Instructivision Inc – ‘10-K’ for 9/30/96

As of:  Thursday, 1/2/97   ·   For:  9/30/96   ·   Accession #:  770183-96-7   ·   File #:  0-14411

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         31    137K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      5K 

10-K   —   Annual Report
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10-K
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UNITED STATES               

SECURITIES AND EXCHANGE COMMISSION                

Washington, D.C. 20549                

FORM 10-K               

Annual Report Pursuant to Section 13 or 15(d) of                                
The Securities Exchange Act of 1934                                             

For the Fiscal Year Ended September 30, 1996                                    

Commission file Number     0-14411                                              

Instructivision, Inc.                     
-------------------------------------------------------                         
(Exact name of registrant as specified in its charter)                          

New Jersey                      22-2386359                        
-------------------------------      ------------------                         
(State or other jurisdiction of      (I.R.S. Employer                           
incorporation or organization)       Identification No.)                        

3 Regent Street, Livingston, NJ                07039                            
----------------------------------------     ----------                         
(Address of principal executive offices)     (Zip Code)                         

Registrant's telephone number, including area code:                             
(201) 992 9081                                                                  

Securities registered pursuant to Section 12(b) of the ACT:                     

Title of each Class:      Name of each exchange on which registered:            
--------------------      ------------------------------------------            
Common Stock                               none                                 

Securities registered pursuant to Section 12(b) of the ACT:                     

Common Stock $0.001 par value                                                   
-----------------------------                                                   
(Title of Class)                                                                

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Indicate by check mark whether the registrant (1) has filed           
all reports required to be filed by Section 13 or 15(d) of the                  
Securities Exchange Act of 1934 during the preceding 12 months                  
(or for such shorter period that the registrant was required to                 
file such reports), and (2) has been subject to such filing                     
requirements for the past 90 days.                                              

YES [X]        NO [ ]         

Indicate by check mark if disclosure of delinquent filers             
pursuant to Item 405 of regulation S-K is not contained herein, and             
will not be contained, to the best of the registrant's knowledge, in            
definitive proxy or information statements incorporated by reference            
in Part III of this Form 10-K or any amendment to this Form 10-K.               

YES [X]       NO [ ]        

The aggregate market value of the voting stock held by non-           
affiliates of the Company as of December 30, 1996, was $418,750                 
based on the over-the-counter closing bid price of $.125 per share on           
December 30, 1996.                                                              

The number of shares of Common Stock, .001 par value, of the          
Company, issued and outstanding as of December 30, 1996 was                     
3,350,000.                                                                      

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PART I                  

ITEM 1. BUSINESS                                                                
----------------                                                                

The Company                                                                     
------------                                                                    

Instructivision, Inc. (the "Company") develops and publishes a        
broad line of educational software and related workbooks, and                   
instructional video tapes.  Educational products, which accounted for           
41% of the Company's revenues, are principally sold to high schools             
in the United States. Education market products include test preparation        
material for college entrance and minimum basic skills for high school          
graduation.                                                                     

The Company currently published over 80 video titles on diverse       
topics such as discipline, cultural diversity, critical thinking                
skills, and learning styles.                                                    

The Company produces software and textbooks for other publishers      
under royalty agreements and/or fixed fee contracts. Royalties accounted for    
12% of revenues in 1996. Customers of the Company's educational programs        
include the National Association of Secondary School Principals (NASSP),        
the National Association of Elementary School Principals (NAESP),               
Educational Testing Service, and Steck-Vaughn Company.                          

The Company owns a video production studio and two post-production    
digital editing suites in which it creates video programs for schools and       
industry. Corporate customers utilize the Company's video services to           
create employee training videos, medical information, product introductions     
and infomercials. The Company specializes in creative services, script          
writing, on-location and in-studio taping, teleconferencing, audio              
recording, digital and analog editing, graphics, animation and duplication      
services.  Clients during the past fiscal year have included First Union        
Bank, Prime Hospitality, Chanel, Exxon, US Postal Service, Resorts USA,         
Merck, and others.                                                              

Background                                                                      
----------                                                                      
The Company, a New Jersey corporation, was established in             
November 1981 to develop and market multi-media educational products.           
The Company's catalog of school products include workbooks, computer            
software, and video programs principally for the high school market.            
These programs include SAT, ACT, and GED test preparation material, and         
programs for New Jersey, Florida and Louisiana State high school                
competency tests. The Company also provides seminars and video tapes for        
teachers on topics such as school violence, truancy, cultural diversity,        
and computer technology.                                                        

The Company's video production was started in 1986 to produce         
instructional video tapes for its own distribution and to serve the             
corporate and advertising community in central New Jersey. Corporate            
video production sales now account for approximately 40% of the Company's       
revenues.                                                                       

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Current Activities                                                              
------------------                                                              
1. Commercial video production                                                  

The Company's video production facility is being marketed to          
the business community in the area: local merchants, advertising                
agencies, independent producers, human resource organizations and health        
care providers.                                                                 

The Company's full service video production facility consists of a      
studio, two broadcast quality editing suites, two VHS editing suites,           
computerized 3-D animation stand, remote location camera package and            
duplicating equipment. Revenues attributable to the Company's video             
production activities for the fiscal year ended September 30, 1996,             
were approximately $450,000.                                                    

2. Educational video tapes, software and workbooks:                             

The principal source of revenues from educational products during     
the fiscal year ended September 30, 1996 were as follows:                       

MASTERING THE GED, a new software package, was completed in April       
1996. Priced at less than $1,000, the product is being marketed to adult        
education facilities and libraries.                                             

