DONNEBROOKE CORP
10-K, 1998-12-04
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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-K

                    [X[ ANNUAL REPORT PURSUANT TO SECTION 13
                         OF THE SECURITIES EXCHANGE ACT
                   For the Fiscal Year Ended December 31, 1996

                          Commission File No. 33-25900

                             DONNEBROOKE CORPORATION

           (Name of Small Business Issuer as specified in its Charter)
<TABLE>

<S>                                                                               <C>         <C>

Delaware                          16910 Dallas Parkway, Suite 100, Dallas, Texas  75248        75-2228820
(State or Other Jurisdiction      (Address of Principal Executive Office,                     (IRS Employer
 of incorporation)                    including Zip Code)                                      Identification No.)

</TABLE>

                                           
                               

                                 (972) 248-1922
              (Registrant's telephone number, including area code)

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

         Title of each Class          Name of Each Exchange on which Registered
         -------------------          -----------------------------------------
             None                                  None

Securities  registered  Under Section  12(g) of the exchange Act:  Common Stock,
$0.00001 Par Value

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  management's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this form 10-K. [ X ]

State issuer's revenues for its most recent fiscal year:  $-0-.

State the  aggregate  market  value of the voting  stock held by  non-affiliates
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: $-0-(stock is not quoted).

As of December 1, 1998 the issuer had  37,333,000  shares of common stock issued
and outstanding.





<PAGE>


                                     PART I


Item 1. Description of Business.
- --------------------------------

 General

Donnebrooke  Corporation (the "Company") was incorporated on April 19,1988 under
the laws of the State of Delaware. The Company subsequently filed a registration
statement under The Securities Act of 1933, as amended,  with the Securities and
Exchange  Commission  with respect to a distribution  of its common stock to the
shareholders of Halter Venture Corporation, its parent. This distribution of the
Company's  stock became  effective  February  15, 1989.  The Company had not yet
engaged in any business  operations.  The business purpose of the Company was to
seek out and obtain an acquisition, merger or outright sale transaction, whereby
its shareholders would benefit.

Early in 1989  Albert Ray Allison  III and his family  purchased  control of the
Company.  During 1989 and 1990 the Company  attempted to enter into the business
of owning,  operating  and managing  various  parcels of real estate and to own,
operate and manage shared tenant service operations  tailored  predominately for
the legal profession and related professions.  The Company was not successful in
initiating  these  operations.  Accordingly,  the  Company  has  never  had  any
substantial operations or substantial assets since its inception.

The Company's corporate charter was revoked in 1992 by the State of Delaware for
failure to file required  franchise tax reports and to pay franchise  taxes.  On
October 16, 1998 Halter Capital Corporation  acquired a controlling  interest in
the Company and the current  Board of  Directors  was  appointed by the previous
Board of  Directors,  who then  resigned.  On October 26,  1998,  the  corporate
charter was revived.

It is the intention of the new management to bring its SEC periodic reporting to
date in order that the  Company  might be  potentially  attractive  to a private
business  that has  interest in becoming a  publicly-held  company,  without the
expense and time delay involved in distributing its securities to the public.


Proposed Business

The  Company  intends to locate and  combine  with an  existing,  privately-held
company,  which is profitable,  or, in management's  view, has growth potential,
irrespective of the industry in which it is engaged.  However,  the Company does
not  intend  to  combine  with a  private  company  that may be  deemed to be an
investment  company subject to the Investment Company Act of 1940. A combination
may be structured as a merger,  consolidation,  exchange of the Company's common
stock for stock or assets  or any other  form that will  result in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as they are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

