KNICKERBOCKER CAPITAL CORPORATION
10-K, 1998-09-02
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  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 [Fee Required]
  
  For the fiscal year ended December 31, 1997
  
  [ ]     Transition Report Pursuant to Section 13 or 15(d) of
  the Securities Exchange Act of 1934 [No Fee Required]
  
  For the transition period from January 1, 1994 to December
  31, 1997
   
  
  Commission file number 33-15596-D
  Knickerbocker Capital Corporation
  (Exact name of small business issuer in its charter)
  
  Colorado                           54-1059107
  - --------------------------------------------------------
  --
  (State or other jurisdiction of incorporation or
  organization)                            I.R.S. Employer
  Identification No.)
  
    45110 Club Drive, Suite B Indian Wells, California       
              92210
  - --------------------------------------------------------
  --
             (Address of principal executive offices)        
          (Zip Code)
  
  Registrant's telephone number, including area code: (760)
  360-1042
  
  Securities registered pursuant to Section 12(b) of the
  Act:  None
  
  Securities registered pursuant to Section 12(g) of the
  Act:  Common Stock, no par value
  
  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        NO   X
  Check disclosure of delinquent  filers in response to Item
  405 of Regulation S-B is not contained in this form, and no
  disclosure will be contained,  to the best of  registrant's 
  knowledge,  in  definitive  proxy  or  information 
  statements incorporated by reference in part III of this
  Form 10-K or any amendment to this Form 10-K. [ X ]
  
  State issuer's revenues for its most recent fiscal year: $-
  0-
  
  
  
  
  The aggregate market value of the voting stock held by non-
  affiliates of the registrant was not  determinable  because
  the common stock does not trade on any market.
  
  The number of shares  outstanding  of the issuer's  classes
  of Common Stock as of December 31, 1997.:
  
  Common Stock, No Par Value -  261,200,000 shares
  - ---------------------------------------------------
  
  DOCUMENTS INCORPORATED BY REFERENCE:  NONE
  
  Item 1.           Description of Business
  
  Background
  
  
  
  No significant business activity was conducted by the
  company during the fiscal years, 1997, 1996, 1995, and 1994. 
  As a result, no income was realized by the company in any of
  the four years and there was no cash in bank at each year
  end.  The primary  activity of the Company  will  involve 
  seeking  merger or acquisition candidates with whom it can
  either merge or acquire. The Company has not selected any
  company for  acquisition or merger and does not intend to
  limit potential acquisition candidates  to any  particular 
  field or industry,  but does retain the right to limit
  acquisition or merger candidates,  if it so chooses, to a
  particular field or industry. The Company's plans are in the
  conceptual stage only.
  
  The  executive  offices of the Company are located at 45110
  Club Drive, Suite B, Indian Wells, California 92210. Its
  telephone number is (760) 360-1042.
  
  
  Plan of Operation - General
  
  The  Company's  current  plans are to seek,  investigate 
  and,  if such investigation   warrants,   acquire  an 
  interest   in  one  or  more   business opportunities 
  presented  to it by persons or firms who or which  desire to
  seek the  perceived  advantages  of a publicly held 
  corporation.  At this time,  the Company  has no plan, 
  proposal,  agreement,  understanding  or  arrangement  to
  acquire or merge with any specific business or company,  and
  the Company has not identified any specific business or
  company for investigation and evaluation. The discussion of
  the proposed business under this caption and throughout this
  annual report is purposefully  general and is not meant to
  be restrictive of the Company's unlimited  discretion to
  search for and enter into potential business opportunities.
  
  The Company  intends to obtain funds in one or more private 
  placements to finance the operation of any acquired
  business. Persons purchasing securities in these placements
  and other  shareholders will likely not have the opportunity
  to  participate  in the  decision  relating to any 
  acquisition.  The  Company's proposed  business  is 
  sometimes  referred  to as a "blind  pool"  because  any
  investors  will entrust  their  investment  monies to the 
  Company's  management before they have a chance to analyze
  any  ultimate  use to which their money may be put. 
  Consequently,  the Company's  potential success is heavily
  dependent on the Company's  management,  which will have 
  virtually  unlimited  discretion in searching  for and 
  entering  into a  business  opportunity. 
  
  Management  anticipates at the present time that it will
  only participate in one potential business  venture.   This 
  lack  of  diversification   should  be  considered  a
  substantial risk in investing in the Company because it will
  not permit the Company to offset potential losses from one
  venture against gains from another.
  
  The  Company  may seek a  business  opportunity  with a firm
  which only recently  commenced  operations,  or a developing 
  company in need of additional funds for  expansion  into new
  products or markets,  or seeking to develop a new product 
  or  service,  or an  established  business  which  may be 
  experiencing financial or operating  difficulties  and is in
  the need for additional  capital which is perceived to be
  easier to raise by a public company. In some instances, a
  business  opportunity may involve the acquisition or merger
  with a corporation which does not need substantial
  additional cash but which desires to establish a public
  trading market for its common stock.  The Company may
  purchase assets and establish  wholly owned  subsidiaries in
  various  businesses  or purchase  existing businesses as
  subsidiaries.
  
  The Company anticipates that the selection of a business
  opportunity in which to  participate  will be complex and
  extremely  risky.  Because of general economic conditions,
  rapid technological advances being made in some industries,
  and shortages of available capital,  management believes
  that there are numerous firms  seeking the benefits of a
  publicly  traded  corporation.  Such  perceived benefits of
  a publicly traded corporation may include  facilitating or
  improving the  terms  on  which  additional  equity 
  financing  may be  sought,  providing liquidity  for the 
  principals  of a  business,  creating a means for  providing
  incentive  stock  options  or  similar  benefits  to  key 
  employees,  providing liquidity (subject to restrictions of
  applicable statutes) for all shareholders, and other
  factors.  Potentially  available  business  opportunities
  may occur in many different  industries and at various 
  stages of  development,  all of which will make the task of 
  comparative  investigation  and analysis of such business
  opportunities extremely difficult and complex.
  