HSPT and EWT SUCCESS consists of a series of software, textbooks and    
video tapes exclusively marketed to the New Jersey middle and high              
school market. These products account for approximately 15% of the              
Company's sales.                                                                

SAT and ACT software and video products are sold nationally by the      
Company through local sales representatives, direct mail catalog sales          
and distributors.                                                               

HSCT SUCCESS, software and textbooks, completed in October 1995, was    
designed to prepare students for the Florida minimum basic skills tests.        
These products are being distributed through Southern Media Systems, a          
marketing group based in Florida. Revenues from the sale of this product        
were approximately 7% of the Company's gross sales for the fiscal year          
ended September 30, 1996.                                                       

The INSERVICE VIDEO NETWORK, a collection of instructional tapes      
for middle and high school educators, is produced under a collaborative         
agreement with the NASSP. The Company's agreement with the NASSP                
requires it to pay royalties of 15% on annual net sales of the                  
product (gross sales less returns and royalties paid to the authors).           
The Company has published over 80 video tapes since 1986. The authors           
of the individual tapes receive a 5% to 12% royalties from the                  
sales of their respective tapes.                                                

The VIDEO WORKSHOP is the trade name under which the Company            
produces and markets teacher training tapes for elementary school               
educators under an agreement with NAESP.  The Company has produced              
18 tapes in the series since 1992.  The NAESP receives a 15% to 20%             
royalty from the net sales of such tapes. The authors of the                    
individual tapes receive a 6% to 12% royalty from the net sale of               
their respective tapes.                                                         

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The Company has produced a video tape program entitled THE              
FROG: INSIDE-OUT, a two part 90 minute program which is being                   
marketed by the Company. The Company has a non-exclusive                        
distributor agreement with United Learning Company to sell the                  
video tapes. The Company has an exclusive distributor agreement                 
with Optical Data Corp. to publish the product on video disk.                   
The Company receives a royalty of 10% from the sale of the                      
program on video disk.                                                          

In 1993 the Company produced an eighteen lesson video course            
for students entitled SAT EDGE. The program is jointly owned by                 
NASSP and the Company who share equally in the revenues from the                
program.                                                                        

STUDY SKILLS FOR SUCCESS: A software program available for Apple,       
MS-DOS, and Macintosh computers, for students grades 8 through 12.              

The Company's other workbooks for improving basic math skills           
are: SRA IMPLEMENTATION KIT IN MATHEMATICS, KEY IT IN I and KEY                 
IT IN II.                                                                       

The Company is obligated to pay royalties to authors of some of         
the Company's products. Such royalties payable range from 5% to 10%.            

The Company's software is available for Apple, Macintosh,             
MS-DOS and Windows formats. Site licenses and networking rights give            
a school license to duplicate and network the program. The Company              
updates its various software products from time to time to be                   
compatible with software currently available in the marketplace.                

c) Other Revenues                                                               
-----------------                                                               

The Company receives a royalty of 1.5 to 3% from Steck-Vaughn         
Company as author of components of TEST BEST, a workbook series                 
published since 1991. Revenues from the product during the fiscal               
year ended September 30 1996 were approximately $86,000.                        

SAT-1 EXCELLERATOR, ACT TEST EXCELLERATOR, and IMPROVING COLLEGE      
ADMISSION SCORES ON THE ACT: The Company receives a royalty of 15%              
on workbooks and 20% to 33% on software sold by the NASSP.  The Company         
also has a license to sell the programs. The NASSP receives a royalty           
of 15% to 20% from the sale of the programs by the Company.                     

WORKLINK:  The Company developed a software program for Educational   
Testing Service which provides a database of students' records to link          
schools with prospective employers.  The Company receives a 5% royalty          
from the sale of the program and related material.                              

KNOWLEDGE NAVIGATORS. The Company offers consulting services on a     
variety of topics to schools for seminars and in-house training of              
teachers and administrators.                                                    

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New Product Development                                                         
-----------------------                                                         
The Company does not separately account for research and development    
costs but estimates that on average such costs are not a material               
portion of cost of sales.                                                       

The Company's new projects under development are:                       

LEAP Success, a test preparation software package for students taking   
the Louisiana basic skills test.                                                

In 1997 the Company intends to add a new program to its successful      
HSPT series. A PRE-HSPT  in Math, Reading and Writing is scheduled to be        
produced to service 9th and 10th grade high school students prepare             
for the HSPT.                                                                   

The Company is developing a CD ROM version of the SAT EDGE program      
for students preparing for the SAT.  The product is scheduled to be             
completed by summer 1997.                                                       

New video titles to be produced for sale under the INSERVICE VIDEO      
WORKSHOP label: The Company has plans to produce three new video tapes          
to be completed in fiscal 1997.                                                 

Future Plans                                                                    
------------                                                                    
The Company intends to continue expanding its product lines, and to   
update existing software in step with new technological developments.           

The Company's video production facility offers competitive rates        
and is easily accessible to the central New Jersey business community.          
The Company has added a full-time sales manager to its staff to better          
compete in the advertising market of the region.                                

Marketing                                                                       
---------                                                                       
The Company has collaborated with the NASSP in the development        
of various programs and, as a result, has transferred several of the            
programs it has created to the NASSP for direct marketing to schools            
throughout the country. The NASSP, of which Dr. Thomas Koerner, a               
director of the Company, is Associate Executive Director, accounted for         
approximately 8% of the Company's sales during the fiscal year ended            
September 30, 1996 (see Item 13 hereof).                                        

The Company has also produced educational software under contract     
to other commercial publishers for fixed fees and/or advances against           
royalties, and royalties.  The Company has retained the broadcast and           
cable television rights to the video tapes it has produced.                     