                                        2

<PAGE>


Combination Suitability Standards

         In its pursuit for a  combination  partner,  the  Company's  management
intends to consider only combination  candidates,  which are profitable,  or, in
management's  view,  have growth  potential.  The Company's  management does not
intend to pursue any combination  proposal  beyond the  preliminary  negotiation
stage with any  combination  candidate  that does not furnish  the Company  with
audited  financial  statements  for at least  its most  recent  fiscal  year and
unaudited  financial  statements for interim  periods  subsequent to the date of
such audited financial statements, or is in a position to provide such financial
statements  in a timely  manner.  In the event such a  combination  candidate is
engaged in a high  technology  business,  the  Company may obtain  reports  from
independent  organizations of recognized  standing covering the technology being
developed  and/or  used  by  the  candidate.  The  Company's  limited  financial
resources may make the acquisition of such reports  difficult or even impossible
to obtain  and,  thus,  there can be no  assurance  that the  Company  will have
sufficient funds to obtain such reports when considering  combination  proposals
or  candidates.  To the  extent  the  Company  is unable to obtain the advice or
reports from experts, the risks of any combined  enterprise's being unsuccessful
will be enhanced.  Furthermore,  to the knowledge of the Company's  officers and
directors,  neither the candidate nor any of its directors,  executive officers,
principal shareholders or general partners:

     (1) will have been convicted of securities  fraud,  mail fraud,  tax fraud,
         embezzlement,   bribery,   or  a  similar  criminal  offense  involving
         misappropriation  or theft of  funds,  or be the  subject  of a pending
         investigation or indictment involving any of those offenses;

     (2) will have been  subject  to a  temporary  or  permanent  injunction  or
         restraining  order arising from unlawful  transactions  in  securities,
         whether as issuer, underwriter,  broker, dealer, or investment advisor,
         may be the subject of any  pending  investigation  or a defendant  in a
         pending  lawsuit  arising  from or based upon  allegations  of unlawful
         transactions in securities; or

     (3) will have been a defendant in a civi1 action which  resulted in a final
         judgement  against it or him awarding  damages or rescission based upon
         unlawful practices or sales of securities.

         The Company's officers and directors will make these  determinations by
asking  pertinent  questions  of  the  management  of  prospective   combination
candidates.  Such persons will also ask pertinent questions of others who may be
involved in the combination proceedings.  However, the officers and directors of
the  Company  will  not  generally  take  other  steps to  verify  independently
information  obtained in this manner which is favorable.  Unless something comes
to their attention that puts them on notice of a possible disqualification which
is being  concealed from them,  such persons will rely on  information  received
from the management of the prospective combination candidate and from others who
may be involved in the combination proceedings.


Item 2. Description of Property.
- --------------------------------
         The Company has no properties.


Item 3.  Legal Proceedings.
- ---------------------------

         The Company is not a party to any material pending litigation nor is it
aware of any threatened legal proceeding.

                                        3

<PAGE>



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

         No matters were  submitted to securities  holders during the year ended
December 31, 1996..



                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.
- -----------------------------------------------------------------

Market Information

         The stock does not trade on any exchange or the OTC market. There is no
known public market for this  security.  As of December 1, 1998,  there were 723
holders on record of the Company's  common stock,  holding a total of 37,333,000
shares.

Dividend Policy

         The Company has never paid any  dividends  on its common stock and does
not have any current plan to pay any dividends in the foreseeable future.


Item 6. Management's  Discussion and Analysis of Financial Condition and Plan of
Operation.
- --------------------------------------------------------------------------------


Discussion of Financial Condition


         The  Company  currently  has no  revenues,  no  operations  and owns no
assets.  The  Company  will  remain  illiquid  until  such  time  as a  business
combination  transaction  occurs, if ever. No prediction of the future financial
condition of the Company can be made.

         Due to the lack of sustaining  operations  from inception, the  Company
is  considered  in  the  development  stage  and,  as  such,  has  generated  no
significant  operating revenues and has incurred cumulative  operating losses of
approximately $133,000.  Accordingly,  the Company is dependent upon its current
management and/or significant stockholders to provide sufficient working capital
to preserve the integrity of the corporation during this phase.


Plan of Business

         General.  The Company  intends to locate and combine  with an existing,
privately-held  company which is profitable or, in management's view, has growth
potential,  irrespective  of the industry in which it is engaged.  However,  the
Company does not intend to combine with a private  company that may be deemed to
be an  investment  company  subject to the  Investment  Company  Act of 1940.  A
combination  may be  structured  as a  merger,  consolidation,  exchange  of the
Company's common stock for stock or assets or any other form that will result in
the combined enterprise's becoming a publicly-held corporation.

