NOVATEK INTERNATIONAL INC
10KSB, 1996-02-26
CONCRETE PRODUCTS, EXCEPT BLOCK & BRICK
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                 U.S. SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                         ----------------------

                               FORM 10-KSB

      ANNUAL  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE  SECURITIES
                         EXCHANGE ACT OF 1934
                                    
                 For fiscal year ended December 31, 1995

                     Commission file number 0-22096
                                    

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

             COLORADO                           84-1074891
      ------------------------          -----------------------------------
      (State of Incorporation)         (I.R.S. Employer Identification No.)

                           1340 Neptune Drive
                      Boynton Beach, Florida 33426
                             (407) 736-6659
  ---------------------------------------------------------------------------
  (Address of principal executive offices, zip code,issuer's telephone number)

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

                                  None

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

                                  None
                                                                            
   Check  whether the issuer (1) filed all reports required to be filed  by
   by section  13 or 15(d)of the Exchange Act during the past 12 months (or 
   for  such  shorter period that the registrant was required to file  such 
   reports), and (2) has been subject to such filing requirements  for  the 
   past 90 days.  Yes   X    No                                             
                     ------     ------                                      
   
   Check  if  disclosure of delinquent filers in response to  Item  405  of 
   Regulation S-B is not contained in this form, and no disclosure will  be 
   contained, to the best of registrant's knowledge, in definitive proxy or 
   information  statements incorporated by reference in Part  III  of  this 
   Form 10-KSB or any amendment to this Form 10-KSB [  ].                   
                                                                            
   Issuer's revenues for its most recent fiscal year:  $2,509,323.          
                                                                            
   State   the  aggregate  market  value  of  the  voting  stock  held   by 
   nonaffiliates  of the registrant.  The aggregate market value  shall  be 
   computed by reference to the price at which the stock was sold,  or  the 
   average  bid  and  asked prices of such stock, as of  a  specified  date 
   within  the past 60 days:  Approximate as of February 16, 1996 based  on 
   the average bid and asked price of $7.06 on that date - $18,460,544.     

                   (Cover page continued on next page)
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   <PAGE>




   State  the number shares outstanding of each of the issuer's classes  of
   common  equity, as of the latest practicable date:  As of  February  16,
   1996 - 2,674,498

   Documents Incorporated By Reference:

     1.  Current Report on Form 8-K dated December 28, 1990; and Agreement
         and Plan of Merger and Articles of Merger filed as Exhibits thereto.

     2.  Agreement and Plan of Merger, Articles of Merger and Articles of
         Amendment to the Articles of Incorporation of the Registrant con-
         tained as exhibits to the Current Report on Form 8-K dated March
         3, 1989 and amended on Form 8 dated August 11, 1989.

     3.  Form  8-K dated January 3, 1996 and Agreement and Plan of Merger
         filed as exhibits thereto.

     4.  Articles of Incorporation and Bylaws.

   Transitional Small Business Disclosure Format:  Yes       No  X
                                                       ----     ----
   
   PLEASE ADDRESS ALL CORRESPONDENCE TO:

                           Mark Gasarch, Esq.
                       1285 Avenue of the Americas
                                3rd Floor
                        New York, New York  10019

























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PART I

Item 1.   Description of Business.
          ------------------------
      The  Company  is  in the business of developing  and  marketing  a
proprietary  building construction process involving the  use  of  steel
trusses.   In  the  past,  the Company's business included  fabricating,
installing,  and  finishing  structures.  Current  and  future  business
efforts  are  directed  toward primarily providing  manufactured  items,
without  being  as involved in the actual process of construction.   The
principal   market  for  the  Company's  products  is  residential   and
commercial  buildings.   The Company's products  compete  directly  with
concrete   block  and  wood  frame  systems,  the  primary  construction
techniques  for  residential building in South Florida  and  other  high
humidity  climates  where  termite  infestation  is  common.   Likewise,
management  believes  that these systems should be  competitive  on  the
international market because of their light weight, transportability and
ease  of  assembly.  The Company is actively pursuing manufacturing  and
installation  contracts  as  well  as  international  licensing  of  its
technology.   The Company determined in 1995 to discontinue  engineering
and  design  through  Trusteel,  its  subsidiary.   All  engineering  is
currently subcontracted to independent Florida licensed engineers.   The
Company  believes  that this action will better control  costs  in  this
area.

      The Company has received two patents on its componentized building
system.   While  protection of trade secrets is a  priority,  management
believes  that  its  success  will depend significantly  more  upon  its
marketing  efforts  and  the  development  of  consistent  manufacturing
capacity  than  on technology protection in maintaining the  competitive
position of the Company for the near future.

      Management expects the business of the Company to change with  the
acquisition  of  Medical Products, Inc.  After the merger,  the  Company
will  be  selling  medical  test kits for  Cholera,  Syphilis,  Glucose,
Hepatitis,  HIV  I  and  HIV  II,  Diphtheria,  Pregnancy  and   others.
Management believes that significant revenue will be received from these
sales during 1996.

      Additionally,  the Company will be receiving a  five  (5)  percent
royalty in excess of royalties paid for all Rapid Medical Test Kits sold
to the Bahamian licensee.

HISTORY

      The  Company was incorporated in Colorado on January 8, 1988 under
the  name  of  Venture Investments Plus Corporation for the  purpose  of
seeking  and  participating in or acquiring a business opportunity.   In
September  of 1988, it completed a public offering of shares  of  common
stock  and  warrants (subsequently expired) for gross  proceeds  to  the
Company of $300,000.

      Effective  on  or  about September 1, 1989, the Company  acquired,
through  a  reverse  triangular merger, Triumph  Timber  Corporation,  a
Wyoming  corporation which was merged into a wholly owned subsidiary  of
the  Company named Triumph Resources Corporation, a Wyoming corporation.
The  Company,  through a name change effected via the Merger  Agreement,
became  Triumph  Group, Inc., a Colorado corporation.   On  October  31,
1990, Triumph Resources Corporation filed a petition in bankruptcy under
Chapter 7 of the Bankruptcy Code.

      On December 28, 1990, the Company's shareholders approved the Plan
of  Merger  and the Articles of Merger between the Company  and  Novatek
International,  Inc., a Florida corporation, with the  surviving  entity
(the  Company)  remaining  a  Colorado corporation  and  becoming  known
through a name change as Novatek International, Inc.

      Novatek  International, Inc., the Florida  corporation,  had  been
incorporated in August 1989 to compete in the commercial and residential
construction industry.  As a result of the Merger, Novatek
                                    3
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International,  Inc., the Florida corporation, was  dissolved,  and  the
Company   remained  in  the  residential  and  commercial   construction
business.

PRODUCTS

     The Company's principal products are described as follows:

     1.  Modular concrete panel building component system

     2.  Full-height concrete panel building component 
         system ("Composite Walls")

     3.  Light steel building component system

     4.  Residential light steel truss systems

     5.  Commercial light steel truss systems

     6.  Light steel roof retro-fit assemblies

     7.  Light steel architectural facade framing system

1.   Modular Concrete Panel Building Component System

      The  system  consists  of concrete panels,  used  as  an  exterior
cladding,  that  attaches to pre-engineered light  steel  wall  framing,
using  a  patented integral steel insert that is cast directly into  the
concrete panel during the fabrication stage.  This system can be a stand-
alone  structural  system that creates the load  bearing  shell  of  the
structure, or it can act as an exterior cladding system in unison with a
structural  steel  pre-engineered system  for  larger  structures.   The
Company's concrete panel also is used in multi-story applications, where
the  balance of the structure may be composed (in whole or in  part)  of
steel  floor  joists or trusses, steel roof trusses, and a  metal  roof.
The  Corporation  also sells all of these components to  go  along  with
their concrete panels.

      The Company's modular concrete panel and steel framing assembly is
a  pre-engineered system that lends itself well to offshore  and  remote
locations, in which transportation and available heavy equipment  become
a   problem.    It  combines  the  structural  advantages   of   masonry
construction   with  the  ease  of  construction  of  panelized   framed
construction.   The competition in the Southeast United  States  in  the
residential  arena  consists primarily of standard masonry  construction
with  wood  trusses,  wood-framed construction,  and  other  proprietary
manufactured  systems.   The Company believes that  the  most  favorable
market for this product exists in offshore applications.

      The  Company  believes that it is presently in a  position  to  be
competitive in the offshore market, where the speed of construction  and
ability  to deliver quality at a fixed price may make it the  system  of
choice over local construction.  This is especially true in the Bahamas,
Cayman   Islands,  and  Virgin  Islands,  where  the  costs   of   local
construction are very high and the quality of construction may  be  more
marginal.

2.    Full  Height Concrete Panel Building Component System  ("Composite
      Walls")

     This system consists of panelized light steel walls, with the full-
height  concrete  exterior  cladding cast directly  to  the  steel  wall
supports,  using the same patented steel insert as the modular  concrete
wall  panel.  This construction system has the advantages of  the  small
modular  panels, with the added benefit of minimizing field construction
labor  requirements.   However, since the large  panel  system  is  more
expensive  to handle and ship, its most viable market has proven  to  be
local areas such as the Bahamas and South Florida.  This building system
also may be used in foreign locations, using local labor.

                                    4
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      The  Company  has undertaken research into the use of  lightweight
concrete  in this application.  Past production has proven too expensive
and  is  not competitive using conventional concrete.  As reported  last
year,  the Company had received a non-binding letter of intent from  the
Ministry  of  Building  in Nicaragua to use this  product.   During  the
Spring   of   1995,  a  former  employee  of  the  Company   interrupted
negotiations  on  this  matter with the representative  from  Nicaragua.
Notwithstanding  litigation undertaken by the  Company  to  protect  its
interest  in this matter, Management of the Company does not  feel  that
this contract will become a reality.

      While  Management believes that this new process  will  ultimately
provide  a profitable product line, there can be no assurance  that  the
Company will be able to market this system successfully.

3.   Light Steel Building Component System
      This  component system consists of light steel framing  components
for  the  walls,  floors,  and  trusses of  residential  and  commercial
buildings.   This system may be delivered as a panelized, pre-fabricated
system or sold as a "knocked-down" framing system, whereby the purchaser
will  be  provided with a full set of engineered plans with all layouts,
pre-cut  and  labeled  steel  members, and  all  pertinent  construction
details.   The  system  consists of exterior and interior  wall  framing
material,  the floor joists and headers, roof trusses and  rafters,  and
all  sub-fascia and blocking material.  At the present time, the Company
knows  of  only five significant companies in this market in the  United
States,  each  of whom, the Company understands, requires a  prospective
"buyer"  of  their system to first become a "dealer" and pay a  dealer's
fee.  The Company believes that its willingness to sell directly to  the
end  user, without requiring the customer to first become a dealer, will
give  it  a  competitive  advantage over  these  other  companies.   The
Company's  integration  of  engineering  and  technical  expertise,  its
marketing exposure, and its commitment to providing a quality product at
a  competitive  price will help determine the extent  of  the  Company's
share of this rapidly-expanding market.  This system is one that can  be
sold  nationwide,  as  well  as in other countries.   The  key  to  this
expansion  will be the establishment of a distribution network  and  the
development  of the in-house capability of producing the  steel  framing
members.   However, there can be no assurance that the Company  will  be
able to market this system successfully.