  As is customary in the industry, the Company may pay a
  finder's fee for locating an acquisition  prospect.  If any
  such fee is paid, it will be approved by the Company's Board
  of Directors. Management has adopted a policy that such a
  finder's fee or real estate  brokerage fee could, in certain 
  circumstances,  be paid to any employee,  officer,  director
  or 5% shareholder  of the Company,  if such person plays a
  material role in bringing a transaction to the Company.
  
  As part of any  transaction,  the  acquired  company may 
  require  that management or other  stockholders  of the
  Company sell all or a portion of their shares to the
  acquired company, or to the principals of the acquired
  company. It is  anticipated  that the  sales  price of such 
  shares  will be lower  than the current market price or
  anticipated  market price of the Company's Common Stock. The 
  Company's  funds  are not  expected  to be used for 
  purposes  of any stock purchase from insiders. The Company
  shareholders will not be provided the  opportunity to
  approve or consent to such sale. The opportunity to sell all
  or a portion of their  shares in  connection  with an 
  acquisition  may influence  management's decision to enter
  into a specific transaction.  However, management  believes 
  that since the  anticipated  sales price will be less than
  market value,  that the  potential of a stock sale by 
  management  will not be a material factor on their decision
  to enter a specific transaction.
  
  
  
  The above  description  of potential  sales of management 
  stock is not based upon any corporate bylaw, shareholder or
  board resolution,  or contract or agreement.  No other
  payments of cash or property are expected to be received by
  management in connection with any acquisition.
  
  The  Company  has  not  formulated  any  policy  regarding 
  the  use of consultants or outside  advisors,  but does not
  anticipate  that it will use the services of such persons.
  
  The Company has, and will continue to have,  following the
  completion of any offering, insufficient capital with which
  to provide the owners of business opportunities  with any
  significant  cash or other assets.  However,  management
  believes the Company will offer owners of an identified
  business  the opportunity at a significant lower cost than
  is required to conduct an initial public offering.  The
  owners of the business   will,  however,  incur  significant 
  post-merger or acquisition  registration  or filing costs in
  the event they wish to register a portion of their shares
  for subsequent sale. The Company will also incur 
  significant legal and  accounting   costs  in  connection 
  with  the  acquisition  of  a  business opportunity 
  including the costs of preparing Forms 8-K,  agreements and
  related reports and  documents.  Nevertheless,  the officers
  and directors of the Company have not conducted  market
  research and are not aware of statistical  data which would
  support the perceived benefits of a merger or acquisition 
  transaction for the owners of a business opportunity.
  
  The Company does not intend to make any loans to any
  prospective merger or acquisition candidates or to
  unaffiliated third parties.
  
  Sources of Opportunities
  
  The  Company  anticipates  that  business  opportunities 
  for  possible acquisition  will be referred by various 
  sources,  including  its  officers and directors,   
  professional   advisers,   securities   broker-dealers,   
  venture capitalists,  members of the  financial  community, 
  and others who may  present. unsolicited proposals.
  
  The Company will seek a potential  business  opportunity
  from all known .sources,  but will rely  principally  on
  personal  contacts of its  officers and .directors as well
  as indirect associations between them and other  business 
  and .professional  people.  It is not  presently anticipated 
  that the Company will engage professional  firms 
  specializing  in business acquisitions or reorganizations.
  
  The officers and  directors  of the Company are  currently 
  employed in other  positions and will devote only a portion
  of their time  to the  business  affairs of the  Company, 
  until such time as an acquisition  has been  determined to
  be  favorable,  at which time,  they expect to spend the
  necessary time to  investigate  and close any  acquisition.  
  
  
  
  
  
  
  Evaluation of Opportunities
  
  The analysis of new business  opportunities  will be 
  undertaken  by or under the  supervision of the officers and
  directors of the Company.  Management intends to concentrate
  on identifying  prospective business  opportunities which
  may be brought to its attention through present associations
  with management. In analyzing  prospective  business 
  opportunities,  management  will consider such matters as
  the available technical,  financial and managerial
  resources; working capital  and  other  financial 
  requirements;  history  of  operation,  if  any; prospects 
  for the future;  present and  expected  competition;  the
  quality and experience of management  services  which may be
  available and the depth of that management;  the potential
  for further  research,  development  or  exploration;
  specific risk factors not now  foreseeable  but which then
  may be anticipated to impact the proposed  activities  of
  the  Company;  the  potential  for growth or expansion;  the 
  potential  for profit;  the  perceived  public  recognition 
  or acceptance  of  products,  services or trades;  name 
  identification;  and other relevant  factors.  Officers and
  directors of each Company will meet  personally with  
  management  and  key  personnel  of  the  firm  sponsoring 
  the  business opportunity as part of their investigation. 
  To the extent possible, the Company intends to utilize 
  written reports and personal  investigation  to evaluate the
  above factors.  The Company will not acquire or merge with
  any company for which audited financial statements cannot be
  obtained.
  