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The Company is marketing its educational and cultural video           
programs to educational institutions and publishers. The Company has            
granted Southern Media Systems exclusive marketing rights to the sale           
of HSCT, SAT, and ACT programs in the State of Florida.                         

The Company has agreements with the NASSP to share in the             
marketing of several of its educational programs. The Company receives          
a royalty of 15% to 50% from the sale of the programs. The NASSP                
receives a royalty of 15% to 50% from the Company's sale of those programs.     

The Company employs three full-time commission salespersons in New    
Jersey.  The Company has agreements with independent sales representatives      
in Florida, Louisiana, Pennsylvania, Delaware, Maryland and the District        
of Columbia to sell its education products in those territories.  The           
Company also markets its products through mail-order distributors               
throughout the United States.  The Company pays commissions of 5% to            
50% to sales representatives and distributors on the sale of the                
Company's products.                                                             

While a significant portion of the Company's sales is made to         
schools, the Company does not generally enter into long-term                    
contracts with such customers, but instead sells pursuant to specific           
orders with a short delivery schedule, or under a price quotation               
valid for no more than one year.  Therefore, a material portion of the          
Company's business is not subject to renegotiation of profits or                
termination of contracts at the election of the government.                     

Seasonality of the Business                                                     
---------------------------                                                     
Approximately 50% of the Company's educational product sales are      
realized during the fourth quarter of its fiscal year, when school              
districts make their purchasing decision for the following academic year.       
Approximately 40% of the Company's sales are made to schools. However,          
revenues from video production services have in the past not been               
significantly affected by season, thereby providing year-round cash flow        
for the Company.                                                                

Employees                                                                       
---------                                                                       
The Company had 8 full-time employees at September 30, 1996.          
The Company employs writers, freelance production crews and other               
support personnel as needed to assist in development of educational             
programs and its video production services.  Contracts for services             
of outside contractors are normally on a fee basis; however, some               
may receive a percentage of revenues as a royalty from the Company for          
their program participation.  This practice has allowed the Company             
to draw on part-time technical personnel and writers, while main-               
taining low overhead and employment costs. The Company anticipates              
maintaining this employment approach in the next fiscal year.                   

Copyrights and Trademarks                                                       
-------------------------                                                       
The Company has applied for copyrights for certain of its programs    
and software documentation related to these programs. However the               
granting of copyright protection cannot prevent the unauthorized copying        

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of the Company's products. Where applicable, the Company utilizes non-          
disclosure and confidentiality agreements and other contractual                 
arrangements with customers, consultants, employees and others.  While          
the enforceability of such agreements cannot be assured, the Company            
believes that they provide a deterrent to the use of information which          
may be proprietary to the Company, and in the event of any breach of            
such agreements, the Company intends to take appropriate legal action.          
There can be no assurance that competitors with substantially greater           
financial resources will not develop similar products outside the               
protection of any copyright that may be granted to the Company.                 
Management believes that the competitive position of the Company depends        
primarily on the creative ability and technical competence of its               
personnel and that its business will not be materially dependent                
on copyright protection.                                                        

The Company markets a portion of its products under the Company's     
name of Instructivision.  The Company has been denied trademark                 
protection by the U.S. Patent and Trademark Office for this name because,       
in the view of the examiners, the Company's name is not easily                  
distinguishable from a registered trademark belonging to a Canadian firm.       
The Company does not believe that the absence of trademark protection           
for its name will cause any marketing difficulties for its products.            
Nevertheless, the Company cannot rule out the possibility of having the         
use of its name challenged and/or having to change its name. The Company        
may not have the resources to successfully defend an infringement action.       
Should the Company be required to change its name or adopt another name         
for marketing purposes, the cost of such change or adoption is presently        
undeterminable.                                                                 

The Company markets some of its video programs under the trade        
name INSERVICE VIDEO NETWORK, VIDEO WORKSHOP and KNOWLEDGE NAVIGATORS.          

Backlog                                                                         
-------                                                                         
The Company's sales backlog at September 30, 1996 consisted of          
contractual video production obligations to be filled over the next 90          
days of approximately $80,000.  Orders for existing computer software           
and books are currently processed and shipped within 3 to 15 days.              

Competition                                                                     
-----------                                                                     
Several of the Company's competitors have greater financial           
resources, more extensive business experience and greater software              
and video program production development, manufacturing, marketing,             
and servicing capabilities than the Company. There already is a large           
number of software programs directed at preparing students for test             
taking on the market.                                                           

The Company also competes with other video production companies       
producing commercials and instructional video programs. The Company             
plans to continue competing in the multimedia educational market on             
the basis of its previous experience in developing test preparation             
software and video tapes and on its management's experience as                  
professional educators, attuned to the needs of the education sector.           

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ITEM 2. Property                                                                
----------------                                                                
The Company's executive facilities, teleproduction studio and         
software production facilities are housed in approximately                      
7,300 sq.ft. of leased office space at 3 Regent Street, Livingston,             
New Jersey. The monthly rental as of September 30, 1996 was                     
$9,133.75. The lease will expire on June 30, 2001.  Under the lease,            
the Company is responsible for insurance, maintenance, taxes and                
other costs of occupancy.  The Company believes that the space will             
meet its needs for the foreseeable future and would accommodate a               
significant increase in production of educational products and video            
services.                                                                       

ITEM 3. Legal Proceedings                                                       
-------------------------                                                       
none                                                                            

ITEM 4. Submission of Matters to a Vote of Security Holders                     
-----------------------------------------------------------                     
none                                                                            

PART II       
-------       
ITEM 5. Market for the Company's Common Equity and Related                      
Shareholder Matters.                                            
-----------------------------------------------------------                     

The Company's Common Stock has been traded on a limited and           
sporadic basis in the over-the-counter market.  The following table             
sets forth for the Company's fiscal periods indicated the high and              
low bid quotation in the over-the-counter market for the Company's              
Common Stock. Quotations represent inter-dealer quotations without              
adjustment for retail mark-ups, mark-downs or commissions and may               
not necessarily represent actual transactions.                                  