         Pending  negotiation  and  consummation  of a combination,  the Company
anticipates  that  it  will  have,  aside  from  carrying  on its  search  for a
combination partner, no business  activities,  and, thus, will have no source of
revenue.  Should  the  Company  incur  any  significant  liabilities  prior to a
combination  with  a  private  company,  it may  not be  able  to  satisfy  such
liabilities as they are incurred.


                                       4

<PAGE>

         If  the   Company's   management   pursues  one  or  more   combination
opportunities  beyond the preliminary  negotiations stage and those negotiations
are  subsequently  terminated,  it is foreseeable that such efforts will exhaust
the Company's ability to continue to seek such combination  opportunities before
any successful  combination  can be  consummated.  In that event,  the Company's
common stock will become  worthless  and holders of the  Company's  common stock
will receive a nominal distribution,  if any, upon the Company's liquidation and
dissolution.

         Combination  Suitability  Standards.  In its pursuit for a  combination
partner,   the  Company's   management  intends  to  consider  only  combination
candidates which are profitable or, in management's view, have growth potential.
The  Company's  management  does not intend to pursue any  combination  proposal
beyond the preliminary  negotiation  stage with any combination  candidate which
does not furnish the Company with audited financial  statements for at least its
most recent fiscal year and unaudited  financial  statements for interim periods
subsequent to the date of such audited financial statements, or is in a position
to provide such  financial  statements in a timely  manner.  In the event such a
combination candidate is engaged in a high technology business,  the Company may
obtain reports from independent  organizations of recognized  standing  covering
the  technology  being  developed  and/or used by the  candidate.  The Company's
limited  financial  resources may make the acquisition of such reports difficult
or even  impossible  to obtain and,  thus,  there can be no  assurance  that the
Company  will have  sufficient  funds to obtain such  reports  when  considering
combination  proposals  or  candidates.  To the extent the  Company is unable to
obtain  the  advice  or  reports  from  experts,   the  risks  of  any  combined
enterprise's being unsuccessful will be enhanced.  Furthermore, to the knowledge
of the Company's  officers and  directors,  neither the candidate nor any of its
directors, executive officers, principal shareholders or general partners:

         (1)  will have been  convicted of  securities  fraud,  mail fraud,  tax
              fraud,  embezzlement,  bribery,  or  a  similar  criminal  offense
              involving misappropriation or theft of funds, or be the subject of
              a  pending  investigation  or  indictment  involving  any of those
              offenses;

         (2)  will have been subject to a temporary or permanent  injunction  or
              restraining   order   arising  from   unlawful   transactions   in
              securities,  whether as issuer,  underwriter,  broker,  dealer, or
              investment   advisor,   may  be  the   subject   of  any   pending
              investigation  or a defendant in a pending lawsuit arising from or
              based upon allegations of unlawful transactions in securities; or

         (3)  will have been a defendant in a civil  action which  resulted in a
              final judgement  against it or him awarding  damages or rescission
              based upon unlawful practices or sales of securities.

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in
the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.








                                       5

<PAGE>


Item 7. Financial Statements.
- -----------------------------

<TABLE>

                                                                                Page
<S>                                                                             <C>


Report of Independent Certified Public Accountants                              F-1

Balance Sheets as of  December 31, 1996 and 1995                                F-2

Statements of Operations                                                        F-3
   for the years ended December 31, 1996 and 1995 and for the period
   April 19, 1988 (date of inception) to December 31, 1996

Statement of Changes in Shareholder's Equity                                    F-4
   for the period from April 19, 1988
   (date of inception) to December 30, 1996

Statements of Cash Flows                                                        F-6
   for the years ended  December  31, 1996 and 1995 and for the
   period  April 19, 1988 (date of  Inception)  to December 31,
   1996

Notes to Financial Statement                                                    F-7




</TABLE>



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


Prior to the change of control on October 16, 1998,  the last year for which the
Registrant  had audited  financial  statements was for the period ended December
31, 1989. The independent certified public accounting firm of Sellers,  Mitchell
& Tinsley,  P.C.  of  Houston,  Texas  issued its  unqualified  opinion on these
financial  statements  on April 13,  1990.  This  independent  certified  public
accounting firm also issued a compilation report under the standards established
by the American  Institute  of Certified  Public  Accountants  on the  financial
statements  contained  in the  Registrant's  Form 10-Q as of May 1,  1990.  This
independent certified public accounting firm performed no procedures of any type
on the Registrant's financial statements subsequent to May 1, 1990.

