TRIANGLE IMAGING GROUP INC, 10KSB, 1999-04-30

TRIANGLE IMAGING GROUP INC
10KSB, 1999-04-30
MISCELLANEOUS AMUSEMENT & RECREATION

Previous: TRIANGLE IMAGING GROUP INC, DEF 14A, 1999-04-30

Next: NORTH PITTSBURGH SYSTEMS INC, 10-Q, 1999-04-30

================================================================================

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

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

For the fiscal year ended December 31, 1998 Commission File Number 000-25213

TRIANGLE IMAGING GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Florida 59-2493183
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

1800 NW 49th Street, Suite 100, Ft. Lauderdale, FL 33309
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 229-5100
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, par value $.001 per share

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B 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-K or any
amendment to this Form 10-KSB. [ ]

Revenues for the Issuer's most recent fiscal year are $7,608,904.

The aggregate market value of the voting stock held by non-affiliates
of the Issuer as of April 20, 1999 was approximately $6,530,960.

The number of outstanding shares of the Issuer's common stock as of
April 20, 1999 was 14,143,791 shares.
DOCUMENTS INCORPORATED BY REFERENCE:

NONE.
================================================================================

<PAGE>

TRIANGLE IMAGING GROUP, INC.

TABLE OF CONTENTS

PART I PAGE

Business......................................................................1
Properties...................................................................15
Legal Proceedings............................................................15
Submission of Matters to a Vote of Security Holders..........................16

PART II

Market for Common Equity and Related Stockholder Matters.....................17
Management's Discussion and Analysis.........................................18
Financial Statements ........................................................20
Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure...................................................21

PART III

Directors, Executive Officers, Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act..........................21
Executive Compensation.......................................................25
Security Ownership of Certain Beneficial Owners and Management...............33
Certain Relationships and Related Transactions...............................34

Exhibits, Lists and Reports on Form 8-K......................................37

<PAGE>

ITEM 1 BUSINESS

GENERAL

Triangle Imaging Group, Inc. (collectively with the subsidiaries, the
"Company" or "Triangle") through its operating subsidiaries creates software and
provides services to the mortgage lending and credit agency industries. All of
the Company's business operations are conducted through Engineered Business
Systems, Inc. ("EBS") and QuickCREDIT Corp. ("QCC") and its subsidiaries. EBS,
acquired by the Company in December 1996, develops and sells software quality
assurance products and services for the mortgage and credit industry. QCC,
formed by the Company in February 1998, acquired three (3) credit agencies in
April and May 1998. Through its three (3) wholly owned subsidiaries, QCC
compiles, organizes and sells comprehensive credit reports to its customers.

HISTORICAL INFORMATION

The Company was incorporated in December 1984 as Benefit Performances
of America, Inc. ("Benefit") to engage in the business of promoting concerts,
shows and other entertainment productions. In April 1988, Benefit ceased
operations and in September 1988 Benefit acquired all of the outstanding stock
of The Triangle Group, Inc., a data processing consulting and software
development firm. In November 1988, Benefit changed its name to The Triangle
Group, Inc. ("Triangle Group"). In September 1992, Triangle Group concluded its
business as a result of insufficient working capital. From September 1992 to
January 1993, the Company had no business activities and Vito Bellezza, a
minority stockholder, approached the Board of Directors regarding the purchase
of the shares of Common Stock held by management and other insiders. In January
1994, Mr. Bellezza acquired from certain existing stockholders 2,970,000 shares
of Common Stock, representing 52% of the total shares of common stock
outstanding.

In April 1995, Triangle Group acquired Pegasus Technologies, Inc.
("Pegasus"), a company which purportedly owned cutting edge imaging technology
used for the inspection of aircraft. In May 1995, Triangle Group, under the
direction of the principal of Pegasus, changed its name to the Company's current
name, Triangle Imaging Group, Inc. After discovering that Pegasus misrepresented
its ownership rights to the imaging technology, the Company rescinded the
transaction and canceled certain of the shares issued in connection therewith.

In December 1996, the Company paid an aggregate purchase price of
$2,620,915 to acquire 760 shares of EBS common stock, or 95% of the total number
of shares of EBS common stock outstanding. The purchase price included the
payment of $896,000 in cash, 500,000 shares of Triangle Common Stock and a
promissory note in the principal amount of $1,600,000 (the "Note"). The Note (i)
bears interest at the prime rate per annum (but no less than 8% and no more than
9% per annum), (ii) is payable monthly, (iii) is secured by all assets of
Triangle and EBS, and (iv) requires a balloon payment of the balance of the Note
on February 1, 2000. In December 1997, the Company acquired 40 shares of EBS
Common Stock (the remaining 5% of shares outstanding) for an aggregate purchase

<PAGE>

price of $153,250. In October 1998, the Company made an additional principal
payment of $375,000 to reduce the balance of the Note incident to certain
capital raising activities of the Company as required by the agreements
ancillary to the purchase by the Company of the EBS Common Stock. Currently, the
principal balance of the balloon payment of the Note due on February 1, 2000 is
$400,000.

The executive offices of the Company are located at 1800 NW 49th
Street, Suite 100, Ft. Lauderdale, FL 33309 (Telephone (954) 229-5100).

RECENT DEVELOPMENTS

On November 18, 1998, the Board of Directors of the Company convened a
meeting with all six members of the Board attending. Information was presented
concerning certain alleged activities of Vito Bellezza, the Company's Chief
Executive Officer and Chairman of the Board. The members of the Board of
Directors adopted certain resolutions which, among other things, established a
Special Committee of the Board to investigate certain transactions in the
Company's common stock which may have involved Mr. Bellezza. In addition, Mr.
Bellezza and Judith Bellezza, the wife of Mr. Bellezza and an administrative
assistant at the Company, each agreed to take a two week vacation commencing
immediately during which period of time the Special Committee (and special
counsel engaged by the Special Committee (the "Special Counsel")) could conduct
a prompt and thorough investigation of the alleged transactions.

On December 1, 1998, the Special Committee convened a meeting with all
three members of the Committee in attendance. The Committee unanimously resolved
to temporarily suspend Mr. Bellezza as Chief Executive Officer and Chairman of
the Board of the Company until such time that Mr. Bellezza provided testimony to
the Special Committee (and its counsel) and provided the Special Committee with
certain requested documents.

On December 3, 1998, the Special Committee convened a meeting with all
three members of the Committee in attendance. In response to Mr. Bellezza's
refusal (i) to acknowledge the authority of the Special Committee, and (ii) to
respect and honor the temporary suspension of his duties of Chief Executive
Officer and Chairman of the Board, the Special Committee unanimously resolved to
engage counsel to petition a court of competent jurisdiction to enforce the
temporary suspension of Mr. Bellezza. On December 9,1998, Mr. Bellezza reported
to the Board of Directors that a majority of the Company's shareholders
allegedly elected to remove J. Alan Lindauer, Charles D. Winslow and Harold S.
Fischer as Directors. Mr. Bellezza, Franz Fideli and Peter Bellezza purported to
take certain actions pursuant to this disputed vote, which actions included,
among other things, the termination of Mr. Fischer as President of the Company
and the termination of certain other officers of the Company, including Mr. Greg
J. Seminack, the Company's Vice President-Finance, and Mr. Patrick J. Haney, the
Executive Vice President of QCC. On December 17, 1998, certain stockholders
filed an Amended Complaint with the Circuit Court of the 17th Judicial Circuit
in Broward County, Florida (the "Circuit Court") against the Company, Vito
Bellezza, Judith Bellezza, Franz Fideli, a director of the Company since
February 1994, and Peter Bellezza, a director of the Company since February 1994
and the brother of Vito Bellezza, asserting a stockholder derivative action with
respect to the allegations involving Mr. Bellezza. On December 21, 1998, the

<PAGE>

Court entered an Order requiring that the parties agree to jointly select a new
special counsel by December 24, 1998 to investigate the allegations involving
Mr. Bellezza.

As of December 23, 1998, stockholders holding a majority of the shares
of common stock outstanding of the Company voted in favor of a new board of
directors consisting of J. Alan Lindauer, Charles D. Winslow and Harold S.
Fischer, the Company's President. As a result, Messrs. Vito Bellezza, Peter
Bellezza and Franz Fideli are no longer members of the Board of Directors and
Mr. Winslow serves as the Company's Chairman of the Board. On December 23, 1998,
the Company also filed a Form 8-A with the Securities and Exchange Commission
(the "Commission") which registered the Company's shares of common stock
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"). As a result, the Company is obligated to file periodic reports
with the Commission as required by the 1934 Act.

On January 14, 1999, a hearing was held before the Circuit Court and an
order was entered on February 22, 1999 (the "Order"). The Order (i) appointed
Harold S. Fischer, the President and a member of the Board of Directors of the
Company, as a receiver until the next annual meeting of the Company's
stockholders, (ii) confirmed the validity of the election of the Company's Board
of Directors consisting of Harold S. Fischer, J. Alan Lindauer and Charles D.
Winslow by the Company's stockholders as of December 23, 1998, and (iii)
required the parties to submit their dispute to non-binding mediation.

On February 12, 1999, the Special Counsel delivered its report
documenting the results of its investigation to the Board of Directors. On March
17, 1999, the Company terminated Mr. Bellezza for "Cause" as defined in his
employment agreement with the Company. The Board of Directors is presently
investigating whether Company securities presently held by Mr. Bellezza and his
family and associates were validly issued.

As of April 16, 1999, shareholders of the Company beneficially holding
an aggregate of 6,368,454 shares of Common Stock, or 45.7% of the total number
of shares then outstanding, entered into a Stockholders Agreement pursuant to
which the participating shareholders (the "Participating Shareholders") agreed
to certain matters pertaining to the governance of the Company and the
circumstances under which the shares held by the Participating Shareholders may
be sold or transferred. The Participating Shareholders agreed, among other
things, that (i) at any annual or special meeting of stockholders called for the
purpose of voting on the election of directors, or by consensual action of
stockholders with respect to the election of directors, the Participating
Stockholders will vote the shares of the Company's Common Stock held thereby in
favor of the directors nominated by Harold S. Fischer, the Company's President,
and (ii) except for certain permitted transfers, each Participating Shareholder
will not sell or transfer shares of the Company's Common Stock held thereby
without first granting the Company and then the other Participating Shareholders
with a right of first offer. Although the Company is not a party to the
Stockholders Agreement, certain members of management are Participating
Shareholders, including Harold S. Fischer, the Company's President.

<PAGE>

ENGINEERED BUSINESS SYSTEMS, INC.

EBS designs, develops, markets and supports a family of PC-based
software products for the credit reporting and mortgage banking industries. EBS
software products include (i) the ACES(TM) Quality Control System, a quality
assurance program for mortgage lenders, (ii) the EBS Xchange(R), an automated
merged infile system with electronic data interchange (EDI) capabilities, and
(iii) the CRIS(R) Mortgage Reporting System, credit reporting software. In
addition to selling the ACES(TM) software program, EBS also provides ACES(TM)
Quality Control Solutions, an outsourcing service that uses ACES(TM) software to
assist mortgage banking institutions in their quality assurance function.

In the second quarter of 1998, EBS released two (2) new software
products. ACES 98 (a Windows 95 and Windows NT version of ACES(TM)) and
DESC(TM)(Data Evaluation and Selection Criteria module).

In February 1998, EBS implemented its new consulting services division.
The EBS Consulting Services Division, offers clients extensive expertise in,
among other things, mortgage quality evaluation, program risk analysis, and
operation reviews that focus on maximizing revenue and reducing risk. It is
critical for mortgage lenders to establish and evaluate effective operating
procedures while assessing and managing risk inherent in the mortgage industry.

PRODUCTS AND SERVICES

ACES(TM)

ACES(TM) software has been created, developed and sold by EBS to assist
Mortgage lenders in assessing the accuracy of the information gathered in
connection with making a loan. When considering whether to lend funds, a
mortgage lender has potential borrowers complete a mortgage application. From
this application and other accumulated information, the lender determines
whether the applicant qualifies for a loan. As part of this loan process, the
lender must also assess whether the property being purchased is of sufficient
value to collateralize the loan. If the information obtained regarding the
potential borrower and the property to be pledged as collateral satisfy certain
lending criteria, the loan can then be made by the mortgage lender. Frequently,
the mortgage lender then bundles a number of loans together and sells the
portfolio of loans to Fannie Mae, Freddie Mac, Federal Housing Authority
("FHA"), Veterans Administration ("VA"), and other mortgage investors.

In order to effect the sale of a mortgage portfolio, a lender, or loan
originator, must review the information compiled in connection with originating
the loan on a representative sample of loans in the portfolio. ACES(TM) software
simplifies this process greatly. The ACES(TM) product enables each customer to
perform quality control reviews based upon the risk management philosophy
determined by their company. ACES(TM) provides either (i) a questionnaire, which
the customer may modify, or (ii) an exception based analysis. The questionnaire
enables the analyst reviewing the information gathered during the origination of
the loan to quickly and accurately determine whether any information was omitted
or misstated. ACES(TM) then creates reverification letters for the application,
employment, deposits (source of funds), credit, and sometimes property

<PAGE>

appraisal. The exception based analysis enables the reviewer to identify
specific exceptions, or items of concern.

ACES(TM) also contains a loan selection module that enables the user to
Select loans for review from the entire universe of loans originated, with
specific criteria or risk elements. This module randomly selects loans to insure
no undue bias.

ACES(TM) receives mortgage loan information in an ASCII comma delimited
Format created by the user from their loan origination system. This provides
automatic downloads of the loans each company originates and reduces redundant
duplicative data input. Alternatively, the customer may manually input any or
all of the loan detail elements.

EBS either sells or leases the ACES(TM) program. When a customer leases
ACES(TM) software the maintenance fee is included. When selling the ACES(TM)
program, the Company charges an additional annual software maintenance fee.

In the second quarter of 1998, EBS released its ACES 98 software. ACES
98, a Year 2000 compliant program, is a Windows 95 and Windows NT based product
which includes enhanced reporting modules. These new reporting modules generate
clearer and more concise reports as well as trend information that was not
available in the previous versions of ACES(TM). As a result, ACES 98 functions
more efficiently and effectively than earlier versions of ACES(TM).

ACES(TM) QUALITY CONTROL SOLUTIONS

In lieu of purchasing or leasing the ACES(TM) software product,
mortgage Lenders can outsource the quality review task to EBS. By using the
ACES(TM) software program, trained specialists at EBS analyze the original file
containing information compiled in connection with a loan. EBS customers
utilizing ACES(TM) Quality Control Solutions include many of the largest
mortgage companies nationwide. Pursuant to the terms of a contract with its
customers, EBS charges its customers a fixed fee for each reviewed file.

EBS provides third party quality review services for professional
reviews of Conventional, FHA, VA, Jumbo, and specialty mortgage loans. The
ACES(TM) Quality Control software also enables EBS to perform reviews for
various transactions, including preliminary reviews prior to funding, post
lending reviews and reviews of portfolios in connection with acquisitions or
divestitures.

DESC(TM)

In the second quarter of 1998 EBS released DESC (Data Evaluation and
Selection Criteria), its statistical sampling software. This new tool, while
providing mortgage lenders with the ability to draw sample data based on their
own criteria, also allows them the ability to categorize their samples into
predetermined risk groups for statistical sampling purposes. Known as
"stratification," this function gives lenders the ability to validate risk
assumptions by any number of factors as well as to assure themselves of the
overall quality of the mortgage loans being sold into the secondary market. This
methodology supports EBS's clients ability to maximize the information obtained

<PAGE>

from the quality control process while minimizing the actual number of mortgage
files to be reviewed.

COMPAREX

This previously announced project to develop a data warehouse and
comparison project has been expanded and restructured. EBS, through its
contractual agreements, processes and retains extensive statistical data on
mortgage loans nationwide. The type of information collected and compiled by EBS
is useful on an individual lender by lender basis by providing mortgage
companies with valuable industry comparisons. It is of even greater value when
correlated to loan performance. Therefore, EBS has sought out and secured a
relationship with a provider of loan performance information and intends to make
available to the market, a product that provides comparisons on the impact of
loan exceptions across the industry. It is uncertain at this time when this
product will be delivered to the market.

EBS CONSULTING SERVICES

Since its inception in February 1998, EBS Consulting Services has
provided advice to a variety of mortgage lenders on operations, systems and
personnel. Aimed at supporting the efforts of the mortgage quality professional,
the consulting division ensures that all clients are assisted in the effective
implementation of software products marketed by EBS. This program is focused
towards a process measurement approach which has proven to be effective in
providing mortgage-lending management with key process quality information. EBS
Consulting Services also provides an analysis of overall quality control
operations for lenders and has the ability to assist them in the development and
implementation of large-scale quality initiatives.

