EXECUTIVE WEALTH MANAGEMENT SERVICES INC /FL/, 10KSB, 1997-03-31

EXECUTIVE WEALTH MANAGEMENT SERVICES INC /FL/
10KSB, 1997-03-31
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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<PAGE> 1

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10K-SB

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

For the fiscal year ended
Commission File Number
December 31, 1996 33-48017-A

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.
(a Florida corporation)
(Exact name of Registrant as specified in its Charter)

Florida 59-2087068
- ------------------------------ --------------------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number

1800 Second Street, Suite 780, Sarasota, Florida 34236-5900
------------------------------------------------------------
(Address of principal executive offices, zip code)

Registrant's telephone number, including area code: 813/365-4200

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
----- -----
For the year ended December 31, 1996, the Registrant had revenues and other
income of $3,000,044.

As of December 31, 1996, the Registrant had 5,000,000 Shares authorized and
2,491,488 Shares outstanding. The aggregate market value of the outstanding
shares held by non-affiliates, computed by reference to the price at which the
stock was originally sold is $1,294,992.

<PAGE> 2

PART I

Item 1. Description of Business

Background. EXECUTIVE WEALTH MANAGEMENT SERVICES, INC. (the
"Company" or "Executive") was incorporated by its initial and original
shareholders under Florida law in June, 1981 under the name of Executive
Securities, Inc. Effective January 17, 1996, the Company changed its name.
Prior to its acquisition by Gaeton (Guy) S. Della Penna in March, 1990, the
Company's principal activities related to real estate investments which were
syndicated by the then shareholders and control persons of the Company and
offered on a limited and a private basis. In March, 1990, Guy S. Della Penna
acquired all of the outstanding Common Stock of the Company.

Since his acquisition of Executive in March, 1990, Mr. Della Penna has
enhanced the operating capabilities of the Company by causing it to become a
fully disclosed broker-dealer and by enlarging activities to include
substantially all aspects of the investment securities business and to offer
and sell both on a best efforts underwritten agency or broker basis, a wide
variety of investment securities. Pursuant to certain exemptions provided
under the rules and regulations adopted by the United States Securities and
Exchange Commission, Executive does not handle or retain customer funds and
presently effects all of its clearing operations and custodial responsibilities
through two New York Stock Exchange Member Firms: Raymond James & Associates,
Inc. in St. Petersburg, Florida and J.W. Charles Clearing Corp. in Boca Raton,
Florida.

Presently, the Company is registered as a securities broker-dealer
under the Securities and Exchange Act of 1934 and the state securities statutes
of Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Maryland,
Maine, Michigan, Minnesota, Missouri, Mississippi, Nebraska, Oklahoma, Oregon,
New Jersey, New Mexico, Nevada, New York, North Carolina, Ohio, Pennsylvania,
South Carolina, Tennessee, Texas, Virginia, Vermont, Washington, Wisconsin,
West Virginia and Wyoming. Executive is also a member of the National
Association of Securities Dealers, Inc. ("NASD") which is the self-regulatory
body exercising broad supervisory powers over the investment banking industry
and securities broker-dealers operating in the United States. As required by
law, Executive is also a member of the Securities Investor Protection
Corporation ("SIPC") which is a public corporation established to afford a
measure of protection to the account balances of customers of securities broker
dealers which become insolvent.

On September 5, 1995, the National Association of Securities Dealers,
Inc. (NASD) approved the Company's request to amend the firm's Restrictive
Agreement to increase the number of registered representatives to 100 and the
number of branch offices to 12. All business and administrative assistance
will continue to flow directly through the Main OSJ office in Sarasota, Florida
to monitor activities for strict compliance. The Company currently has ten
branch offices and 74 registered representatives.

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The Company presently conducts its investment securities business from
offices maintained in Sarasota, Florida, Tampa, Florida, Clearwater, Florida,
Altamonte Springs, Florida, Safety Harbor, Florida, Spring Hill, Florida,
Kansas City and Missouri. The Company's main office is located at 2323
Stickney Point Road, Sarasota, Florida 34231.

The Company has been approved as a Registered Investment Advisor by
the United States Securities and Exchange Commission under the Investment
Advisors Act of 1940 and is registered as such with the states of Florida,
Kansas, Texas, New Mexico and Missouri. Executive also offers insurance
products and advisory services to its customers, as well as consulting services
relating to tax planning, retirement and estate planning. Executive and
certain registered representatives of the Company hold all appropriate
licenses from the states of Florida and California with respect to the offer
and sale of insurance and related products in Florida and California.

The Company has and will continue to operate as a specialized
investment banking firm offering on a best efforts, agency or brokerage basis,
investment media and services to its customers which include common and
preferred stocks, corporate and municipal bonds, United States Treasury
obligations, interests in direct participation programs (principally limited
partnerships), shares of mutual funds, investment and financial planning, as
well as investment analysis and recommendations on a limited basis. The
Company as a "fully disclosed" securities broker-dealer, exercises no custodial
powers over its customer accounts and such services are rendered solely in
connection with the purchase or sale of securities or the anticipated purchase
or sale of securities, as well as variable insurance products.

The Company has and will continue to attract additional securities
brokers to staff its current offices and additional offices, if any, by
offering a more favorable commission sharing arrangement than is believed to be
available to securities brokers who are associated with large securities broker
dealers operating a national system of offices. Additionally, management may
offer qualified securities brokers equity ownership in the Company on an
initial and continuing basis through the grant of options under an Incentive
Stock Option Plan which may be established by the Company. Under this
Incentive Stock Option Plan, a qualified securities broker could be offered
options to purchase shares as an initial inducement to associate with the
Company. Thereafter, based upon such securities broker's performance, such
securities broker may be granted additional options to purchase shares under
the plan as a continuing inducement for his continued association. The grant
of such options is intended to provide a greater incentive for compliance
diligence and employment longevity to the securities broker by their having an
ownership interest in the Company. In its efforts to attract additional
securities brokers, the Company will seek securities broker personnel who,
except under certain circumstances, have been in the securities business for
five or more years, are of good business repute, reflect an acceptable level of
expertise in the securities industry, particularly with reference to the types
of investment media and services offered and intended to be offered, hold all
requisite licenses in order to permit immediate business activity, shall have
developed an acceptable clientele and have

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a reasonable degree of participation in area community affairs.

During 1995, the Company and its majority stockholder sold 44,100
shares of the Company's common stock. The price of the stock was $5.90 per
share and each purchaser of a share received a warrant which gave the purchaser
the right to purchase one share of the Company's stock from the Company for
$7.00 per share ($1.40 per share post split). The price of the warrants were
retained by the Company.

During 1995, the Company and the majority stockholder initiated a
private placement of 80,000 shares of the Company's common stock at a price of
$6.00 per share. The shares contained in the offering were drawn equally from
the authorized but unissued shares of the Company and the majority stockholder.
Accordingly, gross proceeds from the sale of the stock were shared equally by
the Company and the majority stockholder. As of December 31, 1996,
approximately 43,700 shares of the Company's common stock had been sold under
this private placement. The proceeds from this private placement were utilized
for additional expansion and working capital by the Company.

In November, 1995, the Company approved a plan to grant options to
certain employees to purchase the Company's common stock. The plan provides
for the granting of options to purchase a maximum of 100,000 shares (500,000
shares post-split) of the Company's stock at $3.00 per share($.60 per share
post-split). The plan requires a participant to be employed by the Company for
a number of years and Board approved before exercise. Granted options expire
ten years from the grant date. As of December 31, 1996, all options had been
granted, however non had been exercised.

During 1996, the majority stockholder purchased 9,581 shares of common
stock at $6.00 per share.

In May, 1996, the Board of Directors passed a resolution to split the
outstanding common stock shares of Executive Wealth Management Services, Inc.
on a five for one basis effective September 20, 1996. Common stockholders of
record as of September 20, 1996, were entitled to the five for one forward
common stock split.

Competition. Presently, the Company encounters intense competition
in the conduct of its securities business. In such regard, the investment
securities business is highly competitive and there are many firms with capital
and personnel resources far in excess of those which are presently available to
the Company. Additionally, it is affected and will continue to be affected by
the investing public's interest in the securities of issuers or the type of
securities which are offered by the Company through its Sarasota, Florida office
and/or its branch office system. In such regard, the type of securities offered
and related services of the Company are and will be in competition with other
investment media and related services offered by other securities broker-dealers
and financial intermediaries such as commercial banks, savings banks and similar
institutions.