As of the date of this Form 10-K, the independent  certified  public  accounting
firm of Sellers,  Mitchell & Tinsley,  P.C.  is not  licensed by the Texas State
Board of Accountancy as an operating  unit and,  therefore,  cannot be contacted
for any matters related to the Registrant.


                                       6

<PAGE>


The Registrant made no required periodic filings covering the periods from April
1, 1990 through December 31, 1997.

In order to comply with the appropriate reporting requirements of the Securities
Exchange Act of 1934,  subsequent to the change of control  discussed above, the
Registrant's  Board  of  Directors  engaged  the  independent  certified  public
accounting firm of S. W. Hatfield + Associates, Dallas, Texas, effective October
16, 1998.

During the fiscal  years ended  December  31, 1995 and 1996,  there have been no
disagreements  on any matter of accounting  principles  or practices,  financial
statement  disclosure  or auditing  scope or procedure  or any other  reportable
events.



                                    PART III


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

The following table sets forth the officers and directors of the Company.


Name                       Position                                       Age

Kevin B. Halter            President, Treasurer and Director               63
Kevin B. Halter, Jr.       Vice President, Secretary and Director          38

Set forth below is a description of the  backgrounds of each of the officers and
directors of the Company.


Kevin B. Halter has served as President,  Treasurer and Chief Executive  Officer
of the Company since October 16, 1998. Mr. Halter has served as President, Chief
Executive Officer and Chairman of the Board of Millennia,  Inc. since June 1994.
He also served as Vice  Chairman of the Board of  Millennia,  Inc.  from January
1994 until June 1994.  In  addition,  Mr.  Halter has served as  Chairman of the
Board  and  Chief   Executive   Officer  of  Halter   Capital   Corporation,   a
privately-held  investment  and  consulting  company,  since  1987,  and  as its
President since June 1995. Mr. Halter is the father of Kevin B. Halter, Jr.

Kevin B. Halter,  Jr. has served as Vice  President and Secretary of the Company
since October 16, 1998. Mr. Halter has served as Vice President, Secretary and a
director  of  Millennia,  Inc.  since  January  1994.  He is also  President  of
Securities Transfer Corporation, a registered stock transfer company, a position
he has held since 1987. Mr. Halter has served as Vice President and Secretary of
Halter Capital Corporation since 1987. Mr. Halter is the son of Kevin B. Halter.

Item 10. Executive Compensation.
- --------------------------------

         The  Company's  management is not  currently  compensated  for services
provided  to the  Company,  and no  compensation  has been  accrued  and none is
expected to be accrued in the future.

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

         The  following  table set forth the names and  addresses of each of the
persons known by the Company to own beneficially 10% or more of the common stock
of the Company,  as well as the common  stock  ownership of each of the officers
and directors of the Company as of December 1, 1998.

                                       7

<PAGE>


Name and Address           Number of Shares          Percentage of Ownership

Kevin B. Halter                  603,968                     1.6%
16910 Dallas Parkway
Suite 100
Dallas, Texas 75248

Kevin B. Halter, Jr.              67,356                  (less than 1%)
16910 Dallas Parkway
Suite 100
Dallas, Texas 75248

Halter Capital Corporation    19,490,735(A)                  52%
16910 Dallas Parkway
Suite 100
Dallas, Texas 75248

All officers and directors as
a group (2 persons)               671,324                    1.8%

- --------------------------------------------------------------------------------
(A) Kevin B. Halter and Kevin B. Halter,  Jr. serve as directors and officers of
Halter  Capital  Corporation  and as a  result  may  each  be  deemed  to be the
beneficial owner of the 19,490,735 shares  beneficially  owned by Halter Capital
Corporation. However, pursuant to Rule 16a-3 promulgated under the Exchange Act,
they expressly  disclaim that they are the beneficial owners, for the purpose of
Section 16 of the  Exchange  Act, of any such stock,  other than those shares in
which they have an economic interest.