THE MORTGAGE INSTITUTE

The EBS Institute began operation in the third quarter of 1998. Led by
education professionals experienced in adult education and distance learning
programs, the institute is focused on implementing a comprehensive educational
program for mortgage professionals in the area of quality control and process
management. The cornerstone course, "Foundations in Quality" was presented as
the preceding session of the Mortgage Banker's Association (MBA) Quality
Assurance Conference in September 1998, and has been presented to individual
mortgage lenders. The institute also offers a course on Loss Mitigation,
developed at the request of the MBA, that has been offered and presented since
the fourth quarter of 1998. The institute is currently developing a curriculum
on fraud awareness which is scheduled for implementation in the third quarter of
1999. In addition to being presented in regularly scheduled sessions, the
programs are available to lenders at their locations upon request.

CRIS(R)

CRIS(R) software has been created, developed and sold by EBS to assist
Credit agencies in compiling comprehensive credit reports for their customers.
To date, over 350 credit agencies have purchased the personal computer based
CRIS(R) program, each of which have also entered into a software maintenance
agreement with the Company. The CRIS(R) program enables credit agencies through
its built-in communication software to access information from all three major
credit information repositories -- Experian (formerly, TRW), Equifax and

<PAGE>

TransUnion. CRIS(R) then automatically consolidates the credit information
obtained from these sources and creates a simplified, comprehensive credit
report. The program can then generate, upon demand, letters requesting an
explanation of information in the report that requires clarification. In
addition, CRIS(R) also provides credit agencies with an accounts receivable and
billing system to charge their customers for reports generated by the CRIS(R)
program.

CRIS(R), a Year 2000 compliant program, is installed by EBS on a
customer's personal computer or sold pre-loaded on new computer hardware.

EBS XCHANGE(R)

EBS also creates credit reports for its credit agency and mortgage
lending customers. Typically, a customer will need a credit report on an
individual because a lender is considering making a loan to such individual. The
credit agency will then request electronically through the EBS Xchange(R) that a
report be compiled on such individual. By using the CRIS(R) program internally,
EBS can generate and communicate a full credit report to its customer in a few
minutes. EBS charges a fee for compiling each report and charges an additional
fee if its credit agency customer does not have its own account with each of the
credit information repositories.

QUICKCREDIT FOR WINDOWS

In June of 1998, QCC introduced QuickCREDIT for Windows, a software
application which enables credit agency clients to access via telephone modem
the EBS Xchange system for the purpose of requesting and compiling individual
credit reports. This application operates on Windows 3.1, Windows 95 and Windows
NT operating systems and is accessible by industry accepted modems. QuickCREDIT
for Windows is provided without cost to the client, however it derives revenue
on a transactional basis when used.

SALES AND MARKETING

In order to service its customers, EBS and QCC presently employ a
combined sales force of eleven (11) sales representatives. These sales
representatives work on a salary plus commission basis and are responsible for
placing their respective products with its principal customers, which include
commercial banks, mortgage brokers, savings and loan associations, credit
unions, credit agencies and other lenders. The sales representatives are
supported by a marketing services staff and seven (7) technical customer service
representatives.

In addition, customers acquire CRIS(R) and EBS Xchange(R) through
referrals to EBS or contacts through the sales organization. EBS derives revenue
from these products based upon sale of software and hardware, annual service
maintenance agreement payments, and monthly transactional fees.

COMPETITION

The Company is aware of several software programs produced by private
non-mortgage banking companies which compete directly with ACES(TM). More

<PAGE>

significantly, mortgage companies continually develop their own proprietary
software in-house. ACES(TM) Quality Assurance Outsourcing has competition from
many local, regional and national privately held companies.

The credit reporting industry is highly competitive. Many credit
reporting agencies have other software programs which generate credit reports
from information supplied by the credit information repositories. As a result,
both CRIS(R) and EBS Xchange(R) have significant competition.

BACKLOG

At December 31, 1998, EBS had no contract backlog. Revenues from sales
are recorded upon software delivery, hardware delivery, and training. EBS has
entered into one to two year contracts for services that obligate customers to
specific minimum transactions with EBS.

EMPLOYEES

At March 31,1999 the Company, through its operating subsidiaries,
currently employs approximately 84 people of which 11 are engaged in marketing
and sales, 16 are engaged in programming and customer service and 12 are
involved in finance and administration. None of the employees are union members
and none are covered under any collective bargaining agreements. EBS considers
relations with its employees to be good. See "Recent Developments."

PATENTS AND TRADEMARKS

The EBS Xchange(R) and QuickCREDIT(R) trademarks have been registered
in International Class 9 in the United States Patent and Trademark Office
("PTO") and the Company has several applications for registration pending in the
PTO. Through the Company's five (5) year long use of the ACES(TM) trademark in
the United States in connection with computer software, the Company has also
acquired common law trademark rights in the ACES(TM) trademark. There can be no
assurance, however, that the Company will be able to effectively obtain rights
in the Company's mark throughout all the countries of the world. The failure of
the Company to protect such right from unlawful and improper appropriation may
have a material adverse effect on the Company's business, financial condition
and results of operation.

INSURANCE

The Company maintains insurance with respect to its properties and
operations in such form, in such amounts and with such insurers as is customary
in the businesses in which the Company is engaged. The Company believes that the
amount and form of its insurance coverage are adequate at the present time.

RESEARCH AND DEVELOPMENT

During 1998, the Company expensed approximately $1,032,272 of external
research and development costs. Approximately 50% of the internal EBS
programming resources are engaged in research and development activities. These

<PAGE>

internal resources were accounted in the Company's general and administrative
costs. Research and development expenses related to external vendors were
$1,032,272. The development activities were focused on upgrading the ACES and
QCC products to a Microsoft Windows environment.

The Company estimates the future spending for research and development
for the fiscal year 1999 to be approximately $1,000,000 and will be funded by a
combination of equity and debt financing.

QUICKCREDIT CORP.

QuickCREDIT Corp. ("QCC") was formed by the Company as a wholly owned
subsidiary in February 1998 for the purpose of acquiring local credit reporting
agencies. Presently, EBS offers its CRIS(R) software and EBS Xchange(R) services
to credit agencies who in turn service their customers. The Company believes
that QCC can be successful in offering its expertise and experience directly to
end users. In April 1998, QCC acquired two privately held credit agencies
located in Fort Lauderdale, Florida and Orlando, Florida. In May 1998, QCC
acquired a third credit agency located in Jacksonville, Florida. QCC maintains
each of the acquired credit agencies as separate subsidiaries and has
consolidated the operations of the Fort Lauderdale credit agency and the Orlando
credit agency in QCC's corporate offices in Fort Lauderdale, Florida. QCC
continues to operate the Jacksonville credit agency out of its original offices
in Jacksonville, Florida.

In March, 1999, QCC entered into an Agreement for Joint Product
Development, Sales and Marketing with an Atlanta, Georgia based company for the
development and marketing of two new products. QCC's partner in this project is
a company having annual gross revenues in excess of $300,000,000 that offers
certain consumer products to bank credit card holders through (i) direct
marketing materials included with account holder billing invoices, (ii) direct
mail marketing and (iii) a telemarketing sales force. QCC's partner currently
markets products to over 120,000,000 bank credit card holders. The two products
to be developed and marketed under the agreement are a credit card registration
product ("Card Registration Product") and a credit monitoring product ("Credit
Monitoring Product"). The Card Registration Product will offer to the credit
card holder the opportunity to register each of his or her bank credit cards,
oil company credit and store credit cards to allow quick and easy cancellation
by the cardholder in the event any or all of the registered credit cards are
lost or stolen. In the event of loss or theft, the cardholder notifies QCC
through a toll free telephone call of the loss or theft and QCC (i) arranges for
cancellation of the cards identified by the card holder to be cancelled (ii)
reorders the cancelled cards and (iii) provides emergency cash and certain other
emergency services to the card holder. The Credit Monitoring Product will offer
credit reporting services and related data collection services to individual
consumers to permit such persons to obtain periodic information about their
credit history. Credit information will be gathered from each of the three
credit repositories (Equifax, TransUnion Corporation and Experian) and reported
to the customer each calendar quarter. Customers having questions or concerns
regarding the information appearing on their credit report will be directed to
the National Consumer Credit Counseling Service.

<PAGE>

TRIMAX SYSTEMS CORP.

On May 30, 1998 the Company acquired TriMax Systems Corp. and MultiTask
Corp. for 405,000 shares of the Company's common stock. At the time of the
acquisition, the Company understood TriMax to have certain business
relationships and to have a financial history that was later revealed to be
different than that initially contemplated. On September 30, 1998, the Company
and the former principal shareholders of TriMax mutually agreed to rescind the
acquisition of TriMax. Pursuant to the rescission agreement, the 270,000 shares
delivered by the Company as payment of the purchase price for all of the
outstanding shares of TriMax were cancelled and the TriMax shares were returned
to the former TriMax shareholders. In addition, the Company entered into
consulting contracts with each of the former TriMax shareholders and the former
Chairman of the Board of the Company caused the Company to grant 100,000 stock
options having an exercise price of $0.20 per share to each of the two former
shareholders of TriMax. The Company has not made any payments under the
consulting contracts and has suspended the right of exercise under the stock
option agreements until such time as an investigation into the granting of such
options and the relationship between each of the former shareholders of TriMax
and the former Chairman of the Board of the Company has been completed. See
"Recent Developments" and "Legal Proceedings."

IN ADDITION TO OTHER INFORMATION IN THIS ANNUAL REPORT ON FORM 10-KSB,
THE FOLLOWING IMPORTANT FACTORS SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE
COMPANY AND ITS BUSINESS BECAUSE SUCH FACTORS CURRENTLY HAVE A SIGNIFICANT
IMPACT ON THE COMPANY'S BUSINESS, PROSPECTS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

LIMITED HISTORY OF BUSINESS OPERATIONS; ANTICIPATED LOSSES. The Company
has a limited operating history on which to base an evaluation of its business
and prospects, having only commenced its present operations through its
Engineered Business Systems, Inc. subsidiary in December, 1996. The Company's
prospects must be considered in light of the risks, expenses and difficulties
frequently encountered by companies in their early stage of development. Such
risks for the Company include, but are not limited to, an evolving and
unpredictable business model and the management of growth. To address these
risks, the Company must, among other things, maintain and increase its customer
base, implement and successfully execute its business and marketing strategy,
continue to develop and upgrade its technology, provide superior customer
service, respond to competitive developments, and attract, retain and motivate
qualified personnel. Although initial customer acceptance of the Company's
services has been encouraging, the Company is unable to predict with certainty
how demand for these services may develop over time. The Company's future
profitability depends in large measure on acceptance of the Company's products
and services.

The Company has incurred losses for the twelve months ended December
31, 1998 of approximately $5,100,000. Inasmuch as the Company will continue to
have a high level of operating expenses and will be required to make significant
up-front expenditures in connection with both the marketing and expansion of its
business (including, without limitation, salaries of executive, technical,
marketing and other personnel), the Company anticipates that it will continue to
incur losses until such time as the Company is able to generate sufficient
revenues to finance its operations.

<PAGE>

SIGNIFICANT CAPITAL REQUIREMENTS; WORKING CAPITAL DEFICIT; NEED FOR
ADDITIONAL FINANCINGS. The Company's capital requirements have been and will
continue to be significant. At December 31, 1998, the Company had a working
capital deficit and the Company's working capital deficit is increasing through
the date of the filing of this Annual Reports on form 10-KSB. To date, the
Company's capital requirements have been satisfied primarily by the sale of debt
and equity securities, and capital contributions. The Company is dependent on
and intends to use the proceeds from these types of financings to continue the
implementation of its proposed plan of operation. During the quarter ended March
31, 1999, the Company sold an aggregate of 416,183 shares of Common Stock for an
aggregate of $416,183.

RECENT DEVELOPMENTS; LITIGATION. The Company is a defendant in one
lawsuit styled, THOMAS L. BAUER, ET AL V. TRIANGLE IMAGING GROUP, INC., VITO A.
BELLEZZA, JUDITH BELLEZZA A/K/A JUDITH KLOTZ, PETER BELLEZZA AND FRANZ FIDELI in
the Circuit Court of the 17th Judicial Circuit in and for Broward County,
Florida filed in December 1998 by in excess of 25 of the Company's shareholders
some of whom are officers and employees of the Company (the "Shareholder
Litigation"). The Shareholder Litigation alleges, among other things, breaches
of fiduciary duty, self-dealing, stock manipulation and insider trading by Mr.
Bellezza, the Company's former Chief Executive Officer and Chairman of the
Board. The lawsuit further alleges certain claims against Judith Bellezza for
her alleged participation in Mr. Bellezza's complained of activities, as well as
claims against Franz Fideli and Peter Bellezza arising from the failure to
discharge their fiduciary duties as directors of the Company when presented with
the allegations against Mr. Bellezza and Judith Bellezza.

On November 20, 1998, a Special Committee of the Board of Directors
retained the Special Counsel (a law firm specializing in corporate and
securities laws matters) to assist the Special Committee in its investigation
with respect to the allegations later raised in the Shareholder Litigation for
the purpose of determining the validity of such allegations. The Special Counsel
delivered its report (the "Special Counsel Report") dated February 12, 1999 to
the Board of Directors. The Company's litigation counsel has reviewed the
Special Counsel Report and will advise the Company on the Company's defenses to
the claims raised against the Company in the Shareholder Litigation and whether
the Company should pursue separate litigation against Mr. Bellezza, Judy
Bellezza, Peter Bellezza and Franz Fideli. At this time, it is uncertain whether
the Company will pursue such separate litigation and what course the Shareholder
Litigation may take or the outcome of such litigation.

<PAGE>

warrants, Waterside dismissed the Waterside Litigation and delivered to the
Company a contingent general release. The release provides that Waterside may
not refile the lawsuit with the same claims set forth in the Waterside
Litigation unless certain members of management and/or members of the Company's
Board fail to remain in such positions through the date of the second annual
meeting of shareholders held after the date of the settlement.

It is anticipated that litigation may also result from the rescission
of the TriMax acquisition in September 1998. The former shareholders of TriMax
have demanded the right to exercise the stock options purportedly granted to
each of them by the Company's former Chairman which right of exercise the
Company has suspended and is currently reviewing. See "TriMax Systems Corp."

In the event that the foregoing legal disputes or any other legal
matters are determined in favor of an opposing party, the Company may be
materially and adversely effected. In addition, the Company may continue to
incur significant legal expenses from the foregoing legal disputes or other
legal matters which may materially and adversely effect the Company.

ECONOMIC CONDITIONS. The mortgage industry is significantly effected by
general economic conditions, particularly long-term interest rates. When long
term interest rates are relatively low, homeowners refinance their existing
mortgages and demand for new mortgages increases significantly. During the past
several years interest rates have been relatively low resulting in increased
demand for the products and services provided by the Company. If economic
conditions decline and/or long term interest rates increase, demand for the
Company's products and services may be severely effected. As a consequence, the
Company's revenues may decline materially.

IMPACT OF WARRANT AND OPTION EXERCISE; PUT OPTIONS. As of the date
hereof, the Company believes there are warrants and options outstanding
exercisable for not less than 2,800,000 shares of Common Stock. The exercise
price of these warrants and options range from $.05 per share to in excess of
$3.00 per share. The Board of Directors is presently investigating the validity
of the issuance of certain of these securities, and therefore, the number of
options issued and outstanding and the shares subject to issuance upon the
exercise thereof is subject to change. No assurance can be given that any of
such securities will be cancelled. In the event of the exercise of a substantial
number of Warrants and/or Options, the resulting increase in the amount of
Common Stock of the Company could substantially dilute investors ownership
interests in the Company and may negatively effect the market price or the
shares of Common Stock.

QCC acquired three credit services bureaus in 1998. As part of the
purchase price for the credit bureaus, the Company issued a total of 495,000
shares of the Company's common stock (the "Issued Stock"). The former
shareholders of each of the acquired entities that received the Issued Stock
were granted a put option (the "Put Option") giving such stockholders the right,
upon the occurrence of certain circumstances, to require that the Company
repurchase the stock at a repurchase price of $3.00 per share (the "Repurchase
Price"). Since the market price per share of the Company's common stock at
December 31, 1998 was, and continues to be, below the Repurchase Price, the
Company has recorded a liability in the amount of $1,485,000. In the event that
all or part of the Put Options are exercised, the Company may be required to

<PAGE>

repurchase all or part of the Issued Stock which could result in the Company
being obligated to make payments in excess of available funds.