4.   Residential Light Steel Roof Truss System

     The residential light steel truss system consists of pre-fabricated
trusses  (manufactured in the Company's plant), the  engineering,  plans
and  details  for  the installation of the trusses,  and  the  ancillary
bracing  and bridging material.  The scope of this market is nationwide,
and  is  applicable to almost all residential construction.  The Company
believes  that  the  decline on a national basis  in  the  quantity  and
quality  of  available structural timber and the increased awareness  of
environmental concerns have de-stabilized the lumber market, leading  to
higher  costs  and temporary material shortages.  This has led  builders
and  designers  to look further into the implementation  of  alternative
materials  (principally  steel) for their  trusses  and  other  building
components.   The biggest obstacles to a more widespread  acceptance  of
light  steel  trusses  have been the lack of uniformly  accepted  design
criteria  and an economical method of design.  The Company has developed
a  computer generated design system which it believes will resolve these
problems.  During 1995, the Company extensively tested various  software
seeking  to  integrate its truss design system with little success.   To
date,  no  other  design  system is available.   The  Company  has  been
discussing the need for a complete layout and truss design program  with
its  major  steel provider and has determined that it will use  software
generated by the supplier when such becomes available.

5.   Commercial Light Steel Roof Truss System

      The roof truss system used in heavy commercial applications is  an
expanded version of the residential truss system. The primary differences
are the wider spacing of trusses, the use of much heavier gage steel
                                    5
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members, and  the special configurations for equipment, catwalks,  etc.
that are usually required for these installations. While  the Company's
residential trusses compete withwood trusses, the commercial truss system
competes with timber trusses, steel bar joists, and other light steel roof
truss manufacturers.  The installation of light steel roof trusses have 
become mandatory in Florida, Georgia, and other southeastern states for 
schools, nursing homes, adult life care facilities, clubhouses, performing
arts auditoriums  and other public buildings under the Southern Standard
Building  Code  requirements  for non-combustible  construction.   Since
light steel trusses are approximately 35% less expensive than structural
steel and bar joists for pitched roof applications, they have become the
preferential  roof framing system in all of these applications.   During
1995,  the Company completed numerous roof truss jobs but was unable  to
penetrate  the  Georgia  market as anticipated in  last  year's  report.
Increased  competition by new entrants into the market depressed  prices
to a  point that management elected not to bid a number of contracts in
both Georgia and Florida that appeared to be unprofitable. However, there
can be no assurance that the Company will be successful in obtaining any
of  this  business.   It is the Company's intention to  be  primarily  a
manufacturer  only  for each project, and leave the  truss  erection  to
experienced local crews.

6.   Light Steel Roof Retro-Fit Assemblies

      This  product  line is the Company's over-framing system  for  the
application  of  new  pitched  roofs over existing  flat  roofs.   There
appears  to  be a nationwide trend by building and facility managers  of
addressing leaking flat roofs by over-building with more architecturally
appealing  pitched  metal  roofs.   The  new  metal  pitched  roofs  are
virtually maintenance free, and eliminate the need to repair or  replace
a  built-up asphalt and gravel roof.  The market is nationwide, with the
value  of the framing systems only for these applications conservatively
estimated  by  the Company at $40 millon.  The Company's  share  of  the
market should be significantly enhanced by its capability to produce its
own framing sections.  This market is driven by total cost of the system
and the turnaround time in production.  The Company lost the services of
one  of  its  engineers. As a result, the Company  determined  to  delay
purchasing  its own roll forming equipment and entering the light  steel
roof  retro  assembly market.  The Company does not anticipate  entering
this  market  in  the  near  future since engineering  requirements  are
currently being subcontracted.

7.   Light Steel Architectural Facade Framing System

      This  system  refers to the light steel mansard  (facade)  framing
systems  common  around the perimeters of retail  strip  centers,  small
government   buildings,  service  stations  and  vehicle   depots,   and
commercial  and  industrial buildings.  This system  is  also  used  for
equipment screens and decorative rooftop detailing on various  types  of
buildings.   The  Company believes that the market for  this  system  is
fairly  regional;  with the Florida market for the supply  of  only  the
framing system and the engineering for the system being approximately $4
million  per  year.   The Company hopes to obtain a 25%  share  of  this
market once in-house roll forming capability is achieved, but there  can
be  no assurance that the Company will, in fact, be able to achieve some
or any of this market share.

DEVELOPMENT OF FUTURE BUSINESS

      During the fourth quarter of 1994, the Company increased the price
for  its  goods and services to result in an estimated profit margin  of
approximately  20  to  25%.   Contrary to its expectation  during  1995,
Management  found  great  price  resistance  to  the  pricing  structure
implemented in the fourth quarter of 1994.  New participants entered the
light gage steel component market and wood prices remained low.

                                    6
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      On December 29, 1995, the Company signed an Agreement and Plan  of
Merger  with  Medical Products, Inc.  Medical Products,  Inc.  owns  the
marketing  rights  for 12 various Rapid Medical Test Devices  for  South
America  and  the  Bahamas.  Closing on this agreement is  scheduled  to
occur not later than February 29, 1996.

      Additionally, on December 28, 1995, the Company sold a license for
the Bahamas to an unrelated party for $3,000,000 for the distribution of
the Rapid Medical Test Devices described above.

MARKETING AND DISTRIBUTION

      The  Company is actively pursuing commercial contracts on a  daily
basis  through  submission of bids as solicited from the Dodge  Reports,
visiting  regional  architects and engineers to  explain  the  Company's
concept for the purpose of having its products specified on design/build
contracts,  and  conducting monthly mailings  to  non-local  architects,
engineers,  and  builders.  The basis of management's beliefs  regarding
the  proposed markets for its various systems include its experience  in
this   industry,   involvement  in  various   trade   and   professional
associations and information gained from trade periodicals and surveys.

      The  Company  currently markets domestic sales on a  direct  basis
utilizing  one employee based at its manufacturing facility in  Florida.
International  sales  are  negotiated by  the  President.   Negotiations
concerning  licensing  technology continue with  an  Irish  company  for
distribution rights in Belgium and Germany.  Additionally, licenses  for
Venezuela  and Brazil have been issued.  All shipments of  products  are
currently  distributed  from the Company's  two  facilities  in  Boynton
Beach, Florida.

SALES BY PRODUCT AND REGION

      Sales  for  the  years  ended 1995 and  1994  were  2,509,323  and
2,027,737 respectively.  During 1995 and 1994, residential sales of  the
Company's componentized buildings declined to approximately 20% and  36%
respectively of total sales with the remaining approximately 80% and 64%
consisting  of  commercial type component sales of trusses,  walls,  and
roofs.  During 1995, international sales were approximately 38% of total
sales, reflecting projects in Grand Cayman and in the Bahamas.

REGULATION

      Delays in the issuance of building permits no longer significantly
impacts  the Company's business, since the Company has moved  away  from
the general contracting business and is now a provider of materials
to  general  contractors.  No manufacturing occurs by the Company  until
the  general  contractor  advises the Company that  it  has  received  a
building  permit.  Additionally, the Company is focusing  its  marketing
towards delivery only jobs and offshore construction.

      The Company does not anticipate that it will encounter any adverse
governmental  regulations related to the use of light gage  steel  since
municipal and state building codes, as well as design parameters used by
architects  and engineers, have been changed to incorporate the  use  of
steel as an alternative to wood for fire resistance and wind loads.

      Manufacturing  and  assembly of the Company's  systems  and  other
products,  currently and those anticipated to be developed,  involve  no
handling  nor  disposal  of  hazardous  materials,  and  there  are   no
significant   effects  upon  operations  imposed  by   requirements   of
environmental regulations.

                                    7
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EMPLOYEES

      At  the  present  time, there are 25 full-time  employees  of  the
Company,  including  two officers, one controller,  one  estimator,  one
sales  representative, one draftsman, three clerical, and  15  laborers,
which number varies with the flow of business.

      In addition, the Company employs the services of two draftsmen, an
architect  and an engineer who are self-employed.  None of the Company's
employees are represented by unions.

Item 2. Description of Properties.
        --------------------------
      The  Company's manufacturing and principal executive  offices  are
located  at  1340  Neptune  Drive, Boynton Beach,  Florida  33426  in  a
facility  containing  3,100  and  18,000  square  feet  of  office   and
production space, respectively, leased for an initial term of 60  months
through  May 1997 at an annual rental of approximately $83,472  with  an
option to purchase.

      The  Company has retained its concrete casting operation  at  1401
Neptune  Drive,  in  a  building owned by the Company  which  previously
housed   all   of  the  Company's  operations.   The  Company   occupies
approximately one-half of this 14,000 square foot facility,  and  leases
out  2,000 square feet to an affiliate, with the remaining 5,000  square
feet  vacant.   Rental  income to the Company was $18,000  in  1994  and
$12,000 in 1995.

Item 3. Legal Proceedings.
        ------------------
      There  are  no  material  pending  or  threatened  litigation  or
administrative proceedings out of the ordinary course of business.

Item 4. Submission of Matters to a Vote of Security Holders.
        ----------------------------------------------------
      None

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.
        ---------------------------------------------------------
      The Company's shares of Common Stock presently are being traded on
the  NASDAQ  Small  Cap Market under the symbol "NVTK".   The  following
table  shows, for the calendar periods indicated, the range of  reported
high  and  low bid quotations for these shares.  Such prices necessarily
reflect  inter-dealer  prices, without retail  mark  up,  mark  down  or
commission and may not necessarily represent actual transactions.

      Upon  the  effective  date of the public offering,  the  Company's
Units,  Common  Stock, and Warrants were listed for  trading  on  NASDAQ
Small  Cap  Stock  Market  under  the  symbols  NVTKU,  NVTK  and  NVTKW
respectively.   NVTKU  is no longer traded as  units.   The  units  were
separated into stock and warrants.

      On  December  31,  1994,  the Company's  Shareholders  approved  a
resolution  calling for a 1 for 10 reverse split of the  shares  of  the
Company's  common stock, which was effected January 9, 1995.   The  high
and low bid quotations set forth below have been adjusted to give effect
to  this  1  for  10  reverse split by taking the  reported  prices  and
multiplying them by 10.