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

The Company's Vice President,  Kevin B. Halter, Jr., has agreed to provide funds
not exceeding $5000 to the Company to cover the Company's  expenses  relating to
its SEC periodic reporting and other minor corporate expenses.


Item 13. Exhibits and Reports on Form 8-K.
- ------------------------------------------

Exhibits:        None

Reports on Form 8-K :          None













                                       8

<PAGE>



                                   SIGNATURES

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

Dated: December 3,1998


DONNEBROOKE CORPORATION


By: /s/ Kevin B. Halter
    ------------------------------
        Kevin B. Halter, President


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


    /s/ Kevin B. Halter                             December 3, 1998
    -----------------------------------------
    Kevin B. Halter, President,
    (Chief Executive Officer,
    Principal Financial Officer) and Director


    /s/ Kevin B. Halter, Jr.                        December 3, 1998
    -----------------------------------------
    Kevin B. Halter, Jr., Vice President,
    Secretary and Director









                                       9


<PAGE>

                                                     DONNEBROOKE
                                                    CORPORATION
                                           (a development stage company)

                                              Financial Statements
                                                        and
                                                  Auditor's Report

                                             December 31, 1996 and 1995















                           S. W. HATFIELD + ASSOCIATES
                          certified public accountants

                      Use our past to assist your future sm


<PAGE>



                             DONNEBROOKE CORPORATION

                                    CONTENTS




                                                                           Page
                                                                           ----


Report of Independent Certified Public Accountants                          F-1 

Financial Statements

   Balance Sheets as of December 31, 1996 and 1995                          F-2 

   Statements of Operations                                                 F-3
     for the years ended December 31, 1996 and 1995
       and for the period April 19, 1988 (date of inception)
       to December 31, 1996                                               

   Statement of Changes in Stockholders' Equity                             F-4
     for the period from April 19, 1998 (date of inception)
       to December 31, 1996                                               

   Statements of Cash Flows                                                 F-6
     for the years ended December 31, 1996 and 1995
       and for the period April 19, 1988 (date of inception)
       to December 31, 1996                                               

   Notes to Financial Statements                                            F-7 





<PAGE>


S. W. HATFIELD + ASSOCIATES
certified public accountants

Members:   American Institute of Certified Public Accountants
               SEC Practice Section
               Information Technology Section
           Texas Society of Certified Public Accountants


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
Donnebrooke Corporation

We have audited the  accompanying  balance sheets of Donnebrooke  Corporation (a
Delaware  corporation  and a development  stage company) as of December 31, 1996
and 1995 and the related  statements  of  operations,  changes in  stockholders'
equity and cash flows for each of the two years then  ended,  respectively,  and
for the period  from April 19, 1988 (date of  inception)  through  December  31,
1996.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of  Donnebrooke  Corporation (a
development  stage company) as of December 31, 1996 and 1995, and the results of
its  operations  and its  cash  flows  for  each of the two  years  then  ended,
respectively, and for the period from April 19, 1988 (date of inception) through
December 31, 1996, in conformity with generally accepted accounting principles.