RELIANCE ON KEY PERSON. The Company is dependent upon Harold Fischer,
the Company's President. Should Mr. Fischer cease to be affiliated with the
Company, there could be a material adverse effect on the Company's business and
prospects. There can be no assurance that a suitable replacement could be hired
without the Company incurring substantial additional costs.

LIMITED TRADING MARKET; RESTRICTIONS ON TRANSFERABILITY. The Company's
shares of Common Stock trade on the OTC Bulletin Board with limited daily
trading volume. Investors should be aware that the nature of the OTC Bulletin
Board, the lack of market analysts following the Company's Common Stock and the
resulting limited trading volume may make it difficult or impossible for
investors to sell their holdings. In addition, efforts to sell blocks of Company
Common Stock that are large in relation to the average daily trading volume may
cause significant downward pressure on the market price of the Company's Common
Stock.

PRODUCT CONCENTRATION. Although the Company sells a variety of products
and services, the bulk of the Company's revenues are concentrated in the ACES
product line. The Company Revenues from the ACES products represented over 45%
of the Company's total revenues in 1998. The Company expects that revenues from
these products will continue to account for a substantial portion of the
Company's revenues. The life cycles of the Company's products are difficult to
estimate due in large measure to the recent emergence of some of the Company's
products to market, the future effect of product enhancements and future
competition. Declines in demand for these products, whether as a result of
competition, technological change or otherwise, or price reductions would have a
material adverse effect on the Company's operating results.

COMPETITION. The market for the Company's products is intensely
competitive. The Company expects competition to increase and the Company's
market share to decline as other companies introduce additional and more
competitive Microsoft Windows(R)-based products in this emerging market segment.
Many of the Company's present or anticipated competitors have substantially
greater financial, technical, marketing and sales resources than the Company.
There can be no assurance that the Company will be able to compete successfully
in the future.

DEPENDENCE ON OPERATING ENVIRONMENTS. The Company's software
development tools are designed for use with computers running in the Microsoft
Windows(R) operating environment. Future sales of the Company's products are
dependent upon continued use of this operating environment. In addition, changes
to these software programs require the Company to continually upgrade its
products. Any inability to produce upgrades or any material delay in doing so
would adversely affect the Company's operating results. The successful
introduction of new operating systems or improvements of existing operating
systems that compete with these software programs also could adversely affect
sales of the Company's products and have a material adverse effect on the
Company's operating results.

<PAGE>

RAPID TECHNOLOGICAL CHANGE. The market for the Company's products is
characterized by rapid technological advances, evolving industry standards,
changes in end-user requirements and frequent new product introductions and
enhancements. While the Company to date has been committed to the Microsoft
Windows(R), and Windows(R) NT, platforms, the introduction of products embodying
new technologies and the emergence of new industry standards could render the
Company's existing products and products currently under development obsolete
and unmarketable. The Company's future success will depend upon its ability to
enhance its current products and to develop and introduce new products that keep
pace with technological developments, respond to evolving end-user requirements
and achieve market acceptance. Any failure by the Company to anticipate or
respond adequately to technological developments or end-user requirements, or
any significant delays in product development or introduction, could result in a
loss of competitiveness or revenues. In the past, the Company occasionally
experienced delays in the introduction of new products and product enhancements.
There can be no assurance that the Company will be successful in developing and
marketing new products or product enhancements on a timely basis or that the
Company will not experience significant delays in the future, which could have a
material adverse effect on the Company's results of operations. In addition,
there can be no assurance that new products or product enhancements developed by
the Company will achieve market acceptance.

MANAGEMENT OF GROWTH. The Company has recently experienced rapid growth
in the number of employees, the scope of its operating and financial systems and
the geographic area of its operations. This growth has resulted in an increase
in the level of responsibility for both existing and new management personnel.
To manage its growth effectively, the Company will be required to continue to
implement and improve its operating and financial systems and to expand, train
and manage its employee base. There can be no assurance that the management
skills and systems currently in place will be adequate if the Company continues
to grow. The Company may make additional acquisitions in the future. The
Company's management has only limited experience with acquisitions, which
involve numerous risks, including difficulties in the assimilation of the
operations and products of the acquired companies, the diversion of management's
attention from other business concerns and the potential loss of key employees
of the acquired companies.

DEPENDENCE ON PROPRIETARY RIGHTS. The Company regards its software as
proprietary and attempts to protect it with copyrights, trademarks, trade secret
laws and restrictions on disclosure, copying and transferring title. However,
the Company has no patents, and existing copyright laws afford only limited
practical protection for the Company's software. In addition, the laws of some
foreign countries do not protect the Company's proprietary rights to the same
extent as do the laws of the United States. The Company licenses its products
primarily under "shrink wrap" license agreements that are not signed by
licensees and therefore may be unenforceable under the laws of certain foreign
jurisdictions. In addition, in some instances the Company licenses its products
under agreements that give licensees limited access to the source code of the
Company's products. Accordingly, despite precautions taken by the Company, it
may be possible for unauthorized third parties to copy certain portions of the
Company's products or to obtain and use information that the Company regards as
proprietary. As the number of software products in the industry increases and

<PAGE>

the functionality of these products further overlaps, the Company believes that
such software will become increasingly the subject of claims that such software
infringes the rights of others. Although the Company does not believe that its
products infringe on the rights of third parties, there can be no assurance that
third parties will not assert infringement claims against the Company in the
future or that any such assertion will not result in costly litigation or
require the Company to obtain a license to intellectual property rights of such
parties. In addition, there can be no assurance that such licenses will be
available on reasonable terms, or at all.

NO DIVIDENDS AND NONE ANTICIPATED. To date, the Company has paid no
dividends. For the foreseeable future, earnings generated from the Company's
proposed operations will be retained for use in the Company's business.

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE. This Memorandum
contains forward-looking statements and information that are based on
management's beliefs as well as assumptions made by, and information currently
available to, management. When used in this Memorandum (including Exhibits),
words such as "anticipate," "believe," "estimate," "except," and, depending on
the context, "will" and similar expressions, are intended to identify
forward-looking statements. Such statements reflect the Company's current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions, including the specific risk factors described above. Should one
or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, believed, estimated or expected. The Company does not intend to
update these forward-looking statements and information.

YEAR 2000. The Company recognizes that a challenging problem exists in
that many computer systems worldwide do not have the capability of recognizing
the year 2000 or the years thereafter. No easy technological "quick fix" has yet
been developed for this problem. The Company has spent a considerable sum of
money to assure that all its software programs are year 2000 compliant and
believes that they will be year 2000 compliant during 1999, most likely during
the first half of the year. This "Year 2000 Computer Problem" creates risk for
the Company from unforeseen problems in its own software and from third parties
with whom the Company deals. Such failures of the Company and/or third parties'
computer systems could have a material adverse effect on the Company and its
ability to conduct its business in the future.

ITEM 2. PROPERTIES

The Company leases a facility in Fort Lauderdale, Florida consisting of
approximately 20,000 square feet of office and research and development space.
The Company has a lease through January, 2003, at a base monthly rental
increasing from approximately $16,800 per month to $20,000 per month during the
first year of the lease. The lease provides for a base monthly rental of
approximately $20,000 during years two through five of the lease. Prior to the
end of the fifth year of the lease, the Company has the right to renew the lease
for an additional five year term at a base monthly rent of approximately $23,500
during each of the five years of the renewal term.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company is a defendant in one lawsuit styled, THOMAS L. BAUER, ET
AL V. TRIANGLE IMAGING GROUP, INC., VITO A. BELLEZZA, JUDITH BELLEZZA A/K/A
JUDITH KLOTZ, PETER BELLEZZA AND FRANZ FIDELI in the Circuit Court of the 17th
Judicial Circuit in and for Broward County, Florida filed in December 1998 by in
excess of 25 of the Company's shareholders some of whom are officers and
employees of the Company (the "Shareholder Litigation"). The Shareholder
Litigation alleges, among other things, breaches of fiduciary duty,
self-dealing, stock manipulation and insider trading by Mr. Bellezza, the
Company's former Chief Executive Officer and Chairman of the Board. The lawsuit
further alleges certain claims against Judith Bellezza for her alleged
participation in Mr. Bellezza's complained of activities, as well as claims
against Franz Fideli and Peter Bellezza arising from the failure to discharge
their fiduciary duties as directors of the Company when presented with the
allegations against Mr. Bellezza and Judith Bellezza.

In addition to the foregoing, in January, 1999, Waterside Capital
Corporation ("Waterside") filed a lawsuit against the Company (the "Waterside
Litigation") in the United States District Court for the Eastern District of
Virginia, Civil Action No. 2:98 cv 1468, based upon alleged defaults by the
Company under a promissory note in the original principal amount of $1,500,000,
dated October 15, 1998, and alleged breaches of contract under certain related
investment agreements. The Company and Waterside reached a settlement of the
litigation pursuant to which the Company repriced certain stock purchase
warrants granted to Waterside at the time of the closing of Waterside's
investment in the Company. Pursuant to the settlement, the purchase price for
the shares underlying the warrants was reduced from a range of $2.15 per share
to $3.00 per share down to $.05 per share. In exchange for the repricing of the
warrants, Waterside dismissed the Waterside Litigation and delivered to the
Company a contingent general release. The release provides that Waterside may
not refile the lawsuit with the same claims set forth in the Waterside
Litigation unless certain members of management and/or members of the Company's
Board fail to remain in such positions through the date of the second annual
meeting of shareholders held after the date of the settlement.

<PAGE>

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

As of December 23, 1998, a written consent of shareholders in lieu of a
special meeting of shareholders (the "Written Consent") was executed by
shareholders holding an aggregate of 6,541,999 shares of the Company's common
stock, or 50.4% of the shares then outstanding. The sole purpose of the Written
Consent was to elect Messrs. Harold S. Fischer, J. Alan Lindauer and Charles D.
Winslow as directors of the Company. As a result, Messrs. Vito A. Bellezza,
Franz Fideli and Peter Bellezza are no longer directors of the Company. See
"Recent Developments" and "Legal Proceedings."

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

The Company's shares of Common Stock trade on the OTC Bulletin Board
(the "Bulletin Board") under the trading symbol "TRIG." The Common Stock is
regularly quoted and traded on the Bulletin Board.

As of April 20, 1999, there were 14,143,791 shares of Common Sock
issued and outstanding with approximately 975 holders of record of the Company's
Common Stock with approximately 1,118 beneficial owners.

The following table indicates the high and low bid prices for the
Company's Common Stock for the two year period ending December 31, 1998 based
upon information supplied by the Bulletin Board. Prices represent quotations
between dealers without adjustments for retail markups, markdowns or
commissions, and may not represent actual transactions.

HIGH ($) LOW ($)
-------- -------

Calendar 1998
- -------------

January 1 through March 31 2.81 1.50
April 1 through June 30 5.75 2.25
July 1 through September 30 4.44 1.94
October 1 through December 31 2.00 .78

Calendar 1997
- -------------

January 1 through March 31 .87 .35
April 1 through June 30 1.00 .53
July 1 through September 30 .93 .56
October 1 through December 31 1.62 .80

<PAGE>

As of April 20, 1999, the closing bid price for the Company's Common
Stock was $.875 per share.

The Company has never paid dividends on its shares of Common Stock and
does not expect to pay any in the immediate future. The future dividend policy
will depend on the Company's earnings, capital requirements, financial condition
and other factors considered relevant to the Company's ability to pay dividends.

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

STATEMENTS IN THIS "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS DOCUMENT AS WELL AS STATEMENTS
MADE IN PRESS RELEASES AND ORAL STATEMENTS THAT MAY BE MADE BY THE COMPANY OR BY
OFFICERS, DIRECTORS OR EMPLOYEES OF THE COMPANY ACTING ON THE COMPANY'S BEHALF
THAT ARE NOT STATEMENTS OF HISTORICAL OR CURRENT FACT CONSTITUTE "FORWARD
LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN
RISKS, UNCERTAINTIES AND OTHER UNKNOWN FACTORS THAT COULD CAUSE THE ACTUAL
RESULTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE HISTORICAL RESULTS OR
FROM ANY FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
IN ADDITION TO STATEMENTS WHICH EXPLICITLY DESCRIBE SUCH RISKS AND
UNCERTAINTIES, READERS ARE URGED TO CONSIDER STATEMENTS LABELED WITH THE TERMS
"BELIEVES", "BELIEF", "EXPECTS", "INTENDS", "ANTICIPATES" OR "PLANS" TO BE
UNCERTAIN FORWARD-LOOKING STATEMENTS. THE FORWARD LOOKING STATEMENTS CONTAINED
HEREIN ARE ALSO SUBJECT GENERALLY TO OTHER RISKS AND UNCERTAINTIES THAT ARE
DESCRIBED FROM TIME TO TIME IN THE COMPANY'S REPORTS AND REGISTRATION STATEMENTS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

This section presents a review of the Company's financial condition and results
of operations and should be read in conjunction with the consolidated financial
statements of the Company and the notes included elsewhere herein.

The Company's total revenues for the fiscal year 1998 were $7,608,904 which is
an increase of 38% over the Company's fiscal year 1997 revenues of $5,508,267.
The increase was primarily a result of credit service bureau acquisitions made
by QCC which was formed in May 1998 which accounted for revenue of $1,550,025.

For the year ended December 31, 1998, revenue for EBS was $6,058,879. This was
an increase of $550,612 or 10% above 1997 revenue of $5,508,267. EBS accounted
for 80% of the Company's 1998 revenue compared to 100% of the Company's 1997
revenue. The ACES product line accounted for 58%, CRIS transactional services
38% and DESC and Exchange was 4% of EBS revenue during the year ended December
31, 1998, respectively. ACES continued its strong growth, particularly in the
outsourcing arena. Outsourcing revenue was up 36% or $588,000 over the prior
year with 12 of EBS's top 15 clients being new customers doing business with EBS
during 1998. CRIS revenue was down by $423,000 or 20% compared to the preceding

<PAGE>

year. This decline has been a function of the continued contraction of the
Company's wholesale credit client base brought about by multiple mergers and
acquisitions in the mortgage banking industry.

Reoccurring transactional revenue, including outsourcing (38%), wholesale credit
reporting (28%) and annual software maintenance contracts (10%) made up 76% of
EBS revenue during the year ended December 31, 1998. Sales of software (12%),
the emerging consulting practice (4%) and other (8%) complete the remaining
categories of revenue for EBS.

Revenue for the Company's newly formed QCC subsidiary was $1,550,025 for the
period from May 1998 through December 1998. This revenue represents 20% of the
Company's total revenue for the 1998 fiscal year. The Company's product
portfolio has become more diverse with the acquisition of QCC firmly
establishing the Company in the retail side of the credit reporting business.
QCC revenue is made up entirely of transactional events based on processing
credit reports to mortgage companies throughout the U.S.

The cost of sales for the Company was $2,272,657 in fiscal 1998 compared to
$1,577,249 in fiscal 1997 which is an increase of $695,408 or 31% over the
Company's fiscal 1997 cost of sales. Gross profit, as a percentage of revenue
was 70% in fiscal 1998 compared with 71% in fiscal 1997.

The increase in gross profit was attributed to the increase in sales resulting
from the QCC acquisition as well as increased sales and lower cost of sales from
the EBS product lines. The slight decrease in the gross margin percentage is a
result of a lower gross margin business generated by QCC offset by higher
margins from the EBS product lines.

Selling, general and administrative expenses were $6,331,520 in fiscal 1998
compared to $2,753,406 in fiscal 1997, an increase of $3,578,174. The increase
was partially a result of the increase in sales, however, most of the increase
was due to the investment in the infrastructure that management believes is
necessary for the Company's growth. Unfortunately, due to delays in the
development of the ACES for Windows product and the DESC product and other
distractions in the second half of the year, the Company's financial results
have not benefited from the investment that it has made in its sales force,
consulting practice, and management team. Other extraordinary expenses were
incurred during 1998 and included an in depth accounting review of the Company's
accounts receivable which resulted in a write off of $532,390 in bad debt
expense and costs associated with moving the Company's headquarters of
approximately $60,000. As a result in the change of management (see "Recent
Developments"), the Company incurred legal expenses of approximately $194,000.

The Company expensed $1,032,272 in development costs to external vendors to
further enhance its products. Most of the cost was incurred in the conversion of
the ACES product to a Microsoft Windows environment. Development funds were also
invested in the DESC product, which was in production during the second half of
the year.

The 1998 results include a write off to goodwill for the rescission of the
acquisition of Trimax Systems, Inc. ($44,178) and MultiTask Services, Corp.
($203,084). The Company has also taken an expense of $850,968 associated with

<PAGE>

the re-evaluation of the amount of goodwill that was established for QCC in
connection with the credit bureau acquisitions in April and May 1998. The 1998
results include a write off of $467,090 in non-cash imputed compensation for
certain consultants and officers that are no longer providing services to the
Company.