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<PAGE> 5

Regulation. As a securities broker-dealer, Executive is subject to
comprehensive regulation. Such regulation is primarily carried out by the NASD
and the United States Securities and Exchange Commission (the "Commission") and
to a lesser degree by the securities regulatory authorities of the several
states, including Florida. In such regard, the Company is required to comply
with a substantial body of rules and regulations principally administered by the
NASD and the Commission. The NASD is a self-regulatory body, the membership of
which is constituted by securities broker-dealers operating in the United
States. The principal purpose of the NASD is to implement and assure compliance
with the bylaws and rules and schedules thereto of the NASD which are primarily
intended to prevent fraud and to assure fair dealing by NASD members with the
investing public. By becoming a member of the NASD, a securities broker-dealer
such as Executive submits to the jurisdiction and enforcement powers of the
NASD. As a result, member firms are subject to disciplinary action as well as
suspension from membership or expulsion. The Commission, in addition to acting
in a review capacity with respect to the NASD member disciplinary action, is
vested with broad statutory powers permitting it to conduct investigations and
to seek remedial or punitive sanctions against securities broker-dealers for
violations of the Federal securities laws. Presently, any securities broker such
as Executive which utilizes instrumentality's of interstate commerce such as the
mails is required to become a member of the NASD as well as a securities
broker-dealer registrant under the Securities Exchange Act of 1934. The Company
is also regulated and subject to periodic reporting as required under the
Investment Advisors Act of 1940. Regulatory authority is also exercised over
securities broker- dealers by state securities authorities in which the
securities broker-dealer conducts its business.

Regulatory Net Capital

As a securities broker-dealer, the Company is subject to the net
capital rules of the United States Securities and Exchange Commission and
similar rules in force in the states where the Company is registered as a
securities broker- dealer. The aggregate indebtedness of a securities
broker-dealer in relation to its net capital is also subject to Commission
rules. Such rules are somewhat complex in the manner that regulatory net
capital is computed. In summary, however, the computation of regulatory net
capital relates to the stockholder's equity of the Company taking into account
deductions from such stockholder's equity which relate to non-allowable assets
which are a non-liquid type and reductions in the market value of investment
securities owned by the Company in accordance with rule-prescribed "haircuts".
Under the rules, the aggregate indebtedness of the Company in relation to its
net capital may not exceed a ratio of 15 to 1.

The Company is also subject to periodic unannounced inspections and
examinations conducted by the staff of the NASD, the Commission and the
personnel of various state securities authorities, including Florida.
Additionally, the Company is and will continue to be required to conduct its
business in accordance with the high standards of commercial honor which have
been adopted and are enforced by the NASD and the Commission relating to
investors suitability, segregation of investor funds, the requirement to
promptly transmit investor funds to an authorized custodian, disclosures to
investors with respect to positions, if any, of the Company in securities

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in which it engages in trading activities and fairness as to compensation
arrangements concerning public offerings where it acts as underwriter.

Violations of regulatory requirements can result in swift and severe
regulatory sanctions being imposed by the NASD, the Commission and various
state regulatory authorities. Such impositions may result in the total
discontinuation of a broker-dealer's business for a stated or indefinite period
of time or permanently.

Item 2. Description of Properties.

The Company's main office presently occupies approximately 2,500
square feet of leased office space located at 2323 Stickney Point Road,
Sarasota, Florida. The Company also occupies leased space at 1800 Second
Street, Suite 780, Sarasota, Florida.

The lease on the office space at Stickney Point Road expires in
October 1998 and the lease on 1800 Second Street expires in September 1997.
Monthly rental payments for the Stickney Point Road and the 1800 Second Street
offices are $2,800 and $2,821, respectively. The lease agreement for the 1800
Second Street office allows for escalation of the rentals on an annual basis
based upon increases in the consumer price index with a cap of 4% in any 12
month period before the annual adjustment. Additionally, additional charges
are paid to cover ad valorem taxes assessed against the property as pro rated
to this leased premises on an annual basis.

At the 1800 Second Street location, the Company leases space to its
affiliates, Federal Mortgage Management, Inc. and Federal Mortgage Investors,
Ltd for $954 each a month. The affiliates also share in the additional charges
mentioned above.

The Company also leases approximately 1,000 square feet of office
space at 700 Front Street, San Diego, California. This lease expires on March
31, 1998. Monthly rental payments are $3,000. This office space is owned by
Guy S. Della Penna, President and majority shareholder of Executive.

In the opinion of management, the leasehold and other property
interests of the Company are adequately insured from a hazard occurrence and
liability standpoint.

Item 3. Legal Proceedings.

As of December 31, 1996, to the knowledge of management, there were no
pending or threatened lawsuits against the Company or its officers.

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

The Company will notice and convene an annual meeting of its
Shareholders on April 11, 1997. Shareholder business to be transacted at such
meeting is expected to involve the election of directors and the ratification
of the appointment of the Company's independent certified public accountants.

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<PAGE> 7

PART II

Item 5. Market For Registrants Common Stock, Equity and Related
Stockholders Matters

As a corporation formed under Florida law, the Registrant has
5,000,000 shares of Common Stock authorized of which 2,491,488 shares are
outstanding as of December 31, 1996. As of December 31, 1996 there were 52
stockholders of record.

For fiscal years ended December 31, 1996 and 1995, no cash dividends
have been declared on the outstanding shares of common stock.

There is no present market for the Common Stock of the Company.

Item 6. Selected Financial Data

Current Operations

The table set forth below reflects the source of revenue earned by the
Company during the years ended December 31, 1996 and 1995.

Source of Revenue Earned 1996 1995 Increase/(Decrease)
- ------------------------ ---- ---- -------------------
<S> <C> <C> <C>
Commission:
Proprietary Products $ 25,616 $ 56,439 $( 30,823)
Transactional 1,516,059 1,708,922 (192,863)
Mutual Fund Sales 687,433 542,772 144,661
Insurance/Annuity 402,736 230,119 172,617
Sale of non-proprietary
limited partnerships 252,260 169,488 82,772
---------- ---------- ---------
Total Commissions 2,884,104 2,707,740 176,364
Other:
Underwriting fees 32,500 25,250 7,250
Miscellaneous 83,440 64,182 19,258

Total $3,000,044 $2,797,172 $ 202,872
========== ========== =========
</TABLE>

Overall total revenue increased $202,872 or 7.25% for the year ended
December 31, 1996, as compared to same period 1995. While transactional and
proprietary product revenues decreased $223,680 or 12.67% for the year ended
December 31, 1996 as compared to the same period ended 1995, mutual fund,
insurance/annuity and limited partnership revenue increased $400,050 or 42.45%
over the same period during 1995.

The Company has a diverse base of registered representatives at
December 31,

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1996, ranging from transaction oriented producers to strictly insurance and
mutual fund producers. Ttransactional revenue was approximately 50.5% of total
revenue, compared to 61% at December 31, 1995. This decrease is attributable
to the Company's foccused effort in the insurance marketing, education and
recuriting aspects of the business, resulting in an increase in insurance
related production. Also attributing to the decreased percentage of
transactional revenue was the split of the Altamonte Springs branch office into
three offices.

The Company received commissions and underwriting fees of $58,116 and
$81,689 from the sale of proprietary products or commissions which were "in
house" in character for the years ended December 31, 1996 and 1995,
respectively. The decrease of $23,573 and the relatively low levels of
revenues related to underwriting and proprietary commissions over the past two
years relates directly to the fact that the Company has not participated in a
significant underwriting during that time. The Company anticipates a return to
levels of underwriting fees and commissions it experienced in 1994, which were
in excess of $500,000.

Transactional revenues decreased by $192,863 for the year ended
December 31, 1996, as compared to the same period in 1995. This decrease
relates directly to the Altamonte Springs office splitting into three branches
during 1996. At December 31, 1996, each of these three branches have been
established and management believes that during 1997, transactional revenues
will increase and exceed 1996 levels.

Mutual fund revenues increased 144,661 or 26.65% from $542,772 to
$687,433 for the year ended December 1996 as compared to the same period ended
1995. This increase relates to the general market conditions related to the
brokerage business, and a focal change in the way the Company's brokers are
conducting their business.

Insurance and annuity income increased by $172,617 for the year ended
December 31, 1996 as compared to the year ended December 31, 1995. This
increase relates directly to the Company's efforts of marketing, educating and
recruiting brokers who specialize in the insurance side of the business, both
fixed and variable.

Miscellaneous income increased $19,258 for the year ended December 31,
1996, as compared to the same period in 1994. This increase is related to the
Company's negotiated share of ticket charges and rebates of over-the-counter
("OTC") trades through our clearing firms. As the Company's transactional
business increases miscellaneous income will increse, respectively.

As a result of expansion activities not only did the Company
experience increased revenues, but the related expenses have also increased.
The table set forth below reflects the expense categories of the Company in
which there were significant increases or decreases for the year ended December
31, 1996, as compared to the same period in 1995:

<TABLE>
<CAPTION>
Increase/
Expense Category 1996 1995 (decrease)
---------------- ---- ---- ----------
<S> <C> <C> <C>
Clearing charges 238,889 223,603 15,286
Commissions 2,275,456 2,086,154 189,302
Consulting 49,988 25,415 24,573
Insurance 16,651 11,999 4,652
Occupancy 89,343 76,503 12,840
Rental Equipment 7,798 14,918 (7,120)
Salaries/Wages 316,308 278,161 38,147
Travel/Entertainment 50,874 22,808 28,066
</TABLE>

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Clearing charges increased for the year ended December 31, 1996 as
compared to the same period in 1995 in the aggregate of $15,286. This increase
is directly attributable to the increase in commission income.