                                    8
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                   Quarterly Common Stock Price Range
                   ----------------------------------
<TABLE>
<CAPTION>
                                             High Bid       Low Bid
                                             --------       --------
<S>                                          <C>            <C>
1994:
Quarter ended 03/31                          $20.00         $ 2.50
Quarter ended 06/30                          $ 8.75         $ 3.13
Quarter ended 09/30                          $ 9.38         $ 1.88
Quarter ended 12/31                          $ 6.88         $  .62

1995:
Quarter ended 03/31                          $ 6.38         $ 2.50
Quarter ended 06/30                          $ 8.75         $ 2.75
Quarter ended 09/30                          $ 5.00         $ 2.50
Quarter ended 12/31                          $ 6.00         $ 4.38

</TABLE>

      As of February 16, 1996, there were approximately 1,174 holders of
record of the shares of the Company's Common Stock.

COMMON STOCK

     The holders of Common Stock elect all directors and are entitled to
one  vote  for  each share held of record.  All shares of  Common  Stock
participate equally in dividends, when, as and if declared by the Board
of  Directors  and in net assets on liquidation.  All shares  of  Common
Stock  presently outstanding are, and the shares of Common Stock offered
hereby  and purchasable upon the exercise of the Warrants, when  issued,
will be duly authorized, validly issued, fully paid and nonassessable by
the Company.  The shares of Common Stock have no preference, conversion,
exchange, preemptive or cumulative voting rights.

PREFERRED STOCK

      The  Company is authorized to issue shares of preferred stock with
such  designation, rights and preferences as may be determined from time
to  time by the Board of Directors.  Accordingly, the Board of Directors
is empowered, without shareholder approval, to issue shares of preferred
stock  with  dividend, liquidation, conversion, voting or  other  rights
which  could  adversely affect the voting power or other rights  of  the
holders  of  the Company's Common Stock.  In the event of issuance,  the
shares   of   preferred   stock  could  be   utilized,   under   certain
circumstances,  as a method of discouraging, delaying  or  preventing  a
change  in control of the Company.  The Company has no present intention
to  issue  any additional shares of its preferred stock, and has  agreed
with  the  Representative  not to issue any  additional  shares  of  its
preferred stock for a period of three years from April 17, 1995 without 
the prior written consent of the Representative.

      The Company has designated 5,000 shares of its Preferred Stock  as
Series  A 10% Cumulative, Convertible Preferred Stock ("Preferred Series
A").   The  Preferred Series A carries a liquidation preference,  and  a
stated redemption value and face value of $1,000 per share.  Each  share
of  Preferred  Series A is convertible into 333 shares of the  Company's
common stock.  As of February 16, 1996, 1,887 shares of Preferred Series
A are issued and outstanding.

DIVIDENDS

       The   convertible  Redeemable  Preferred  Stock  described  above
currently entitles its holders to receive out of the net profits of  the
Company,  as  and  when  declared by the Board of Directors,  cumulative
dividends at the rate of $100 per share per annum.  No dividends on  the
Common Stock may be paid until any and all
                                     
                                     9
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accumulated dividends on the Redeemable Preferred Stock has  been  paid.
As at December 31, 1995, holders
of  1,887 of these Preferred Shares had waived all present dividends, in
exchange the Company waiving interest on certain outstanding loans.   To
date, the Company has not paid any cash or other dividends on its Common
Stock  and  does  not  anticipate paying dividends  in  the  foreseeable
future.  Moreover, the Company's ability to pay dividends on its  Common
Stock in the future may be limited by future preferred stock issuances.

Item 6. Management's Discussion and Analysis of Financial Condition  and
        ----------------------------------------------------------------
        Results of Operations.
        ----------------------
General
- -------
      Since  inception, the Company has not been able to  generate  cash
flow  from operations to cover expenses without advances from affiliates
and  private placements of its securities.  This casts significant doubt
upon  the  Company's  ability to continue as a going  concern  with  its
current  business  methodology.  As a result of this,  on  December  29,
1995,  the Company executed an agreement and plan of merger with Medical
Products,  Inc.  (MedPro), a Florida company, which  has  the  marketing
rights  to South America and the Bahamas for certain rapid medical  test
devices  (see Note 18 to the Consolidated Financial Statements).  These 
devices include test kits  for HIV, cholera, diabetes  as well as nine 
other viruses.  The test kits are manufactured by Universal Health Watch,
Inc. (UHW) in Columbia, Maryland.  Currently, MedPro is in negotiations
with Brazil for a ten year contract that  is  expected  to generate $100 
million in revenue and approximately $12 million in profit each  year.
MedPro  also has additional products in  development which will  allow
access to the animal health market for cattle in Argentina (Also see 
Note 1 to the Consolidated Financial Statements regarding entities con-
tinued existence). 

      On  December 1, 1995, Management acquired from MedPro the  license
for  the  Commonwealth  of the Bahamas for the medical  testing  devices
referred  to  above.  Consideration for this license was  the  Company's
license  for  the  use  of its patents and technology  in  Brazil.   The
Company,  on  December 28, 1995, entered into an agreement to  sell  its
newly  acquired  license  to  a Bahamian individual  through  a  license
agreement  for  $3,000,000  (see Note 18 to the  Consolidated  Financial
Statements).   This  transaction was finalized during  January  1996  at
which time the Company recognized $3,000,000 of revenue.

      Management  has determined that competition in local and  regional
market  has intensified to the extent that management will downsize  the
Company's  facilities by subletting 1340 Neptune Drive  and  moving  its
corporate  offices  to  1401 Neptune Drive during  1996.   Additionally,
production requirements have been diminished, since the focus  of  sales
for  1996  will be offshore contracts which can be supported  with  less
factory  prefabrication.  Management will review its plant needs  for  a
final determination once the expected merger with Medical Products, Inc.
has been consummated.

Results of Operations
- ---------------------
       During  1995,  the  Company completed residential  and  commercial
buildings  for a total of $2,509,000 in revenue and received  $1,794,000
in  orders, all of which were for commercial projects.  During 1994, the
Company  completed residential and commercial buildings for a  total  of
$2,028,000  in revenue and received $3,000,000 in orders, of  which  13%
were residential and 87% were for commercial projects.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994
- ----------------------------------------------------------------------
      Revenues from contracts for the year ended December 31, 1995  were
$2,509,000, an increase of $482,000 or 24% over revenues from  contracts
of  $2,028,000 for the year ended December 31, 1994.  This  increase  in
revenue  was  a  result of the Company focusing on the commercial  steel
truss  market  in  South  Florida and the Caribbean  and  targeting  its
marketing  efforts  at  schools, private  development  club  houses  and
Adult Congregate Living Facilities ("ACLF").   Prior  to  1994,  the  Company 
was  primarily  a  provider  of residential structures.
                                   10
<PAGE>
<PAGE>
      The  gross  loss has remained somewhat consistent.  The  Company's
gross  loss  in 1995 was $530,000, compared to $533,000 for  1994.   The
percentage of gross loss to contract revenues earned was 21% during 1995
compared to 26% during 1994.

      Operating expenses during 1995 were $1,096,000 or 44% of  contract
revenues, an increase from $881,000 and 43% of contract revenues  during
1994.  This dollar increase is primarily due to increases in salaries and
professional and consulting fees.  Management believes that the percentage
of operating expenses  to contract revenues should remain relatively con-
sistent during 1996.

      The  Company incurred (net) nonoperating expense of $37,000 during
1995  compared to (net) nonoperating expenses of $684,000 in 1994.  This
decline  was  due primarily to a gain of $88,000 on the sale  of  equity
securities of an affiliate in 1995 compared to a $500,000 write-down  of
an  investment in equity securities of an affiliate during 1994, as well
as a decrease in interest expense resulting from the Company's reduction
of debt during 1995.

      The  Company's  backlog as of December 31, 1995 was  approximately
$377,000  compared to a backlog of approximately $379,000 as of December
31, 1994.

Liquidity and Capital Resources
- -------------------------------
      The Company's net cash used in operating activities was $2,458,000
for  the  year  ended December 31, 1995 compared to  net  cash  used  in
operating activities of $1,415,000 during 1994.  The primary reason  for
this increase in net cash used in operating activities was a decrease in
accounts  payable  of $620,000 during 1995 compared to  an  increase  in
accounts payable of $370,000 during 1994.

      Net cash provided by investing activities during 1995 was $825,000
compared to net cash provided by investing activities of $95,000  during
1994.  During 1995, the Company received $500,000 from the redemption of
a  certificate of deposit and $363,000 from the proceeds of the sale  of
investment  in  equity  securities of an affiliate.   During  1994,  the
majority of the net cash provided by investing activities was through  a
reduction  in  amounts due from affiliates of $136,000.   The  Company's
purchases  of  property  and  equipment were approximately  $22,000  and
$54,000 during 1995 and 1994, respectively.

      The  net  cash  provided by financing activities during  1995  was
$1,680,000 compared to net cash providing by financing activities during
1994  of  $1,332,000.   During 1995, the Company  received  $595,000  of
proceeds  from  long term debt while making principal payments  on  long
term  debt of $2,021,000 and received net proceeds from the issuance  of
common  stock of $3,161,000.  During 1994, the Company received proceeds
from  long  term debt of $1,222,000 while making principal  payments  of
$57,000  and received net proceeds from the issuance of common stock  of
$138,000.

     Without positive cash flow from operations, the Company experiences
the  typical  problems  of  obtaining debt and equity  capital  funding.
During  April  1995,  the Company completed a secondary  offering  which
generated the net proceeds from the issuance of common stock noted above
of  $3,161,000.   These  net  proceeds were  used  as  outlined  in  the
prospectus  to retire debt and provide working capital for the  Company.
The  Company has 862,500 warrants outstanding with an exercise price  of
$6.75 issued in connection with the public offering that the Company has
the  option  to  redeem  under  certain circumstances.   Currently,  the
Company's common stock is trading at a level that may encourage exercise
of these warrants, however, no assurance exist that  these warrants will
be exercised.

      Management believes that the pending merger with Medical Products,
Inc.,  through the profits derived form the sale of the medical  testing
devices,  will  provide  sufficient cash  flow  to  meet  the  Company's
operating needs during 1996.   Additionally, the  Company has an under-
standing with a Bahamian developer, to produce townhomes. This developer
who will advance funds necessary to complete this  project for the next
three years.
                                   11
<PAGE>
<PAGE>
Item 7. Financial Statements
        --------------------
        The  Consolidated Financial Statements are filed as part of
        this Annual Report on form 10-KSB.

Item 8. Changes In and Disagreements With Accountants on Accounting
        -----------------------------------------------------------
        and Financial Disclosure.
        -------------------------
       
        Not applicable.

PART III

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

Directors and Executive Officers
- --------------------------------
          The following persons were directors and executive officers of the
          Company as of February 16, 1996.