Period                      Common Stock                                        
High     Low            
-------                     ----     ---                                        

                                                                [Download Table]
                                       
1/1/95  - 3/31/95           3/8     1/4
4/1/95  - 6/30/95           3/8     1/4
7/1/95  - 9/30/95           3/8     1/4
10/1/95 - 12/30/95          3/8     1/4
1/1/96 -  3/31/96           1/4     1/8
4/1/96 -  6/30/96           1/4     1/8
7/1/96 -  9/30/96           1/4     1/8
10/1/96 - 12/30/96          1/4     1/8

At December , 1996 management believes that the approximate           
number of holders of the Company's Common Stock was 280.  This number           
is based upon the Company's stockholder mailing list and information            

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provided to the Company by investors. At December 30, 1996 the                  
Company's transfer agent advised that there were 202 holders of                 
record of the Company's Common Stock. The Company has not paid any              
cash dividends on its Common Stock and does not anticipate paying               
dividends in the foreseeable future.  As of March 1, 1992 the                   
Company's stock is no longer traded on the NASDQ system.                        

ITEM 6. Selected Financial Data                                                 
-------------------------------                                                 
The selected financial data presented below are derived from the      
Company's financial statements. The financial statements as of and for          
the five years ended September 30, 1996 have been examined by Stanley           
Morin and Associates, independent certified public accountants. Their           
audit report on such financial statements as of September 30, 1996 and          
1995 and for the three years ended September 30, 1996 is included               
elsewhere in this Form 10-K. This data should be read in conjunction            
with the financial statements and notes thereto appearing elsewhere             
herein. The Company has never paid cash dividends.                              

Summary of Balance Sheets                                                       
-------------------------                                                       

                                                                [Download Table]

                                     September 30,                          
                      1996        1995       1994        1993        1992   
                    ---------- ---------  ----------   ---------  --------- 
                                                                            
Current assets      $1,599,313 $ 762,489  $  808,172   $ 668,016  $ 606,986 
Current liabilities    272,793   271,598     247,732     199,220    194,790 
Working capital      1,326,520   490,891     560,440     468,796    412,196 
Total Assets         2,185,990 1,411,159   1,285,242     962,112    935,014 
Total liabilities      314,151   358,080     251,065     199,220    225,979 
Stockholder's                                                               
 equity              1,871,839 1,053,079   1,034,177     762,892    709,035 
Net tangible book                                                           
 value per share           .48       .23         .24         .20        .18 
Shares used in per                                                          
 share calculation    3,350,000  3,350,000  3,350,000  3,350,000  3,350,000 


Summary Statement of Operations                                             
-------------------------------                                             
                       1996        1995         1994       1993       1992  
                    ---------- ----------  ----------  ---------- ----------
                                                                            
Revenues            $1,138,171 $1,224,282  $1,253,011  $1,197,806 $1,263,773
Cost of sales          751,974    698,958     648,822     690,440    700,177
Gen.admin.expenses     477,610    485,324     456,983     449,954    458,320
Income (loss) before                                                        
extraord item and cum.                                                      
effect of accounting                                                        
change                (110,240)    18,902      83,285      53,857    100,186
Extraordinary item     938,000         --          --          --         --
Cum.effect of change                                                        
in accounting              --          --     188,000          --         --
Net income (loss)      818,760     18,902     271,285      53,857    100,186
Earnings (loss) per                                                         
 share before extra-                                                        
 ord.items & cumulative                                                     
 effect of acctg.change   (.03)        .01        .02         .01        .02
Earnings(loss) per share   .24         .01        .08         .02        .03
Shares used in per                                                          
 share calculations   3,350,000  3,350,000  3,350,000   3,350,000  3,350,000

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ITEM 7. Management's Discussion and Analysis of Financial Condition             
and Results of Operation.                                       
-------------------------------------------------------------------             

On August 2, 1996, the Company's founder and CEO, Jay Comras, died.   
In September, the Board of Directors unanimously elected Rosemary Comras        
as Company president. Ms. Comras previously served as Vice President and        
Controller of the Company.                                                      

For the fiscal year ended September 30, 1996, the Company's net       
sales were $1,138,171 compared to $1,224,282 for 1995 and $1,253,011            
in 1994.  Revenues declined 7% over the previous year. Loss of income           
from consulting activities by the Company's former CEO, Jay Comras affected     
sales. Mr. Comras had been active in the marketing of the Company's             
products and providing consulting services for fees to educational              
organizations until his illness in February. The Company has commenced          
a major reorganizing effort to expand its network of sales re-                  
presentatives in New Jersey and other states. Advertisements in national        
trade publications and direct catalog mailings to schools throughout the        
country are expected to boost sales in the coming fiscal year.                  