Results from continuing operations were also affected by a write off of a
deferred tax asset in the amount of $226,000. A provision for a reserve to cover
anticipated litigation and restructuring expenses was established in the amount
of $594,119.

Interest expense was $130,616 in 1998 compared to $110,182 in 1997 reflecting
interest paid on two debt instruments. The Company issued one note in the
original principal amount of $1,600,000 and bearing an annual interest rate of
between 8% and 9% in connection with the purchase of EBS. The remaining
principle balance of such note as of December 31,1998 is $700,000 and it becomes
due and payable in February 2000 (See "Historical Information"). The second note
in the original principal amount of $1,500,000 was issued in October 1998. This
note bears interest at the rate of 14% per annum and is scheduled to be paid in
full by October 2003. A portion of the proceeds from this note ($375,000) was
used to reduce the outstanding principal balance of the note issued in
connection with the EBS acquisition in accordance with the terms of the purchase
documents relating thereto. The remaining proceeds were used for software
development and working capital.

QCC acquired three credit services bureaus in 1998. As part of the purchase
price for the credit bureaus, the Company issued a total of 495,000 shares of
the Company's common stock (the "Issued Stock"). The former shareholders of each
of the acquired entities that received the Issued Stock were granted a put
option (the "Put Option") giving such stockholders the right, upon the
occurrence of certain circumstances, to require that the Company repurchase the
stock at a repurchase price of $3.00 per share (the "Repurchase Price"). Since
the market price per share of the Company's common stock at December 31, 1998
was, and continues to be, below the Repurchase Price, the Company has recorded a
liability in the amount of $1,485,000.

The Company reported a loss from continuing operations of $4,658,593 in the 1998
fiscal year compared to a profit of $1,045,488 in the 1997 fiscal year. In
addition, the discontinued operations of Trimax and MultiTask resulted in a loss
of $473,771 for a combined net loss to the Company of $5,132,364.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its working capital and capital expenditures requirements
with cash provided from operations, the private sale of the Company's stock, and
debt financing. In 1999 the primary source of cash receipts will be from
payments for software and services. The Company's management believes that cash
flows from continuing operations will be sufficient to fund operational
expenditures in the immediate future and that planned expansion will be funded
with cash from operations and the proceeds from the issuance of equity and/or
debt financing.

<PAGE>

Management estimates the future spending for capital expenditures during the
1999 fiscal year will be approximately $300,000 and believes that the current
and future cash flows from sales and debt and equity financing will be
sufficient to fund the planned capital expenditures as needed.

At December 31, 1998, the Company had a working capital deficit of $742,288
compared to a working capital surplus of $325,874 at December 31, 1997.

ITEM 7. FINANCIAL STATEMENTS

See the Index to Financial Statements following Item 13 of this Annual
Report for a listing of the financial statements included as part of this
report.

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

None.

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

The following table sets forth certain information concerning the
Company's directors and executive officers during the 1998 fiscal year:

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

NAME AGE POSITION(S) WITH THE COMPANY
- ---- --- ----------------------------

Vito A. Bellezza(1) 62 Former Chairman of the Board and Chief
Executive Officer of the Company and EBS and
Director of QuickCREDIT Corp.
Harold S. Fischer 61 President of the Company and EBS and Director
of the Company, EBS and QuickCREDIT Corp.
Greg J. Seminack 47 Vice President-- Finance of the Company
Rebecca B. Walzak 50 Vice President and General Manager of
Consulting Services of EBS
Patrick J. Haney 57 Executive Vice President of QuickCREDIT Corp.
Charles D. Winslow(2) 63 Chairman of the Board of the Company
J. Alan Lindauer 60 Director of the Company
William R. Daniels(3) 40 Former Vice President-- Mortgage Services and
Former Director of EBS
Franz A. Fideli(4) 76 Former Director of the Company and EBS
Peter J. Bellezza(5) 64 Former Director of the Company and EBS
Van Saliba(6) 41 Former President of QuickCREDIT Corp.
J.D. Talton(7) 31 Former Vice President-- Finance of EBS
Albert J. Briggs(8) 65 Former Vice President-- Product Development of
EBS
Timothy F. Thompson(9) 53 Former Vice President-- Product Development of
EBS

<PAGE>

1. Mr. Bellezza was not re-elected as a director of the Company by the
shareholders of the Company as of December 23, 1998. Mr. Bellezza's
employment with the Company and EBS was terminated on March 17, 1999.
See "Recent Developments."
2. Mr. Winslow was appointed Chairman of the Company on December 23, 1998.
3. Mr. Daniels' employment with the Company terminated on February 28,
1999.
4. Mr. Fideli was not re-elected as a director of the Company by the
shareholders of the Company as of December 23, 1998. See "Recent
Developments."
5. Mr. Bellezza was not re-elected as a director of the Company by the
shareholders of the Company as of December 23, 1998. See "Recent
Developments."
6. Mr. Saliba's employment with QuickCREDIT Corp. terminated on August 25,
1998.
7. Mr. Talton's employment with the Company terminated on September 1,
1998.
8. Mr. Brigg's employment with the Company terminated on September 2,
1998.
9. Mr. Thompson's employment with the Company terminated on November 6,
1998.

Officers and directors are elected on an annual basis. The present
terms for each director will expire at the next annual meeting of shareholders
or at such time as a successor is duly elected. Officers serve at the discretion
of the Board of Directors.

Directors are not paid any fees for membership on the Board of
Directors, but are reimbursed for out-of-pocket expenses incurred in connection
with attending meetings. Presently, there are no family relationships between
any of the officers or directors, except that Harold S. Fischer and the spouse
of Charles D. Winslow are second cousins.

The following is a biographical summary of the business experience of
the directors and executive officers of the Company:

VITO A. BELLEZZA served as Chairman of the Company from January 1994 until
December 23, 1998 and as an officer of the Company, EBS and QuickCREDIT Corp.
until March 17, 1999. Mr. Bellezza has previously served as President of Omnicap
Corp., a merchant banking firm privately owned by Mr. Bellezza and his wife,
from June of 1993 until its administrative dissolution in 1998. Additionally,
since 1981, Mr. Bellezza has served as a President of Wealthmasters, a financial
planning firm. Mr. Bellezza has served as a licensed sales executive for US Life
Equity Sales from 1980 to 1994 and for Redstone Securities as a sales
representative from 1994 to present. Mr. Bellezza served as a sales
representative of New York Life Insurance Co from 1967 until 1996. Mr. Bellezza
is the brother of Peter Bellezza. See "Recent Developments."

HAROLD S. FISCHER has served as President of the Company since April 1997,
President of EBS since January 1997, President of QCC since February 1998 and as
a director of the Company since April 1997. From June 1995 to December 1996, Mr.
Fischer was the President of Turnkey Solutions, Inc., a marketing media
replication and logistics firm. Previously, Mr. Fischer served as Vice President
with Wang Laboratories, Inc. from December 1990 to May 1995 and as a President
of the Commercial Systems Division of Unisys Corporation from June 1988 through

<PAGE>

December 1990. Mr. Fischer has held various executive responsibilities with the
Unisys Corporation in his 30 year tenure there. See "Recent Developments."

GREGORY J. SEMINACK has been the Company's Vice President of Finance since
August, 1998. From 1987 to July 1998, Mr. Seminack was employed with Unysis
Corporation holding various financial and business management positions, most
recently as Director of Finance having Profit and Loss Statement and Balance
Sheet responsibility for a $250 million division that sells and delivers
computer services and system integration projects. See "Recent Developments."

REBECCA B. WALZAK has been the Vice President and General Manager of EBS
Consulting Services since February 1998. From May 1994 to February 1998, Ms.
Walzak was with Chase Manhattan Mortgage Corp. in the position of First Vice
President - Quality Assurance. Previously, Ms. Walzak was with Prudential Home
Mortgage's Quality Control program from 1985 to May 1994 as Regulatory,
Compliance and Quality Control Officer. Ms. Walzak currently serves as an
executive board member of the Mortgage Bankers Association Quality Assurance
Committee.

PATRICK J. HANEY has served as Executive Vice President of QuickCREDIT Corp.
since June, 1998. From 1996-1998, Mr. Haney was employed with Cellular
Technology Services as Vice President of International Sales. From 1983 to 1996,
Mr. Haney worked with Lotus Systems, Inc. where he held various managerial
positions including the position of Director of the Southern Region which he
occupied at the time of his departure. Mr. Haney has in excess of thirty years
of experience in software/hardware sales and Management. See "Recent
Developments."

CHARLES D. WINSLOW has served as a member of the Board of Directors since April,
1998 and as its Chairman since December, 1998. Prior to his retirement in 1996,
Mr. Winslow spent thirty-four years with Andersen Consulting, twenty-five of
them as a partner. He managed the Columbus, Ohio consulting practice for several
years, and performed the same duties in their Tokyo office for the five years of
its major expansion. Among the major executive positions he held in the firm was
Managing Partner of the Worldwide Industry Program, and most recently, Worldwide
Managing Partner of Change Management.

J. ALAN LINDAUER has served as a director of the Company since October 1998. Mr.
Lindauer has served as a director since July 1993 and as Chairman of the
Executive Committee since December of 1993 of Waterside Capital Corporation, a
Virginia-based Small Business Investment Company. Mr. Lindauer has occupied the
position of President and Chief Executive Officer of Waterside Capital
Corporation since March 1994. Since 1986, Mr. Lindauer has been President of
JTL, Inc., a business consulting firm. Mr. Lindauer is a Certified Management
Consultant. Mr. Lindauer is a director of the following publicly-traded
companies: (i) Avery Communications, Inc., a long distance telecommunications
billing services company; (ii) Branch Bank & Trust of Virginia, a commercial
bank; and (iii) Netplex Group, Inc., a computer systems integration company. See
"Recent Developments."

WILLIAM R. DANIELS served as the Vice President and as Director of EBS from July
1996 to February 1999. Prior to EBS, Mr. Daniels managed the Quality Control
function for J.I. Kislak Mortgage Corporation. He chaired the Mortgage Bankers

<PAGE>

Association of America's Quality Assurance Committee. Mr. Daniels has chaired
the California Mortgage Bankers Association's Mortgage Quality and Compliance
Committee.

FRANZ A. FIDELI served as a director of the Company from February 1994 to
December, 1998. Mr. Fideli, a Professional Engineer, has served as President of
Arctic Contracting, a heating, ventilation and air conditioning firm since 1985,
and currently is owner of Fideli Associates Consulting. See "Recent
Developments."

PETER J. BELLEZZA served as a Director of the Company from February 1994 to
December 1998. Prior to joining the Company, Mr. Bellezza was President and 100%
owner of Alpha Systems, Inc., a manufacturer and marketer of high end vacuum
valves, from 1968 to 1992. Mr. Bellezza has been retired since 1992. Mr.
Bellezza and Vito Bellezza are brothers. See "Recent Developments."

VAN SALIBA was the President of QCC from February, 1998 until August, 1998. Mr.
Saliba is the owner and President of Lumberman's Credit Association of Florida.
Previously, Mr. Saliba was a certified public accountant and auditor with
Deloitte and Touche, LLP.

J.D. TALTON was Vice President of Finance of EBS from March, 1997 until
September 1998 and served as Controller for EBS since 1991. Mr. Talton holds
bachelor's degrees in Business Administration from Florida International
University (Finance) and Florida Atlantic University (Accounting).

ALBERT J. BRIGGS was the Vice President of Development of EBS from February 1997
until September, 1998. From 1986 to June 1991, Mr. Briggs was the Vice President
of Customer Support Programs with Unisys Corp. From July 1991 to January 1997,
Mr. Briggs was a consultant providing product development services to various
companies.

TIMOTHY F. THOMPSON was Vice President of Development of the Company from June
1998 until October 1998. Prior to joining the Company. Mr. Thompson worked as a
Project Manager for IBM.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

On December 23, 1998, the Company filed a registration statement on
Form 8-A registering the Company's common stock pursuant to Section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange Act"). Following the filing of
the Form 8-A, the Company became subject to Section 16(a) of the Exchange Act
which requires the Company's directors and executive officers, and persons who
own more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. No such reports were required to be
filed by the Company's officers, directors and greater than ten percent
beneficial owners during the year ended December 31, 1998.

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table shows all the cash compensation paid or to be paid
by the Company to the Chief Executive Officer, and all officers who received in
excess of $100,000 in annual salary and bonus, for the fiscal years ended
December 31, 1998, 1997 and 1996:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------

Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------------------ -------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Restricted LTIP All Other
Name and Other Annual Stock Options/ Payouts Compensation
Principal Position Year Salary($) Bonus($) Compensation ($) Awards SARs(#) ($) ($)
- ------------------ ---- -------- ------- --------------- ---------- --------- ------- ------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vito A. 1998 $154,500 $30,000 $ 28,040(2) -0- 500,000(3) -0- -0-
Bellezza(1), CEO
1997 $120,000 $33,000 $ -0- -0- 200,000(3) -0- -0-

1996 $ 10,000 -- -- -- -- -- --

Harold S. Fischer, 1998 $154,500 $30,000 $ 9,600(4) -0- 500,000 -0- -0-
President
1997 $120,000 $23,000 $ -0- -0- 200,000(5) -0- -0-
William R. Daniels 1998 $ 94,000 $12,500 $ -0- -0- -0- -0- -0-

- --------------------------------------------------------------------------------------------------------
</TABLE>
1. Mr. Bellezza `s employment with the Company terminated in March 1999.
2. Housing and automobile allowance paid by the Company on Mr. Bellezza's
behalf.
3. Such options were cancelled in March 1999.
4. Automobile expenses paid by the Company.
5. Options exercisable at $.875 until October 31, 2002.

The following table sets forth certain information with respect to
options granted during the last fiscal year to the Company's Executive Officers
named in the above Summary Compensation Table.

OPTION/SAR GRANTS IN LAST FISCAL YEAR
(a) (b) (c) (d) (e)

% of Total Options
Number of Securities Options/SARs Granted
Underlying Option/ Granted to Employees Exercise or Base Expiration
Name SARs Granted (#) in Fiscal Year Price (# Share) Date
- ----------------- ---------------- -------------------- ---------------- ----------
<S> <C> <C> <C> <C> <C>
Vito A. Bellezza 500,000(1) 25.9% $1.875 3/13/03
Harold S. Fischer 500,000 25.9% $1.875 3/13/03

- -----------------------------------------------------------------------------------------
</TABLE>
1. Such Options were cancelled in March 1999.

<PAGE>

The following table sets forth certain information with respect to
options exercised during the fiscal year ended December 31, 1998, by the
Company's Executive Officers named in the Summary Compensation Table, and with
respect to unexercised options held by such person at the end of the fiscal year
ended December 31, 1998.

AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)

=========================================
Number of Value of
Securities Underlying Unexercised
Unexercised Options/ In-the-Money
SARs at FY-End (#) Options/SARs at
Shares Acquired Value Exercisable/ FY-End Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable(1)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vito A. Bellezza 0 0 1,500,000/0(2) $1,912,500/0
Harold S. Fischer 0 0 700,000/0 $ 100,000/0

- ----------------------------------------------------------------------------------------
</TABLE>
1. Based upon a closing price of $1.375 per share of the Company's Common
Stock as reported by the OTC Bulletin Board for December 31, 1998.
2. Certain options held by Mr. Bellezza may be subject to cancellation in
the event that the Company's Board of Directors determines that such
securities were not validly issued or Mr. Bellezza is determined to be
liable for damages caused to the Company.

EMPLOYMENT AGREEMENTS

As of January 7, 1998, the Company entered into a two (2) year
employment agreement with Vito Bellezza. The agreement provided for Mr. Bellezza
to receive a salary of $156,000 per annum during the first year and an annual
increase as determined in the discretion of the Board of Directors. The
agreement also provides for the payment of a quarterly bonus in cash to Mr.
Bellezza based upon the Company achieving certain quarterly profit targets. In
addition, Mr. Bellezza was also granted the right to purchase ten percent (10%)
of the outstanding Common Stock of EBS if EBS (i) files for an initial public
offering, (ii) is acquired by another company, (iii) in the event of the death
of Mr. Bellezza or (iv) Mr. Bellezza terminates his employment with the Company.
Mr. Bellezza was also entitled to reimbursement of business expenses including a
car allowance of $800 per month. Mr. Bellezza was terminated for "cause" under
his employment agreement in March, 1999.