          Director                Age        Positions with Company
          --------                ---        ----------------------
          Frank J. Cooney          54        President, Director
          Brigitte U. Cooney       54        Secretary, Director
          Theodore B. Thomas       44        Treasurer, Director
          Howard Korer             63        Director
          Richard Ernest           55        Director
          Dr. Jaime Puccio         60        Director

      The  by-laws provide that the Directors of the Company serve until
the  next annual meeting of shareholders and until their successors  are
duly appointed and qualified.  All officers serve at the pleasure of the
Board of Directors.

BUSINESS EXPERIENCE

      Frank  J.  Cooney  has been the President and a  Director  of  the
Company  from  1989  to  the  present.  He is  a  graduate  of  Syracuse
University  with a Bachelor of Science in accounting, law, and  finance.
Mr.  Cooney was formerly the President of the Buffalo Braves,  Inc.,  an
NBA franchise, as well as former President of Freezer Queen Foods Canada
Ltd.,  former  Senior  Vice President of Freezer Queen  Foods,  Inc.,  a
Nabisco  subsidiary,  a former President of Silda  Enterprises  Inc.,  a
holding company operating supermarkets and department stores in New York
State,  and worked independently as a Financial Consultant in West  Palm
Beach, Florida from 1985 to 1989.

      Brigitte  U. Cooney has been the Secretary and a Director  of  the
Company  from 1989 to present.  Mrs. Cooney serves as President of  Nova
Specialty Risks, Inc., a managing general insurance agency.  Mrs. Cooney
served  as  an  Administrative Assistant to Donco Food  Services,  Ltd.,
Toronto,  Canada and as general manager of Down Under Shoppes,  Inc.  in
New  York  State.   She  was  an Administrative  Assistant  to  Lawrence
Goldman,  Ph.D.,  and a research consultant to Luitpolde Pharmaceuticals
Company from 1986 to 1989.  Mrs. Cooney is the wife of Frank Cooney.

      Theodore  B. Thomas has been the Treasurer and a Director  of  the
Company since December 1993.  Mr. Thomas formerly had been employed for 
17 years in commercial  banking  at  Sun  Bank N.A., last  serving  as 
Senior Vice President.

      Howard Korer has been a Director since May 26, 1995.  Mr. Korer is
Chief  Executive Officer of Scientific Movers, Inc. located in  Franklin
Park, Illinois.  Mr. Korer founded Scientific Movers, Inc. in 1955.

                                   12
<PAGE>
<PAGE>
      Richard Ernest has been a Director since May 26, 1995.  Mr. Ernest,
a  graduate Engineer, is President of Whitehall Machinery Inc. which was
incorporated in 1980 and specializes in metal forming equipment.

      Dr. Jaime Puccio has been a Director since January 16, 1996.   Dr.
Puccio has extensive involvement as a staff member and consultant to the
World  Health  Organization  (WHO),  Pan  American  Health  Organization
(PANO), and the Organization of American States (OAS).

Item 10. Executive Compensation.
         ----------------------
     No officer of the Company received compensation of $100,000 or more
in  any  of  the  Company's  last three years.   Frank  J.  Cooney,  the
Company's  Chief Executive Officer, received compensation of $73,100  in
1995 and $38,000 in 1994.

     There were no pension, profit sharing or long term incentive plans
nor  stock  options or stock appreciation rights plans nor any  non-cash
compensation in effect during any of the past three years.  None of  the
Company's  employees  are party to any employment agreement.   Directors
are  not  paid any compensation for the undertaking of their  duties  as
such  other  than  any  out  of pocket expenses  incurred  in  attending
meetings.

Item 11. Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------
                        
                         PRINCIPAL SHAREHOLDERS

      The following table sets forth as of February 16, 1996 all persons
known  by the Company to be a beneficial owner of more than five percent
of  any  class  of  the  Company's voting securities  and  the  security
ownership  in the Company, directly or indirectly, by all directors  and
executive officers and by all directors and officers of the Company as a
group.  All of the persons and entities listed below have agreed not  to
sell  any  of their shares for a period of one year after the  effective
date of the secondary offering (04/17/95).
<TABLE>
<CAPTION>
Name and Address                Amount and Nature of
Beneficial Owners (1)           Benefits of Ownership   Percent of Class (2)
- ---------------------           ---------------------   --------------------
<S>                             <C>                     <C>
Brigitte U. Cooney                  30,427                 1.3% (3)
4616 Suburban Pines Drive
Lake Worth, FL  33463

Frank J. Cooney                     58,680                 2.6% (4)
4616 Suburban Pines Drive
Lake Worth, FL  33463

Polydex Pharmaceuticals, Ltd.      160,000                 5.9%
421 Comstock Road
Scarborough, Ontario
Canada M1L 2H5

Theodore B. Thomas                   1,010                  .2% (5)
734 Rider Road
Boynton Beach, FL  33435

All Officers and                    59,690                 2.8% (6)
Directors as a Group
(3 Persons)
</TABLE>
*  Less than 1%
                                   13
<PAGE>
<PAGE>

(1)  Unless  otherwise  indicated,  each  person  named  in  the   table
     exercises  sole  voting and investment power with  respect  to  all
     shares beneficially owned.

(2)  Assumes no exercise of any of the warrants issued.

(3)  Includes 29,000 shares owned directly and 1,427 indirectly  through
     a corporation.  Does not include shares owned by her husband, Frank
     J. Cooney.  Includes 5,000 options available at $5.00 per share.

(4)  Includes  1,306  shares  owned directly,  26,947  owned  indirectly
     through  a  corporation  and 30,427 owned  by  his  wife,  Brigitte
     Cooney,  as  well  as 10,000 options available at $5.00  per  share
     (5,000 available directly and 5,000 to his wife)

(5)  Includes 5,000 options at $5.00 per share available directly

(6)  Exclusive  of  Mr.  Larry  Schone who acts as  Assistant  Secretary
     through his relationship as corporate counsel to the Company

Item 12. Certain Relationships and Related Transactions.
         -----------------------------------------------
    
     During 1995, the Company paid $15,636 of interest to officers.

     During 1995 approximately $50,000 of insurance premiums were  paid
to Tribune Agency, Inc., a company controlled by the corporate secretary
of the Company.

     On   December  31,  1994,  the  Company'  shareholders   ratified
resolutions (1) authorizing the Company's Board of Directors to fix  the
terms  of a reverse split of the Company's Common Stock and (2) revising
the  terms  of  the  Company's Preferred Series A so  as  to  make  each
Preferred Series A share convertible into 333 shares of Common Stock.  A
1 for 10 reverse stock split was effected January 9, 1995.

Item 13. Exhibits and Reports on Form 8-K and 8-K/A.
         -------------------------------------------
     (a) Exhibits

 Exhibit No.   Description                    Comment
 -----------   -----------                    -------
 
      3        Article of Incorporation       Incorp. by Ref. to S-18 and
                                              By-Laws, as amended
                                              Registration Statement Filed
                                              April 12, 1988; Current
                                              Report on Form 8-K filed
                                              Aug. 11, 1989; and Current
                                              Report on Form 8-K dated
                                              December 28, 1990.

       4       Instruments Defining Rights    Same Certificate of Designation
               of Security Holders            Preferred to be filed by
                                              Amendment

       9       Voting Trust Agreement         None

      10       Material Contracts             Agreement and Plan of Merger with
                                              Articles of Merger  were filed as
                                              exhibits to Form 8-K dated 
                                              December 28, 1990 and


                                   14
<PAGE>
<PAGE>

 Exhibit No.   Description                    Comment
 -----------   -----------                    -------

                                              Agreement and Plan of Merger were
                                              filed as exhibits to Form 8-K 
                                              dated January 31, 1996 and are  
                                              incorp. by reference
                                          
                     
      11       Statement on Computation       See Notes to Financial Statements
               of Per Share Earnings  
                
      12       Annual Report of Security      To be filed by amendment
               holders
                
      16       Letter on Change in            Previously Filed on Form 8-K/A
               Certifying Accountant

      18       Letter on Change in            Previously Filed
               Accounting Principles

      21       Subsidiaries of the            Trusteel Engineering Co.,
               Registrant                     Inc., Florida

      22       Published Report Regarding     Filed Supplementally
               Matters Submitted to Vote
               of Security Holders

      23       Consent of Experts and Counsel Not Applicable

      24       Power of Attorney              Not Applicable

      27       Financial Data Schedule        Included

      28       Information from Reports       None
               Furnished to State Insurance
               Regulatory Authorities

      99       Additional Exhibits            None


     (b) Reports on Form 8-K and 8-K/A
         -----------------------------
         
     (1)  Reports on Form 8-K dated September 30, 1994 regarding Change
of  Accountants was filed on   October 3,1994 and amended on Form  8-K/A
filed October 12, 1994.

     (2)  Reports  on  Form  8-K dated January  3,  1996  regarding  an
Agreement and Plan of Merger










                                   15
<PAGE>
<PAGE>    
    
                               SIGNATURES
    
    
      Pursuant  to  the requirements of Section 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 hereunto duly authorized.

Dated:  February 23, 1996


                                   Novatek International, Inc.
                                   (Registrant)


                                   By: /s/ Frank J. Cooney 
                                       -------------------
                                   Frank J. Cooney, President
                                   Chief Executive Officer



































                                   16

<PAGE>
<PAGE>




                  NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL REPORT

                              DECEMBER 31, 1995



                        INDEX TO FINANCIAL STATEMENTS
                

INDEPENDENT AUDITOR'S REPORT                                               F-2
- ------------------------------------------------------------------------------
FINANCIAL STATEMENTS            
                
  Consolidated balance sheets as of December 31, 1995 and 1994             F-3
                
  Consolidated statements of operations for the years             
  ended December 31, 1995 and 1994                                         F-5
                
  Consolidated statements of shareholders' equity (deficit) for the years     
  ended December 31, 1995 and 1994                                         F-6
                
  Consolidated statements of cash flows for the years             
  ended December 31, 1995 and 1994                                         F-8
                
  Notes to consolidated financial statements                              F-10
- ------------------------------------------------------------------------------























<PAGE>
<PAGE>                
                
INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Shareholders
Novatek International, Inc.
Boynton Beach, Florida

We have audited the accompanying consolidated balance sheets of Novatek 
International, Inc. and subsidiary as of December 31, 1995 and 1994, and the 
related consolidated statements of operations, shareholders' equity (deficit),
and cash flows for the years then ended.  These financial statements are the 
responsibility of the Company's management.  Our responsibility is to express 
an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Novatek 
International, Inc. and subsidiary as of December 31, 1995 and 1994, and the 
results of their operations and their cash flows for the years then ended, in 
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern.  As discussed in Note 1 to the 
financial statements, the Company has suffered recurring losses from 
operations.  This raises substantial doubt about the Company's ability to 
continue as a going concern.   Management's plan in regard to these matters 
are described in Note 1.  The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