Revenues from video production services have decreased from $577,451  
in 1995 to $451,560 in 1996 due primarily to loss of business from one          
video customer. Revenues from video production activities accounted for 44%     
of the Company's revenues in 1996. In 1995 video revenues were 53% of total     
sales, up from 45% in 1994.                                                     

Sales of educational products showed a slight increase over the       
previous fiscal year, due to the Company's marketing activities in Florida.     
In October 1995, the Company introduced new high school competency              
software and workbook to prepare high school students for the State             
mandated basic skills test.                                                     

 The Company received a payment of $1,000,000 of life insurance proceeds
upon the death of Jay Comras. The funds were held in an interest bearing        
account on September 30, 1996.                                                  

The Company reduced its inventory in fiscal 1996 by 30% from 1995.    
Inventory consisted principally of textbooks and video tapes held for           
sale. Over the same period capitalized software increased from $114,804 to      
$196,528 due to completion of the Company's new products Mastering the          
GED software and the HSCT Series for the Florida school market.                 

The Company experienced an increase of cost of goods of 7% or $53,000 
in fiscal 1996 over the prior year on lower revenues. Higher maintenance        
costs and depreciation expenses in connection with the video and computer       
equipment impacted on the Company's operating costs.                            

The Company reported a net loss of 10% from operations before extra-  
ordinary items for the year ended September 30, 1996, compared to a net         
gain of 2% in 1995 and a net gain of 12% in 1994.                               

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The Company experienced no significant change in the level of         
accounts receivables and accounts payables at fiscal year end compared          
to the previous two years. Accounts receivables were $296,728, $316,759         
and $338,892 respectively for fiscal years ending September 1996, 1995          
and 1994.                                                                       

At September 30, 1996, the Company had working capital in the       
amount of $1,342,113, principally as a result of receipt of insurance           
proceeds on the life of Jay Comras in the amount of $1,000,000.                 

Management believes the Company has sufficient funds to meet its      
operating requirements for the comming year.                                    

ITEM 8.  Financial Statements and Supplementary Data                            
----------------------------------------------------                            
See attached Financial Statements.                                              

ITEM 9. Disagreements on Accounting and Financial Disclosure                    
------------------------------------------------------------                    
None                                                                            

PART III                
--------                
ITEM 10. Directors and Executive Officers of Registrant                         
-------------------------------------------------------                         

The executive officers and directors of the Company, and further      
information concerning them, are as follows:                                    

[S]                 [C]  [C]                                                    
Rosemary Comras     56   President, Secretary/Treasurer and                     
Director                      

Thomas Koerner      65   Director                                               

Marcus Ruger        65   Director                                               

David Sousa         56   Director                                               

Rosemary Comras was elected President of the Company on September 4,  
1996 following the death of Jay Comras, the founder, Chairman of the Board,     
President and Chief Executive Officer of the Company. Ms. Comras had been       
Vice President, Secretary/Treasurer and a director of the Company since         
its inception. Ms. Comras is the widow of Jay Comras.                           

Dr. Thomas F. Koerner has been a director of the Company since        
March 1985. Dr. Koerner has been Associate Executive Director for               
the NASSP since 1971. Dr. Koerner will continue to devote only as               
much time to the affairs of the Company as is necessary to carry out            
his duties as a director, which is estimated to be a minimal amount             
of his time.                                                                    

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Dr. Marcus Ruger has been a director of the Company since March         
1986. Dr. Ruger was employed as Director of Assessment Services for             
the Mountain Plains Regional Office of American College Testing (ACT)           
from 1983 until his retirement in September 1995. Dr. Ruger will continue       
to devote only as much time to the affairs of the Company as is                 
necessary to carry out his duties as a director, which is estimated             
to be a minimal amount of time.                                                 

Dr. David Sousa has been a director of the Company since April          
1994. Dr. Sousa was employed as Superintendent for the New Providence           
New Jersey School district from 1991 till July 1994. Dr. Sousa conducts         
training seminars and consulting services to schools thoughout the              
United States. Dr. Sousa will continue to devote only as much time              
to the affairs of the Company as is necessary to carry out his duties           
as a director, which is estimated to be a minimal amount of his time.           

All of the directors of the Company were elected in 1996 to serve     
until the next annual meeting of the stockholders and until their               
successors have been elected and have qualified. Officers are appointed         
to serve until the meeting of the Board of Directors following the next         
annual meeting of stockholders and until their successors have been             
elected and have qualified.                                                     

ITEM 11.  Executive Compensation                                                
--------------------------------                                                

The following table sets forth information concerning the com-        
pensation paid to Jay Comras, the Company's Chairman of the Board,              
President, and Chief Executive Officer, during each of the last three           
fiscal years. There are no excecutive officers of the Company for whom          
total annual salary and bonus exceeds $100,000.                                 

                                                                [Download Table]

                                    Annual Compensation                  
                 Fiscal   Salary    Bonus     Other          All Other   
                 year                     Compensation(1) Compensation(2)
-------------    ------  ---------  ------- ------------- ---------------
                                                                         
Jay Comras,       1994     $73,533  $ ---     $  500       $    10,880   
Chairman of the   1995      77,825    ---        500            11,700   
Board, President  1996(3)   45,000   4,850       300             6,500   
and CEO                                                                  

(1) Compensation consisted of personal use of a Company-owned automobile        
(2) Compensation consisted of premiums paid on a life insurance policy          
covering Mr. Comras, the proceeds of which were payable to beneficiaries        
designated by him.                                                              
(3) Compensation through Aug 2,1996                                             

The Company has a three year employment agreement with Rosemary       
Comras, President and Secretary/Treasurer of the Company, which                 
commenced September 1, 1996, for an annual salary of $75,000, which             
increases to $78,500 on September 1, 1997, and $83,000 on September 1,          
1998 . In addition Ms. Comras receives a bonus of 2.5% of the                   
Company's net profit before taxes.                                              

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The Company may, in the future, offer disability insurance,           
reimbursement of medical expenses and such other benefits as may be             
authorized by the Board of Directors.  Presently, all full-time employees       
are eligible to receive Company paid health and dental insurance                
premiums. No retirement, pension, profit sharing, or other similar              
program has been adopted by the Company.  No surviving warrants or stock        
options have been granted to any officer, director or other employee of         
the Company. However, such benefits may be adopted or options granted in        
the future, if they are authorized by the Board of Directors.                   