  It may be  anticipated  that  any  opportunity  in  which 
  the  Company participates  will  present  certain  risks. 
  Many  of  these  risks  cannot  be adequately  identified
  prior to selection of the specific  opportunity,  and the
  Company's  shareholders must, therefore,  depend on the
  ability of management to identify  and  evaluate  such 
  risk.  In the  case of some of the  opportunities available
  to the Company,  it may be anticipated that the promoters
  thereof have been  unable  to  develop  a going  concern  or 
  that  such  business  is in  development  stage in that it
  has not  generated  significant  revenues from its principal
  business activities prior to the  Company's  participation. 
  There is a risk even  after  the  Company's participation 
  in the  activity  and the related  expenditure of the 
  Company's funds,  that the  combined  enterprises  will 
  still be unable to be a going concern or advance beyond the
  development  stage.  Many of the opportunities may involve
  new and untested products, processes, or market strategies
  which may not succeed.  Such  risks  will  be  assumed  by
  the  Company  and,  therefore,  its shareholders.
  
  The  Company  will not  restrict  its search for any 
  specific  kind of business,  but may acquire a venture which
  is in its  preliminary or development stage,  which is 
  already  in  operation,  or in  essentially  any  stage of
  its corporate life. It is currently impossible to predict
  the status of any business in which  the  Company  may 
  become  engaged,  in that  such  business  may need
  additional capital, may merely desire to have its shares
  publicly traded, or may seek other perceived advantages
  which the Company may offer. 
  
  Acquisition of Opportunities
  
  In implementing a structure for a particular business
  acquisition,  the Company  may become a party to a merger, 
  consolidation,  reorganization,  joint venture, franchise or
  licensing agreement with another corporation or entity. It
  may also purchase stock or assets of an existing  business. 
  On the consummation of a transaction, it is possible that
  the present management and shareholders of the Company  will
  not be in control of the Company.  In addition,  a majority
  or all of the  Company's  officers and  directors  may, as
  part of the terms of the acquisition  transaction,  resign
  and be replaced by new officers and  directors
  without a vote of the Company's shareholders.
  
  It is anticipated that any securities issued in any such
  reorganization would be issued in reliance on exemptions 
  from  registration  under  applicable federal  and  state 
  securities  laws.  In  some  circumstances,  however,  as a
  negotiated  element of this transaction,  the Company may
  agree to register such securities  either at the time the 
  transaction  is  consummated,  under certain conditions,  or
  at a specified  time  thereafter.  The  issuance  of 
  substantial additional securities and their potential sale
  into any trading market which may develop  in the  Company's 
  Common  Stock may have a  diluteve  effect on such market. 
  While the actual terms of a  transaction  to which the
  Company may be a party cannot be  predicted,  it may be
  expected that the parties to the business transaction  will
  find it desirable to avoid the creation of a taxable event
  and thereby structure the acquisition in a so called "tax-
  free" reorganization under Sections  368(a)(1) or 351 of the
  Internal Revenue Code of 1986, as amended (the "Code").  In
  order to  obtain  tax-free  treatment  under  the  Code,  it
  may be necessary  for the  owners of the  acquired  business 
  to own 80% or more of the voting stock of the surviving
  entity. In such event, the shareholders  of the  Company 
  would  retain  less  than 20% of the  issued  and
  outstanding  of the surviving  entity,  which could result
  in significant dilution in the equity of such shareholders.
  
  As part of the Company's  investigation,  officers and
  directors of the Company will meet personally  with 
  management and key personnel,  may visit and inspect 
  material  facilities,  obtain  independent  analysis or
  verification of certain information  provided,  check
  reference of management and key personnel, and take other
  reasonable investigative measures, to the extent of the
  Company's limited financial resources and management
  expertise.
  
  The manner in which each company  participates  in an
  opportunity  will depend on the nature of the opportunity,
  the respective needs and desires of the Company and other
  parties,  the management of the opportunity,  and the
  relative negotiating strength of the Company and such other
  management.
  
  With respect to any mergers or acquisitions,  negotiations 
  with target company  management  will be expected to focus
  on the  percentage of the Company which  target  company  
  shareholders   would  acquire  in  exchange  for  their
  shareholdings  in the target company.  Depending upon, 
  among other things,  the target company's assets and
  liabilities,  the Company's shareholders will in  likelihood
  hold a lesser percentage  ownership interest in the Company
  following any  merger  or  acquisition.   The  percentage 
  ownership  may  be  subject  to significant  reduction in
  the event the Company  acquires a target  company with
  substantial  assets.  Any merger or  acquisition  effected
  by the Company can be expected to have a significant 
  dilution effect on the percentage of shares held by the
  Company's then shareholders.
  
  The Company will not have sufficient  funds (unless it is
  able to raise funds  in  a  private  placement)  to 
  undertake  any  significant  development marketing and
  manufacturing of any products which may be acquired. 
  Accordingly, following  the  acquisition  of any  such 
  product,  the  Company  will,  in all likelihood,  be 
  required  to either  seek debt or  equity  financing  or
  obtain funding from third parties,  in exchange for which
  the Company would probably be required  to give up a 
  substantial  portion  of its  interest  in any  acquired
  product.  There is no  assurance  that the Company will be
  able either to obtain additional  financing or interest 
  third  parties in  providing  funding for the further
  development, marketing and manufacturing of any products
  acquired.
  
  It  is  anticipated  that  the   investigation  of  specific 
  business opportunities   and  the   negotiation,   drafting 
  and  execution  of  relevant agreements,  disclosure
  documents and other instruments will require substantial
  management time and attention and substantial  costs for
  accountants,  attorneys and others.  If a decision  is made
  not to  participate  in a specific  business opportunity,
  the costs therefore incurred in the related investigation 
  would not be  recoverable.  Furthermore,  even if an
  agreement is reached for the participation in a specific
  business opportunity, the failure to consummate that
  transaction may result in the loss of the Company of the
  related costs  incurred  The costs of the  investigation 
  and  analysis  of a potential acquisition will be funded by
  the Company's  limited cash on hand or by advances from
  officers.
  