Commission expense increased from $189,302 for the year ended December 31,
1996, as compared to the year ended December 31, 1995. As a percentage of
total revenue, commissions rose from approximately 75% for the year ended
December 31, 1995 to 75.8% for the same period ended 1996. This increase is
due to the reduced production of the home office for which the registered
representatives received a lower payout, for the year ended December 31, 1996
as compared to the same period in 1995.

Consulting fees increased $24,573 for the year ended December 31,
1996, as compared to the same period ended 1995. This increase is primarily
attributable to the outsourcing of accounting and compliance functions from
October 1995 through August 1996. In August 1996, these functions were brought
back in-house.

Insurance expense increased $4,652 or 38.77% for the year ended
December 31, 1996, compared to the same period ended 1995. This increase
relates to increases in health insurance, surety bond and property insurance
premiums.

Occupancy costs increased by $12,840 for the year ended December 31,
1996 as compared to the same period in 1995. This increase relates to the fact
that the Company is currently leasing office space in San Diego, CA which it
began leasing in November 1995. This office space is being utilized in the
Company's business development plan for offering exclusive investment product
marketing and financial service agreements with large medical groups, alliances
and state associations, of which three of these organizations which the Company
has targeted are located in California.

Rental equipment decreased $7,120 or 47.73% to $7,798 for the year
ended December 31, 1996, as compared to $14, 918 for the same period ended
1995. This decrease is attributable to the fact that the home office had one
less quotron machine during the year, 1996 as compared to the same period ended
1995.

Salaries and wages increased $38,147 for the year ended December 31,
1996, as compared to the same period ended in 1995. This increase relates to
the Company employing a full time in-house general counsel. Such decision was
based primarily upon such counsel's background and expertise in insurance
marketing as well as general corporate matters. Such expertise has and will be
utilized in the continued development and marketing to affinity groups, medical
groups, alliances, state associations and in-house as well as branch office
brokers. In addition to marketing knowledge and experience, the addition is
expected to result in reduced legal fees experienced by the Company in the
usual course of business.

Travel and lodging increased $28,066 for the year ended December 31,
1996, as compared

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to the year ended December 31, 1995. This increase relates to the Company's
aggressive pursuit of and marketing to affinity groups, medical groups,
alliances and state associations.

Item 7: Management Discussion and Analysis of Financial Condition and
Result of Operations

The Company and its management anticipate continued growth and expansion in
1997. The Company increased revenues by approximately 50% and 7% during 1995
and 1996, respectively without the benefit of a sizeable proprietary
underwriting. During 1997, management anticipates significant increases in
transactional revenues, commissions on proprietary product and underwriting
fees. This anticipated growth is expected to be achieved through the addition
of up to three branch and or satellite offices, increased home office
production and increased investment banking activities.

The Company participated in three underwritings in 1995, Plains
Refrigerant ("Plains"), HomeVestors Funding, Inc. ("HomeVestors"), and Flight
Sciences Incorporated ("Flight Sciences").

As of December 31, 1995, the Company had sold approximately 20,000
shares of the 600,000 being offered in the Plains offering. As a result of
these sales, the Company generated commissions of $9,600 and underwriting fees
of $6,000 during 1995. In November 1995, the Company withdrew as managing
underwriting of Plains best efforts initial public offering. No commissions
or fees were earned or paid during the year ended December 31, 1996 related to
this offering.

Effective September 26, 1995, the Company began offering (on a private
basis) $500,000 in 12% Promissory Notes ("Notes") in HomeVestors. As of
December 31, 1995, the Company had placed $100,000 principal balance of the
Notes. As a result of the placement of these Notes the Company earned
placement fees of $10,000 and note offering management fees of $3,000 for the
year ended December 31, 1996 compared to $25,000 and $7,500, respectively for
the same period in 1996.

Effective October 3, 1994, the Company began offering (on a private
basis) $350,000 in 12% Secured Promissory Notes in Flight Sciences. As of
December 31, 1995, the Company had placed $350,000 in principal balance of the
Notes of which $300,000 in Notes were placed during the year ended December 31,
1995. As a result of the placement of these Notes the Company earned placement
fees of $30,000 and offering management fees of $15,000 for the year ended
December 31, 1995. No placement fees or offering management fees earned or
paid during the year ended December 31, 1996 related to this offering.

The Company anticipated the completion of a best efforts public
offering of an affiliate during fiscal 1996, which did not occur. The Company
does, however, anticipate the underwriting to be completed in the first half of
fiscal 1997. As a result of this underwriting, the Company anticipates
significant underwriting fees and enhanced commission revenues generated by its
brokers in 1997.

On December 1, 1994, the Company and the majority shareholder
initiated a private

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placement of 100,000 Units. Each Unit sells for $6 and consists of one share
of common stock at $5.90 and one warrant at $.10. The warrants have an
exercise price of $7.00 a share and may be exercised at any time until December
1, 1999. The 100,000 shares contained in the units offered were drawn equally
from the authorized but unissued shares of the Company and the majority
shareholder. Accordingly, gross proceeds from the sale of the stock were
shared equally between the Company and the majority shareholder. Gross
proceeds from the sale of warrants were received by the Company. A total of
44,100 Units were sold under this offering providing gross proceeds to the
Company of $134,505. The proceeds from this private placement received by the
Company were utilized for additional expansion and working capital.

Effective December 15, 1995, the Company initiated a new private
placement of 80,000 shares of the Company's stock at $6 a share. The shares
contained in this offering were drawn equally from the authorized but unissued
shares of the Company and the majority shareholder. As of December 31, 1996,
approximately 25,860 shares of the Company's stock had been sold resulting in
gross proceeds to the Company of approximately $77,600.

As of March 13, 1997, the Company had entered into a Letter of Intent
with American Healthcare Alliance ("AHA"), the largest nationwide network of
Preferred Provider Managed Healthcare System and Organization, whereby the
parties agreed to undertake a formal contractual relationship in which
Executive will engage in the marketing, on an endorsed basis, of designated
financial services and products as well as other services to physician and
healthcare providers who are members of AHA's Preferred Provider Organizations.
In this regard, Executive has obtained an exclusive marketing agreement with
the nation's largest provider of a pre-paid tax audit defense program to offer
their services to AHA's 180,000 plus physician members on an endorsed basis.
The marketing of this program, conducted on a direct mail basis, commenced on
February 4, 1997. Pursuant to the terms of the exclusive marketing agreement,
the Company receives first year and renewal commissions on the fees paid by the
physician members for the service.

In addition to AHA, Executive has also entered into contracts with the
pre-paid tax audit defense firm to market their services, on an exclusive
basis, to members of other large medical and healthcare affinity groups and
associations.

In April, 1996, the Company secured a Super Master General Agent
Contract with an A+ (Superior) (A.M. Best rating) insurance company to market,
on a wholesale level, the insurance company's Universal Life Insurance, Term
Insurance, Survivorship Life Insurance and Annuity products. These insurance
products are marketed by Executive to insurance agents and agencies on a
national level, who in turn offer the products at retail to their clients and
prospect. Executive receives an override commission on each insurance policy
or annuity that is sold by the agents or agencies who license under Executive's
Super Master General Agent Contract.

Future Operations

In 1997 management has and will be implementing several growth and
expansion related initiatives. These initiatives will include, but are not
limited to the following:

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- Continued branch development and expansion,
- Increased investment banking activities,
- Expanded service and marketing to "Affinity Groups",
- Possible secondary public offering, and
- Market making.

The Company and its management continue to pursue the addition of new
offices and new registered representatives to existing offices. Management is
currently in negotiations with prospective offices in New Jersey and Illinois.
The addition of these offices could result in additional gross revenues to the
Company of approximately $2.1 million. Management will continue to pursue new
retail establishments in addition to the two currently being pursued.

Management anticipates an increase in investment banking activities
because of its involvement in two underwritings, specifically, The Outlet Mall
Network, Inc. and Federal Mortgage Management II, Inc. The following is a
brief description of both offerings:

- Executive was named best efforts managing Placement Agent for The
Outlet Mall Network, Inc. ("OMNI") private offering of 2.5 million
Units (at $2 per Unit). Each Unit consists of one Share of Class A
Preferred Stock and one Warrant to purchase one Share of Class B
common stock. As compensation for acting as the best efforts managing
Placement Agent, Executive will receive commissions equal to ten
percent (10%), a managing Placement Agent fee equal to three percent
(3%) and a non-accountable expense allowance equal to one percent (1%)
of the Offering Price. Additionally, for serving as best efforts
managing Placement Agent, Executive will receive Warrant(s) to
purchase Shares of OMNI's Class A Preferred Stock. This offering has
a dated date of February 24, 1997.

- Executive was also named best efforts managing Placement Agent for
Federal Mortgage Management II, Inc., an affiliate of Executive, in
the $5,000,000 Public offering of Promissory Notes. As compensation
for acting as the best efforts managing Placement Agent Executive will
receive average selling commissions equal to six and one tenth percent
(6.1%), a note offering management fee equal to three percent (3%) and
a non-accountable expense allowance equal to two percent (2%) of the
Note offering price. It is anticipated that this offering will
commence in April 1997.