Key Man Insurance                                                               
-----------------                                                               

The Company obtained a "key man" term life insurance policy on the    
life of Jay Comras, Chairman of the Board, President and Chief                  
Executive Officer of the Company, in the amount of $1,000,000.  Upon his        
death on August 2, 1996 the proceeds were paid to the Company.                  

Compensation Committee Interlocks and Insider Participation                     
-----------------------------------------------------------                     

As directors of the Company, Jay Comras and Rosemary Comras           
participated in deliberations of the Board of Directors concerning              
executive officer compensation.  The Board of Directors has no                  
compensation committee or other committee performing equivalent                 
functions.                                                                      

Dr. Thomas Koerner is a director of the Company. Dr. Koerner is       
also Associate Executive Director of the NASSP, a customer of the               
Company. During the fiscal years ended September 30, 1996 and 1995, the         
Company derived revenues of approximately $95,000 and $100,000,                 
respectively, from sales and consulting services to the NASSP.                  

Compensation of Directors                                                       
-------------------------                                                       

Outside directors receive $250 for each board meeting attended        
and are reimbursed for the reasonable out-of-pocket expenses incurred           
by them in connection with the performance of their services as                 
directors.                                                                      

ITEM 12.  Security ownership of certain beneficial owners and Management        
------------------------------------------------------------------------        

The following table sets forth certain information regarding the      
beneficial ownership of the Company's Common Stock as of the date hereof        
by (i) each person who is known by the Company to own beneficially more         
than 5% of the Company's outstanding Common Stock; (ii) each of the             
Company's officers and directors; and (iii) officers and directors of the       
Company as a group:                                                             

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                                                                [Download Table]
Name and address of    Amount and Nature of        Percentage of
Beneficial Owner       Beneficial Ownership        Ownership    
-------------------    --------------------        -------------
                                                                
Rosemary Comras               1,100,000                33%      
14 Tilden Drive                                                 
East Hanover NJ                                                 

Rosemary Comras                 975,000                29%      
ITF Kevin Comras and                                            
Joann Doniloski                                                 

Thomas F. Koerner                   ---                 --      
Tumbletree Way                                                  
Reston VA                                                       

Marcus C. Ruger                     ---                 --      
3131 South Vaughn Way                                           
Aurora CO                                                       

David Sousa                       6,000                 --      
729 Belvidere Avenue                                            
Plainfield NJ                                                   
--------------------------------------------------------------  
All officers and directors                                      
as a group (5 persons)        2,081,000                 62%     

ITEM 13. Certain relationships and related transactions                         
-------------------------------------------------------                         

Dr. Thomas Koerner is a director of the Company. Dr. Koerner is       
also Associate Executive Director of the NASSP, a customer of the               
Company. During the fiscal years ended September 30, 1996 and 1995 the          
Company derived revenues of approximately $95,000 and $100,000,                 
respectively, from sales and consulting services to the NASSP.                  

Possible conflict of interest                                                   
-----------------------------                                                   

Any conflict of interest between the Company and the personal         
interests of its officers and directors will be resolved to the best            
ability and in the best judgment of the officers and directors of the           
Company, in a manner which protects the interest of the Company.  The           
officers and directors of the Company have agreed to present any                
opportunities to the Company first, when possible, for review and               
evaluation by the other directors of the Company.                               

If the Company enters into transactions in the future with any of     
its officers and/or directors or companies affiliated with them, the            
terms of such transactions will be as favorable to the Company as those         
which could be obtained from an unrelated party in the arms-length              
transaction.                                                                    

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ITEM 14. Exhibits, Financial Statements, Schedules and Reports on               
Form 10-K                                                     
-----------------------------------------------------------------               

(a) 1. Financial Statements                                                     
2. Schedules                                                            
(b) Reports on Form 8-K                                                         
none                                                                    
(c) Exhibits required by Item 601(b) of Regulation 5-K:                         