  Management  believes  that the Company may be able to
  benefit  from the use of "leverage" in the  acquisition  of
  a business  opportunity.  Leveraging a transaction involves
  the acquisition of a business through incurring significant
  indebtedness  for a large  percentage of the purchase  price
  for that  business. Through a leveraged  transaction,  the
  Company  would be required to use less of its available
  funds for acquiring the business opportunity and, therefore,
  could commit those funds to the operations of the business
  opportunity, to acquisition of other business  opportunities
  or to other activities.  The borrowing involved in a 
  leveraged  transaction  will  ordinarily  be  secured by the
  assets of the business opportunity to be acquired. If the
  business opportunity acquired is not able to generate 
  sufficient  revenues to make  payments on the debt incurred
  by the Company to acquire that  business  opportunity,  the
  lender would be able to exercise  the  remedies  provided 
  by  law  or  by  contract.  These  leveraging techniques, 
  while  reducing the amount of funds that the Company must
  commit to acquiring a business opportunity,  may
  correspondingly increase the risk of loss to the Company. No
  assurance can be given as to the terms or the availability
  of financing for any acquisition by the Company. During
  periods when interest rates are  relatively  high,  the 
  benefits of  leveraging  are not as great as during periods 
  of  lower  interest  rates  because  the  investment  in 
  the  business opportunity  held on a leveraged  basis will
  only be  profitable if it generates sufficient  revenues to
  cover the related debt and other costs of the financing.
  Lenders  from which the  Company  may obtain  funds for 
  purposes of a leveraged buy-out  may impose  restrictions 
  on the future  borrowing,  distribution,  and operating 
  policies of the  Company.  It is not possible at this time
  to predict the restrictions,  if any, which lenders may
  impose or the impact thereof on the Company.
  
  
  
  
  
  
  
  Competition
  
  The Company is an insignificant participant among firms
  which engage in business  combinations  with, or financing
  of,  development  stage  enterprises. There are many 
  established  management and financial  consulting  companies
  and venture capital firms which have  significantly  greater
  financial and personnel resources,  technical  expertise and
  experience than the Company. In view of the Company's
  limited financial resources and management  availability, 
  the Company will  continue  to  be a  significant 
  competitive  disadvantage  vis-a-vis  the Company's
  competitors.
  
  Regulation and Taxation
  
  The Investment  Company Act of 1940 defines an "investment 
  company" as an  issuer  which  is or holds  itself  out as
  being  engaged  primarily  in the business of investing, 
  reinvesting or trading of securities.  While the Company
  does not intend to engage in such  activities,  the Company
  could become subject to regulation under the Investment 
  Company Act of 1940 in the event the Company obtains or 
  continues  to hold a minority  interest  in a number of 
  development stage   enterprises.   The  Company  could  be 
  expected  to  incur  significant registration  and
  compliance  costs if required to register under the
  Investment Company  Act of 1940.  Accordingly,  management 
  will  continue  to  review  the Company's  activities  from 
  time  to  time  with a  view  toward  reducing  the
  likelihood the Company could be classified as an "investment
  company."
  
  The Company intends to structure a merger or acquisition in
  such manner as to  minimize  federal  and state tax 
  consequences  to the Company and to any target company.
  
  Employees
  
  The Company's  only  employees at the present time are its
  officers and directors,  who will devote as much time as the
  Board of Directors  determine is necessary to carry out the
  affairs of the Company.
  
  
  Item 2.           Description of Property
  
  The Company shares a nominal amount of office space with an
  officer.
  
  
  Item 3.           Legal Proceedings
  
  The company is a party to no legal proceedings, nor are
  any property or shareholders subject to such. 
  
  
  Item 4.           Submission of Matters to a Vote of
  Security Holders
  
  No matters were submitted during the transactional period
  of January 1, 1994 through December 31, 1997  to a vote of
  security holders, through solicitation of proxies or
  otherwise.
  
  
                   KNICKERBOCKER CAPITAL CORPORATION
                     (A Development Stage Company)
          Index to Financial Statements and Supplementary Data

                                                            Pages

Independent Auditors' Report
 .......................................................................
       F-2

Balances Sheets as of December 31, 1995 and 1994
 .................................    F-3

Statements of Operations for the Years Ended
 December 31, 1995 and 1994
 .....................................................................  
F-4

Statements of Cash Flows for the Years Ended
 December 31, 1995 and 1994
 .....................................................................  
F-5

Statements of Stockholders' Equity for the Periods
 through December 31, 1995
 ........................................................................
       F-6
     
Notes to Financial Statements
 ......................................................................
       F-7 & F-8

Schedules:

All schedules are omitted as the required information is included in the
financial statements or notes thereto, or is not present in sufficient
amounts.
































The Board of Directors
Knickerbocker Capital Corporation
Indian Hills, California


                      INDEPENDENT AUDITOR'S REPORT


I have audited the accompanying balance sheet of Knickerbocker Capital
Corporation (a Development Stage Company), as of December 31, 1995 and
December 31, 1994 and the related statements of operations, cash flows,
and changes in stockholders' equity for the years then ended.  These
financial statements are the responsibility of the Company's
management.  My responsibility is to express an opinion on these
financial statements based on my audit.

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

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  As shown in the
financial statements, the Company incurred a net loss of $ 352,045
since inception to December 31, 1995.  The Company has no assets and
has had no operation during the two years ended December 31, 1995. 
These factors indicate that the Company may be unable to continue in
existence.  The financial statements do not include any adjustments
relating to the amounts and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.