McGLADREY & PULLEN, LLP

/s/ McGLADREY & PULLEN, LLP 
- ---------------------------
West Palm Beach, Florida
February 6, 1996 
                
                                    F-2
                
<PAGE>
                
                
<PAGE>

NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY


CONSOLIDATED BALANCE SHEETS
December 31, 1995 and 1994

<TABLE>
<CAPTION>
                                                                        1995          1994  
                                                                     ----------    ----------
<S>                                                                  <C>           <C>
ASSETS                                                               
- ------
CURRENT ASSETS                                  
  Cash and cash equivalents                                          $   58,234    $   11,946  
  Certificate of deposit                                                     -        500,000 
  Contract receivables, less allowance for doubtful accounts                                   
    1995 $105,845; 1994 $61,072 (Note 2)                                164,705       339,948 
  Current maturities of notes receivable (Notes 3 and 10)                64,450            -   
  Costs in excess of billings on uncompleted contracts (Note 4)         285,103       384,541 
  Inventories (Note 5)                                                  119,115       161,663 
  Prepaid expenses  (Note 6)                                            111,329         7,657  
  Investments in equity securities at fair value (Note 7)                24,651            -   
                                                                     ----------    ----------
           Total current assets                                         827,587     1,405,755  
                                                                     ----------    ----------
PROPERTY AND EQUIPMENT, AT COST (Note 9)                                        
  Land and improvements                                                 345,000       345,000 
  Buildings and improvements                                            724,801       724,801 
  Leasehold improvements                                                 25,077        25,077  
  Equipment                                                             148,679       138,728 
  Office furniture and equipment                                         93,583        86,738  
  Delivery equipment                                                     61,980        59,709  
                                                                     ----------    ----------
                                                                      1,399,120     1,380,053  
  Less accumulated depreciation                                         343,200       273,026 
                                                                     ----------    ----------  
                                                                      1,055,920     1,107,027  
INVESTMENTS AND OTHER ASSETS                                         ----------    ----------
  Notes receivable, less current maturities (Notes 3 and 10)            225,579            -   
  Investment in equity securities of affiliates at fair value (Note 7)       -        300,000 
  Deferred public offering costs                                             -        112,187 
  Due from affiliates                                                        -          9,473  
  Intangibles and other (Note 8)                                         66,201        73,602  
                                                                     ----------    ----------
                                                                        291,780       495,262 
                                                                     ----------    ----------
                                                                     $2,175,287    $3,008,044  
                                                                     ==========    ==========
</TABLE>
See Notes to Consolidated Financial Statements.
                                 
                                    F-3
<PAGE>
<PAGE>                                        


<TABLE>
<CAPTION>
                                                                        1995          1994  
                                                                     ----------    ----------
<S>                                                                  <C>           <C>
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)      
- ----------------------------------------------
CURRENT LIABILITIES                                     
  Outstanding checks in excess of bank balances                      $       -     $   55,196  
  Current maturities of long-term debt (Note 9)                           7,472     2,150,567  
  Accounts payable                                                       79,691       699,203 
  Accrued expenses                                                       84,936       118,320 
  Billings and estimated losses in excess of costs on                                     
    uncompleted contracts (Note 4)                                       78,742       480,512 
  Due to affiliates                                                          -         16,489  
                                                                     ----------    ----------
                                        
Total current liabilities                                               250,841     3,520,287  
                                                                     ----------    ----------
LONG-TERM DEBT, LESS CURRENT MATURITIES (Note 9)                        322,777       306,115 
                                                                     ----------    ----------
COMMITMENTS AND CONTINGENCIES (Notes 11 and 16)                                 
SHAREHOLDERS' EQUITY (DEFICIT)                                  
  Preferred stock, 10,000,000 shares authorized; 5,000 shares                                  
    designated series A 10% cumulative and convertible;                                     
    $1,000 stated value                                               1,887,000     1,887,000  
  Common stock, no par value; 250,000,000 shares authorized           6,228,185     2,456,289  
  Additional paid-in capital                                              1,076         1,076  
  Accumulated (deficit)                                              (6,514,592)   (4,851,402) 
  Due from affiliate (Notes 3 and 10)                                        -       (311,321) 
                                                                     ----------    ----------
                                                                      1,601,669      (818,358) 
                                                                     ----------    ----------
                                        
                                        
                                        
                                        
                                        
                                                                     $2,175,287    $3,008,044  
                                                                     ==========    ==========

</TABLE>

                                    F-4      

<PAGE>
<PAGE>

NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY


CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 1995 and 1994

<TABLE>
<CAPTION>
                                                                        1995          1994  
                                                                    -----------   -----------
<S>                                                                  <C>           <C>
                                   
Contract revenues earned                                            $ 2,509,323   $ 2,027,737  
Cost of contracts                                                     3,038,911     2,560,970  
                                                                    -----------   -----------
             Gross (loss)                                              (529,588)     (533,233) 
Operating expenses                                                    1,096,201       880,700 
                                                                    -----------   -----------
             Operating (loss)                                        (1,625,789)   (1,413,933) 
                                                                    -----------   -----------
Nonoperating income (expense):                                  
  Interest income                                                        35,710        23,882  
  Rental income                                                          12,000        20,400  
  Interest expense                                                     (156,681)     (170,037) 
  Gain (loss) on sale and write-down of investment in equity
    securities of affiliate (Note 7)                                     87,655      (500,000) 
  Other, net                                                            (16,085)      (58,384)
                                                                    -----------   -----------  
                                                                        (37,401)     (684,139) 
                                                                    -----------   -----------
             Net (loss)                                             $(1,663,190)  $(2,098,072) 
                                                                    ===========   ===========
(Loss) per common share                                             $     (0.65)  $     (1.57) 
                                                                    ===========   ===========
Common shares outstanding                                             2,558,257     1,225,567  
                                                                    ===========   ===========
See Notes to Consolidated Financial Statements.

</TABLE>






                                    F-5
<PAGE>
<PAGE>



NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
Years Ended December 31, 1995 and 1994
        
<TABLE>                                        
<CAPTION>                        
        
                                                    Preferred Series A        Common  
                                                   ---------------------------------- 
                                                    Shares        Amount      Shares  
- ------------------------------------------------------------------------------------- 
<S>                                                <C>        <C>           <C>
Balance, December 31, 1993                           1,887    $ 1,887,000   1,268,008 

  Common stock issued as                                  
    payment for services                                -              -       18,982 

  Common stock issued for cash                          -              -      100,000 

  Transfer of amount due from affiliate (Note 9)        -              -           - 
  
  Net (loss)                                            -              -           -
                                                   ----------------------------------
Balance, December 31, 1994                           1,887      1,887,000   1,386,990 

  Common stock issued through                                     
    public offering (Note 12)                           -              -      862,500 
                                                                            
  Subscription agreements converted into                                  
    common stock  (Notes 8 and 12)                      -              -      425,000 

  Transfer of amount due from affiliate to notes                                  
    receivable (Notes 3 and 10)                         -              -           -

  Net (loss)                                            -              -           -
                                                   ----------------------------------
  Balance, December 31, 1995                         1,887    $ 1,887,000   2,674,490 
                                                   ==================================
                                        
                                        
                                        
See Notes to Consolidated Financial Statements.
        


</TABLE>

                                    F-6

<PAGE>
<PAGE>

<TABLE>
<CAPTION>
                                                                        
                 Additional                                              
Stock              Paid-In       Accumulated     Due From                
- ------------     
      Amount       Capital        (Deficit)      Affiliate               Total   
- ----------------------------------------------------------------------------------- 
<S>              <C>           <C>               <C>                   <C>
                                                 (Notes 3 and 10)                   
$  2,158,834     $   1,076     $  (2,753,330)    $           -         $ 1,293,580  
   
                                                                                
      47,455            -                 -                  -              47,455  
       
     250,000            -                 -                  -              250,000 
  
          -             -                 -             (311,321)          (311,321)
   
          -             -         (2,098,072)                -           (2,098,072)
- ----------------------------------------------------------------------------------- 
   2,456,289         1,076        (4,851,402)           (311,321)          (818,358)
                                                                                
   3,049,138            -                 -                  -            3,049,138 
                                                                                
     722,758            -                 -                  -              722,758 
                                                                                
          -             -                 -              311,321            311,321 

          -             -         (1,663,190)                -           (1,663,190)
- -----------------------------------------------------------------------------------
$  6,228,185     $   1,076     $  (6,514,592)    $           -         $  1,601,669 
===================================================================================


</TABLE>



                                    F-7
<PAGE>
<PAGE>

NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1995 and 1994

<TABLE>
<CAPTION>
                                                                        1995          1994  
                                                                   ------------   ------------
<S>                                                                <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES                                    
  Net (loss)                                                       $ (1,663,190)  $ (2,098,072) 
  Adjustments to reconcile net (loss) to net cash (used in)                                     
    operating activities:                                   
    Depreciation                                                         72,438         75,682  
    Amortization                                                          5,112         12,398  
    Interest expense on subscription agreements which were                                  
      converted into common stock                                        22,758             -   
    Loss on write-down of investment in equity securities                                   
      of affiliate to fair value                                          6,474        500,000 
    Gain on sale of investment in equity securities of affiliate        (94,129)            -   
    Loss on sale and abandonment of equipment and other assets               -          21,865  
    Issuance of common stock for services                                    -          32,455  
    Changes in assets and liabilities:                                      
      (Increase) decrease in:                                 
        Contract receivables                                            175,243       (264,317) 
        Costs in excess of billings on uncompleted contracts             99,438       (384,541) 
        Inventories                                                      42,548         11,372  
        Prepaid expenses                                                (53,672)        37,896  
      Increase (decrease) in:                                 
        Accounts payable                                               (619,512)       369,863 
        Customer deposits                                                    -         (58,168) 
        Billings and estimated losses in excess of costs                                        
          on uncompleted contracts                                     (401,770)       316,442 
        Due to affiliates                                               (16,489)        (8,368) 
        Accrued expenses                                                (33,384)        20,617  
                                                                   ------------   ------------
          Net cash (used in) operating activities                    (2,458,135)    (1,414,876) 
                                                                   ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES                                    
  Purchase of property and equipment                                    (22,247)       (53,747) 
  Proceeds from sale of equipment                                           916          6,300  
  Redemption of certificate of deposit                                  500,000             -   
  Proceeds from sale of investment in equity securities of affiliate    363,004             -   
  Collections on notes receivable                                        21,292             -   
  Costs incurred in connection with proposed merger                     (50,000)            -   
  Decrease in due from affiliates                                         8,865        136,176 
  Decrease in other assets                                                2,897          6,580  
                                                                   ------------   ------------
  Net cash provided by investing activities                             824,727         95,309  
                                                                   ------------   ------------
                                 (Continued)
</TABLE>
                                    F-8
<PAGE>
<PAGE>

NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 1995 and 1994

<TABLE>
<CAPTION>
                                                                        1995          1994  
                                                                   ------------   ------------
<S>                                                                <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES                                    
  Increase (decrease)  in outstanding checks in excess                                    
    of bank balances                                               $    (55,196)  $     28,039  
  Proceeds from long-term debt                                          595,000      1,222,310  
  Principal payments on long-term debt                               (2,021,433)       (56,649) 
  Proceeds from issuance of common stock                              3,395,499        250,000 
  Public offering costs                                                (234,174)      (112,187) 
                                                                   ------------   ------------
          Net cash provided by financing activities                   1,679,696      1,331,513  
                                                                   ------------   ------------
          Net increase in cash                                           46,288         11,946  

Cash:                                                                                       
  Beginning                                                              11,946             -   
                                                                   ------------   ------------
  Ending                                                           $     58,234   $     11,946  
                                                                   ============   ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                       

  Cash payments for interest                                       $    165,289   $    147,556 
                                                                   ============   ============

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING                                      
  AND FINANCING ACTIVITIES                                        

  Common stock issued as payment for services pertaining to                                     
    development of patent                                          $        -     $     15,000  
                                                                   ============   ============
  Offsetting of balances due to and from affiliates as agreed                                   
    upon by the related parties (Note 10)                          $        -     $    230,711 
                                                                   ============   ============
  Reclassification of due from affiliate (Note 10)                 $        -     $    311,321 
                                                                   ============   ============
  Subscription agreements converted into common stock (Note 9)     $    700,000   $         -   
                                                                   ============   ============
  Due from affiliate transferred to notes receivable 
    (Notes 3 and 10)                                               $    311,321   $         -   
                                                                   ============   ============



See Notes to Consolidated Financial Statements.

</TABLE>





                                    F-9
<PAGE>
<PAGE>                                    

NOVATEK INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  NATURE OF BUSINESS, ENTITY'S CONTINUED EXISTENCE AND SIGNIFICANT 
         ACCOUNTING POLICIES

        
Nature of business: Novatek International, Inc. is in the business of 
developing and marketing a proprietary building construction process involving 
the use of steel trusses.  The Company's componetized building system consists 
of concrete panels, steel wall supports, floor joists and roof trusses.  
During 1995 and in prior years, the Company's business included fabricating, 
installing and finishing structures.  The Company operates within the 
construction industry primarily in Florida and the Caribbean. 
 
Trusteel Engineering Co., Inc., a wholly-owned subsidiary of Novatek 
International, Inc., designs and engineers the concrete panels, steel wall 
supports, floor joists and roof trusses manufactured by Novatek International, 
Inc. 
 
Entity's continued existence:  The Company incurred a  loss  from operations 
of $1,625,789 and a net loss of $1,663,190 during the year ended December 31, 
1995.  This raises substantial doubt about the Company's ability to continue 
as a going concern. 
 
The financial statements do not include any adjustments relating to the 
recoverability and classification of liabilities that might be necessary 
should the Company be unable to continue in existence. 
 
Management believes despite the losses incurred during 1995, the Company will 
continue to operate as a going concern for the following reasons: 
 
  1. During the last quarter of 1995, management has imposed strict 
     compliance in bidding only jobs that will deliver a gross profit. 
  2. The Company is currently under contract to complete three buildings on
     the Bimini Sands project.  While a small loss was incurred on the first 
     buildings, economies of scale will be realized on future identical 
     buildings and the original design has been modified to provide cost 
     reduction. 
  3. Management has downsized overhead and will continue to do so by: 
     a.  Eliminating and consolidating positions.  
     b.  Subletting its facilities at 1340 Neptune Drive. 
  4. Royalties accruing to the Company from the sale of medical screening 
     tests to its Bahamian distributor should provide additional income (see 
     Note 18). 
  5. The merger of the Company with Med Pro (see Note 18) will provide an 
     opportunity for Novatek to call outstanding warrants which may produce 
     additional capital. 
 
A summary of the Company's significant accounting policies follows: 
 
Principles of consolidation:  All significant intercompany balances and 
transactions are eliminated in consolidation.

                                    F-10
<PAGE>
<PAGE> 
Note 1.  Nature of Business, Entity's Continued Existence and Significant 
         Accounting Policies (Continued) 
 
Revenue and cost recognition:  Revenues from fixed-price construction 
contracts are recognized on the completed-contract method.  This method is 
used because historically there have been inherent hazards in estimating 
contract conditions and other external factors which have affected the 
reliability of the initial contract estimates.  A contract is considered 
complete when all costs except insignificant items have been incurred and the 
installation complies with specifications or has been accepted by the 
customer. 
 
Contract costs include all direct material and labor costs and those indirect 
costs related to contract performance, such as indirect labor, supplies, 
tools, repairs and depreciation.  Selling, general and administrative costs 
are charged to expense as incurred.  Provisions for estimated losses on 
uncompleted contracts are made in the period in which such losses are 
determined.  Claims are included in revenue when received. 
 
Costs in excess of amounts billed are classified as current assets under the 
caption "Costs in excess of billings on uncompleted contracts."  Billings and 
estimated losses in excess of costs are classified under current liabilities 
under the caption "Billings and estimated losses in excess of costs on 
uncompleted contracts."  Contract retentions are included in accounts 
receivable. 
 
Inventories:  Inventories are stated at the lower of cost (first-in, first-out 
method) or market. 
 
Investment in Trusteel Design Services, Inc.:  Investment in Trusteel Design 
Services, Inc. is accounted for using the equity method of accounting and 
carried at its acquisition cost of $7,500.  This investment is included in 
intangibles and other assets.  Trusteel Design Services, Inc. has been dormant 
since its acquisition. 
 
Property and equipment:  Property and equipment is stated at cost.  
Depreciation is computed principally by the straight-line method over the 
following estimated useful lives of the assets. 
 

                                 Years 
                              ---------
Buildings and improvements      31 - 39 

Leasehold improvements             5 

Equipment                        5 - 15 

Office furniture and equipment     5 

Delivery equipment                 5 


                                    F-11
<PAGE>
<PAGE>

NOTE 1.  NATURE OF BUSINESS, ENTITY'S CONTINUED EXISTENCE AND SIGNIFICANT 
         ACCOUNTING POLICIES Continued)

Investment in marketable securities of affiliate: The Company accounts for its 
investments in marketable securities under FASB Statement No. 115 which 
requires the Company to carry its investment in marketable securities of 
affiliate, classified in its available for sale portfolio during 1994 and 
transferred into its actively traded portfolio during 1995, at fair value.  
Differences between original cost and fair value, other than declines 
considered to be other than temporary in the available for sale portfolio, are 
recorded in a valuation allowance in the Statement of Shareholders' Equity 
(Deficit).  Declines in fair value considered other than temporary are charged 
to expense in the period the decline is considered to be other than temporary. 
Differences between original cost and fair value in the actively traded 
portfolio are credited to income or charged to expense.

Intangibles:  Intangibles, consisting of patent costs, are being amortized 
over their expected useful life of 17 years.

Income taxes:  Deferred taxes are provided on a liability method whereby 
deferred tax assets are recognized for deductible temporary differences and 
operating loss and tax credit carryforwards and deferred tax liabilities are 
recognized for taxable temporary differences.  Temporary differences are the 
differences between the reported amounts of assets and liabilities and their 
tax bases.  Deferred tax assets are reduced by a valuation allowance when, in 
the opinion of management, it is more likely than not that some portion or all 
of the deferred tax assets will not be realized.  Deferred tax assets and 
liabilities are adjusted for the effects of changes in tax laws and rates on 
the date of enactment.

Common stock and net (loss) per share:  On January 9, 1995, the Company 
effected a 1-for-10 reverse stock split.  The net (loss) per common share 
amounts are computed using the weighted average number of common shares 
outstanding during the period after giving retroactive effect to the reverse 
stock split.  The Company's net (loss) is adjusted for any cumulative 
dividends on preferred stock.

Preferred stock:  The Company has designated 5,000 shares of its Preferred 
Stock as Series A 10% Cumulative, Convertible Preferred Stock ("Preferred 
Series A").  The Preferred Series A carries a liquidation preference, and a 
stated redemption value and face value of $1,000 per share.  Each share of 
Preferred Series A is convertible into 333 shares of the Company's common 
stock.  At present, 1,887 shares of Preferred Series A are issued and 
outstanding (see Note 3).

Risks and uncertainties:  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.


                                    F-12
<PAGE>
<PAGE>

NOTE 2.  CONTRACT RECEIVABLES

Contract receivables consisted of the following as of December 31, 1995
and 1994:

<TABLE>
<CAPTION>

                                                          1995          1994    
                                                       ----------   ----------
<S>                                                    <C>          <C>
Contract receivables:                            

  Completed contracts                                  $  118,494   $  145,770 
  Contracts in progress                                    47,244      150,228 
  Retentions                                              104,812      105,022 
                                                       ----------   ----------
                                                          270,550      401,020 
Less allowance for doubtful accounts                      105,845       61,072 
                                                       ----------   ----------
                                                       $  164,705   $  339,948 
                                                       ===========  ==========
</TABLE>

NOTE 3.  NOTES RECEIVABLE

On April 28, 1995, the outstanding preferred stock of the Company was acquired 
by third parties in accordance with a purchase agreement. This agreement was 
contingent upon the success of the public offering and provided for the 
acquisition of the preferred stock in exchange for the assumption of  
liabilities of a former affiliate (Lincoln) to the Company and other 
consideration.  The amount due from the former affiliate was transferred to 
shareholders' equity  in 1994, as collection was contingent upon the 
successful completion of the sale of the preferred stock to the aforementioned 
parties.  During 1995, the amount due from the former affiliate was 
transferred to notes receivable.  The Company waived interest in exchange for 
the preferred shareholders' waiver of the cumulative preferred stock 
dividends.  Semiannual principal payments of 10% (20% per annum) are due on 
these notes until paid in full.