1.1   Form of Common Stock(A)                                                   
1.2   Form of Warrant Agreement (B)                                             
1.2A  Amendment No. 1 to Warrant Agreement with Amended Warrant                 
annexed. (D)                                                        
1.2B  Amendment No. 2 to Warrant Agreement with Amended Warrant                 
annexed (H)                                                         
1.2C  Amendment No. 3 to Warrant Agreement with Amended Warrant                 
annexed (J)                                                         
1.2D  Amendment No. 4 to Warrant Agreement with Amended Warrant                 
annexed (K)                                                         
1.2E  Amendment No. 5 to Warrant Agreement with Amended Warrant                 
annexed (L)                                                         
1.3   Form of Sellling Agreement (B)                                            
1.4   Form of Agreement among Underwriters (B)                                  
1.5.  Form of Represantive's Stock Purchase Options (B)                         
1.6   Selling Security Holder's Options (H)                                     
3.1   Certificate of Incorporation of the Registrant (A)                        
3.2   Certificate of Amendment to the Certificate of Incorporation (A)          
3.3   Certificate of change to the Certificate of Incorporation  (A)            
3.4   By-Laws of the Registrant (A)                                             
10.2  Contract of Employment with Rosemary Comras (A)                           
10.2a Renewal of Employment Contract with Rosemary Comras (O)                   
10.3  Memorandum of Agreement with the NASSP (A)                                
10.4  Memorandum of Agreement with the NASSP and CBS Software (A)               
10.5   Memorandum of Agrement with the NASSP (Achievment Tests (A)              
10.6   Agreement with Research for Better Schools (A)                           
10.7   Memorandum of Agreement with the NASSP (ACT Preparation                  
Program (A)                                                       
10.8   Agreement with Peterson's Guides Inc. (A)                                
10.9   Agreement with Hayden Software (A)                                       
10.10  Assignment of income from Jay Comras to Instructivision (B)              
10.11  intentionally omitted                                                    
10.12  intentionally omitted                                                    
10.13  Loan Document with Howard Savings Bank (D)                               
10.14  Letter Agreement (April 2, 1986 with NASSP (D)                           
10.15  Agreement with Research for Better Schools dated April 1986 (D)          
10.16  Lease for 3 Regent Street, Livingston NJ (F)                             
10.16a Amendment to Lease (G)                                                   
10.16b Amendment No. 2 to Lease (O)                                             
10.17  Release from Hayden Software Company (F)                                 
10.18  intentionally omitted                                                    
10.19  intentionally omitted                                                    
10.20  Loan Agreement with Principal stockholder (J)                            
10.21  Agreement with NASSP for Inservice Video Network (K)                     
10.22  Agreement with NASSP (ACT preparation Programs (M)                       

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(A)    Incorporated by reference, filed with the initial filing of              
the Company's Registration Statements, File No. 2-98176-NY on     
or about June 4, 1985                                             
(B)    Incorporated by reference, filed with Pre-Effective Amendment            
No. 2 of the Company's Registration Statement, File No.           
2-98176-NY on or about July 18 1985                               
(C)    Incorporated by Reference, filed with form 8-K, dated                    
August 12, 1986                                                   
(D)    Filed with Post-Effective Amendment  No. 1 to the Company's              
Registration Statement, File No. 2-98176-NY on October 1, 1986    
(E)    Incorporated by Reference, filed with Form 8-K, dated August             
12, 1986                                                          
(F)    Filed with Post-Effective Amendment No. 1 on October 1, 1986             
(G)    Incorporated by Reference, filed with Form 10-K on January 13,           
1987                                                              
(H)    Filed with Post-Effective Amendment No. 3 on March 9, 1987               
(I)    Filed with Post-Effective Amendment No. 4 on July 13, 1987               
(J)    Filed with 10-K on January 8, 1988                                       
(K)    Filed with Post-Effective Amendment No. 6 on April 1, 1988               
(L)    Filed with Post-Effective amendment No. 7 on July 12, 1988               
(M)    Filed with Form 10-K on December 29, 1988                                
(N)    Filed with Form 10-K on December 29, 1990                                
(O)    Filed with Form 10-K on December 28, 1994                                

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REPORT OF INDEPENDENT AUDITORS                    

Board of Directors                                                              
Instructivision, Inc.                                                           

We have audited the accompanying balance sheets of                    
Instructivision, Inc. as of September 30, 1996 and 1995, and the                
related statements of operations, stockholders' equity and cash                 
flows for the years ended September 30, 1996, 1995, and 1994.  These            
financial statements are the responsibility of the Company's                    
management.  Our responsibility is to express an opinion on these               
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted         
auditing standards. Those standards require that we plan and                    
perform the audit to obtain reasonable assurance about whether the              
financial statements are free of material misstatement. An audit                
includes examining, on a test basis, evidence supporting the                    
amounts and disclosures in the financial statements. An audit also              
includes assessing the accounting principles used and significant               
estimates made by management, as well as evaluating the overall                 
financial statement presentation.  We believe 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             
Instructivision, Inc. as of September 30, 1996 and 1995, and the                
results of its operations and its cash flows for the years ended                
September 30, 1996, 1995, and 1994 in conformity with generally                 
accepted accounting principles.                                                 

As discussed in Note 8 to the financial statements, the               
Company changed its method of accounting for income taxes in 1994.              

Our audits were conducted for the purpose of forming an               
opinion on the basic financial statements taken as a whole. The                 
accompanying schedules V, VI and X are presented for purposes of                
additional analysis and are not a required part of the basic                    
financial statements. Such information has been subjected to the                
auditing procedures applied in the audit 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.                                                                          

                       STANLEY J. MORIN & ASSOCIATES

Cedar Knolls, New Jersey                                                        
December 20, 1996                                                               

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                                                                [Download Table]


                        INSTRUCTIVISION, INC                      
                           BALANCE SHEETS                         
                      September 30,1996 and 1995                  

                                             1996        1995     
                                           ----------- -----------
                                                                  
Current assets                                                    
Cash                                       $1,007,906  $    1,246 
Accounts receivable - unaffiliated            235,245     263,577 
Accounts receivable - affiliated               61,483      53,182 
Inventory                                     280,078     411,918 
Prepaid expenses                                4,601       9,566 
Deferred income taxes                          10,000      23,000 
                                           ----------- -----------
 Total current assets                       1,599,313     762,489 

Property and equipment at cost, less                              
 accumulated depreciation                     300,024     425,741 

Other assets                                                      
Capitalized software - net of amortization    196,528     114,804 
Deposits                                       13,125      13,125 
Deferred income taxes                          77,000      95,000 
                                           ----------- -----------
 Total other assets                           286,653     222,929 
                                           ----------- -----------
 Total assets                              $2,185,990  $1,411,159 
                                           ==========  ===========