In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Knickerbocker Capital Corporation as of December 31, 1995 and December
31, 1994, and the results of its operations and cash flows for each of
the years then ended in conformity with generally accepted accounting
principles.






Julius A. Otto
Monterey Park, California
February 2, 1998



                     KNICKERBOCKER CAPITAL CORPORATION
                               BALANCE SHEET


                                                      December 31,  
                                                    1995      1994  
ASSETS:

Total Assets                                      $      -  $      -
                                                                    


LIABILITIES AND STOCKHOLDERS' DEFICIT:

Current Liabilities:                                     -         -

     Total Liabilities:                           $      -  $      -

Stockholders' Equity:

Common Stock, 500,000,000 shares authorized,
 $ .001 par value, 261,200,000 and 186,200,000
 shares issued and outstanding, respectively       261,200   186,200
Preferred stock, 50,000,000 shares
 authorized, $ .01 par value, no shares
 issued and outstanding                                   -        -
Additional Paid-In Capital                          90,845   155,845
Accumulated Deficit                               (352,045) (342,045)

Total Stockholders' Deficit                              -         -

     Total Liabilities and
      Stockholders' Deficit                       $      -  $      -




























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

                     KNICKERBOCKER CAPITAL CORPORATION
                         STATEMENTS OF OPERATIONS
                            For the Year Ended

                                                    December 31,    
                                               1995           1994  
Operating Expenses:

 Services rendered by
  Board of Directors                                        $ 12,000
 Costs incurred in connection
  with continuing operations                 $ 10,000

Total Operating Expense                      $ 10,000       $ 12,000

Net (Loss) Income from Operations            ($10,000)      ($12,000)

                                                                    

Weighted average number of 
 shares outstanding                          186,405,480    111,405,480

Net Loss per Share                           $      -       $      -


































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

                     KNICKERBOCKER CAPITAL CORPORATION
                         STATEMENTS OF CASH FLOWS
                            For the Year Ended


                                                     December 31,   
                                                    1995      1994  
Cash Flows From
 Operating Activities:
Net Profit (Loss)                                 ($10,000  ($12,000)
Adjustments to Reconcile
 Net Loss to Net Cash Used
 for Operations:
Common stock issued for services
 rendered or costs incurred at
 stated value                                       10,000    12,000
Net Cash Provided (Used) by
 Operating Activities                                    -         -

Increase (Decrease) in Cash
Cash and Cash Equivalents,
 Beginning of Period                                     -         -
Cash and Cash Equivalents,
 End of Period                                    $      -  $      -

































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

<TABLE>

                     KNICKERBOCKER CAPITAL CORPORATION
                     STATEMENT OF STOCKHOLDERS' EQUITY
                           Year Ended December 31

<CAPTION>
                                                       Additional
                                                        Paid-In  Accumulated
                           Shares       Common Stock    Capital    Deficit      Totals 

<S>                     <C>            <C>            <C>       <C>            <C>               
Balance
 12/31/93...............111,200,000    $    111,200   $218,845  ($ 330,045)   $      -

Shares 
 issued December 31,
 1994 for services
 ofBoard of Directors... 75,000,000    $     75,000   ($63,000)               $ 12,000

Net (loss)..............                                        ($  12,000)     ($12,000)

Balance
 12/31/94.............. 186,200,000    $    186,200   $155,845  ($ 342,045)     $      -

Shares 
 issued December 31, 1995
 for costs incurred by a
 related corporation...  75,000,000    $    75,000    ($65,000)                $ 10,000

Net (loss)............                                          ($  10,000)     ($10,000)

Balance
 12/31/95.............  261,200,000    $   286,200    $  90,845 ($ 352,045)     $      -




</TABLE>







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

                     KNICKERBOCKER CAPITAL CORPORATION
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS
                  DECEMBER 31, 1995 AND DECEMBER 31, 1994

NOTE 1 - ORGANIZATION:

Knickerbocker Capital Corporation, (the "Company") commenced operations with
certain nominal operations on November 6, 1986 upon establishing a bank
account and subsequently incorporating in the State of Colorado on February
24, 1987 for the purpose of acquiring an interest in unspecified business
opportunities through merger of acquisitions.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Public Stock Offering:

On April 7, 1988 the Company completed a public stock offering and raised
$300,000.  Stock offering costs were $38,430 and were offset against the
proceeds.

Reverse acquisition and Subsequent Business Discontinuance:

On June 10, 1988, Knickerbocker Capital Corporation entered into and agreement
to acquire a concrete formula and rights to produce and sell the product from
Promotional Video Productions, Inc. (PVP), a Nevada corporation.  PVP had been
incorporated April 27, 1987 to acquire the aforementioned product and rights. 
As a result of the agreement, the Company issued common stock for 100% of the
common stock of PVP.  The transaction has been treated as a reverse
acquisition in that PVP acquired the net assets of the Company.  The Company
issued 29,775,000 shares in connection with the reverse acquisition by PVP,
the cost of acquisition and issuance of shares were offset against the
precapitalization equity and resulted in a discount to the common stock.  The
concrete business was not a profitable business and was discontinued in 1990.

Fixed Assets:

Fixed assets were depreciated on a straight line basis commencing in the month
the asset was purchased and placed in service.  The fixed assets were sold at
a loss in 1989 and the resulting charge was to operations and is included in
accumulated deficit.