For approximately two and one half years, the Company has aggressively
engaged in, and committed significant financial and personnel resources to an
extensive market study and analysis of the viability of marketing, on an
exclusive and endorsed basis, various insurance, financial and
securities-related products, and other services to members of large medical
affinity groups and associations. In this regard, Executive has established
contacts and relationships with various medical associations and affinity
groups and has presented comprehensive marketing proposals to specific groups.
The Company will continue to develope these relationships along wth attempting
to establish additional relationships with new groups in 1997.

12
<PAGE> 13

Effective March, 1997, the Company has entered into an exclusive
"Service and Non-Circumvention Agreement" with Financial Marketing Consultants,
Inc. ("FMC") of Naples, Florida. Under the Agreement, among other things, FMC
shall make introductions to and presentations with and/or on behalf of the
Company to underwriters, broker/dealers, corporations, partnerships or
individuals that may invest and/or assist Executive with a secondary public
offering of securities issued by Executive. FMC has agreed to provide these
services on a contingency basis. Executive will issue warrants to FMC equal to
1.5% of the securities and warrants placed as a direct effort of FMC as well as
a cash fee in the amount of 1.5% of the value of amounts obtained or to be
obtained by Executive under the Agreement.

In conjunction with and concurrent to the aforementioned Agreement,
the Company has retained the services of James D. Cullen, P.A. to provide legal
services with regard to the structuring, documentation and other corporate
matters required and necessary for a secondary public offering of the Company's
stock. Legal fees related to such work are not to exceed $20,000 plus
reimbursement for costs incurred on behalf of the Company. The Company has
provided James D. Cullen, P.A. with a $5,000 retainer, with a balance of
$15,000 due only upon closing of any secondary public offering transaction by
the Company.

The Company expects to make presentations under the guidance of FMC
and James D. Cullen, P.A. to underwriters during the first half of fiscal 1997.

Executive is exploring the possibility of establishing market making.
Management anticipates that upon NASD approval, it will initially engage in
market making of a limited number of specific listed stocks, assuming the
successful completion of its secondary public offering.

With the increase of the in-house securities/insurance brokers and
outside independent brokers, coupled with the increased investment banking
activities and the sale of insurance-related products and services, it is
management's belief that it has and will have the resources to not only sustain
its operations, but become profitable during fiscal 1997.

Regulatory Net Capital

13
<PAGE> 14

The table set forth below, with respect to the Company, the amount of
regulatory net capital and the amount of aggregate indebtedness and the ratio
thereof to such regulatory net capital as of December 31, 1996 and 1995:

<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Net Capital $ 22,618 $ 37,837
Aggregate Indebtedness 177,616 202,596
Ratio of aggregate indebtedness
to net capital 7.85 to 1 5.35 to 1
</TABLE>

The National Association of Securities Dealers, Inc. (the "NASD") requires
certain members, such as the Company, to maintain net capital equal to the
greater of 130% of the Commission's net capital requirement or 6 2/3% of
aggregate indebtedness. Thus, the Company is required to maintain a minimum
net capital requirement of $11,842. As of December 31, 1996, the Company had
excess net capital of $10,776.

Item 8. Financial Statements and Supplementary Data.

Included with this Annual Report on Form 10-K SB as an Exhibit are the
financial statements specified in Instruction (a) to this Item 7.

Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The table set forth below reflects the directors and officers of the
Company.

Name, age and, if a director,
the term of director service Positions held with Executive
- ---------------------------- -----------------------------
<S> <C>
Guy S. Della Penna, Age 44, Director, President and Chief Executive Officer
March 1990 to present

Robert E. Windom, M.D., age 64 Director
June 1993 to present

J. Scott Fulton, age 34, Executive Vice President, Chief Operating Officer and
Treasurer

Bonnie S. Gilmore, age 35, Senior Vice President, Chief Financial Officer, Chief
Compliance Officer and Secretary

Robert H. DeVore, Esq., age 37 Vice President, General Counsel, and Director of Insurance
Marketing
</TABLE>

14
<PAGE> 15

Information Concerning Directors and Officers

MR. DELLA PENNA has been a resident of Sarasota, Florida since 1980
and is the founder and President of Capital Management. Capital Management was
organized by Mr. Della Penna in 1989. Under the auspices of Capital
Management, Mr. Della Penna has provided financial and advisory services, as
well as insurance products, to individuals and corporate entities. Capital
Management acts as general agent for various insurance companies. Mr. Della
Penna has been active in the financial industry for approximately 18 years.
Mr. Della Penna is a General Securities Principal and Financial and Operations
Principal pursuant to NASD Rules. During the period April 1980 to January
1986, Mr. Della Penna served as the Assistant to the Chairman of the Board of
Snelling & Snelling, Inc., as well as Assistant Treasurer. Snelling &
Snelling, Inc. is a franchisor of an employee recruitment business. While with
such firm, Mr. Della Penna also served as a member of the Executive,
Acquisition and Pension and Profit Sharing Committees. Mr. Della Penna also
served as the personal business manager and financial advisor to the Snelling
family and affiliated entities and in such capacity, was responsible for cash
management, tax and investment analysis and commitments. The Snelling family
is the principal shareholder of Snelling & Snelling, Inc.

During the period April 1978 through February 1980, Mr. Della Penna
was an associated person of Lehman Brothers, New York, New York, where he was
involved in the structuring, documentation and marketing of tax exempt
financings issued by state and local governments. Mr. Della Penna also
during the period June 1989 to August 1989 was an associated person of Miller
Securities, Inc. and its successor Miller, Johnson & Kuehn, Inc. in Sarasota,
Florida. Mr. Della Penna holds a Bachelor of Science degree in Business
Administration from Ithaca College, Ithaca, New York and received a Master of
Business Administration degree in Finance from the State University of New
York, Albany, New York. Mr. Della Penna also presently serves in an individual
capacity as the co-General Partner of a privately capitalized limited
partnership formed under Florida Law. Since August 1990, Mr. Della Penna has
served as the sole shareholder, director, and officer (President, Secretary and
Treasurer) of Midwest Energy Corporation, which acts as the co-General Partner
of such privately held limited partnership. Such private limited partnership,
known as Federal Resource Income Program, Ltd., principally engages in the
purchase and holding of producing petroleum leases.

Mr. Della Penna, together with Capital Mortgage Management, Inc., a
Florida corporation wholly-owned by Mr. Della Penna, also presently serve as
the co-General Partners of Federal Mortgage Investors, Ltd., a Florida limited
partnership which is publicly held. Mr. Della Penna also serves as the sole
director and officer (President, Secretary and Treasurer) of Capital

15
<PAGE> 16

Mortgage Management, Inc. Mr. Della Penna has served in such capacities since
August 1991. Federal Mortgage Investors, Ltd. was organized to invest, hold
and deal in residential real estate mortgages. Mr. Della Penna is also the
sole shareholder of Federal Mortgage Management, Inc., which was organized to
invest, hold and deal in residential real estate mortgages.

During the period June 1984 through June 1989, Mr. Della Penna was
associated with Executive as a sales representative. Such association was
prior to Mr. Della Penna's acquisition of Executive in March 1990. Such
association was not continuous during such period. Mr. Della Penna has in the
past and in the future devoted significant business time, to the business and
affairs of the Company.

ROBERT E. WINDOM, M.D. is a resident of Sarasota, Florida. Dr. Windom
holds a Bachelor of Arts degree from Duke University and graduated from the
Medical School of Duke University in 1956. During the period 1956 through
1960, Dr. Windom engaged in an internship residency in internal medicine at
Parkland Hospital, Dallas, Texas. During the period 1960 through 1986, Dr.
Windom engaged in the private practice of internal medicine-cardiology in
Sarasota, Florida. In 1986, Dr. Windom was appointed by President Ronald
Reagan to serve as Assistant Secretary for Health and to head the United States
Public Health Service in Washington, D.C. Dr. Windom served as Assistant
Secretary until 1989. Since 1989, Dr. Windom acted as a health care consultant
on a domestic and international basis. Currently, Dr. Windom engages in
numerous activities and holds numerous positions, including that of Principal,
Council for Excellence in Government, Washington, D.C.; member of the
Secretary's Council on Health Promotion/Disease Prevention, Department of
Health and Human Services, Washington, D.C.; member of Governor Lawton Chiles'
Healthy Start Work Group; spokesman for the Florida Medical Association,
Chairman, Cardiac Disease of the Young Council, American Heart Association,
Florida Affiliate; member of the Advisory Board of SunBank/Gulf Coast,
Sarasota, Florida; member of the Board of Directors of Power Brands, Inc. and
BESTech, Inc.; Director of the Boys and Girls Club of Sarasota County
Foundation, Inc.; Director of the Sarasota Heart Center Foundation; Director of
New College Associates, Sarasota, Florida; as well as Clinical Professor of
Internal Medicine, University of South Florida School of Medicine, Tampa,
Florida; and Assistant Professor of Medicine, University of Miami School of
Medicine, Miami, Florida. In the past, Dr. Windom has served as a member of a
number of Boards, both from a commercial business standpoint and with respect
to community activities, including member of Governor Lawton Chiles' Workshop
on Health Reform; Campaign Chairman of Sarasota United Way (1989-1990); member
of Florida's Aging and Adult Services Advisory Council (1986-1991); Director of
Coast Bank (now SunBank/Gulf Coast) (1989-1993); member of Governor Robert
Graham's Advisory Committee for Alzheimer Disease (1986); and member of the
Board of Directors of First Presidential Savings and Loan Association,
Sarasota, Florida (1983-1986). Dr. Windom is a published author and frequent
speaker on medical and other subjects and has received numerous awards and
honors, including distinguished alumnus award, Duke University Medical Center.
Presently, Dr. Windom is a member of the Sarasota County Medical Society, the
Florida Medical Association, the American Medical Association, the

16
<PAGE> 17

American Heart Association, the American College of Physicians, the American
College of Cardiology, the Florida Society of Internal Medicine and the
American Society of Internal Medicine. Dr. Windom will be compensated for his
services as a director of Executive.