                                        S. W. HATFIELD + ASSOCIATES
Dallas, Texas
October 26, 1998




                      Use our past to assist your future sm

P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      [email protected]


                                                                             F-1
<PAGE>


<TABLE>

<CAPTION>

                             DONNEBROOKE CORPORATION
                          (a development stage company)
                                 BALANCE SHEETS
                           December 31, 1996 and 1995


                                                                1996         1995
                                                             ---------    ---------
<S>                                                          <C>         <C>


ASSETS                                                       $    --      $    --
                                                             =========    =========


LIABILITIES                                                  $    --      $    --
                                                             ---------    ---------


STOCKHOLDERS' EQUITY Preferred stock - $0.00001 par value 
     10,000,000 shares authorized; none
     issued and outstanding                                       --           --
   Common stock - $0.00001 par value 
     1,000,000,000 shares authorized 
     37,333,000 issued and outstanding                             373          373
   Additional paid-in capital                                  132,217      132,217
   Deficit accumulated during
     the development stage                                    (132,590)    (132,590)
                                                             ---------    ---------

       Total stockholders' equity                                 --           --
                                                             ---------    ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $    --      $    --
                                                             =========    =========

</TABLE>

The accompanying notes are an integral part of these financial statements.
                                                                       
                                                                             F-2

<PAGE>


<TABLE>

<CAPTION>

                             DONNEBROOKE CORPORATION
                          (a development stage company)
                            STATEMENTS OF OPERATIONS
                   Years ended December 31, 1996 and 1995 and
    Period from April 19, 1988 (date of inception) through December 31, 1996


                                                                           Period from
                                                                          April 19, 1988
                                                                       (date of inception)
                                         Year ended     Year ended         through
                                         December 31,   December 31,      December 31,
                                            1996          1995                1996
                                         ----------     ----------        ------------
<S>                                      <C>            <C>               <C>

Revenues
   Real estate management fees           $     --       $     --          $     41,253
                                         ----------     ----------        ------------

Expenses
   General and administrative                  --             --                45,685
   Amortization of organization costs          --             --                 1,208
                                         ----------     ----------        ------------

     Total expenses                            --             --                46,893
                                         ----------     ----------        ------------


Loss from operations                           --             --                (5,640)

Other expenses
   Loss on abandonment of fixed assets         --             --              (126,950)
                                         ----------     ----------        ------------

NET LOSS                                 $     --       $     --          $   (132,590)
                                         ==========     ==========        ============


Net loss per weighted-average
   share of common stock
   outstanding                                  nil            nil                 nil
                                                ===            ===                 ===
Weighted-average number
   of shares of common
   stock outstanding                     37,333,000     37,333,000          36,531,629
                                         ==========     ==========        ============

</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-3

<PAGE>


<TABLE>

<CAPTION>

                             DONNEBROOKE CORPORATION
                          (a development stage company)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
    Period from April 19, 1988 (date of inception) through December 31, 1996


                                                                              Deficit
                                                                             accumulated
                                                               Additional     during the
                                       Common Stock             paid-in      development
                                   Shares         Amount       capital          stage         Total
                                 -----------    -----------   -----------   ------------   -----------
<S>                              <C>            <C>           <C>           <C>            <C>    

Issuance of stock at formation
   on April 19, 1988              16,000,000    $       160   $      --     $      --      $       160

Capital contributed to
  support development                   --             --           1,700          --            1,700

Net loss for the period                 --             --            --          (1,728)        (1,728)
                                 -----------    -----------   -----------   -----------    -----------
Balances at
   December 31, 1988              16,000,000            160         1,700        (1,728)           132

Shares issued during
   the year                       21,333,000            213       130,517          --          130,730

Shares issued into
   escrow pending
   acquisition of
   real estate                    17,303,000           --            --            --             --

Net loss for the year                   --             --            --          (5,520)        (5,520)
                                 -----------    -----------   -----------   -----------    -----------

Balances at
  December 31, 1989               54,636,000            373       132,217        (7,248)       125,342

Return of shares to
   unissued status due
   to non-performance
   by the selling parties        (17,303,000)          --            --            --             --

Net loss for the year                   --             --            --        (124,633)      (124,633)
                                 -----------    -----------   -----------   -----------    -----------

Balances at
  December 31, 1990               37,333,000            373       132,217      (131,881)           709

Net loss for the year                   --             --            --            (242)          (242)
                                 -----------    -----------   -----------   -----------    -----------

Balances at
  December 31, 1991               37,333,000    $       373   $   132,217   $  (132,123)   $       467
                                 ===========    ===========   ===========   ===========    ===========