NOTE 3 - STOCKHOLDERS' DEFICIT AND REORGANIZATION:

Of the 500,000,000 shares of $.001 par value common stock authorized,
261,200,000 and 186,200,000 shares are issued and outstanding at December 31,
1995 and 1994, respectively.  On April 24, 1987, 1,300,000 shares were issued
to the founders of the Company for $15,000 cash.  On April 7, 1988, the
Company completed a public stock offering of 3,000,000 shares for $300,000. 
Offering costs of $38,430 were offset against the proceeds.  On June 10, 1988,
the Company issued 29,775,000 shares in connection with the reverse
acquisition by Promotional Video Productions, Inc.  In addition, 5,000,000
shares were issued to the developer of the formula.

As this was the equivalent of a recapitalization of PVP, the cost of
acquisition and issuance of shares were offset against the precapitalization
equity and resulted in a discount to the common stock.

                     KNICKERBOCKER CAPITAL CORPORATION
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS
                  DECEMBER 31, 1995 AND DECEMBER 31, 1994

NOTE 3 - STOCKHOLDERS' DEFICIT AND REORGANIZATION (continued):

On April 30, 1993 after the reorganization of the Company, 77,000,000 shares
valued at $7,700 were issued by the board of directors for services rendered. 
On September 18, 1993, 5,000,000 previously issued shares were rescinded due
to contract non-compliance.  Effective December 31, 1994 the Board of
Directors authorized the issue of 75,000,000 shares for services rendered by
the Board.  The stated value of such services was $12,000.  Effective December
31, 1995 the Board of Directors authorized the issue of 75,000,000 shares to
a related company for certain costs incurred by the corporations.  The stated
value was $10,000.  The offsetting charge for the discounted value of the
shares was charged to addititonal paid-in capital.

With respect to preferred stock of the 50,000,000 shares of $.01 par value
Preferred Stock authorized, no shares are issued and outstanding as of
December 31, 1995 or December 31, 1994.

NOTE 4 - RELATED PARTY TRANSACTIONS:

Certain officers, directors and a corporation controlled by the Board of
Directors were issued shares of common stock for services rendered and costs
incurred during each of the years in the two years ended December 31, 1995
(see Note 3).

NOTE 5 - GOING CONCERN AND INCIDENTAL COSTS:

The Company has had no significant business activity since 1990.  The Company
has incurred significant losses since inception.  The Company has a
significant accumulated deficit and no assets.  These factors indicate that
the Company may be unable to continue in existence.  The financial statements
do not include any adjustments relating to the amounts and classification of
liabilities that might be necessary in the event the Company cannot continue
in existence.

Incidental costs to maintain the legal registration of the Company in the
State of Colorado and with the Securities Exchange Commission have been paid
or assumed by the current officers and directors.  

     
                   KNICKERBOCKER CAPITAL CORPORATION
                     (A Development Stage Company)
          Index to Financial Statements and Supplementary Data

                                                            Pages

Independent Auditors' Report
 .......................................................................
       F-2

Balances Sheets as of December 31, 1997 and 1996
 .................................    F-3

Statements of Operations for the Years Ended
 December 31, 1997 and 1996
 .....................................................................  
F-4

Statements of Cash Flows for the Years Ended
 December 31, 1997 and 1996
 .....................................................................  
F-5

Statements of Stockholders' Equity for the Periods
 through December 31, 1995
 ........................................................................
       F-6
     
Notes to Financial Statements
 ......................................................................
       F-7

Schedules:

All schedules are omitted as the required information is included in the
financial statements or notes thereto, or is not present in sufficient
amounts.
































The Board of Directors
Knickerbocker Capital Corporation
Indian Hills, California


                      INDEPENDENT AUDITOR'S REPORT


I have audited the accompanying balance sheet of Knickerbocker Capital
Corporation ( a Development Stage Company), as of December 31, 1997 and
December 31, 1996 and the related statements of operations, cash flows,
and changes in stockholders' equity for the years then ended.  These
financial statements are the responsibility of the Company's
management.  My responsibility is to express an opinion on these
financial statements based on my audit.

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

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  As shown in the
financial statements, the Company incurred a net loss of $352,045 since
inception to December 31, 1997.  The Company has no assets and has had
no operation during the two years ended December 31, 1997.  These
factors indicate that the Company may be unable to continue in
existence.  The financial statements do not include any adjustments
relating to the amounts and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.

In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Knickerbocker Capital Corporation as of December 31, 1997 and December
31, 1996, and the results of its operations and cash flows for each of
the years then ended in conformity with generally accepted accounting
principles.






Julius A. Otto
Monterey Park, California
February 2, 1998

                     KNICKERBOCKER CAPITAL CORPORATION
                              BALANCE SHEETS


                                                     December 31, 
                                                     1997      1996
ASSETS:

Total Assets                                      $      -  $      -
                                                                    


LIABILITIES AND STOCKHOLDERS' DEFICIT:

Current Liabilities:                                     -         -

     Total Liabilities:                           $      -  $      -

Stockholders' Equity:

Common Stock, 500,000,000 shares
 authorized, $ .001 par value,
 261,200,000 shares issued and
 outstanding                                       261,200   261,200
Preferred stock, 50,000,000 shares
 authorized, $ .01 par value, no shares
 issued and outstanding                                  -         -
Additional Paid-In Capital                          90,845    90,845
Accumulated Deficit                               (352,045) (352,045)

Total Stockholders' Deficit                              -         -

     Total Liabilities and
      Stockholders' Deficit                       $      -  $      -


























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

                     KNICKERBOCKER CAPITAL CORPORATION
                         STATEMENTS OF OPERATIONS
                            For the Year Ended


                                                    December 31,    
                                               1997           1996  
Operating Expenses:

Total Operating Expense                      $      -       $      -

Net (Loss) Income from Operations            $      -       $      -

                                                                    