J. SCOTT FULTON, CPA, age 34, serves Executive Wealth
Management Services, Inc. as Executive Vice President, Chief Operating Officer
and Treasurer. Mr. Fulton's responsibilities include client relations and
service, investment banking and the supervision of the various areas of
regulatory compliance and daily operations which affect the Company's business
as a securities broker-dealer. Mr. Fulton is a resident of Sarasota, Florida
and holds a Bachelor of Science degree in Business Administration-Accounting
from Central Michigan University, which degree was awarded to Mr. Fulton in
1985. During the period January 1986 to May 1991, Mr. Fulton was associated
with Deloitte & Touche in Detroit, Michigan, an international public accounting
firm. Mr. Fulton is a certified public accountant. During the period June
1991 to June 1993, Mr. Fulton had been associated with Kerkering, Barberio &
Co., P.A., Sarasota, Florida, a firm of independent certified public
accountants. Mr. Fulton is a member of the American and Florida Institutes of
Certified Public Accountants and holds the General Securities Representative
Series 7 and General Securities Principal Series 24 securities licenses and
life and health insurance and variable annuity licenses issued by the State of
Florida.

BONNIE S. GILMORE joined Executive in December 1992. Ms. Gilmore
serves as Senior Vice President, Chief Financial Officer, Chief Compliance
Officer and Secretary. Prior to joining Executive, Ms. Gilmore was Vice
President and Assistant Operations Director of Integrity Securities Group,
Sarasota, Florida, a securities broker-dealer. Ms. Gilmore held such position
during the period December 1991 to November 1992. During the period December
1989 to September 1991, Ms. Gilmore was District Manager of Crossland Savings,
F.S.B., Sarasota, Florida, a Federal savings bank. During the period July 1989
through November 1989, Ms. Gilmore was an associate of Meridian Associates,
Inc. and during the period April 1989 through July 1989, served as a Vice
President of John Haylett and Company, Inc., Sarasota, Florida. During the
period April 1988 through April 1989, Ms. Gilmore served as Financial and
Operations Principal, General Securities Principal and Municipal Securities
Rule Making Board Principal of Financial Information Centers Brokerage of
Sarasota, Florida. Ms. Gilmore also serves in such capacities with Executive.
During the period May 1985 through February `1987, Ms. Gilmore was an
associated person of Stuart-James Investment Banking, Lincolnshire, Illinois.
Meridian Associates, Inc. and Financial Information Centers Brokerage are
securities broker-dealers. John Haylett and Company, Inc. is a financial
consulting firm.

ROBERT H. DEVORE, ESQ., age 37, serves Executive Wealth Management
Services, Inc. in the capacity of Vice President and General Counsel. Mr.
DeVore graduated from Denison University in 1982 with a Bachelor of Arts Degree
in Political Science. In 1986, Mr. DeVore graduated from the University of
Toledo, College of Law, and holds a Juris Doctor degree. While attending the
University of Toledo, College of Law, Mr. DeVore was a member of the University
of Toledo Law Review and received American Jurisprudence awards for excellent

17
<PAGE> 18

achievement in the studies of Civil Procedure and Secured Transactions. Mr.
DeVore also interned for U. S. Magistrate James G. Carr. Following graduation
from the University of Toledo College of Law, Mr. DeVore engaged in private
practice in Sarasota, Florida and was an associate of a Sarasota, Florida law
firm. Mr. DeVore's practice emphasis related to civil, commercial and
construction litigation. During the period 1993 through March 1996, Mr. DeVore
acted as counsel for a Sarasota, Florida based insurance agency and insurance
marketing entity. Mr. DeVore has been a producing insurance agent since 1993
in the lines of life insurance, health insurance and annuities. Mr. DeVore is
a member of the Florida Bar and holds life and health insurance and variable
annuity licenses issued by the State of Florida as well as a Series 7 General
Securities Representative License.

Item 11. Executive Compensation

For his services as President and Chief Executive Officer of Executive, Mr.
Della Penna is compensated on the basis of an annual salary of $100,000.
Additionally, Mr. Della Penna is entitled to receive reimbursement for expenses
sustained by him in connection with the carrying out of his employment
responsibilities.

The table presented below presents estimated aggregate compensation to be paid
to each executive officer of Executive in excess of $100,000 and for all
executive officers as a group for the fiscal years ending December 31, 1996,
1995, 1994, and 1993:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------
Annual Compensation Awards Payouts
------------------------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)

Other Securities
Name Annual Restricted Under- All Other
and Compen- Stock lying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary ($) Bonus ($) ($) ($) SARs (#) ($) ($)
- -------- ---- ---------- --------- ------ ------ -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 100,000 8,000 --- --- --- ---
1995 102,467 --- 8,000 --- --- --- ---
Guy S. Della Penna 1994 106,250 --- --- --- --- --- ---
President/CEO 1993 125,000 --- --- --- --- --- ---

All Other Executive 1996 120,192 --- --- --- --- --- ---
Officers 1995 82,224 --- --- --- --- --- ---
1994 79,200 --- --- --- --- --- ---
1993 147,800 --- --- --- --- --- ---
</TABLE>

For their services as directors, Dr. Windom and Mr. Della Penna receive annual
compensation of $8,000 each. Meetings of the Board of Directors of the Company
are held quarterly.

Long-Term Stock Option Plan. The Long-Term Stock Option Plan which
became effective

18
<PAGE> 19

on November 22, 1995, the date adopted by the Board of Directors. No option
granted under this Plan may be exercised prior to stockholder approval.

The purpose of the Stock Option Plan is to initially attract the
employment of or to induce existing key employees to remain in the employ of
Executive or any subsidiary of the Company, and to encourage such employees to
secure or increase on reasonable terms their stock ownership in the Company.
Additionally, the Plan is intended to provide benefit to contractors providing
services to the Company which have been or are believed to be instrumental in
developing or expanding the business of the Company or which are otherwise
anticipated to have significant and material benefit to the Company, to induce
any person or entity to continue relationship with the Company and to reward
certain individuals or entities with commission or finders fees without
immediate cash payment by the Company. The Board of Directors of the Company
believes the Plan will promote continuity of management and increase incentive
and personal interest in the welfare of the Company by those who are primarily
responsible for shaping and carrying out the long range plans of the Company
and securing its continued growth and financial success.

The initial maximum number of shares of common stock which were to be
issued pursuant to the exercise of options granted under the Plan is one
hundred thousand (100,000). As of December 31, 1996, all 100,000 options under
this plan had been granted. The table below presents the options granted to
executive officers during the year ended December 31, 1996:

Option Grants For The Year Ended December 31, 1995

---------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Percent of Total
Options Granted
Options To Employees Exercise or Base Expiration
Name Granted (#) in Fiscal Year Price ($/Sh) Date
Pre-Split/Post-Split Pre-Split/Post-Split
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Guy S. Della Penna
President & CEO 70,000/350,000 70% $3.00/$.60 November 2005

J. Scott Fulton
Executive Vice President
and Treasurer 25,000/125,000 25% $3.00/$.60 November 2005

Other 5,000/25,000 8% $3.00/$.60 November 2005
</TABLE>

Item 12. Security Ownership of Certain Beneficial Owners and Management.

As of December 31, 1996, Guy S. Della Penna beneficially owns of
record, a total of 1,417,328 shares, which constitutes approximately 57% of
the shares outstanding. The table presented below reflects the percentage of
share ownership vested in Mr. Della Penna of record and beneficially as of
December 31, 1996.

19
<PAGE> 20

<TABLE>
<CAPTION>
Amount and
Nature of Percent of Class
Name and Address Beneficial as of
Title of Class of Beneficial Owner Ownership December 31, 1996
- -------------- ------------------- --------- -----------------
<S> <C> <C> <C>
Common Stock, Gaeton S. Della Penna,
$.002 par value Trustee, Gaeton S. Della 1,417,328
Penna Rev. Living Trust Shares;
Dtd 6/1/92, Record 57%
141 Ogden Street Ownership
Sarasota, FL 34242

Common Stock, Russell W. Lee, Trustee 14%
$.002 par value William Edmund Davies 350,000
Trust Dtd. 12/13/91 Shares
3513 Pinecrest Street Record
Sarasota, FL 34239 Ownership
</TABLE>

Item 13. Certain Relationships and Related Transactions

As a result of ownership or contractual provisions vested in or
involving Mr. Della Penna, the Company is affiliated with several business
entities ("Affiliates"). Set forth below is a listing of such Affiliates,
indicating the basis or nature of Mr. Della Penna's control of such Affiliates:

Name of Affiliate and Summary of Nature or Basis
Form of Organization Business Activity of Control
- -------------------- ----------------- ----------------------
<S> <C> <C>
Federal Mortgage Investors, Ltd. Buyer and seller Individual co-general
("Federal Mortgage"), a Florida of residential real partner; beneficial
limited partnership estate mortgage loans owner of all outstanding
voting common stock of
corporate co-general
partner, Capital Mortgage
Management, Inc.