As of January 7, 1998, the Company entered into a two (2) year
employment agreement with Harold S. Fischer, pursuant to which Mr. Fischer
serves as the Company's President. The agreement provides for Mr. Fischer to
receive a salary of $156,000 per annum during the first year and an annual
increase as determined in the discretion of the Board of Directors. The
agreement also provides for the payment of a quarterly bonus in cash to Mr.
Fischer based upon the Company achieving certain quarterly profit targets. In
addition, Mr. Fischer has been granted the right to purchase ten percent (10%)
of the outstanding Common Stock of EBS if EBS (i) files an initial public

<PAGE>

offering, (ii) is acquired by another company, (iii) in the event of the death
of Mr. Fischer or (iv) Mr. Fischer terminates his employment with the Company.
Mr. Fischer is also entitled to reimbursement of business expenses including a
car allowance of $800 per month.

DESCRIPTION OF THE OPTION PLANS

As of December 17, 1997, the Board of Directors of the Company adopted
the 1997 Employee Stock Option Plan (the "Employee Plan"), and the 1997 Officers
and Directors Stock Option Plan (the "Officers and Directors Plan", together
with the Employee Plan, the "Option Plans"). The purpose of the Option Plans is
to provide a means whereby selected employees, officers, and directors of the
Company, or of any parent or subsidiary thereof, may be granted incentive stock
options and/or nonqualified stock options to purchase shares of Common Stock in
order to attract and retain the services or advice of such employees, officers,
and directors and to provide additional incentive for such persons to exert
maximum efforts for the success of the Company and its affiliates by encouraging
stock ownership in the Company. The description of the Option Plans set forth
below is qualified in its entirety by reference to the full text of each of the
Option Plans.

The maximum number of shares of Common Stock with respect to which
awards may be granted pursuant to the Employee Plan and Officers and Directors
Plan was initially 300,000 shares and 600,000 shares, respectively. On July 30,
1998, the Board reserved an additional 50,000 shares for issuance pursuant to
the Employee Plan and an additional 350,000 shares for issuance pursuant to the
Officers and Directors Plan and amended said plans to reflect the same. On
October 5, 1998, the Board of Directors reserved an additional 1,150,000 shares
for issuance pursuant to the Officers and Directors Plan and amended said plan
to reflect the additional shares. Shares issuable under the Option Plans may be
either treasury shares or authorized but unissued shares, or shares purchased on
the open market and shall include shares representing the unexercised portion of
Options granted under the Plans which expire or terminate without being
exercised in full. The number of shares available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits, stock dividends
or other changes in the capitalization of the Company.

Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934, the Plan shall be administered by the Board of Directors of the Company
(the "Board") or, in the event the Board shall appoint and/or authorize a
committee, such as the Compensation Committee, of two or more members of the
Board to administer the Plan, by such committee. The administrator of the Plan
shall hereinafter be referred to as the "Plan Administrator". Except for the
terms and conditions explicitly set forth herein, the Plan Administrator shall
have the authority, in its discretion, to determine all matters relating to the
options to be granted under the Plan, including, without limitation, selection
of whether an option will be an incentive stock option or a nonqualified stock
option, selection of the individuals to be granted options, the number of shares
to be subject to each option, the exercise price per share, the timing of grants
and all other terms and conditions of the options.

<PAGE>

Options granted under the Option Plans may be "incentive stock options"
("Incentive Options") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or stock options which are not incentive
stock options ("Non-Incentive Options" and, collectively with Incentive Options,
hereinafter referred to as "Options"). Each Option may be exercised in whole or
in part; provided, that only whole shares may be issued pursuant to the exercise
of any Option. Subject to any other terms and conditions herein, the Plan
Administrator may provide that an Option may not be exercised in whole or in
part for a stated period or periods of time during which such Option is
outstanding; provided, that the Plan Administrator may rescind, modify, or waive
any such limitation (including by the acceleration of the vesting schedule upon
a change in control of the Company) at any time and from time to time after the
grant date thereof. During an Optionee's lifetime, any Incentive Options granted
under the Plan are personal to such Optionee and are exercisable solely by such
Optionee.

Payment for shares of Common Stock purchased upon exercise of an Option
granted under either of the Plans must be made in full in cash at the time of
such exercise; provided, however, that the Plan Administrator can determine at
the time the Option is granted in the case of Incentive Options, or at any time
before exercise in the case of Nonincentive Options, that additional forms of
payment will be permitted. To the extent permitted by the Plan Administrator and
applicable laws and regulations (including, without limitation, federal tax and
securities laws and regulations and state corporate law), an option may be
exercised by:

(a) delivery of shares of Common Stock of the Company held by
an Optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator;

(b) delivery of a properly executed Notice of Exercise,
together with irrevocable instructions to a broker, all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price and any federal,
state, or local withholding tax obligations that may arise in connection with
the exercise; or

(c) delivery of a properly executed Notice of Exercise,
together with instructions to the Company to withhold from the shares of Common
Stock that would otherwise be issued upon exercise that number of shares of
Common Stock having a fair market value equal to the option exercise price.

Upon a Change in Control of the Company, any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions, deferral limitations and forfeiture conditions applicable to any
other award granted shall lapse and any performance conditions imposed with
respect to awards shall be deemed to be fully achieved.

Awards under the Option Plans may not be transferred, pledged,
mortgaged, hypothecated or otherwise encumbered other than by will or under the
laws of descent and distribution.

<PAGE>

The Board may amend, alter, suspend, discontinue or terminate the
Option Plans at any time, except that the Board may not increase the number of
shares subject to the Plan, unless such increase is due to a reclassification or
increase or decrease in the number of the issued shares of the Company's Common
Stock, or reduce the option exercise price below 85% of fair market value of the
shares subject to the option at the time the option was granted. In addition, no
amendment to, or alteration, suspension, discontinuation or termination of the
Option Plans may materially impair the rights of any participant with respect to
any award without such participant's consent. Unless terminated earlier by
action of the Board of Directors, the Employee Plan and the Officer and Director
Plan shall terminate ten (10) years and five (5) years, respectively, after
adoption by the shareholders.

The 1999 Incentive Plan

As of March 10, 1999 the Board of Directors of the Company, subject to
approval of the Company's shareholders, adopted the 1999 Incentive Plan
(hereinafter called the "1999 Plan"). The 1999 Plan has been adopted for the
purpose of attracting and retaining persons of ability as directors, employees
or consultants or advisors of the Company. and its subsidiaries, motivate and
reward good performance, encourage such employees to continue to exert their
best efforts on behalf of the Company and its subsidiaries and provide
opportunities for stock ownership by such employees in order to increase their
proprietary interest in the Company by providing incentive awards to key
employees, whose responsibilities and decisions directly affect the performance
of the Company and its subsidiaries.

The maximum number of shares of Common Stock with respect to which
awards may be granted pursuant to the 1999 Plan is initially 4,000,000 shares.
Shares issuable under the 1999 Plan may be either treasury shares or authorized
but unissued shares. The number of shares available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits, stock dividends
or other changes in the capitalization of the Company.

The Plan Administrator can determine at the time the option is granted
in the case of incentive stock options, or at any time before exercise in the
case of nonqualified stock options, that additional forms of payment will be

<PAGE>

permitted. To the extent permitted by the Plan Administrator and applicable laws
and regulations (including, without limitation, federal tax and securities laws
and regulations and state corporate law), an option may be exercised by:

Awards under the 1999 Plan may not be transferred, pledged, mortgaged,
hypothecated or otherwise encumbered other than by will or under the laws of
descent and distribution, except that the Committee may permit transfers of
awards for estate planning purposes if, and to the extent, such transfers do not
cause a participant who is then subject to Section 16 of the Exchange Act to
lose the benefit of the exemption under Rule 16b-3 for such transactions.

The Board may amend, alter, suspend, discontinue or terminate the 1999
Plan at any time, except that any such action shall be subject to stockholder
approval at the annual meeting next following such Board action if such
stockholder approval is required by federal or state law or regulation or the
rules of any exchange or automated quotation system on which the Common Stock
may then be listed or quoted, or if the Board of Directors otherwise determines
to submit such action for stockholder approval. In addition, no amendment,
alteration, suspension, discontinuation or termination to the 1999 Plan may
materially impair the rights of any participant with respect to any award
without such participant's consent. Unless terminated earlier by action of the
Board of Directors, the 1999 Plan shall terminate ten (10) years after adoption
by the shareholders.

TYPES OF AWARDS

STOCK OPTIONS. Options granted under the 1999 Plan may be "incentive
stock options" ("Incentive Options") within the meaning of Section 422 of the
Code or stock options which are not incentive stock options ("Non-Incentive

<PAGE>

Options" and, collectively with Incentive Options, hereinafter referred to as
"Options") will be granted, the number of shares subject to each Option granted,
the prices at which Options may be exercised (which in the case of an Incentive
Option shall not be less than the Fair Market Value of shares of Common Stock on
the date of grant), whether an Option will be an Incentive Option or a
Non-Incentive Option, the time or times and the extent to which Options may be
exercised and all other terms and conditions of Options will be determined by
the Committee.

Each Incentive Option shall terminate no later than ten (10) years from
the date of grant, except as provided below with respect to Incentive Options
granted to 10% Stockholders (as hereinafter defined). Each Non-Incentive Option
shall terminate not later than ten (10) years and one day from the date of
grant. The exercise price at which the shares may be purchased incident to an
Incentive Option may not be less than the Fair Market Value of shares of Common
Stock at the time the Option is granted, except as provided below with respect
to Incentive Options granted to 10% Stockholders.

The exercise price of an Incentive Option granted to a person possessing
more than 10% of the total combined voting power of all shares of stock of the
Company or a parent or subsidiary of the Company ("10% Stockholder") shall in no
event be less than 110% of the Fair Market Value of the shares of the Common
Stock at the time the Incentive Option is granted. The term of an Incentive
Option granted to a 10% Stockholder shall not exceed five (5) years from the
date of grant.

The exercise price of the shares to be purchased pursuant to each
Option shall be paid (i) in full in cash, (ii) by delivery (i.e., surrender) of
shares of the Company's Common Stock owned by the optionee at the time of the
exercise of the Option, (iii) in such other consideration as the Committee deem
appropriate, or (iv) if any combination of cash, surrender of share or such
other consideration having a total value equal to the purchase price.

STOCK APPRECIATION RIGHTS. The Committee is authorized to grant stock
appreciation rights ("SARs") under the 1999 Plan on the same basis as it may
grant an Option. SARs are a form of award whereby the Company calculates the
amount of a cash payment to be made to an award recipient based upon an increase
in the market value of a fixed number shares of Common Stock during a
pre-determined period of time. SARs may be granted alone or in combination with
either an Incentive Option or a Non-Incentive Option. The Committee may
determine the number of shares of common stock that shall be used to determine
the value of the SAR and the time or times during which the SAR may be
exercised. The exercise of an SAR may be conditioned by the Committee upon the
satisfaction of certain events, performance of the recipient of other criteria.

RESTRICTED AND DEFERRED STOCK. An award of restricted stock or deferred
stock may be granted under the 1999 Plan. Restricted stock is subject to
restrictions on transferability and other restrictions as may be imposed by the
Committee at the time of grant. In the event that the holder of restricted stock
ceases to be employed by the Company during the applicable restrictive period,
restricted stock that is at the time subject to restrictions shall be forfeited
and reacquired by the Company. Except as otherwise provided by the Committee at
the time of grant, a holder of restricted stock shall have all the rights of a

<PAGE>

stockholder including and receive other distribution, without limitation, the
right to vote restricted stock and the right to recover dividends thereon. An
award of deferred stock is an award that provides for the issuance of stock upon
expiration of a deferral period established by the Committee. Except as
otherwise determined by the Committee, upon termination of employment of the
recipient of the award during the applicable deferral period, all stock that is
at the time subject to deferral shall be forfeited. Until such time as the stock
which is the subject of the award is unissued, the recipient of the award has no
rights as a stockholder.

PERFORMANCE UNITS. Performance Units may be granted by the Committee to
individuals or groups of individuals participating under the 1999 Plan.
Performance Units are tied to the successful completion of certain performance
driven Company goals during a given period of time and will be assigned a dollar
value by the Committee. Upon the satisfactory attainment of the goal identified
by the Committee during the period prescribed for its completion, the
participant or participants reaching such goal shall be entitled to a payment in
settlement of each Performance Unite earned by such participant. Certain
adjustments to the amount of the cash payment, if any, to be made incident to a
grant of Performance Units may be made by the Committee in the event a
participant ceases to be employed by the Company during the performance period
or upon the occurrence of a significant event that causes the attainment of the
prescribed goal more or less likely to occur during the performance period. Each
Performance Unit may be paid in whole shares of Common Stock, including
restricted stock and deferred stock, or cash, or in any combination of Common
Stock and cash.

LOANS AND SUPPLEMENTAL CASH PAYMENTS. The Committee may provide for
supplemental cash payments and loans to participants in the 1999 Plan in
connection with awards granted under the 1999 Plan. The Committee shall specify
the terms and conditions of such payments, provided that in the case of
supplemental cash payments the amount of such payment shall not exceed (i) in
the case of an Option, the excess of the fair market value of the shares of
Common Stock on the date of exercise over the option price, or (ii) in the case
of award of an SAR, Performance Unit, Restricted Stock or Deferred Stock, the
value of the shares of Common Stock and other consideration issued in payment of
such award. In the case of loans, any such loan shall be evidenced by a written
loan agreement or other instrument setting forth all terms and conditions of the
loan.

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information, as of April 20,
1998 with respect to the beneficial ownership of the outstanding Common Stock by
(i) any holder of more than five (5%) percent; (ii) each of the Company's
officers and directors; and (iii) the directors and officers of the Company as a
group:

Name and Address of Shares of Common Stock
Beneficial Owner(1) Beneficially Owned(2) Percent of Class(3)
- ------------------- --------------------- -------------------
Vito A. Bellezza(4) 5,242,136(5) 33.5%

Harold S. Fischer(6) 2,991,500(7) 20.2%

J. Alan Lindauer(8) 500,000(9) 3.5%

Charles D. Winslow(10) 150,000(11) 1.1%

Greg Seminack(12) 75,000(13) *

Rebecca Walzak(14) 17,000 *

Patrick J. Haney(15) 54,200(16) *

All Officers and Directors 3,787,700(7)(9)(11)(13)(16) 25.8%
as a Group (6 persons)

- ----------
* represents less than 1% of the total number of shares of the Company's
Common Stock outstanding
1. Unless noted otherwise, the address for such person is c/o Triangle
Imaging Group, Inc., 1800 NW 49th Street, Suite 100, Ft. Lauderdale, FL
33309.
2. Unless noted otherwise, all shares indicated as beneficially owned are
held of record by and the right to vote and transfer such shares lies
with the person indicated. A person is deemed to be a beneficial owner
of any securities of which that person has the right to acquire
beneficial ownership within sixty (60) days.
3. Calculated based upon 14,143,791 shares of common stock outstanding on
April 20, 1999.
4. Mr. Bellezza was the Chairman of the Board of the Company until
December 1998 and Chief Executive Officer of the Company, EBS and QCC
until March 1999.
5. Includes (i) 485,500 shares held of record by Judith Bellezza (a/k/a
Judith Klotz), Mr. Bellezza's wife, (ii) 1,500,000 shares of Common
Stock allegedly issuable upon the exercise of stock options at exercise
prices ranging from $.05 to $.20 per share, and (iii) 211,636 believed
to be owned by DeltaCap Corporation, a company believed to be
beneficially owned by Mr. Bellezza. The beneficial ownership of the
Company's securities by Mr. Bellezza is unclear to the Company because
of (i) Mr. Bellezza's failure to file appropriate documents indicating
his beneficial ownership of the Company's securities with the
Securities and Exchange Commission and (ii) a pending investigation by
the Board of Directors assessing the validity of the Company's
securities issued to Mr. Bellezza, Ms. Bellezza and Omnicap
Corporation.
6. Mr. Fischer is a director and President of the Company, EBS and QCC.
7. Includes (i) 291,500 shares of Common Stock owned by Mr. Fischer's
wife, and (ii) 700,000 shares of Common Stock issuable upon the
exercise of stock options at exercise prices ranging from $.875 to
$1.875 per share. Mr. Fischer disclaims the beneficial ownership of
6,368,454 shares of Common Stock held by certain stockholders of the
Company, each of whom have agreed pursuant to the terms of a
stockholders agreement to vote in favor of the directors nominated by
Mr. Fischer. See "Stockholders Agreement."
8. Mr. Lindauer is a director of the Company.
9. Includes 500,000 shares of Common Stock held by Waterside Capital
Corporation. Mr. Lindauer is the President and Chief Executive Officer
of Waterside Capital Corporation.
10. Mr. Winslow is a director of the Company.