Weighted average number of 
 shares outstanding                          261,200,000    261,200,000

Net Loss per Share                           $      -       $      -





































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

                     KNICKERBOCKER CAPITAL CORPORATION
                         STATEMENTS OF CASH FLOWS
                            For the Years Ended

                                                 December 31,  
                                                1997      1996  
Cash Flows From
 Operating Activities:                       $       - $       -
Net Profit (Loss)                                    -         -
Adjustments to Reconcile
 Net Loss to Net Cash Used
 for Operations:
Net Cash Provide (Used) by
 Operating Activities                                -         -

Increase (Decrease) in Cash
Cash and Cash Equivalents,
 Beginning of Period                                 -         -
Cash and Cash Equivalents,
 End of Period                               $       - $       -




































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

                     KNICKERBOCKER CAPITAL CORPORATION
                     STATEMENT OF STOCKHOLDERS' EQUITY
                       For the Year Ended December 31



                                        Additional
                                         Paid-In  Accumulated
            Shares       Common Stock    Capital    Deficit        Totals 

Balance
 12/31/95 261,200,000    $    261,200   $ 90,845  $(352,045)     $      - 

Balance
 12/31/96 261,200,000    $    261,200   $ 90,845  $(352,045)     $      - 

Balance
 12/31/97 261,200,000    $    261,200   $ 90,845  $(352,045)     $      - 











































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

                     KNICKERBOCKER CAPITAL CORPORATION
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS
                  DECEMBER 31, 1997 AND DECEMBER 31, 1996


NOTE 1 - ORGANIZATION:

Knickerbocker Capital Corporation, (the "Company") commenced operations with
certain nominal operations on November 6, 1986 upon establishing a bank
account and subsequently incorporating in the State of Colorado on February
24, 1987 for the purpose of acquiring an interest in unspecified business
opportunities through merger or acquisitions.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Public Stock Offering:

On April 7, 1988 the Company completed a public stock offering and raised
$300,000.  Stock offering costs were $38,430 and were offset against the
proceeds.

Reverse acquisition and Subsequent Business Discontinuance:

On June 10, 1988, Knickerbocker Capital Corporation entered into and agreement
to acquire a concrete formula and rights to produce and sell the product from
Promotional Video Productions, Inc. (PVP), a Nevada corporation.  PVP had been
incorporated April 27, 1987 to acquire the aforementioned product and rights. 
As a result of the agreement, the Company issued common stock for 100% of the
common stock of PVP.  The transaction has been treated as a reverse
acquisition in that PVP acquired the net assets of the Company.  The Company
issued 29,775,000 shares in connection with the reverse acquisition by PVP,
the cost of acquisition and issuance of shares were offset against the
precapitalization equity and resulted in a discount to the common stock.  The
concrete business was not a profitable business and was discontinued in 1990. 
There have been no significant operations since that date.

Fixed Assets:

Fixed assets were depreciated on a straight line basis commencing in the month
the asset was purchased and placed in service.  The fixed assets were sold at
a loss in 1989, and the resulting charge was to operations and is included in
accumulated deficit.

NOTE 3 - GOING CONCERN AND INCIDENTAL COSTS:

The Company has had no significant business activity.  The Company incurred
significant losses from operations until 1990 and certain other incidental
costs and expenses in 1995 and 1994.  The Company has a significant
accumulated deficit and no assets.  These factors indicate that the Company
may be unable to continue in existence.  The financial statements do not
include any adjustments relating to the amounts and classification of
liabilities that might be necessary in the event the Company cannot continue
in existence.

Incidental costs to maintain the legal registration of the Company in the
State of Colorado and with the Securities Exchange Commission have been paid
or assumed by the current officers and directors.

                                     PART II

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


(a)      Market Information

The  Company's  Common  Stock has not traded on any market for several years.

(b)      Holders

As of  December 31, 1997, there were  approximately 120 holders of Company
Common Stock.

(c)      Dividends

The Company has not paid any  dividends  on its common  stock. The Company 
currently  intends to retain any earnings for use in its  business, and 
therefore  does not  anticipate  paying cash  dividends in the  foreseeable
future.

Item 6.Management's Discussions and Analysis or Plan of
Operations

         See Item 1.

Item 7.           Financial Statements and Supplementary Data

         Financial Statements

         The following financial statements are included herein:

Independent  Auditors'  Report Balance Sheet at December 31, 1997 and 1997
Statement of Operations for the years ended December 31, 1997, 1996, 1995 and
1994.  Statement  of  Stockholders'  Equity  (Deficit)  Statement of Cash
Flows for the years ended December 31, 1997, 1996, 1995 and             1994
and the  Notes to Financial Statements

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

The Registrant, on  January 6, 1998  engaged Julius Otto, Certified Public
Accountant as its new independent accountant.


                                                     PART III

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

The members of the Board of  Directors  of the Company  serve until the next 
annual  meeting  of  stockholders,  or until  their  successors  have been
elected.  The  officers  serve  at the  pleasure  of  the  Board  of 
Directors. Information  as to the directors  and  executive  officers of the
Company is set forth below.


Name                                 Age                Position

Dempsey K. Mork                         55          President, Chief Financial
Officer and Director

Randall Baker                           53          
Vice President, Secretary and Director

Robert Filiatreaux                      66          
Vice President and Direct


Dempsey K. Mork, age 55, has been President and a Director since November 8,
1994.  He has been Secretary/Treasurer of Development  Bancorp, Ltd. since
December 1992 and President and Director of Gaensel Gold Mines, Inc. since
February 1996.  He is president of Magellan Capital Corporation, a merger and
acquisition firm.