Federal Resource Income Program, Owner of producing Individual co-general
Ltd. ("Federal Resource"), a oil and gas leaseholds Partner; beneficial
Florida limited partnership owner of all outstanding
voting common stock
of corporate
co-general partner,
</TABLE>

<PAGE> 21

<TABLE>

<S> <C> <C>
Midwest Energy
Corporation

Capital Growth Management, Inc. Investor in equity Beneficial owner of
("Capital Growth"), a Florida and debt securities all outstanding voting
corporation common stock; sole
director and officer

Capital Management Group, Inc. Seller of Insurance and Beneficial owner of
("Capital Management"), a Florida related products, and all outstanding voting
corporation financial planning common stock; sole
services director and officer

Federal Mortgage Management, Inc. Buyer and seller Beneficial owner of
("FMMI"), a Florida corporation of residential real estate all outstanding vot-
outstanding voting common
stock

Federal Mortgage Management II Buyer and seller of Beneficial owner of all out-
, Inc. (FMMII), a Florida Cor- residential real estate standing voting common stock,
poration mortgage loans sole director and CEO
</TABLE>

Federal Mortgage is a publicly held limited partnership. No
current transactions between the Company and Federal Mortgage are pending or
proposed.

The limited partnership interests of Federal Resource are beneficially
held by 28 persons. No current transactions between the Company and Federal
Resource Income Program are pending or proposed.

21
<PAGE> 22

The Company may receive nominal transaction commissions from the
investment activities of Capital Growth.

Pursuant to general agency arrangements existing between Capital
Management and various insurance companies, Capital Management is capable of
offering life, disability, health, fixed annuity, long term care and Medicare
supplement policies to the public in Florida. For the sale of such insurance
products, the Company, under such general agency arrangements, is entitled to
earn commissions. A number of the registered representatives/associated
persons of the Company hold the necessary licenses to sell such insurance
products to customers, and do so under the auspices of the general agency
arrangements vested in Capital Management. Capital Management will, upon the
sale of such insurance products by registered representatives, allocate and pay
to the Company and such registered representatives a portion of such general
agency commissions.

Federal Mortgage Management II, Inc. is a development stage corporation. Upon
a successful public offering of its Promissory Notes, it will commence
operational activities.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8K

(a) The Financial statements of the Company for the fiscal year
ended December 31, 1996, as audited by Bobbitt, Pittenger &
Co., P.A., Certified Public Accountants, is included as
Exhibit 1 attached to this report

Exhibit 27 - Financial Data Schedule (for SEC use only).

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

EXECUTIVE WEALTH MANAGEMENT
SERVICES, INC.

By: Guy S. Della Penna
-----------------------------------
Guy S. Della Penna, President
Chief Executive Officer

By: J. Scott Fulton
-----------------------------------
J. Scott Fulton
Executive Vice President,
Chief Operating Officer and
Treasurer

By: Bonnie S. Gilmore
-----------------------------------
Bonnie S. Gilmore
Senior Vice President, Chief
Financial Officer, Chief
Compliance Officer, and Secretary

March 11, 1997

22
<PAGE> 23

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

REPORT ON AUDITS OF
FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION

FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995

BOBBITT, PITTENGER & COMPANY, P.A.
<PAGE> 24

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1

BALANCE SHEETS 2

STATEMENTS OF OPERATIONS 3

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY 4

STATEMENTS OF CHANGES IN LIABILITIES
SUBORDINATED TO CLAIMS OF GENERAL CREDITORS 5

STATEMENTS OF CASH FLOWS 6

NOTES TO FINANCIAL STATEMENTS 7

ADDITIONAL INFORMATION

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON ADDITIONAL INFORMATION 11

COMPUTATIONS OF NET CAPITAL AND NET CAPITAL
REQUIREMENTS UNDER RULE 15c3-1 OF THE
SECURITIES AND EXCHANGE COMMISSION 12

COMPUTATION FOR DETERMINATION OF RESERVE
REQUIREMENTS UNDER RULE 15c3-3 OF THE
SECURITIES AND EXCHANGE COMMISSION 13

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON INTERNAL ACCOUNTING CONTROL REQUIRED
BY SEC RULE 17a-5 14

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON THE SIPC ANNUAL ASSESSMENTS REQUIRED
BY SEC RULE 17A-5 16
</TABLE>

<PAGE> 25
BOBBITT, PITTENGER & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS

February 5, 1997

BOARD OF DIRECTORS
Executive Wealth Management Services, Inc.
Sarasota, Florida

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited the accompanying balance sheets of Executive Wealth Management
Services, Inc., as of December 31, 1996 and 1995, and the related statements of
operations, changes in stockholder's equity, changes in liabilities
subordinated to claims of general creditors, and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express and 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 addurance 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 Executive Wealth Management
Services, Inc. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.

/s/ Bobbit, Pittenger & Company, P.A.
- -------------------------------------
Bobbit, Pittenger & Company, P.A.
Certified Public Accountants

<PAGE> 26

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
---------------------
1996 1995
---- ----
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ $ 20,403
Receivables
Broker/dealers 40,306 39,343
Correspondent brokers 122,201 142,973
Customers 13,000
Affiliates and employees 3,650
--------- ----------

TOTAL CURRENT ASSETS 179,157 202,719

FURNITURE, FIXTURES AND EQUIPMENT -
at cost, net of accumulated depreciation 37,192 42,351

OTHER ASSETS
Deposits with clearing organizations 43,742 42,424
Other deposits 1,934 1,934
--------- ---------

$ 262,025 $ 289,428
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 36,483 $ 58,053
Commissions payable 143,566 144,543
--------- ---------

TOTAL CURRENT LIABILITIES 180,049 202,596

STOCKHOLDERS' EQUITY
Common stock - authorized 5,000,000 shares;
par value $.002 in 1996 and $.01 in 1995; issued
and outstanding, 2,491,490 shares and 462,833
shares in 1996 and 1995, respectively 4,983 4,629
Preferred stock - authorized 750,000 shares
of $.01 par value; no shares issued - -
Stock warrants 4,410 4,410
Additional paid-in capital 913,688 706,853
Accumulated deficit (841,105) (629,060)
--------- ---------

TOTAL STOCKHOLDERS' EQUITY 81,976 86,832
--------- ---------

$ 262,025 $ 289,428
========= =========
</TABLE>

See notes to financial statements.

-2-
<PAGE> 27

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995
---- ----
<S> <C> <C>
REVENUE
Commissions $2,909,749 $2,733,913
Underwriting fees 32,500 25,250
Other 57,795 38,009
---------- ----------

3,000,044 2,797,172
EXPENSES
Employer compensation and benefits 345,561 304,700
Commissions 2,275,456 2,086,154
Clearing charges and regulatory fees 262,542 250,003
Occupancy and equipment rental 125,968 118,468
Depreciation 11,844 11,474
Other operating expenses 214,687 166,850
---------- ----------

3,236,058 2,937,649
---------- ----------

OPERATING LOSS (236,014) (140,477)

OTHER INCOME
Rent 23,969 24,598
---------- ----------

LOSS BEFORE INCOME TAXES (212,045) (115,879)

INCOME TAXES - -
---------- -----------

NET LOSS $ (212,045) $ (115,879)
=========== ===========
NET LOSS PER SHARE $ (.071) $ (.254)
=========== ===========
</TABLE>

See notes to financial statements.

-3-
<PAGE> 28

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Additional
Common Preferred Paid-in Accumulated Stock
Stock Stock Capital Deficit Warrants Total
------ --------- ---------- ----------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
January 1, 1995 $4,408 $ $ 598,210 $ (513,181) $ $ 89,437

Issuance of
common stock 221 129,985 4,410 134,616

Syndication costs (21,342) (21,342)

Net loss (115,879) (115,879)
------ --------- ---------- ----------- -------- ----------

BALANCE,
December 31, 1995 4,629 706,853 (629,060) 4,410 86,832

Issuance of
common stock 381 222,611 222,992

Syndication costs (15,803) (15,803)

Net loss (212,045) (212,045)
------ --------- ---------- ----------- -------- ----------
BALANCE,
December 31, 1996 $5,010 $ $ 913,661 $ (841,105) $ 4,410 $ 81,976
====== ========= ========== =========== ======== ==========
</TABLE>

See notes to financial statements.

-4-
<PAGE> 29

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

STATEMENT OF CHANGES IN LIABILITIE
SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

The Company has no subordinated claims as of December 31, 1996 and 1995.

See notes to financial statements.

