated Statement of Cash Flows
                      For the year ended December 31, 1996
                                   (Unaudited)
                                                            1996
                                                           ------

Cash flows from operating activities
     Net income (loss)                                  $ (184,210)
     Adjustments to reconcile net
       cash used by
         operating activities
             Depreciation and amortization                   8,097
             Increase in prepaids                           (9,587)
             Decrease in receivable                          7,175
             Increase in accounts payable                  107,462
             Increase in other current liabilities           9,560
             Decrease in other assets                        8,749
                                                           --------
Net cash used by operating activities                      (52,754)

Cash flows from investing activities

     Purchase of equipment and leasehold improvements      (21,446)
     Loans to related parties                               (1,977)
     Loan to stockholder                                   (11,033)
                                                           -------
Net cash used by investing activities                      (34,456)

Cash flows from financing activities 
     Proceeds from related party borrowings                114,459 
     Repayment of debt                                     (13,638)
                                                           --------
Net cash provided by financing activities                  100,821
                                                           --------
Net increase in cash                                        13,611

Cash at beginning of period                                 34,040
                                                           --------
Cash at end of period                                  $    47,651
                                                           ========
                                      F-17