Randall A. Baker.  Mr. Baker is 53 years old.  He attended the University of
Minnesota.  After a tour in the United States Navy and a navigation teaching
stint in San Francisco, he began his investment career with the Pacific Coast
Stock Exchange followed by employment with a number of major brokerage houses. 
He then was employed for twenty years as Executive Vice President with Wm.
Mason & Company, an Investment Counseling firm in Los Angeles.  Mr  Baker
designed and implemented all data systems, was responsible for trading,
personnel and was the client/broker liaison.  Mr  Baker is currently employed
as the Vice President for Magellan Capital Corporation, a merger and
acquisition firm.

Robert Filiatreaux.  Mr. Filiatreaux is 66 years of age and has been engaged
in international business for the past 27 years. He attended school in
Wisconsin where he received his degree from the University of Wisconsin. 
During the Korean Conflict Mr  Filiatreaux served a three year tour of duty
in the US Air Force The majority of international business experience came
from the airline industry where Mr. Filiatreaux worked for many years in
various executive capacities in sales and marketing.  Mr Filiatreuax has
worked and traveled to over 55 countries and is currently an associate in the
merger and acquisition firm of Magellan Capital Corporation of Indian Wells,
California.

Conflicts of Interests

Certain  conflicts of interest  now exist and will  continue to exist between
the Company and its officers and directors due to the fact that each has other
business interests to which he devotes his primary attention. 

The Company has not established  other policies or procedures for the
resolution of current or potential  conflicts of interests  between the
Company, its officers and directors or affiliated  entities.   There can be
no assurance that management will resolve all conflicts of interest in favor
of the Company,  and failure by  management  to conduct the  Company's 
business in the Company's best interest may result in liability to the
management.  The officers and directors are  accountable to the Company as 
fiduciaries,  which means that they are required to exercise good faith and
integrity in handling the Company's affairs. Officers and directors will be
required to disclose to each company the liability  of each  potential 
acquisition.  Shareholders  who believe  that the Company has been  harmed by
failure of an officer or  director to  appropriately resolve any  conflict 
of interest  may,  subject to  applicable  rules of civil procedure,  be able
to bring a class action or derivative  suit to enforce their rights and the
Company's  rights.  Although  officers and directors believe that future
shareholders are implying consent to management's  informal method of
allocating  opportunities,  there can be no  assurance  that such belief will
be supported by the Colorado, California, or any other court having
jurisdiction..





The Company has no arrangement,  understanding  or intention to enter into any 
transaction for  participating  in any business  opportunity  with any
officer,  director,  or  principal  shareholder  or with  any  firm or 
business organization with which such persons are affiliated,  whether by
reason of  ownership, position as an officer or director, or otherwise.

Item 10.            Executive Compensation

No  compensation  is paid or  anticipated  to be paid by the  Company until
an acquisition is made.

On  acquisition  of a business  opportunity,  current  management may resign
and be  replaced  by persons  associated  with the  business  opportunity
acquired,  particularly if the Company participates in a business opportunity
by effecting a reorganization,  merger or  consolidation.  If any member of 
management  remains after  effecting a business  opportunity  acquisition, 
that member's time  commitment will likely be adjusted based on the nature and
method of the  acquisition  and  location of the business ,  which  cannot be 
predicted. Compensation of management will be determined by the new board of
directors, and shareholders  of the Company will not have the opportunity to
vote on or approve such compensation.





Item 11.Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information relating to the beneficial
ownership of Company  Common Stock by those  persons  beneficially  holding
more than 5% of the Company capital stock,  by the Company's  directors and
executive officers,  and by all of the Company's  directors  and  executive 
officers as a group, based on 261,200,000 shares  outstanding.  The addresses
of each other and directors is in care of the Company. All persons have sole
investment and voting power unless otherwise noted.
<TABLE>
<CAPTION>
 
                                                                            
                               Percentage
Name of                   Number of           of Outstanding
Stockholder               Shares Owned        Common Stock

<S>                                               <C>                       
         <C>  
Dempsey K. Mork(1)        100,000,000         38.28%

Randy Baker(1)             25,000,000          0 .095%

Robert Filiatreaux(1)      25,000,000          0.095%

All officers and directors
as a group (3 persons)    150,000,000         57.42%
</TABLE>



(1)      The address of this person is c/o of the Company.

Item 12.           Certain Relationships and Related Transactions

            Not Applicable.



                                     PART IV

Item 13.           Exhibits

                                   
    Exhibit No.            Document Description

        3.                 Certificate of Incorporation and Bylaws

                           3.1.     Articles of Incorporation(1)
                           3.2      Bylaws(1)
        10.



                                                    SIGNATURES


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


Dated: August 6, 1998



                                         By: /s/ Dempsey K. Mork
                                                 Dempsey K. Mork
                                                 President









Pursuant to the  requirements of the Securities  Exchange Act of 1934, this 
report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on August 6 1998.



By:       /s/ Dempsey K. Mork                 
President, Chief Financial Officer and Director
          Dempsey K. Mork(chief executive, financial and accounting officer)


By:       /s/ Randall Baker Secretary and Director
          Randall Baker


By:       /s/ Robert Filiatreaux Vice President and  Director
          Robert Filiatreaux


















<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          Dec-31-1997
<PERIOD-END>                               Dec-31-1997
<CASH>                                               0
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                       0
<CURRENT-LIABILITIES>                                0
<BONDS>                                              0
                                0
                                          0
<COMMON>                                       261,200
<OTHER-SE>                                  ($261,200)
<TOTAL-LIABILITY-AND-EQUITY>                         0
<SALES>                                              0
<TOTAL-REVENUES>                                     0
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                      0
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                         0
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>


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