-5-
<PAGE> 30

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (212,045) $ (115,879)

Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 11,844 11,474
(Increase) decrease in operating assets:
Receivables:
Broker dealers (963) (6,897)
Correspondent brokers 20,772 (55,051)
Affiliates and employees (3,650) 990
Customers (13,000)
Deposits (1,318) (2,188)
(Decrease) increase in operating liabilities:
Accounts payable (21,570) 24,428
Commissions payable (977) 45,686
---------- ----------

(8,862) 18,442
---------- ----------

NET CASH USED IN OPERATING ACTIVITIES (220,907) (97,437)
---------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture, fixtures and equipment (6,685)
---------- ----------
NET CASH USED BY
INVESTING ACTIVITIES (6,685)
---------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 222,992 134,616
Syndication costs (15,803) (21,342)

NET CASH PROVIDED BY FINANCING ACTIVITIES 207,189 113,274
---------- ----------

NET (DECREASE) INCREASE IN CASH (20,403) 15,837

CASH, at beginning of year 20,403 4,566
---------- ----------

CASH, at end of year $ $ 20,403
========== ==========
</TABLE>

See notes to financial statements.

-6-
<PAGE> 31

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Executive Wealth Management Services, Inc. (the "Company") is a securities
broker/dealer that transacts business through correspondent brokers and does
not handle any customer securities or funds. Customer security transactions
and related commission revenue and expenses are recorded on the trade date.
The Company also acts as a broker/dealer in selling both public and private
securities offerings on a best efforts basis. The Company receives commissions
and underwriting fees for its services.

Use of Estimates

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

Receivables from Correspondent Brokers and Broker/Dealers

The receivables from correspondent brokers and broker/dealers represent
commissions earned which had not been received at year-end. Management has
determined that these amounts are fully collectible.

Furniture, Fixtures and Equipment

Furniture, fixtures and equipment are recorded at cost. Depreciation is
provided in amounts sufficient to relate the cost of assets to operations over
their estimated useful lives using the straight-line method.

Investments

The Company was issued 55,263 shares of common stock of Flight Sciences, Inc.
This stock was issued to the Company in relation to a private offering of
Flight Sciences' promissory notes. These shares represent 5% of Flight
Sciences, Inc.'s outstanding common stock. The Company has assigned no value
to the stock due to the fact there is no ready market and its value is not
determinable.

Loss per Share

Loss per share is computed based upon 2,991,488 and 455,477 weighted average
shares outstanding during the years ended December 31, 1996 and 1995,
respectively.

-7-
<PAGE> 32

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Statements of Cash Flows

For purposes of reporting cash flows, the Company considers cash and cash
equivalents as those amounts which are not subject to restrictions or penalties
and have an original maturity of three months or less.

Reclassifications

Certain reclassifications have been made to the 1995 financial statements to
conform with the 1996 financial statement presentation. Such reclassifications
had no effect on net income as previously reported.

NOTE B - DEPOSITS WITH CLEARING ORGANIZATIONS

Deposits with clearing organizations represent investments in money market
funds and mutual funds. The investments are required by the Company's clearing
brokers and are in accordance with the correspondent broker agreements between
the parties. Deposits are reflected at their fair market value.

NOTE C - FURNITURE, FIXTURES AND EQUIPMENT

A summary of furniture, fixtures and equipment follows at December 31:

1996 1995
---- ----
<S> <C> <C>
Furniture and fixtures $ 37,951 $ 37,951
Equipment 33,240 26,555
Leasehold improvements 6,622 6,622
-------- --------

77,813 71,128
Less accumulated depreciation (40,621) (28,777)
-------- --------

$ 37,192 $ 42,351
======== ========
</TABLE>

NOTE D - OPERATING LEASE

The Company leases office space under operating lease agreements which expire
in 1996 through 1998. Rent expense for the years ended December 31, 1996 and
1995 was $103,452 and $101,101, respectively.

-8-
<PAGE> 33

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE D - OPERATING LEASE (CONTINUED)

The future minimum rental commitment for the noncancellable lease agreements as
of December 31, 1996 is as follows:

<TABLE>
<S> <C>
1997 $ 76,452
1998 67,452
---------

$ 143,904
=========
</TABLE>

NOTE E - NET CAPITAL REQUIREMENT

Pursuant to the net capital provisions of Rule 15c3-1 of the Securities and
Exchange Act of 1934, the Company is required to maintain a minimum net capital
of $5,000. In December, 1991, the National Association of Securities Dealers,
Inc. approved the Company as a fully disclosed broker/dealer. The Company has
a restrictive agreement to maintain the greater of a net capital of 130% of the
minimum requirement or 6 2/3% of aggregate indebtedness for each of the two
years in the period ended December 31, 1996.

The Company had a net capital of $22,618 or 188% and $37,837 or 356% of the
minimum requirement at December 31, 1996 and 1995, respectively. The net
capital rules may effectively restrict the payment of dividends to the
Company's stockholders. The Company operates pursuant to the (K)(2)(ii)
exemptive provisions of the Securities and Exchange Commission's Rule 15c3-3
and does not hold customer funds or securities.

Rule 15c3-1 also requires that the ratio of aggregate indebtedness to net
capital, both as defined, shall not exceed 15 to 1. The Company's ratio was
7.85 to 1 and 5.35 to 1 at December 31, 1996 and 1995, respectively.

NOTE F - INCOME TAXES

At December 31, 1996, the Company has a net operating loss carryforward of
approximately $657,000 that will be available to offset future taxable income
through 2011. Due to the lack of historical operations, management has elected
to record a valuation allowance equal to the deferred tax asset of $240,000 and
$174,270, for 1996 and 1995, respectively, calculated using an effective income
tax rate of 37% for the Company. The Company has no significant differences
between book and taxable income.

NOTE G - RELATED PARTY TRANSACTIONS

The majority stockholder is the controlling stockholder of a corporation
organized in 1995 to develop and implement a franchise business pursuant to
which the franchisee will purchase residential single family houses for resale.
The Company realized placement and management fees of $32,500 and $13,000
during 1996 and 1995, respectively, relating to the offering of notes for this
corporation.

-9-
<PAGE> 34

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE G - RELATED PARTY TRANSACTIONS (CONTINUED)

During the years ended December 31, 1996 and 1995, companies affiliated with
the Company's majority stockholder shared office space with the Company and
paid rent of $24,000 and $25,000, respectively, for the use of the space.

During the year ended December 31, 1996 and 1995, the Company paid rent of
$36,000 and $21,000, respectively, to the Company's majority stockholder for
the use of office space. The lease with this stockholder expires March, 1997.

See Note H for additional related party transactions.

NOTE H - COMMON STOCK TRANSACTIONS

During 1995, the Company and its majority stockholder sold 44,100 shares of the
Company's common stock. The price of the stock was $5.90 per share and each
purchaser of a share received a warrant which gave the purchaser the right to
purchase one share of the Company's stock from the Company for $7.00 per share.
The price of the warrants were $.10 each and expire on December 1, 1999. The
proceeds of the warrants were retained by the Company.

In November, 1995, the Company approved a plan to grant options to certain
employees to purchase the Company's common stock. The plan provides for the
granting of options to purchase a maximum of 100,000 shares of the Company's
stock at a price to be determined at the time of grant. The price, however,
shall not be greater than $3.00 per share. The plan requires a participant to
be employed by the Company for a number of years before exercise. Granted
options expire 10 years from the grant date. At December 31, 1995, all of the
options had been granted. Under the plan the Company has complete discretion
in approving exercise of the options, which encompasses the option price as
well as whether any options will be allowed to be exercised.

On December 15, 1995, the Company and the majority stockholder initiated a
private placement of 80,000 shares of the Company's common stock at a price of
$6.00 per share. The shares contained in the offering are to be drawn equally
from the authorized but unissued shares of the Company and the majority
stockholder. Accordingly, gross proceeds from the sale of the stock will be
shared equally by the Company and the majority stockholder. The proceeds from
this private placement were utilized for additional expansion and working
capital by the Company. During 1996, the Company sold 38,164 shares, of which
10,898 were sold to the majority stockholder. All sales were at $6.00 per
share.

In May 1996, the Board approved a five to one stock split of its common stock
which reduced its par value to $.002. In September 1996 the split became
effective. Total shares and options outstanding after the split at December
31, 1996 were 2,491,490 and 500,000, respectively.

-10-
<PAGE> 35

ADDITIONAL INFORMATION

<PAGE> 36
BOBBITT, PITTENGER & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS

February 5, 1997

BOARD OF DIRECTORS
Executive Wealth Management Service, Inc.
Sarasota, Florida

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON ADDITIONAL INFORMATION

We have audited the accompanying financial statements of Executive Wealth
Management Services, Inc. as of December 31, 1996 and 1995. Our audits were
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplementary schedules of Computations of Net Capital
and Net Capital Requirements Under Rule 15c3-1 of the Securities and Exchange
Commission and Computation for Determination of Reserve Requirements under Rule
15c3-3 of the Securities and Exchange Commission are presented for the purposes
of additional analysis and are not a required part of the basic financial
statements. The accompanying schedules are required by Rule 17a-5 of the
Securities and Exchange Commission. Such information has been subjected to the
testing procedures applied in the suit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

The Company is exempt form the determination of reserve requirements in
compliance with provisions under SEC Rule 16c3-3. We found no material
differences in the computation of not capital under SEC Rule 15c3-1.