<PAGE>

11. Includes 50,000 shares of Common Stock issuable upon the exercise of
stock options at an exercise price of $2.50 per share.
12. Mr. Seminack is the Company's Vice President of Finance.
13. Includes 75,000 shares of Common Stock issuable upon the exercise of
stock options at an exercise price of $3.00 per share.
14. Ms. Walzak is the Company's Vice President of Consulting.
15. Mr. Haney is the Executive Vice President of QCC.
16. Includes 25,000 shares of Common Stock issuable upon the exercise of
stock options exercisable at an exercise price of $2.50 per share.

STOCKHOLDERS AGREEMENT

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On August 22, 1995, the Company allegedly issued 10,000 shares of Class
A Convertible Preferred Stock to Vito Bellezza, the Company's former Chairman of
the Board and Chief Executive Officer, in exchange for the payment of $10,000.
The shares of Class A Convertible Stock were allegedly convertible into an
aggregate of 1,500,000 shares of the Company's Common Stock. On March 23, 1998,
the Company issued 1,500,000 shares of Common Stock to Mr. Bellezza in exchange
for the cancellation of the 10,000 shares of Class A Convertible Preferred
Stock.

On October 31, 1995, the Company issued 720,000 shares of Common Stock
to Mr. Bellezza allegedly for consulting fees and expenses incurred by him and
280,000 shares of Common Stock to Omnicap Corp., a corporation controlled by Mr.
Bellezza, allegedly for satisfaction of rent and other services provided by
Omnicap.

On November 15, 1995, the Company issued 100,000 shares of Common Stock
to Mr. Bellezza allegedly for services rendered to the Company without
compensation during 1995.

<PAGE>

On September 4, 1996, the Company issued 350,000 shares of Common Stock
to Mr. Bellezza allegedly as compensation for settling an outstanding lawsuit
against the Company.

On October 31, 1996, the Company issued 275,000 shares of Common Stock
to Mr. Bellezza allegedly for services rendered to the Company without
compensation during 1996.

On January 23, 1997, in exchange for an investment of $100,000 made by
Mr. Bellezza, the Company issued (i) a subordinated note in the amount of
$50,000, (ii) options to purchase 1,000,000 shares of the Company's Common Stock
at an exercise price of $.05 per share, and (iii) options to purchase 500,000
shares of the Company's Common Stock at $.20 per share.

On October 30, 1997, the Company issued to each of Messrs. Bellezza and
Harold S. Fischer options under the Officers and Directors Stock Option Plan in
the amount of 200,000 shares exercisable for a period of five years at $.875 per
share. Mr. Bellezza's options terminated when his employment with the Company
terminated in March 1999.

During 1997, the Company issued an aggregate of 2,283,000 shares of
Common Stock to the Company's President and Director, Harold S. Fischer and his
wife for the consideration of $743,700.

On March 13, 1998, the Company issued options to purchase 500,000
shares of Common Stock at an exercise price of $1.875 per share to each of Vito
Bellezza and Harold S. Fischer. Mr. Bellezza's options terminated when his
employment with the Company terminated in March 1999.

On October 15, 1998, the Company entered into a Series C Preferred
Stock Purchase Agreement (the "Purchase Agreement") with Waterside Capital
Corporation, a small business investment company ("Waterside"), pursuant to
which the Company has agreed to issue 1,500 shares of the Company's Series C
Preferred Stock and a Warrant exercisable for shares of the Company's Common
Stock (the "Warrant") in exchange for the investment of $1,500,000. The Purchase
Agreement requires that the Company use the proceeds from the transaction to
repay a portion of that certain promissory note issued by the Company to the
former owners of Engineered Business Systems, Inc., a wholly owned subsidiary of
the Company, repay trade payables and for working capital purposes. The Company
is also obligated under the terms of the Purchase Agreement to cause a nominee
of Waterside to be elected to the Board of Directors of the Company which
obligation has been satisfied by the appointment of Mr. J. Alan Lindauer to the
Board of Directors. In light of the fact that the Company was not able to
lawfully assign rights and preferences to a class of preferred stock under its
existing Articles of Incorporation, the Company issued to Waterside a promissory
note in the aggregate principal amount of $1,500,000 (the "Note") in lieu of
issuing shares of the Company's Series C Preferred Stock at the closing. The
Note bears interest at the rate of 14% per annum; provided however, that should
the Company issue to Waterside the shares of the Company's Series C Preferred
Stock purchased pursuant to the Purchase Agreement prior to January 15, 1998,
all of the Company's obligations under the Note shall terminate and no principal
and interest shall be due and payable to Waterside. To date, the Company has not
issued the shares of Series C Preferred Stock to Waterside. See "Proposal Three"

<PAGE>

regarding an amendment to the Company's Articles of Incorporation authorizing
the issuance of preferred stock with specific rights and preferences.

Upon issuance of the Company's Series C Preferred Stock, the holders
thereof will have the right (i) to receive a liquidation payment of $1,000 per
share plus accrued unpaid dividends, (ii) to receive a quarterly cash dividend
of $31.25 per share, (iii) to vote with respect to certain matters which
adversely effect the holder of Series C Preferred Stock, (iv) to elect one
member to the Board of Directors of the Company, and (v) to require the Company
to redeem the shares of Series C Preferred Stock commencing as of October 15,
2003 at a price of $1,500 per share. In addition, the Company may not (a) issue
any shares of capital stock with rights pari passu with, or superior to, the
Series C Preferred Stock or (b) redeem under certain circumstances shares of
capital stock ranking junior to the Series C Preferred Stock, without the prior
written consent of the holders of a majority of the Series C Preferred shares.

The Warrant entitled the holder to purchase up to the greater of (i)
500,000 shares of the Company's Common Stock or (ii) 1% of the shares of the
Company's Common Stock outstanding on a fully diluted basis. The Warrant was
exercisable at any time prior to October 15, 2005. In connection with the
settlement of a pending legal proceeding brought by Waterside against the
Company, the exercise price of the Warrant was reduced to $.05 per share. The
Warrant was exercised in full in April 1999.

On April 15 1998, the Company issued options to purchase 50,000 shares
of Common Stock to Charles D. Winslow, the Company's Chairman of the Board, at
an exercise price of $2.50 per share.

<PAGE>

ITEM 13. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit
Number Description of Exhibit

3.1* Articles of Incorporation, as amended
3.2* Bylaws, as amended
10.1** Agreement and Plan of Merger dated as of April 30, 1998 by and among
Triangle Imaging Group, Inc., QuickCredit Corp., CBS Acquisition Corp.,
Credit Bureau Services, Inc. , Kim A. Naimoli and Steven P.
Naimoli.
10.2** Agreement and Plan of Merger dated as of April 30, 1998 by and among
Triangle Imaging Group, Inc., QuickCredit Corp., CBS Acquisition Corp.,
Credit Bureau Services, Inc. , Kim A. Naimoli and Steven P.
Naimoli.
10.3** Agreement and Plan of Merger dated as of April 30, 1998 by and among
Triangle Imaging Group, Inc., QuickCredit Corp., CBS Acquisition Corp.,
Credit Bureau Services, Inc. , Kim A. Naimoli and Steven P.
Naimoli.
10.4** Stock Purchase Agreement dated as of May 29, 1998 by and among Thomas
Secreto, Arthur Marino and Triangle Imaging Group, Inc.

10.5** Stock Purchase Agreement dated as of May 29, 1998 by and between Marios
Roussos and Triangle Imaging Group, Inc.

10.6* Series C Preferred Stock Purchase Agreement dated as of October 15,
1998 by and between the Company and Waterside Capital Corporation.

21.1 Subsidiaries of the Registrant.

* Incorporated by reference to the Form Registration Statement on Form 8-A
filed on December 23, 1998.

** Incorproated by reference to the current Report on Form 8-K filed with the
Commission on June 23, 1998.

*** Incorporated by reference to the Current Report on form 8-K filed with the
Commission on November 5, 1998.

(b) Reports on Form 8-K

Form 8-K filed on November 5, 1998, Item 5.

<PAGE>

TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1998 AND 1997

Page
Number
------

INDEPENDENT AUDITORS' REPORT................................................F-2

CONSOLIDATED BALANCE SHEET................................................F-3

CONSOLIDATED STATEMENTS OF OPERATIONS.......................................F-4

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY.............................F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS.......................................F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...............................F-7-23

F-1

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors
Triangle Imaging Group, Inc. and Subsidiaries

We have audited the consolidated balance sheet of Triangle Imaging
Group, Inc. and Subsidiaries as of December 31, 1998 and the related
consolidated statements of operations, stockholders' deficiency and cash flows
for the years ended December 31, 1998 and 1997. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Triangle Imaging
Group, Inc. and Subsidiaries as of December 31, 1998, and the results of its
operations and its cash flows for the years ended December 31, 1998 and 1997 in
conformity with generally accepted accounting principles.

Mazars & Guerard, LLP
Certified Public Accountants

New York, New York
March 26, 1999

F-2

<PAGE>

<TABLE>
<CAPTION>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1998

ASSETS

CURRENT ASSETS:
<S> <C>
Cash and cash equivalents $ 229,423
Accounts receivable, net of allowance for
doubtful accounts of $105,000 807,241
Prepaid expenses 46,177
-----------
TOTAL CURRENT ASSETS 1,082,841

EQUIPMENT 287,732

GOODWILL 1,998,668

OTHER ASSETS 525,165
-----------

$ 3,894,406
===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,121,709
Deferred revenue 303,420
Due to stockholder 50,000
Current portion of long-term debt 350,000
-----------
TOTAL CURRENT LIABILITIES 1,825,129

LONG-TERM DEBT 1,900,000

COMMON STOCK SUBJECT TO PUT 1,485,000

STOCKHOLDERS' DEFICIENCY:
Common stock, $.001 par value, authorized
50,000,000 shares, 13,011,978 shares issued
and outstanding 13,012
Additional paid-in capital 5,919,416
Accumulated deficit (5,721,751)
Deferred compensation (41,400)
Common stock subject to put (1,485,000)
-----------
TOTAL STOCKHOLDERS' DEFICIENCY (1,315,723)
-----------

$ 3,894,406
===========
</TABLE>

See notes to consolidated financial statements.
F-3

<PAGE>

<TABLE>
<CAPTION>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31,
---------------------------

1998 1997
----------- -----------
<S> <C> <C>
SALES $ 7,608,90 $ 5,508,267

COST OF SALES 2,272,657 1,577,249
----------- -----------

GROSS PROFIT 5,336,247 3,931,018

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 6,104,530 2,753,406

PRODUCT DEVELOPMENT 1,032,272 --

NON-CASH IMPUTED COMPENSATION EXPENSE 637,150 138,158

AMORTIZATION EXPENSE AND GOODWILL WRITE-OFF 952,003 85,483

NON-RECURRING EXPENSES ASSOCIATED WITH ACQUISITIONS 191,269 --

LITIGATION EXPENSES 547,000

RESTRUCTURING EXPENSE 174,000 --
----------- -----------

INCOME (LOSS) FROM OPERATIONS (4,301,977) 953,971

INTEREST EXPENSE, net 130,616 110,182
----------- -----------

INCOME (LOSS) BEFORE MINORITY INTEREST (4,432,593) 843,789

MINORITY INTEREST -- 24,301
----------- -----------

INCOME (LOSS) BEFORE INCOME TAX PROVISION (4,432,593) 819,488

PROVISION FOR INCOME TAXES 226,000 (226,000)
----------- -----------

NET INCOME (LOSS) FROM CONTINUING OPERATIONS (4,658,593) 1,045,488

DISCONTINUED OPERATIONS (473,771) --
----------- -----------

NET INCOME (LOSS) $ (5,132,36) $ 1,045,488
=========== ===========

NET INCOME (LOSS) PER SHARE:
Basic $ (0.4) $ 0.13
=========== ===========
Diluted $ (0.4) $ 0.09
=========== ===========

NUMBER OF SHARES USED IN COMPUTATION:
Basic 11,991,016 8,224,044
=========== ===========
Diluted 11,991,016 11,141,700
=========== ===========
</TABLE>

See notes to consolidated financial statements.
F-4

<PAGE>
<TABLE>
<CAPTION>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1997 AND 1998

Preferred Stock Preferred Stock
Class A Class B Common Stock
------------------------- ----------------------- ------------------------
Shares Amount Shares Amount Shares Amount
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE - December 31, 1996 10,000 10,000 75,000 $ 300,000 5,153,166 $ 5,153

Shares issued for services -- -- -- -- 33,200 33
Shares issued for deferred compensation -- -- -- -- 650,000 650
Shares sold -- -- -- -- 2,557,250 2,557
Conversion of preferred stock -- -- (75,000) (300,000) 1,500,000 1,500
Shares issued for purchase of minority interest -- -- -- -- 75,000 75
Shares purchased and retired -- -- -- -- (550,000) (550)
Amortization of deferred compensation -- -- -- -- -- --
Cash received on stock subscription -- -- -- -- -- --
Net income -- -- -- -- -- --
Cumulative preferred dividends paid -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------

BALANCE - December 31, 1997 10,000 10,000 -- -- 9,418,616 9,418

Shares issued for services -- -- -- -- 22,642 23
Shares sold -- -- -- -- 876,220 876
Shares issued for option exercises -- -- -- -- 570,000 570
Shares issued for acquisitions -- -- -- -- 900,000 901
Shares canceled for discontinued operations -- -- -- -- (270,000) (270)
Conversion of preferred stock (10,000) (10,000) -- -- 1,500,000 1,500
Shares purchased and retired -- -- -- -- (5,500) (6)
Cash received on stock subscription -- -- -- -- -- --
Stock subscription charged to compensation -- -- -- -- -- --
Warrants issued for services -- -- -- -- -- --
Amortization of deferred compensation -- -- -- -- -- --
Net loss -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------

BALANCE - December 31, 1998 -- -- -- $ -- 13,011,978 $ 13,012
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Stock Common Total
Paid-In Accumulated Deferred Subscription Stock Subject Stockholders'
Capital Deficit Compensation Receivable To Put Equity
----------- ----------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE - December 31, 1996 $ 1,722,611 $(1,628,984) $ -- $ -- $ -- $ 408,780

Shares issued for services 17,065 -- -- -- -- 17,098
Shares issued for deferred compensation 173,350 -- (174,000) -- -- --
Shares sold 878,393 -- -- (768,700) -- 112,250
Conversion of preferred stock 298,500 -- -- -- -- --
Shares issued for purchase of minority interest 53,175 -- -- -- -- 53,250
Shares purchased and retired (278,035) -- -- -- -- (278,585)
Amortization of deferred compensation -- -- 66,300 -- -- 66,300
Cash received on stock subscription -- -- -- 242,400 -- 242,400
Net income -- 1,045,488 -- -- -- 1,045,488
Cumulative preferred dividends paid -- (5,891) -- -- -- (5,891)
----------- ----------- ---------- ----------- ----------- -----------

BALANCE - December 31, 1997 2,865,059 (589,387) (107,700) (526,300) -- 1,661,090

Shares issued for services 23,978 -- -- -- -- 24,001
Shares sold 1,483,189 -- -- -- -- 1,484,065
Shares issued for option exercises 190,680 -- -- -- -- 191,250
Shares issued for acquisitions 1,287,503 -- -- -- (1,485,000) (196,596)
Shares canceled for discontinued operations (338,850) -- -- -- -- (339,120)
Conversion of preferred stock 8,500 -- -- -- -- --
Shares purchased and retired (10,643) -- -- -- -- (10,649)
Cash received on stock subscription -- -- -- 501,300 -- 501,300
Stock subscription charged to compensation -- -- -- 25,000 -- 25,000
Warrants issued for services 410,000 -- (50,000) -- -- 360,000
Amortization of deferred compensation -- -- 116,300 -- -- 116,300
Net loss -- (5,132,364) -- -- -- (5,132,364)
----------- ----------- ---------- ----------- ----------- -----------

BALANCE - December 31, 1998 $ 5,919,416 $(5,721,751) $ (41,400) $ -- $(1,485,000) $(1,315,723)
=========== =========== ========== =========== =========== ===========

See notes to consolidated financial statements.
F-5
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(5,132,364) $ 1,045,488
Adjustment to reconcile net income (loss) to net cash
provided by operating activities (net of effects of acquisition):
Depreciation 156,981 142,203
Amortization of goodwill 952,003 85,483
Non-cash imputed compensation 637,150 83,398
Minority interest -- 24,301