</TABLE>

                                  - Continued -




The accompanying notes are an integral part of these financial statements.
                                                                             F-4

<PAGE>

<TABLE>

<CAPTION>


                             DONNEBROOKE CORPORATION
                          (a development stage company)
            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - CONTINUED
    Period from April 19, 1988 (date of inception) through December 31, 1996


                                                                 Deficit
                                                               accumulated
                                                  Additional    during the
                               Common Stock        paid-in      development
                           Shares      Amount      capital        stage         Total
                        ----------   ----------   ----------   ------------  ----------
<S>                     <C>          <C>          <C>          <C>           <C>    

Balances at
  December 31, 1991     37,333,000   $      373   $  132,217   $ (132,123)   $      467

Net loss for the year         --           --           --           (242)         (242)
                        ----------   ----------   ----------   ----------    ----------

Balances at
   December 31, 1992    37,333,000          373      132,217     (132,365)          225

Net loss for the year         --           --           --           (221)         (221)
                        ----------   ----------   ----------   ----------    ----------

Balances at
   December 31, 1993    37,333,000          373      132,217     (132,586)            4

Net loss for the year         --           --           --             (4)           (4)
                        ----------   ----------   ----------   ----------    ----------

Balances at
   December 31, 1994    37,333,000          373      132,217     (132,590)         --

Net loss for the year         --           --           --           --            --
                        ----------   ----------   ----------   ----------    ----------

Balances at
   December 31, 1995    37,333,000          373      132,217     (132,590)         --

Net loss for the year         --           --           --           --            --
                        ----------   ----------   ----------   ----------    ----------

Balances at
   December 31, 1996    37,333,000   $      373   $  132,217   $ (132,590)   $     --
                        ==========   ==========   ==========   ==========    ==========


</TABLE>



The accompanying notes are an integral part of these financial statements.
                                                                             F-5

<PAGE>


<TABLE>

<CAPTION>

                             DONNEBROOKE CORPORATION
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
                   Years ended December 31, 1996 and 1995 and
    Period from April 19, 1988 (date of inception) through December 31, 1996

                                                                           Period from
                                                                            April 19, 1988
                                                                         (date of inception)
                                          Year ended    Year ended            through
                                          December 31,   December 31,         December 31,
                                             1997          1996                 1998
                                          ------------  -------------    -------------------
<S>                                                                          <C>

Cash Flows from Operating Activities
Net loss for the period                      $ --            $ --            $(132,590)
Adjustments to reconcile net loss
   to net cash provided by operating
   activities
     Loss on abandonment of fixed assets       --              --              126,950
     Amortization of organization costs        --              --                1,208
     Payment of organization costs             --              --               (1,208)
                                             ------          ------          ---------

Net cash used in operating activities          --              --               (5,640)
                                             ------          ------          ---------

Cash Flows from Investing Activities           --              --                --
                                             ------          ------          ---------

Cash Flows from Financing Activities
Issuance of common stock                       --              --                3,940
Capital contributed to support development     --              --                1,700
                                             ------          ------          ---------

Net cash used in financing activities          --              --                5,640
                                             ------          ------          ---------

Increase in Cash                               --              --                 --

Cash at beginning of period                    --              --                 --
                                             ------          ------          ---------

Cash at end of period                        $ --            $ --            $    --
                                             ======          ======          =========

Supplemental Disclosure of
   Interest and Income Taxes Paid
     Interest paid for the period            $ --            $ --            $    --
                                             ======          ======          =========
     Income taxes paid for the period        $ --            $ --            $    --
                                             ======          ======          =========

Supplemental Disclosure of
   Non-cash Investing and
   Financing Activities
     Common stock exchanged for
       office furniture and equipment        $ --            $ --            $ 126,950
                                             ======          ======          =========

</TABLE>

The accompanying notes are an integral part of these financial statements.
                                                                             F-6

<PAGE>



                             DONNEBROOKE CORPORATION
                          (a development stage company)

                          NOTES TO FINANCIAL STATEMENTS


NOTE A - Organization and Description of Business

Donnebrooke  Corporation  (Company)  was  incorporated  on  April  19,  1988  as
Alluristics, Inc. under the laws of the State of Delaware. During 1989 and 1990,
the Company  attempted to enter the business of owning,  operating  and managing
various  parcels of real  estate and to own,  operate and manage  shared  tenant
service operations  tailored  predominately for the legal profession and related
professionals. The Company was unsuccessful in initiating these operations.