/s/ Bobbitt, Pittenger & Company, P.A.
- --------------------------------------
Bobbitt, Pittenger & Company, P.A.
Certified Public Accountants
<PAGE> 37

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

COMPUTATIONS OF NET CAPITAL AND NET CAPITAL REQUIREMENTS
UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995
---- ----
<S> <C> <C>
NET CAPITAL

Stockholders' equity $ 81,976 $ 86,832

Deductions - non-allowable assets
Furniture, fixtures and equipment (37,192) (42,351)
Deposits (1,934) (1,934)
Petty cash (100) (100)
Accounts receivable (19,257) (3,762)
--------- ---------

Net capital before haircuts on securities 23,493 38,685

Haircuts on securities (875) (848)
--------- ---------

NET CAPITAL $ 22,618 $ 37,837
========== =========

AGGREGATE INDEBTEDNESS

Items included in balance sheet
Accounts payable $ 34,050 $ 58,053
Commissions payable 143,566 144,543
--------- ---------

Total Aggregate Indebtedness $ 177,616 $ 202,596
========= =========

Ratio: Aggregate Indebtedness to Net Capital 7.85 to 1 5.35 to 1
========== =========

CAPITAL REQUIREMENTS

MINIMUM NET CAPITAL REQUIREMENT PER
SEC RULE 15c3-1 $ 5,000 $ 5,000
========= =========

NET CAPITAL REQUIREMENT PER NATIONAL
ASSOCIATION OF SECURITIES DEALERS (130%
OF MINIMUM NET CAPITAL REQUIREMENT
OR 6 2/3% AGGREGATE INDEBTEDNESS) $ 11,842 $ 13,507
========= =========

</TABLE>

-12-
<PAGE> 38

EXECUTIVE WEALTH MANAGEMENT SERVICES, INC.

COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS
UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION
DECEMBER 31, 1996 AND 1995

The Company is exempt from the determination of reserve requirements under
provisions of SEC Rule 15c3-3 exemption K- 2ii.

-13-

<PAGE> 39
BOBBITT, PITTENGER & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS

February 5, 1997

BOARD OF DIRECTORS
Executive Wealth Management Services, Inc.
Sarasota, Florida

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON INTERNAL ACCOUNTING CONTROL REQUIRED BY SEC RULE 17A-5

In planning and performing our audit of the financial statements of Executive
Wealth Management Services, Inc. for the years ended December 31, 1996 and
1995, we considered its internal control structure in order to determine our
auditing procedures of the purposes of expressing our opinion on the financial
statements and not provide assurance on the internal control structure.

We also made a study of the practices and procedures followed by the Company,
in making the periodic computations of aggregate indebteness and net capital
under Rule 17a-3(a)(11) and the procedures of determining compliance with the
exemption provisions of Rule 15c3-3. We did not review the practices and
procedures followed by the Company in making the quarterly securities
examinations, counts, verifications and the recordation of differences required
by Rule 17a-13 or in complying with the requirements for prompt payment for
securities under Section 8 of Regulation of the Board of Governors of the
Federal Reserve System because the Company did not carry security accounts for
customer s or perform custodial function relating to customer securities.

The management of the Company is responsible for establishing and maintaining a
system of internal accounting control and the practices and procedures referred
to in the preceding paragraph. In fulfilling this responsibility, estimates
and judgements by management are required to assess the expected benefits and
related costs of control procedures and of the practices and procedures
referred to in the preceding paragraph and to assess whether those practices
and procedures can be expected to achieve the Commission's above-methioned
objectives of a system of internal accounting control and the practices and
procedures are to provide management with reasonable, but not absolute,
assurance that assets for which the Company has responsibility are safeguarded
against loss from unauthorized use or disposition, and that transactions are
executed in accordance with management's authorization and recorded properly to
permit the preparation of financial statements in accordance with generally
accepted accounting principles. Rule 17a-5(g) lists additional objectives of
the practices and procedures listed in the preceding paragraph.

Because of inherent limitations in any internal accounting control procedures
or the practices and procedures referred to above, errors or irregularities may
nevertheless occur and not be defected. Also, projection of any evaluation of
them to future periods is subject to the risk that they may become inadequate
because of changes conditions or that the degree of compliance with them may
deteriorate.

<PAGE> 40
Bobbitt, Pittenger & Company, P.A.

BOARD OF DIRECTORS
Page Two
February 5, 1997

Our consideration of the Internal control structure would not necessarily
disclose all matters in the Internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific Internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted the following matter
involving the control environment and its operation that we consider to be a
material weakness as defined above. This condition was considered in
determining the nature, timing and extent of the procedures to be performed in
our audits of the financial statements of Executive Wealth Management Services,
Inc. for the years ended December 31, 1996 and 1995, and this report does not
affect our report thereon dated February 5, 1997.

Segregation of Duties
- ---------------------

Because of a limited number of personnel, it is not always possible to
adequately segregate certain incompatible duties so that no one employee has
access to both physical assets and the related accounting records, or to all
phases of a transaction. Consequently, the possibility exists that
unintentional or intentional errors or irregularities could exist and not be
promptly detected.

Our audit did not reveal any significant errors or irregularities resulting from
this lack of segregation of employee duties and responsibilities.

We understand that practices and procedures that accomplish the objectives
referred to in the second paragraph of this report are considered by the
Commission to be adequate for its purpose in accordance with the Securities
Exchange Act of 1934 and related regulations, and that practices and procedures
that do not accomplish such objectives in all material respects indicate a
material inadequacy for such purposes. Based on this understanding and on our
study, we believe that the Company's practices and procedures were adequate at
December 31, 1996 and 1995, to meet the Commission's objectives.

The condition was considered in determining the nature, timing and extent of
the procedures to be performed in our audits of the financial statements of
Executive Wealth Management Services, Inc. for the years ended December 31,
1996 and 1995. This report does not affect our report dated February 5, 1997
relating to the audit of the financial statements for the years ended December
31, 1996 and 1995.

* * * * *

This report is intended solely for the use of management of Executive Wealth
Management Services, Inc. and the Securities and Exchange Commission and other
regulatory agencies which rely on Rule 17a-5(g) under the Securities Exchange
Act of 1934 and should not be used for any other purposes.

Bobbitt, PIttenger & Company, P.A.

Certified Public Accountants
<PAGE> 41
Bobbitt, Pittenger & Company, P.A.
Certified Public Accountants

February 5, 1997

BOARD OF DIRECTORS
Executive Wealth Management Services, Inc.
Sarasota, Florida

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
ON THE SIPC ANNUAL ASSESSMENT REQUIRED BY SEC RULE 17A-5
--------------------------------------------------------

In accordance with Rule 17a-5(e)(4) of the Securities and Exchange Commission,
we have performed the following procedures with respect to the accompanying
schedule (Form SIPC-7) of Securities Investor Protection Corporation
assessments and payments of Executive Wealth Management Services, Inc. for the
year ended December 31, 1996. Our procedures were performed solely to assist
you in complying with Rule 17a-5(e)(4), and our report is not to be used for
any other purpose. The procedures we performed are as follows:

1. Compared listed assessment payments with respective cash disbursement
records entries;

2. Compared amounts reported on the audited Form X-17A-5 for the period
January 1, 1996 to December 31, 1996, with the amounts reported in the
General Assessment Reconciliation (Form SIPC-7);

3. Compared any adjustments reported in Form SIPC-7 with supporting
schedules and working papers;

4. Proved the arithmetical accuracy of the calculations reflected in Form
SIPC-7 and in the related schedules and working papers supporting
adjustments; and

5. Compared the amount of any overpayment applied with the Form SIPC-7 on
which it was computed.

Because the above procedures do not constitute an audit made in accordance with
generally accepted auditing standards, we do not express an opinion on the
schedule referred to above. In connection with the procedures referred to
above, nothing came to our attention that caused us to believe that the amounts
shown on Form SIPC-07 were not determined in accordance with applicable
instructions and forms. This report relates only to the schedule referred to
above and does not extend to any financial statements of Executive Wealth
Management Services, Inc. taken as a whole.

Bobbitt, Pittenger & Company, P.A.
Certified Public Accountants

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 45,676
<RECEIVABLES> 179,157
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 224,833
<PP&E> 77,813
<DEPRECIATION> (40,621)
<TOTAL-ASSETS> 262,025
<CURRENT-LIABILITIES> 180,049
<BONDS> 0
0
0
<COMMON> 4,983
<OTHER-SE> 76,993
<TOTAL-LIABILITY-AND-EQUITY> 262,025
<SALES> 0
<TOTAL-REVENUES> 3,000,044
<CGS> 0
<TOTAL-COSTS> 3,212,089
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (212,045)
<INCOME-TAX> 0
<INCOME-CONTINUING> (212,045)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (212,045)
<EPS-PRIMARY> (.071)
<EPS-DILUTED> (.071)

</TABLE>