Changes in assets and liabilities:
Increase in accounts receivable (28,686) (408,687)
Increase in prepaid expenses (7,688) (7,214)
Decrease (Increase) in deferred tax asset 229,000 (393,000)
Increase in other assets (17,992) (366,226)
Increase in accounts payable and accrued expenses 717,455 133,079
(Decrease) Increase in deferred tax liability (3,000) 167,000
(Decrease) Increase in deferred revenue (87,505) 43,722
----------- -----------

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (2,584,646) 549,547
----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions (261,682) --
Cash received for acquisition liabilities -- 10,000
Purchase of equipment (290,224) (104,976)
----------- -----------

CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES (551,906) (94,976)
----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock 1,484,065 354,650
Proceeds from option exercises 191,250 --
Cost of purchasing and retiring stock (10,649) (278,585)
Cumulative preferred dividends paid, Class B -- (5,891)
Cash received for stock subscription 526,300 --
Funds provided by new financing 1,500,000 --
Repayment of debt (850,000) (200,000)
----------- -----------

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 2,840,966 (129,826)
----------- -----------

NET INCREASE (DECREASE) IN CASH (295,586) 324,745

CASH - BEGINNING OF YEAR 525,009 200,264
----------- -----------

CASH - END OF YEAR $ 229,423 $ 525,009
=========== ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest $ 154,775 $ 121,976
=========== ===========
Taxes $ -- $ 8,000
=========== ===========

Non cash financing and investing activities:
Issuance of common stock in connection with acquisitions $ 949,284 $ --
=========== ===========
Issuance of debt in connection with acquisitions $ 100,000 $ --
=========== ===========
Issuance of debt in connection with purchase of minority interest $ -- $ 100,000
=========== ===========
Shares subject to subscription receivable $ -- $ 768,700
=========== ===========
Issuance of common stock in connection with purchase of minority
interest $ -- $ 53,250
=========== ===========
Issuance of warrants for services $ 410,000 $ 50,000
=========== ===========

</TABLE>
See notes to consolidated financial statements.
F-6

<PAGE>

TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1998 AND 1997

1. BUSINESS

Triangle Imaging Group, Inc. and Subsidiaries (the "Company"),
formerly known as The Triangle Group, Inc., formerly Benefit
Performance of America, Inc. was incorporated under the laws of the
State of Florida on December 12, 1984. From 1992, during which the
Company ceased its previous business, through December 1996, the
Company did not have any operations. On December 2, 1996, the Company
acquired 95% of the outstanding stock of Engineered Business Systems,
Inc. ("EBS") and on December 31, 1997 the remaining 5% of EBS was
purchased by the Company (see Note 10). On February 27, 1998 the
Company formed QuickCREDIT Corp. ("QCC"), a Florida corporation, for
the purpose of acquiring and developing Credit Reporting Agencies.

EBS designs, develops and sells windows based software systems
for both the mortgage quality control and the credit reporting
industries. Additionally, the outsourcing division processes quality
control files for mortgage banks.

QCC processes credit reports for the retail residential
mortgage industry.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All material intercompany
transactions have been eliminated.

CASH AND CASH EQUIVALENTS

The Company classifies as cash equivalents highly liquid
temporary investments with an original maturity of three months or less
when purchased.

EQUIPMENT

Equipment is stated at cost and is depreciated over the
estimated useful lives of the assets using various accelerated methods
which approximates economic depreciation.

F-7

<PAGE>

GOODWILL

Goodwill resulting from acquisitions represents the excess of
the purchase price plus the acquisition costs over the fair value of
the net assets of the acquired companies. Goodwill is amortized on a
straight line basis over a period of 20 years. The Company assesses the
recoverability of this intangible asset by determining whether the
amortization of the goodwill balance over its remaining life can be
recovered through projected undiscounted future cash flows of the
acquired companies.

REVENUE RECOGNITION

Revenue from software sales is generally recognized upon
execution of a sales contract, the delivery of the software and
completion of the major portion of the contract requirement.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred. These
costs primarily consist of fees paid for the development of the
Company's software. Research and development costs for the year ended
December 31, 1998 were $1,032,000.

MINORITY INTEREST

Minority interest represents the minority stockholders'
proportionate share of the equity in EBS which was 5%. In 1997, the
Company purchased the minority interest.

ACCOUNTING ESTIMATES

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash,
receivables, and accrued expenses approximate fair value based on the
short-term maturity of these instruments.

STOCK BASED COMPENSATION

The Company accounts for stock transactions in accordance with
APB Opinion No. 25, "Accounting For Stock Issued To Employees" and has
adopted the disclosure-only option under SFAS No. 123, as of December
31, 1995.

F-8

<PAGE>

ACCOUNTING OF LONG - LIVED ASSETS

The Company reviews long-lived assets, certain identifiable
assets and any goodwill related to those assets for impairment whenever
circumstances and situations change such that there is an indication
that the carrying amounts may not be recoverable.

EARNINGS (LOSS) PER SHARE

In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" ("FAS No. 128"), which became effective for both interim and
annual financial statements for periods ending after December 15, 1997.
FAS No. 128 requires a presentation of "Basic" and (where applicable)
"Diluted" earnings per share. Generally, Basic earnings per share are
computed on only the weighted average number of common shares actually
outstanding during the period, and the Diluted computation considers
potential shares issuable upon exercise or conversion of other
outstanding instruments where dilution would result. Furthermore, FAS
No. 128 requires the restatement of prior period reported earnings per
share to conform to the new standard.

SOFTWARE DEVELOPMENT COSTS

The Company has capitalized software costs included in Other
Assets which totaled $335,545 at December 31, 1998. The capitalization
of such costs is in accordance with SFAS No. 86. Amortization is
computed on an individual product basis and has been recognized for
those products available for market based on their estimated economic
lives.

ACCOUNTING FOR INCOME TAXES

The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS No. 109"). SFAS No. 109 requires the recognition of deferred tax
assets and liabilities for both the expected impact of differences
between the financial statements and tax basis of assets and
liabilities, and for the expected future tax benefit to be derived from
tax loss and tax credit carryforwards.

F-9

<PAGE>

CONCENTRATION OF CREDIT RISKS

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade accounts
receivable. Concentrations of credit risk with respect to trade
receivables include concentrations of trade account from software
products users.

3. EQUIPMENT

Equipment at December 31, 1998 consisted of the following:

Estimated
useful lives
Computer hardware 5 - 7 $ 680,418
Computer software 5 151,078
Office furniture 7 70,960
Office equipment 5 - 7 164,188
Leasehold improvements 5 54,718
-------------
1,121,362
Less: Accumulated depreciation 833,630
-------------
$ 287,732
=============

4. DEFERRED REVENUE

At December 31, 1998, deferred revenue of $303,420 represents
the unearned portion of sales related to software maintenance
agreements. Deferred revenue is recognized as income on a straight -
line basis over the service contract terms which are generally for
renewable twelve month periods.

5. DUE TO STOCKHOLDER

Amounts due to stockholder are non-interest bearing advances
which are repayable on demand.

F-10

<PAGE>

6. LONG TERM DEBT

Long term debt consists of the following:

December 31,
-------------------------
1998 1997
------------ -----------
Note payable to original owners of EBS (a) $ 700,000 $ 1,500,000
Notes payable to former owners of QCC
acquisitions (b) 50,000 --

Note payable to Waterside (c) 1,500,000 --
------------ -----------
2,250,000 1,500,000

Less current maturities 350,000 300,000
------------ -----------
$ 1,900,000 $ 1,200,000
============ ===========

Principal payments through maturity are as follows:

1999 $ 350,000

2000 400,000

2001 --

2002 --

2003 1,500,000

a. On December 2, 1996 in connection with the acquisition of EBS,
the Company entered into a $1,600,000 promissory note with the
former stockholders of EBS. The note presently bears interest
at a rate of 8% per annum with the interest rate determined
annually, at a rate per annum equal to the Prime Rate less one
quarter percent, with a minimum and maximum rate of 8% and 9%
per annum, respectively. Payments of interest only were due
and payable on the first day of January, February, March and
April 1997, thereafter principal is payable in equal
installments of $25,000 each, together with interest,
commencing in May 1997 through January 2000 when all
outstanding principal and interest is due. The note is secured
by a Stock Pledge Agreement and a Security Agreement. Under

F-11

<PAGE>

the Stock Pledge Agreement, the Company agreed to pledge all
of its stock of EBS as security for the note. Additionally,
under the Security Agreement, the note is collateralized by
all assets of the Company. The Company covenants and agrees to
use not less than twenty-five (25) percent of the net proceeds
from the sale by the Company of the Company's common stock or
other securities in any private placement or public offering
occurring after the date of the note agreement to pay the
indebtedness evidenced by the Note. Pursuant to this agreement
the Company paid $375,000 during the year ended December 31,
1998.

In December 1997, in connection with the purchase of the 5%
minority interest of EBS the Company entered into a promissory
note for $100,000 payable in four equal installments of
$25,000 payable on the fifteenth of each month from February
through May 1998.

b. In May 1998, the Company acquired all of the outstanding
capital stock of Credit Bureau Services, Inc., EJG Services,
Inc., and Florida Credit Bureau, Inc. In connection with these
acquisitions, the Company entered into notes payable for
$100,000. As of December 31, 1998, the remaining balance of
these notes was $50,000.

c. In October 1998, the Company entered into a financing and
investment agreement ("the Agreement") with an investor
("Investor"). Under the Agreement the Investor agreed to
purchase, for $1,500,000, 1,500 shares of a new class of
preferred stock of the Company to be classified as Series C
Redeemable Preferred Stock.

At the time of the Agreement the Company, under Florida law,
was not allowed to issue preferred stock. The Company and the
Investor have agreed to enter into the Agreement on the basis
that the Company will take all measures practicable to
authorize and issue the preferred stock on or before January
15, 1999. As security for the Investor prior to the issuance
of the preferred stock, the Company will execute a promissory
note for the full purchase price of the preferred stock.

Interest at 14% per annum will accrue on the note prior to
issuance of the preferred stock but will not be payable unless
the preferred stock is issued after January 15, 1999. In that
case, interest is payable quarterly commencing January 15,
1999.

The note matures on October 15, 2003.

In connection with the Agreement, as amended, the Investor was
granted a warrant to purchase 500,000 shares of the
outstanding common stock on the date of exercise on a fully
diluted basis. The exercise price is $.05 per share as amended
pursuant to the Waterside litigation discussed hereafter.

F-12

<PAGE>

At any time after the earlier of a change in control (as
defined) or the date which is five years after the issuance of
the preferred stock, the Investor has the right to require the
Company to redeem all of the shares of preferred stock at a
redemption price of $1,000 per share.

The terms of the Series C Preferred Stock is expected to be as
follows: (i) total number of Series C Preferred Stock issuable
will be 1,500 with a liquidation value of $1,000 per share,
(ii) such Series C Preferred Stock will be cumulative and bear
dividends at a rate of $125 per share or 12.5% accruing
quarterly, (iii) unpaid dividends will accrue interest at
12.5% compounded annually, (iv) certain capital transactions
of the Company will require consent of at least 66 2/3% of the
Series C Preferred Stockholders and (v) the Series C Preferred
Stockholders have the right to elect one board member at all
times.

7. STOCKHOLDERS' EQUITY

a. In September 1995, the Company issued 100,000 shares of Class
A Convertible Preferred Stock to its former Chairman with a
par value of $1.00. In March 1997, the Company effected a
reverse stock split of the shares on a 1:10 basis, thereby
reducing he number of shares to 10,000. The Class A Preferred
has the following features: (1) voting - 500 votes per share,
(2) convertible into 1,500,000 shares of common stock until
March 27, 1998 and convertible into 1,000,000 shares of common
stock thereafter, (3) holder has a special vote to appoint a
majority of the members of the Board of Directors for a period
of three years from the date of issue. The stock does not bear
any dividends. The former Chairman converted the preferred
stock into 1,500,000 shares of common stock on March 27, 1998.

b. In December 1996, the Company sold for $300,000, 75,000 shares
of Class B, $1.00 par value convertible preferred stock. The
shares paid cumulative dividends at the rate of 8% per year
and were convertible into 1,500,000 shares of common stock. In
May 1997, all such shares were converted into 1,500,000 shares
of common stock.

c. In January 1997, the Company issued 500,000 shares of common
stock for consulting services. The stock was valued at $69,000
and is being amortized over 5 years resulting in an annual
non-cash charge to income of $13,800. The remaining
unamortized balance at December 31, 1998 of $41,400 is
recorded as deferred compensation.

d. In April 1997, pursuant to stock subscription agreements, the
President of the Company and the wife of the former Chairman
subscribed to 2,333,000 shares of common stock for a total
value of $768,700. As of March 10, 1998, the amount was paid
in full by the President. At December 31, 1998, the balance
due from the wife of the former Chairman of $25,000 was
charged to compensation.

F-13

<PAGE>

e. During 1997, the Company sold 224,250 shares of common stock
for a total value of $112,250.

f. In July 1997, the Company purchased 500,000 shares of the
Company's common stock from the original sellers of EBS for
$233,000. In December 1997, the Company purchased 50,000
shares of common stock on the open market for $45,583. All
said shares have been retired, and accordingly, the costs have
been charged against additional paid-in capital.

g. In July 1997, the Company issued 150,000 shares of common
stock to two consultants. The stock was valued at $105,000 and
is being amortized over 1 year resulting in a non-cash charge
to income of $52,500. At December 31, 1998 there was no
remaining unamortized balance.

h. In December 1997, the Company entered into an agreement with
the individuals representing the minority interest of EBS. The
agreement provides for Triangle to purchase the minority
interest of EBS in exchange 75,000 shares of common stock and
a note payable for $100,000.

i. During 1997, the Company issued 33,200 shares of common stock
to various employees and consultants for services resulting in
a non-cash charge to income of $17,098.

j. In December 1997, the Company issued 675,000 stock options to
a consulting firm which provides management and consulting
services. The options range in price from $0.625 to $3.50.
Such options expire between June 1998 and December 2001. Such
options were valued at $50,000, the fair market value on the
date of grant. Such costs will be accrued as consulting
expense over the period for which services are provided.
During 1998, the total value of $50,000 was expensed resulting
in a non-cash charge to income. On April 13, 1998, the
consulting firm exercised 75,000 of such options resulting in
the issuance of 75,000 shares of common stock and the Company
receiving proceeds of $46,875. On August 21, 1998, the Company
canceled the balance of 600,000 options.

k. During 1998, several individuals exercised stock options
resulting in the issuance of 495,000 shares of common stock
and the Company receiving proceeds of $144,375.

l. During 1998, the Company made several acquisitions which
resulted in the issuance of 900,000 shares of common stock.
These shares were valued at their fair market value at the
time of negotiation. In September 1998, the Company rescinded
one of the acquired companies transaction and discontinued its
operations resulting in the cancellation of 270,000 shares.

F-14

<PAGE>

m. In April 1998, 22,642 shares of common stock were issued for
services resulting in a non-cash charge to income of $24,000.

n. In March 1998, the Company repurchased 5,500 shares of common
stock on the open market for $10,643. Such shares have been
retired and, accordingly, the costs have been charged against
additional paid-in-capital.

o. During 1998, the Company sold 876,220 shares of common stock
for a total value of $1,484,065.

p. Through March 26, 1999, the Company sold 441,183 shares of
common stock for a total value of $441,183.

8. INCOME TAXES

The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS No. 109"). SFAS No. 109 requires the recognition
of deferred tax assets and liabilities for both the expected impact of
differences between the financial statements and tax basis of assets
and liabilities, and for the expected future tax benefit to be derived
from tax loss and tax credit carryforwards. SFAS No. 109 additionally
requires the establishment of a valuation allowance to reflect the
likelihood of realization of deferred tax assets. At December 31, 1998,
the Company had net deferred tax assets of approximately $2,410,000.
The Company has established a valuation allowance for the full amount
of such deferred tax assets. The following table gives the Company's
deferred tax assets and liabilities at December 31, 1998:

Temporary difference - liability $ (118,000)

Net operating loss carryforward - asset 2,528,000

Valuation allowance (2,410,000)
--------------
$ --
==============

The income tax provision consisted of the following:

Year Ended December 31,
-----------------------
1998 1997
-------- ----------
Deferred $226,000 $(226,000)
======== ==========

F-15

<PAGE>

The provision for income taxes (benefits) differs from the
amount computed by applying the statutory federal income tax rate to
income (loss) before income taxes as follows:

Year Ended December 31,
------------------------
1998 1997
----------- ----------
Income tax (benefit) computed
at statutory rate $(1,800,000) $ 287,000
State tax -- 41,000
Effect of permanent differences (425,000) 74,000
Tax benefit not recognized 2,225,000 --
Valuation adjustment 226,000 --
Tax benefit recognized -- (628,000)
----------- ----------
Provision for income taxes (benefit) $ 226,000 $ (226,000)
=========== ==========

The Company has net operating loss carryforwards for tax
purposes totaling approximately $7,200,000 at December 31, 1998
expiring in the years 2005 to 2011. Substantially all of the
carryforwards are subject to limitations on annual utilization because
there are "equity structure shifts" or "owner shifts" involving 5%
stockholders (as these terms are defined in Section 382 of the Internal
Revenue Code), which have resulted in a more than 50% change in
ownership. The annual limitation is based on the value of EBS as of the
date of the ownership change multiplied by the applicable Federal Long
Term Tax Exempt Bond Rate. In April 1997 the Company triggered a
section 382 net operating loss limitation on the cumulative net
operating loss carryforwards. Utilization of such net operating losses
are limited to $650,000 per annum.