Accordingly, the Company has had no substantial operations or substantial assets
since inception.  The current business purpose of the Company is to seek out and
obtain a merger,  acquisition or outright sale transaction whereby the Company's
stockholders  will benefit.  The Company is not engaged in any  negotiations and
has not  undertaken any steps to initiate the search for a merger or acquisition
candidate.

Due to the  lack  of  sustaining  operations  from  inception,  the  Company  is
considered in the  development  stage and, as such, has generated no significant
operating revenues and has incurred cumulative operating losses of approximately
$132,590.   Accordingly,  the  Company  is  fully  dependent  upon  its  current
management and/or significant stockholders to provide sufficient working capital
to preserve the integrity of the corporate  entity during this phase.  It is the
intent of management and significant  stockholders to provide sufficient working
capital necessary to support and preserve the integrity of the corporate entity.

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.


NOTE B - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     The Company considers all cash on hand and in banks,  including accounts in
     book overdraft  positions,  certificates of deposit and other highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

2.   Organization costs
     ------------------

     Organization costs were amortized using the straight-line basis.

3.   Income taxes
     ------------

     The Company files its own separate  federal  income tax return and uses the
     asset and  liability  method  of  accounting  for  income  taxes.  Due to a
     September  30, 1998 change in control  involving  in excess of 50.0% of the
     outstanding  common stock of the Company,  the Company has no net operating
     loss  carryforwards  available to offset financial  statement or tax return
     taxable income in future periods.



                                                                             F-7

<PAGE>


                             DONNEBROOKE CORPORATION
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE B - Summary of Significant Accounting Policies - Continued

4.   Loss per share
     --------------

     Loss per share is computed by dividing the annual net loss by the composite
     weighted-average  number of shares of common stock  outstanding  during the
     year.  As of  December  31,  1996 and 1995,  the  Company has no issued and
     outstanding   securities,   options  or  warrants   that  would  be  deemed
     potentially dilutive in the current and future periods.


NOTE C - Related Party Transactions

For the period  April 19, 1988 (date of  inception)  through  December 31, 1988,
Halter  Venture   Corporation,   the  Company's   initial   former   controlling
shareholder, provided office space and management services to the Company for an
aggregate fee of $1,700.



                                                                             F-8


<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
     
</LEGEND>
<CIK>                         0000843494        
<NAME>                        Donnebrooke Corporation
<MULTIPLIER>                                   1
<CURRENCY>                                     US DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                              DEC-31-1996
<PERIOD-START>                                 JAN-01-1996
<PERIOD-END>                                   DEC-31-1996
<EXCHANGE-RATE>                                1
<CASH>                                         0
<SECURITIES>                                   0
<RECEIVABLES>                                  0
<ALLOWANCES>                                   0
<INVENTORY>                                    0
<CURRENT-ASSETS>                               0
<PP&E>                                         0
<DEPRECIATION>                                 0
<TOTAL-ASSETS>                                 0
<CURRENT-LIABILITIES>                          0
<BONDS>                                        0
                          0
                                    0
<COMMON>                                       373
<OTHER-SE>                                     (373)
<TOTAL-LIABILITY-AND-EQUITY>                   0
<SALES>                                        0
<TOTAL-REVENUES>                               0
<CGS>                                          0
<TOTAL-COSTS>                                  0
<OTHER-EXPENSES>                               0
<LOSS-PROVISION>                               0
<INTEREST-EXPENSE>                             0
<INCOME-PRETAX>                                0
<INCOME-TAX>                                   0
<INCOME-CONTINUING>                            0
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   0
<EPS-PRIMARY>                                  0.00
<EPS-DILUTED>                                  0.00
        


</TABLE>


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