NOTE 4.  UNCOMPLETED CONTRACTS

Information regarding uncompleted contracts as of December 31, 1995 and 1994 is
as follows:

<TABLE>
<CAPTION>

                                                          1995          1994    
                                                       ----------   ----------
<S>                                                    <C>          <C>
Total amount of contracts in process                   $  517,310   $1,747,125 
                                                       ==========   ==========
Costs incurred on uncompleted contracts                $  418,907   $1,663,732 
Estimated (losses)                                        (71,866)    (452,474) 
                                                       ----------   ----------
                                                          347,041    1,211,258 
Less billings to date                                     140,680    1,307,229 
                                                       ----------   ----------
                                                       $  206,361   $  (95,971) 
                                                       ==========   ==========
</TABLE>                                                       
                                    F-13
<PAGE>
<PAGE>

NOTE 4.  UNCOMPLETED CONTRACTS (Continued)

Included in the accompanying balance sheets under the following captions:

<TABLE>
<CAPTION>
                                                          1995          1994    
                                                       ----------   ----------
<S>                                                    <C>          <C>
Costs in excess of billings on uncompleted contracts   $  285,103   $  384,541 

Billings and estimated losses in excess of costs                                 
on uncompleted contracts                                  (78,742)    (480,512) 
                                                       ----------   ----------
                                                       $  206,361   $  (95,971) 
                                                       ==========   ==========
</TABLE>

As a result of the inherent hazards in estimating contract conditions and 
other external factors which have affected the reliability of initial contract 
estimates total estimated contract completion costs have been revised upward 
by approximately $43,000.

NOTE 5.  INVENTORIES

Inventories as of December 31, 1995 and 1994 consisted of the following:

<TABLE>
<CAPTION>

                                                          1995          1994    
                                                       ----------   ----------
<S>                                                    <C>          <C>
Raw materials                                          $   96,159   $  116,779 

Finished goods                                             22,956       44,884 
                                                       ----------   ----------
                                                       $  119,115   $  161,663 
                                                       ==========   ==========
</TABLE>



NOTE 6.  PREPAID EXPENSES

Prepaid expenses as of December 31, 1995 and 1994 consisted of the following:

<TABLE>
<CAPTION>

                                                          1995          1994    
                                                       ----------   ----------
<S>                                                    <C>          <C>
Cost incurred in connection with proposed merger 
  (Note 18)                                            $   50,000   $      -  

Insurance                                                  39,766          - 

Other                                                      21,563        7,657 
                                                       ----------    ---------
                                                       $  111,329    $   7,657 
                                                       ==========    =========
</TABLE>                                                       
                                                    
                                    F-14
<PAGE>
<PAGE>

NOTE 7. INVESTMENT IN EQUITY SECURITIES OF AFFILIATE

The marketable equity securities held as of December 31, 1995 and 1994, 
consisted of 41,500 and 400,000 shares, respectively, of Polydex 
Pharmaceuticals Limited (an affiliated company through April 1995, see Note 
10).  During the year ended December 31, 1994, the Company wrote down this 
investment to $300,000, the fair value as of December 31, 1994, because the 
decline in market value was considered to be other than temporary.  During the 
year ended December 31, 1995 the Company realized a gain of $94,129 from the 
sale of 358,500 shares.

On January 26, 1996, the Company sold the remaining portion of its investment 
for $27,234 .

NOTE 8. INTANGIBLES AND OTHER ASSETS

Intangibles and other assets as of December 31, 1995 and 1994 consisted of the 
following:

<TABLE>
<CAPTION>
                                                          1995          1994    
                                                       ----------   ----------
<S>                                                    <C>          <C>
Patent costs, net of  accumulated amortization         $   47,784   $   50,293 

Other                                                      18,417       23,309 
                                                       ----------   ----------
                                                       $   66,201   $   73,602 
                                                       ==========   ==========
</TABLE>

NOTE 9.   LONG TERM DEBT

Long term debt as of December 31, 1995 and 1994 consisted of the following:

<TABLE>
<CAPTION>

                                                                      1995          1994    
                                                                   ----------   ----------
<S>                                                                <C>          <C>

Purchase money mortgage, interest paid monthly at 11%, was                              
  renegotiated on January 22, 1996, which required an immediate
  $30,000 principal payment, the remaining principal is due in
  full on February 15,1998, mortgage is collateralized by real
  property and is subordinated to the new mortgage note
  (see below)                                                      $  185,000   $  185,000 

Mortgage note payable to bank, interest was payable at 2-1/2
  percent over prime, the mortgage was paid in full on January 
  22, 1996 as a result of refinancing with a new lender
  (see below)                                                         137,777      297,501 

Bridge notes, automatically converted into units at $1.33                               
  per unit upon public offering (see Note 12), the Company also
  obtained additional bridge notes of $450,000 during 1995, of 
  which $50,000 converted at $1.33 per unit and $400,000 converted 
  at $2.00 per unit, interest that accrued at 10% was forgiven and
  was credited to shareholders' equity at the time of conversion           -       250,000 
                                                                       
</TABLE>
        
                                    F-15
<PAGE>
<PAGE>                                    

NOTE 9.   LONG TERM DEBT (Continued)

<TABLE>
<CAPTION>
                                                                      1995          1994    
                                                                   ----------   ----------
<S>                                                                <C>          <C>
Notes payable, convertible into restricted common stock at $2.50
  per share, convertible in units of $5,000 or greater, interest 
  at 10% ($120,000 of such notes were purchased by the Directors
  of the Company )                                                 $       -    $  299,500 

Promissory notes, interest at 10%                                          -       450,000 
                                                                          
Note payable to bank, interest at prime                                    -       500,000 

Unsecured promissory note, interest at 12%                                 -        61,013 

Unsecured demand promissory notes, interest at 10% to                           
  12% ($30,000 of such notes were purchased by an affiliate)               -       290,000 

Demand loans from officers, interest at 10% to 12%                         -       104,340 

Other                                                                   7,472       19,328 
                                                                   ----------   ----------
                                                                      330,249    2,456,682 

Less current maturities                                                 7,472    2,150,567 
                                                                   ----------   ----------
                                                                   $  322,777   $  306,115 
                                                                   ==========   ==========

</TABLE>

As of December 31, 1995, minimum payments required on long-term debt
are as follows:

<TABLE>
<CAPTION>

Year Ending             
December 31,                                                      Amount  
- ------------                                                  ------------
<S>                                                           <C>
1996                                                          $     7,472 

1997                                                                   -
                                                                       
1998                                                              322,777 
                                                               -----------
                                                              $   330,249 
                                                              ============
</TABLE>

On January 22, 1996 the Company refinanced its mortgage note with a new 
lender.  The amount borrowed under the new mortgage note was $240,000. The new 
note requires monthly interest only payments at sixteen percent (16%) through 
January 1998, at which time the note matures. The Company may extend the terms 
of the note for an additional two years by paying a $2,400 fee prior to the 
maturity date.  In addition to providing working capital, proceeds from the 
note were used to pay off the original mortgage note ($137,777) and paydown 
the purchase money mortgage note by $30,000.  The purchase money mortgage note 
is subordinated to this note. 

                                    F-16
<PAGE>
<PAGE>

NOTE 10.  RELATED PARTY TRANSACTIONS

The Company's former chairman of the Board of Directors was affiliated with 
entities with whom the Company entered into various transactions during  1994.  
The entities and nature of the chairman's affiliation are as follows:

<TABLE>
<CAPTION>

<S>                                             <C>
Entity                                          Nature of Affiliation of Company's Chairman 
- -------------------------------                 -------------------------------------------
Polydex Pharmaceuticals, Limited                Chairman of the Board of Directors 
  and Subsidiaries (Polydex)              

Lincoln Underwriting Management Inc. (Lincoln)  Chairman of the Board of Directors and 
                                                  majority shareholder 

Novadex Corporation (Novadex)                   Chairman of the Board of Directors and  
                                                  majority  shareholder 

Shure Insurance Company (Shure)                 Chairman of the Board of Directors and 
                                                  majority shareholder 

Usher Insurance Company, Ltd. (Usher)           Chairman of the Board of Directors and 
                                                  majority shareholder 

TDF Premium Finance Company, Inc. (TDF)         Chairman of the Board of Directors and 
                                                  majority shareholder 

</TABLE>

Nova Specialty Risks, Inc. is controlled by the corporate secretary of the 
Company.

Tribune Agency, Inc. (Tribune) is controlled by the corporate secretary of 
the Company.

During 1994, the Company and Lincoln formally agreed to offset balances due by 
the Company to TDF, Shure and Usher resulting in a reduction to the balance 
due from Lincoln of  $292,597.  The balance of $311,321 has been reclassified 
as a component of shareholders' equity (deficit) in 1994 as its payment was 
based on assumption by third parties, whom acquired the preferred stock of the 
Company (see Note 12), upon the successful completion of the public offering 
described in Note 12.

During 1995 and 1994 the Company received $12,000 and $18,000, respectively, 
of rental income from Novadex. 

During 1995 and 1994 the Company incurred interest expense of $12,296 and 
$15,636, respectively, to affiliates and officers.

The Company purchased approximately $50,000 of insurance during 1995 through 
Tribune.

The remaining changes in affiliate balances resulted primarily from repayment 
of advances.

                                    F-17
<PAGE>
<PAGE>                                    

NOTE 11. OPERATING LEASES

The Company leases its office, warehouse and vacant land adjacent to the 
office and warehouse under noncancelable leases through 1997.  The leases 
provide for an initial free rent period of six months, with annual rent 
increases of the lesser of the cost of living index or 6% beginning January 1, 
1994.  One lease also provides for an option to purchase the office and 
warehouse at a specified price through December 31, 1995, with annual 
increases to the purchase price of the lesser of the cost of living index or 
5% after December 31, 1995.  The Company is also required to maintain the 
property as well as pay all applicable taxes.  Rent expense for all operating 
leases was approximately $85,000 for each of the years ended December 31, 1995 
and 1994.

As of December 31, 1994, the Company's minimum annual lease commitments under 
all noncancelable operating leases are as follows:

<TABLE>
<CAPTION>

Year Ending             
December 31,                                                      Amount  
- ------------                                                  ------------
<S>                                                           <C>
1996                                                          $     83,472 

1997                                                                27,822
                                                              ------------
                                                              $    111,294
                                                              ============
</TABLE>

NOTE 12.  PUBLIC OFFERING

On April 17, 1995 the Company's public offering was effective. The Company 
sold 862,500 units, including  the exercise of the over-allotment option, each 
consisting of one share of common stock and one common stock purchase warrant 
(exercise price $6.75 per share through April  14, 1999 with the Company 
having the option to redeem the warrants under certain circumstances), for a 
unit price of $4.50. The net proceeds after deducting the underwriting 
commission and offering expenses amounted to $ 3,049,138. 

Also connected with the public offering was the conversion of subscription 
agreements into 425,000 units, each unit consisting of one share of common 
stock and one common stock purchase warrant, for $722,758, which included 
$22,758 of accrued interest payable on the subscription agreements prior to 
conversion. The warrants issued are convertible into common stock at $6.50 per 
share.

In conjunction with the public offering, the Company issued to the 
underwriters, for nominal consideration, warrants to purchase an aggregate of 
75,000 units exercisable at $5.40 per share, a price equal to 120% of the 
price to the public.