9. COMMITMENTS

a. The Company leases office space under a non-cancelable lease
expiring in February 2009. The future minimum rent payments
under this lease for the next five years are as follows:

1999 $191,000
2000 251,000
2001 251,000
2002 251,000
2003 251,000
-----------------------------------------------------

F-16

<PAGE>

Rent expense was $173,395 for the year ended December 31, 1998
and $79,869 for the year ended December 31, 1997.

b. The Company has an employment agreement with one officer of
the Company. The agreement expires in January 2000. Minimum
commitments under this agreement are as follows:

1999 $156,000
2000 13,000

The agreement also provides for incentive bonuses based on
profit criteria and the payment of various expenses. In
addition, the agreement entitles the officer to receive 10% of
the outstanding stock of EBS.

ThePresident's options to purchase 10% of the shares of EBS
have been valued at $136,850. Such amount has been recorded as
deferred compensation and is being amortized over 5 years. The
current year's non-cash imputed compensation expense as a
result of this amortization was $27,380.

On April 14, 1998, the employment agreement was amended to
grant options to purchase 10% of QCC for $10. No compensation
has been recorded since QCC was merely a shell company in
April 1998.

10. ACQUISITIONS

a. On December 2, 1996, 95% of the stock of EBS was acquired by
the Company for $896,000 in cash, a note payable to EBS's
shareholders for $1,600,000 and 500,000 restricted shares of
the Company's common stock. The acquisition of EBS has been
accounted for as a purchase and accordingly, the assets
acquired and liabilities assumed have been recorded at their
estimated fair values which approximates book value. The
following table summarized this acquisition:

Purchase Price, including acquisition costs $ 2,620,915

Liabilities assumed 454,159

Assets acquired (1,146,561)
------------
Goodwill $ 1,928,513
============

F-17

<PAGE>

In December 1997, the Company purchased the 5% minority
interest of EBS for 75,000 shares of common stock and a note
payable for $100,000. The common stock was valued at its fair
market value on the date of the agreement. The total cost
$153,250 was recorded as additional goodwill.

b. In May 1998, the Company acquired all of the outstanding
capital stock of Credit Bureau Services, Inc. ("CBS"), EJG
Services, Inc. ("EJG"), Florida Credit Bureau, Inc. ("FCB"),
Multitask Computer Systems, Inc. and Trimax Systems
Corporation. These companies were acquired by the Company for
an aggregate of (i) $250,000 in immediately available funds,
(ii) promissory notes in the principal amount of $100,000, and
(iii) 900,000 restricted shares of the Company's common stock.
The acquisition of these companies have been accounted for as
a purchase and accordingly, the assets required and
liabilities assumed have been recorded at their estimated fair
values which approximates book value. The purchase prices,
including acquisition costs, less the companies' book values
totaled $1,876,101 which was recorded as goodwill and $850,968
of the recorded goodwill was subsequently written off in 1998.

The results of operations for CBS, FCB and EJG from the dates
of acquisition to December 31, 1998 are included in the
accompanying consolidated financial statements for the year
ended December 31, 1998.

The following schedule combines the unaudited pro forma
results of operations of the Company and these acquisitions
for the years ended December 31, 1998 and 1997 as if the
acquisition had occurred on January 1, 1997 and includes such
adjustments which are directly attributable to the
acquisition. It should not be considered indicative of the
results that would have been achieved had the acquisition not
occurred or the results that would have been obtained had the
acquisition actually occurred on January 1, 1997.

Year Ended December 31,
---------------------------
1998 1997
----------- -----------
Net sales $ 8,261,120 $ 7,371,915

Net income $(5,095,630) $ 1,150,441

Net income per share:

Basic $ (.42) $ .13

Diluted $ (.42) $ .10

Basic 12,166,431 8,719,044

Diluted 12,166,431 11,636,700

Shares used in computation:
-----------------------------------------------------------

F-18

<PAGE>

11. STOCK OPTIONS

In September 1997, the Company adopted two stock option plans
authorizing the issuance of options covering 900,000 shares of the
Company's common stock. Officers and Directors are eligible to
participate in the Officers and Directors Stock Option Plan covering
600,000 shares while key employees are eligible to participate in the
Employee Stock Option Plan covering 300,000 shares. During 1998, the
Company amended such Plans to increase the number of options issuable
under each plan to be 350,000 for the Employee Stock Options Plan and
2,100,000 for the Officers and Directors Stock Option Plan.
Participants receive incentive stock options pursuant to the Plan.
Options granted under the Employee Stock Option Plan are exercisable
for a period of not more than ten years from the inception of the Plan.
Options granted under the Officers and Directors Stock Option Plan are
exercisable for a period of not more than five years from the inception
of the Plan. Selection of participants, allotment of shares,
determination of exercise price and other conditions of the granting of
options will be determined by the Company. Additionally, the Plan
provides that no options may be issued at an exercise price which is
less than the fair market value of the Company's common stock on the
date of grant.

The Company has outstanding stock options as follows:

Plan Options Non-Plan Options
---------------------- -----------------------
Outstanding at
December 31,1997 680,000 $ .875 2,850,000 $ .05-$3.50

Option grants 1,957,000 $1.25-$4.25 -- --

Option cancellations (240,000) $ .875 (1,745,000) $ .2-$3.625

Option expirations -- -- (200,000) $ .20

Option exercises (20,000) $ .875 (550,000) $ .2-$.625
---------------------- -----------------------
Outstanding at
December 31, 1998 2,377,000 $.875-$4.25 355,000 $.05-$3.625
====================== =======================

At December 31, 1998, all of the 355,000 Non-Plan options and
2,377,000 Plan options were immediately exercisable.

F-19

<PAGE>

On March 10, 1999, the Board of Directors of the Company
adopted a 1999 Incentive Stock Plan, ("the 1999 Plan"), whereby
4,000,000 shares of common stock have been reserved for issuance under
the 1999 Plan. Stock options issued under the 1999 Plan are also
expected to have limited stock appreciation rights, "LSAR". A LSAR
entitles the holder to receive within 60 days following a change in
control an amount equal to the difference between the exercise price of
the stock option and the market value of the common stock on the
effective date of the change in control.

12. ACCOUNTING FOR EMPLOYEE STOCK OPTIONS

In fiscal 1996, the Company adopted the disclosure provisions
SFAS No. 123, "Accounting for Stock-Based Compensation". For disclosure
purposes, the fair value of options is estimated on the date of grant
using the Black-Scholes option pricing model with the following
weighted average assumptions used for stock options granted during the
years ended December 31, 1998 and 1997: annual dividends of $0;
expected volatility of 50%; risk- free interest rate of 7% and expected
life of five years. The weighted average fair value of stock options
granted during the years ended December 31, 1998 and 1997 was $.73 and
$.37, respectively. If the Company had recognized compensation cost for
stock options in accordance with SFAS No. 123, the Company's proforma
net income (loss) and net income (loss) per share would have been
($5,726,003) and ($.48) per share for the fiscal year ended December
31, 1998 and $522,378 and $.06 per share for the fiscal year ended
December 31, 1997.

13. WRITE-OFF UNEARNED COMPENSATION

In February 1999, the Company terminated its employment
agreement with the Company's Chairman/CEO. Accordingly, the Company
wrote off the balance of deferred compensation of $82,090 associated
with the future services required under his employment agreement. Such
amount has been included in non-cash imputed compensation expense for
the year ended December 31, 1998.

14. COMMON STOCK SUBJECT TO PUT

In connection with the 1998 acquisitions of CBS, FCB and EJG,
495,000 shares of common stock issued are subject to the seller's
ability to require the Company to repurchase such shares for a one to
three year period for $1,485,000.

The common stock subject to the puts allows the holder of
these puts to require the Company to purchase their common stock during
the following periods of time: (i) 50,000 shares of common stock for
$150,000 during the period of May 1999 to May 2000, (ii) 245,000 shares
of common stock for $735,000 during the period of May 2000 to May 2001
and (iii) 200,000 shares of common stock for $600,000 during the period
of January 1, 2001 to January 1, 2002.

F-20

<PAGE>

15. WRITE-OFF OF GOODWILL

Goodwill arose in connection with the acquisition of CBS, FCB
and EJG. The goodwill is being amortized on a straight line basis over
a period of 20 years. In 1998, the Company, under Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed", evaluated the recoverability of the goodwill of CBS and EJG
by determining whether the amortization of the goodwill balance over
its remaining life can be recovered through projected undiscounted
future cash flows. As a result of such evaluation, the Company recorded
a charge of $850,968 against this goodwill.

16. DISCONTINUED OPERATIONS

On May 29, 1998, the Company acquired 100% of the stock of
Trimax Systems Corp. and Multitask Corp. for 270,000 and 135,000 shares
of the Company's common stock, respectively. The total purchase price,
including acquisition costs, was $565,133 which was recorded as
goodwill. In September and December 1998, the Company decided to
discontinue the operations of Trimax and Multitask, respectively. The
270,000 shares of common stock issued in connection with the
acquisition of Trimax were canceled. The remaining goodwill, advances
to and costs incurred relating to these transactions were written off
and shown separately as "discontinued operations".

Revenues of the discontinued companies were $1,220,350 for
1998.

17. FOURTH QUARTER ADJUSTMENTS (UNAUDITED)

The following adjustments were made in the fourth quarter of
the year ended December 31, 1998:

Additional accounts receivable bad debt write-offs $ 275,000
===========
Write off of goodwill $ 850,968
===========
Restructuring expenses $ 174,000
===========
Litigation expenses $ 547,000
===========
Write off of deferred compensation expense $ 82,090
===========

F-21

<PAGE>

18. LEGAL PROCEEDINGS

The Company is a defendant is one lawsuit styled Thomas L.
Bauer, et al v. Triangle Imaging Group, Inc., Vito a. Bellezza, Judith
Bellezza a/k/a Judith Klotz, Peter Bellezza and Franz Fideli in the
Circuit Court of the 17th Judicial Circuit in and for Broward county,
Florida filed in December 1998 by in excess of 25 of the Company's
shareholders (the "Shareholder Litigation"). The Shareholder Litigation
alleges, among other things, breaches of fiduciary duty, self-dealing,
stock manipulation and insider trading by Mr. Bellezza, the Company's
former Chief Executive Officer and Chairman of the Board. In general
the allegations assert that Mr. Bellezza engaged in trading in the
Company's common stock for his own benefit through an off-shore entity
at a time when Mr. Bellezza was also allegedly engaged, through the use
of a third-party stock promoter, in the unlawful upward manipulation of
the trading price of the Company's common stock. The lawsuit further
alleges certain claims against Judith Bellezza for her alleged
participation in Mr. Bellezza's complained of activities, as well as
claims against Franz Fideli and Peter Bellezza arising from the failure
to discharge their fiduciary duties as directors of the Company when
presented with the allegations against Mr. Bellezza and Judith
Bellezza.

On November 20, 1998, the Company retained the Special Counsel
(a law firm specializing in corporate and securities laws matters) to
act as independent investigator with respect to the allegations later
raised in the Shareholder Litigation for the purpose of determining the
validity of such allegations. The Special Counsel delivered its report
(the "Special Counsel Report") dated February 12, 1999 to the Company
outlining the conclusion of the Special Counsel based upon a review and
analysis of certain corporate documents and certain stock transfer and
trading records. The Company's litigation counsel has reviewed the
Special Counsel Report and will advise the Company on the Company's
defenses to the claims raised against the Company in the Shareholder
Litigation and whether the Company should pursue separate litigation
against Mr. Bellezza, Judith Bellezza, Peter Bellezza and Franz Fideli.
At this time, it is uncertain whether the Company will pursue such
separate litigation and what course the Shareholder Litigation may take
or the outcome of such litigation.

In addition to the foregoing, in January 1999, Waterside
Capital Corporation ("Waterside") filed a lawsuit against the Company
(the "Waterside Litigation") based upon alleged defaults by the Company
under a promissory note in the original principal amount of $1,500,000,
dated October 15, 1998, and alleged breaches of contract under certain
related investment agreements. The Company and Waterside reached a
settlement of the litigation pursuant to which the Company repriced
certain stock purchase warrants granted to Waterside at the time of the
closing of Waterside's investment in the Company. Pursuant to the
settlement, the purchase price for the shares underlying the warrants
was reduced from a range of $2.15 per share to $3.00 per share down to
$.05 per share. In exchange for the repricing of the warrants,
Waterside dismissed the Waterside Litigation and delivered to the
Company a contingent general release. The release provides that
Waterside cannot refile the lawsuit with the same claims set forth in
the Waterside Litigation unless certain members of management and/or
members of the Company's Board fail to remain in such positions through
the date of the second annual meeting of shareholders held after the
date of the settlement.

F-22

<PAGE>

It is anticipated that litigation may also result from the
recission of the TriMax acquisition in September 1998. Counsel for the
former shareholders of TriMax has demanded payment pursuantto the terms
of each of the consulting agreements entered into between the Company
and each of the former TriMax shareholders incident to the recission of
the acquisition of all of the outstanding shares of TriMax by the
Company. As a consequence of, among other factors, the relationship
between the Company's former Chairman and each of the former TriMax
shareholders, based upon the results independent investigation and as a
result of the fact that neither of the former TriMax shareholders has
provided any services to the Company under their respective consulting
agreements, the Company has canceled the consulting agreements with
each such individual. Counsel for the former shareholders has likewise
demanded the right to exercise the stock options purportedly granted to
each of the former TriMax shareholders by the Company's former Chairman
after the recission which right of exercise the Company has suspended
and is currently reviewing.

The Company has accrued $320,000 for legal services and
settlement costs with regard to the aforementioned as of December 31,
1998.

F-23

<PAGE>

SIGNATURES

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

Dated: Fort Lauderdale, Florida
April 28, 1999

TRIANGLE IMAGING GROUP, INC.

By: /s/ HAROLD S. FISCHER
-----------------------------------
Harold S. Fischer
President and Director

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

SIGNATURE TITLE DATE

/s/HAROLD S. FISCHER President and Director April 28, 1999
- ---------------------------
Harold S. Fischer

/s/GREG J. SEMINACK Vice President-Finance April 28, 1999
- --------------------------- (Chief Accounting Officer)
Greg J. Seminack

/s/CHARLES D. WINSLOW Chairman of the Board April 28, 1999
- ---------------------------
Charles D. Winslow

/s/J. ALAN LINDAUER Director April 28, 1999
- ---------------------------
J. Alan Lindauer

EXHIBIT 21.01

SUBSIDIARIES OF TRIANGLE IMAGING GROUP, INC.

Engineered Business Systems, Inc., a Florida corporation.

QuickCredit Corporation., a Florida corporation.

CBS Acquisition Corp., a Florida corporation.

FCB Acquisition Corp., a Florida corporation.

EJG Acquisition Corp., a Florida corporation.

<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000764763
<NAME> Triangle Imaging Group, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 229,423
<SECURITIES> 0
<RECEIVABLES> 912,241
<ALLOWANCES> 105,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,082,841
<PP&E> 1,121,362
<DEPRECIATION> 833,630
<TOTAL-ASSETS> 3,894,406
<CURRENT-LIABILITIES> 1,825,129
<BONDS> 1,900,000
13,012
0
<COMMON> 0
<OTHER-SE> (1,328,735)
<TOTAL-LIABILITY-AND-EQUITY> 3,894,406
<SALES> 7,608,904
<TOTAL-REVENUES> 7,608,904
<CGS> 2,272,657
<TOTAL-COSTS> 2,272,657
<OTHER-EXPENSES> 9,638,224
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130,616
<INCOME-PRETAX> (4,432,593)
<INCOME-TAX> 226,000
<INCOME-CONTINUING> (4,658,593)
<DISCONTINUED> (473,771)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,132,364)
<EPS-PRIMARY> (0.43)
<EPS-DILUTED> (0.43)

</TABLE>