                                    F-18
<PAGE>
<PAGE>                                       

NOTE 13. INCOME TAXES

There is no current provision for income taxes due to operating losses.  The 
net operating losses from 1989 through 1995 expire as follows:

<TABLE>
<CAPTION>

Year Incurred                        Year Expires                   Amount  
- -------------                        ------------                 ----------
<S>                                  <C>                          <C>
1989                                      2004                    $   14,409 

1990                                      2005                       298,752 

1991                                      2006                       672,044 

1992                                      2007                       154,081 

1995                                      2008                     1,268,513 

1994                                      2009                     1,632,792 

1995                                      2010                     1,648,007 
                                                                  ----------
Net operating loss carryforward                                   $5,688,598 
                                                                  ==========
</TABLE>

The amount and availability of the net operating loss carryforwards may be 
subject to limitations set forth by the Internal Revenue Code.  Factors such 
as the number of shares ultimately issued within a three-year look-back 
period; whether there is a deemed more than 50 percent change in control; the 
applicable long-term tax exempt bond rate; continuity of historical business; 
and subsequent income of the Company all enter into the annual computation of 
allowable annual utilization of the carryforwards.

Net deferred tax asset consists of the future tax benefit of the net operating 
loss carryforwards, taking into account the  differential between the regular 
and alternative minimum tax basis, at an expected tax rate of 35% as follows:

Deferred tax asset                                $  1,991,009

Less valuation allowance                            (1,991,009)
                                                   -----------
Net deferred tax asset                            $         -
                                                   ===========


The Company has allowed fully for its deferred tax asset because under present 
conditions as described in Note 1, "entities continued existence", and for the 
effect on the net operating loss which may occur as a result of a successful 
merger, as described in Note 18, management believes it more likely than not 
that substantially all of the deferred tax asset will not be realizable.

                                    F-19
<PAGE>
<PAGE>                                       

NOTE 14.  GEOGRAPHIC INFORMATION

Contract revenues and operating loss for the years ended December 31, 1995 and 
1994, and identifiable assets as of the end of each year classified by 
geographic area, were as follows:

<TABLE>
<CAPTION>
                             United States           Caribbean          Total    
                          ----------------        -------------   --------------
<S>                       <C>                     <C>             <C>
December 31, 1994:                                              

  Contract revenues       $     2,027,737         $          -    $     2,027,737 
                          ===============         =============   ===============
  Operating (loss)        $    (1,347,342)        $     (66,591)  $    (1,413,933) 
                          ===============         =============   ===============     
  Identifiable assets     $     3,008,044         $          -    $     3,008,044 
                          ===============         =============   ===============
December 31, 1995:                                              

  Contract revenues       $     1,550,450         $     958,873   $     2,509,323 
                          ===============         =============   ===============
  Operating (loss)        $    (1,415,781)        $    (237,008)  $    (1,625,789) 
                          ===============         =============   ===============
  Identifiable assets     $     1,856,687         $     318,600   $     2,175,287 
                          ===============         =============   =============== 
</TABLE>

NOTE 15.  MAJOR CUSTOMERS

Net sales for the year ended December 31, 1995 include sales to the following 
major customers, together with the receivables due from those customers:

<TABLE>                                                                             
<CAPTION>
                                                            Accounts 
                                                           Receivable,     
                                                             Net of             
Major Customer                         Sales                Allowance       
- --------------                    ------------            ------------
<S>                               <C>                     <C>
A                                 $    594,780            $    69,673 

B                                      270,620                     -

C                                      256,093                  2,000 

</TABLE>

There were no major customers in 1994.

Because of the nature of the Company's business, the major customers will vary
between years.

NOTE 16.  LITIGATION

The Company is a defendant in various lawsuits wherein substantial amounts are 
claimed.  In the opinion of management, these suits are without substantial 
merit and should not result in judgments which in the aggregate would have a 
material adverse effect on the Company's financial statements.


                                    F-20
<PAGE>
<PAGE>
 
NOTE 17.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments as of 
December 31, 1995 and 1994 are as follows:

<TABLE>
<CAPTION>
 
                                                       1995                     1994                   
                                              ---------------------    ----------------------
                                                Carrying      Fair       Carrying       Fair
                                                 Amount       Value       Amount       Value   
                                              ----------  ----------   ----------- ----------
<S>                                           <C>         <C>          <C>         <C>
Cash and cash equivalents                     $   58,234  $   58,234   $    11,946 $    11,946 
                                              ==========  ==========   =========== ===========
Certificate of deposit                        $       -   $       -    $   500,000 $   500,000 
                                              ==========  ==========   =========== ===========
Investment in equity securities of affiliate  $   24,651  $   24,651   $   300,000 $   300,000 
                                              ==========  ==========   =========== ===========
Notes receivable                              $  290,029  $  290,029   $        -  $        -
                                              ==========  ==========   =========== ===========
Long-term debt                                $  330,249  $  321,792   $ 2,456,682 $ 2,456,682 
                                              ==========  ==========   =========== ===========
</TABLE> 

Cash and cash equivalents:  The carrying amount approximates fair value 
because of the short maturity of those instruments.

Certificates of deposit:  The carrying amount approximates fair value because 
of the short maturity of the instrument.

Notes receivable:  The fair value of the Company's notes receivable are based 
on the market rates currently available for similar instruments.

Investment in equity securities of affiliate:  The fair value as of 
December 31, 1995 and 1994 are based on the investments listed trading price 
as of December 31, 1995 and 1994.

Long-term debt:  The fair value of the Company's long-term debt is based on 
the borrowing rates currently available to the Company for loans with similar 
terms and average maturities.  The fair value balance does not represent a 
pay-off amount available to the Company.

NOTE 18.  SUBSEQUENT EVENTS

Plan of merger: On January 7, 1996, the Company entered into an Agreement and  
plan of merger  (the "agreement") with Medical Products, Inc. ("Med Pro") and 
the shareholders of Medical Products, Inc. with the intent of forming a 
Florida corporation (to be called "Novatek International Holdings, Inc." 
hereafter referred to as "Novatek Holdings") which will be a wholly-owned 
subsidiary of the Company.  The subsidiary to be formed, Novatek Holdings, 
will be merged with Med Pro resulting in Novatek Holdings being the surviving 
corporation. The plan is contemplated to qualify as a reorganization under 
Section 368(a)(1)(A) of the Internal Revenue Code of 1986.  The agreement 
specifies that closing will take place no later than February 29, 1996.  The 
total purchase price for the shares of Med Pro shall be $72,000,000 consisting 
of :

* Upon the execution of the agreement (January 7, 1996), a nonrefundable 
  deposit of a $3,000,000 convertible note, convertible into 1.2 million 
  shares of the Company's common stock was issued.

                                    F-21
<PAGE>
<PAGE>
                                    
NOTE 18.  SUBSEQUENT EVENTS (Continued)

* At closing, $3,000,000 in immediately available funds shall be paid to 
  the shareholders of Med Pro.  These funds are anticipated to be supplied 
  by bridge loans placed by the underwriter.  The bridge loans are to be 
  converted into common stock at an effective exercise price of $2.50 per 
  share. 
* At closing, the Company will transfer to the shareholders of Med Pro 
  and/or their assigns, six million shares of the Company's unregistered 
  common stock, valued at $5 per share, representing $30,000,000 of the 
  consideration to be paid under the agreement.
* At closing, the Company will deliver and execute noncancelable 
  convertible debenture in the aggregate principal of $36,000,000, interest 
  payable at 9%, due on January 1, 2001 (date of payment subject to other 
  provisions of the agreement).  In the event the Company has not, by the 
  closing date, entered into a final agreement (the "Brazil Agreement") 
  pursuant to which the Company (or its successor) would provide 
  $100,000,000 of medical diagnostic devices to the Government of Brazil, 
  the $36 million dollar debenture, which otherwise would have been 
  included in the total purchase price may be retained by Novatek in 
  escrow, and will be delivered upon the execution and delivery of the 
  Brazil Agreement.

As part of the agreement the Company is prohibited from issuing any additional 
shares of common stock, options, warrants, units or other instruments or 
rights convertible into the Company's common stock, except for:

* At closing, 1,000,000 shares of the Company's unregistered common stock 
  may be issued to the underwriter.
* An option to purchase up to 450,000 shares of the Company's unregistered 
  common stock at $7.00 per share granted the Bahamian individual connected 
  with the sale of the license agreement described below.

Exchange of technologies agreement and sale of license agreement:  On December 
1, 1995 the Company acquired a license to distribute medical screening tests, 
"Universal Health Watch, Inc.'s Rapid Medical Diagnostic Kits", to the 
Commonwealth of the Bahamas from Medical Products, Inc. through an exchange of 
technology licensing agreements with Medical Products, Inc. ("Med Pro").  The 
Company, on December 28, 1995, entered in an agreement to sell its newly 
acquired license to a Bahamian individual through a license agreement for 
$3,000,000.  The individual assigned an 8% promissory note due him from a real 
estate corporation wholly-owned by him to the Company with the following 
terms:

* Cash payment of $250,000 within 45 days of the execution of the agreement 
  (paid on January 31, 1996).
* Minimum quarterly principal payments of $250,000 per quarter, or the net 
  proceeds from the sale of real estate, owned by a corporation wholly owned 
  by the individual, up to $750,000 during the initial year.
* Principal payments of $250,000 per quarter during years two and three.
* The individual has personally guaranteed the note.

The above transaction was finalized during January 1996 at which time the 
Company recognized $3,000,000 of revenue.  As of February 6, 1996, the Company 
has a note receivable of $2,750,000 ($3,000,000 sales price less $250,000 cash 
payment).

                                    F-22     


<TABLE> <S> <C>


        <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF NOVATEK INTERNATIONAL INC. FOR THE TWELVE MONTHS
ENDED DECEMBER 3, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO 
SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S>                             <C>

<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               DEC-31-1995
<CASH>                                          58,234
<SECURITIES>                                    24,651
<RECEIVABLES>                                  560,579
<ALLOWANCES>                                   105,845
<INVENTORY>                                    119,115
<CURRENT-ASSETS>                               827,587
<PP&E>                                       1,399,120
<DEPRECIATION>                                 343,200
<TOTAL-ASSETS>                               2,175,287
<CURRENT-LIABILITIES>                          250,841
<BONDS>                                              0
<COMMON>                                     6,228,185
                                0
                                  1,887,000
<OTHER-SE>                                  (6,513,516)
<TOTAL-LIABILITY-AND-EQUITY>                 2,175,287
<SALES>                                      2,509,323
<TOTAL-REVENUES>                             2,509,323
<CGS>                                        3,038,911  
<TOTAL-COSTS>                                3,038,911
<OTHER-EXPENSES>                               172,766
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             156,681  
<INCOME-PRETAX>                             (1,663,190) 
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                         (1,663,190)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                (1,663,190)
<EPS-PRIMARY>                                     (.65)
<EPS-DILUTED>                                     (.65)

        

</TABLE>


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