                 LIABILITIES AND STOCKHOLDERS' EQUITY             
                                                                  
Current liabilities                                               
Accounts payable                           $   60,397  $   83,241 
Accrued expenses                              121,802      94,174 
Notes payable - current portion                45,594      43,633 
Notes payable - shareholder                    45,000      50,550 
                                           ----------- -----------
 Total current liabilities                    272,793     271,598 
Notes payable, less current portion            41,358      86,482 
                                           ----------- -----------
 Total liabilities                            314,151     358,080 
                                           ----------- -----------
Stockholder's equity                                              
Common Stock, $.001 par value, 10,000,000                         
shares authorized, 3,350,000 shares                               
issued and outstanding                          3,350       3,350 
Additional paid-in capital                  1,425,218   1,425,218 
Accumulated earnings (deficit)                443,271    (375,489)
                                           ----------- -----------
 Total stockholder's equity                 1,871,839   1,053,079 
                                           ----------- -----------
 Total liabilities and stockholders equity $2,185,990  $1,411,159 
                                           =========== ===========

[FN]                                                                            
See accompanying notes to financial statements        

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                                                                [Download Table]

                          INSTRUCTIVISION, INC.                      
                        STATEMENT OF OPERATIONS                      
         For each of the Three Years ended September 30, 1996        

                                       1996      1995      1994      
                                   ---------- -----------  ----------
Revenues                                                             
                                                                     
Net sales: Products                $  469,980  $  459,639  $  521,938
           Services - unaffiliated    573,269     644,765     562,073
           Services - affiliated       94,922     119,878     169,000
                                   ----------- ----------   ---------
 Total revenues                     1,138,171   1,224,282   1,253,011

Costs and expenses                                                   
Cost of sales                                                        
   Products                           322,334     235,263     176,163
   Services - unaffiliated            353,980     389,504     363,396
   Services - affiliated               75,660      74,191     109,263
                                   ----------- ----------   ---------
 Total cost of sales                  751,974     698,958     648,822
General and administrative expenses   477,610     485,324     456,983
Interest expenses                      18,827      12,098       2,921
                                   ----------- ----------   ---------
 Total costs and expenses           1,248,411   1,196,380   1,108,726
                                   ----------- ----------   ---------
Income (loss) before income taxes,                                   
 extraordinary items & cumulative                                    
 effect of change in accounting                                      
 principle                           (110,240)     27,902     144,285
Provision for income taxes              9,000       9,000      61,000
                                   ----------- ----------   ---------
Income (loss) before extraordinary                                   
 items and cum.effect of change                                      
 in accounting principles            (119,240)     18,902      83,285
Extraordinary item - life insurance                                  
 proceeds (net of income taxes of                                    
 $62,000)                             938,000          --          --
                                  ------------ ----------   ---------
Income before cumulative effect of                                   
 change in accounting principle       818,760      18,902      83,285
Cum.effect of change in accounting         --          --     188,000
                                  ------------ ----------   ---------
Net income                        $   818,760  $   18,902   $ 271,285
                                  ===========  ==========   =========
Earnings per share -income before                                    
extraordinary item and cumulative                                    
effect of change in accounting          (.04)       .01          .02 
Earnings per share - extraord.item       .28         --           -- 
Earnings per share - cumulative                                      
effect of change in accounting            --         --          .06 
                                   ---------   ---------    ---------
Earnings per share                   $   .24     $  .01       $  .08 
                                   =========   =========    =========

[FN]                                                                            
See accompanying notes to financial statements                          

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                                                                [Download Table]

                          INSTRUCTIVISION, INC.                     
                   STATEMENT OF STOCKHOLDERS' EQUITY                
               For the Three Years Ended September 30, 1996         

                 Common Stock     Additional   Accumulated  Total   
               Shares    Amount   paid-in       Deficit             
                                  Capital                           
              ---------  -------  -----------  ----------- ---------
Balance,                                                            
                                                                    
Sept.30,1993  3,350,000  $3,350   $1,425,218   $(665,676)  $ 762,892
Net income                                                          
for year            --     --            --      271,285     271,285
              ---------  ------   ----------   ----------   --------
Balance,                                                            
Sept.30,1994  3,350,000   3,350    1,425,218    (394,391)  1,034,177

Net income                                                          
for year             --      --           --      18,902      18,902
              ---------  ------   ----------   ----------  ---------
Balance,                                                            
Sept.30,1995  3,350,000   3,350    1,425,218    (375,489)  1,053,079

Net income                                                          
for year             --      --           --     818,760     818,760
              ---------  ------   ----------   ---------- ----------
Balance,                                                            
Sept.30,1996  3,350,000  $3,350   $1,425,218   $ 443,271  $1,871,839
              =========  ======   ==========   ========== ==========

[FN]                                                                            
See accompanying notes to financial statements          

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                                                                [Download Table]

                        INSTRUCTIVISION, INC.                           
                       STATEMENT OF CASH FLOWS                          
          For each of the Three Years Ended September 30, 1996          

                                          1996        1995      1994    
                                        ---------  ---------  --------- 
                                                                        
Operating activities                                                    
Net income                              $ 818,760  $  18,902  $ 271,285 
Adjustments to reconcile net income to                                  
net cash provided by operatg.activities                                 
Depreciation                              132,833    112,353     76,070 
Amortization of capitalized software       45,969     38,556     28,225 
Deferred income taxes                      31,000      9,000     61,000 
Cum.effect of change in accounting princ.      --         --   (188,000)
Changes in operatg.assets and liabilities:                              
(In)decrease in accounts receivable                                     
 - unaffiliated                            28,332    (45,265)    43,733 
 - affiliated                              (8,301)    67,398    (55,337)
De(In)crease in inventory and prepaid                                   
 expenses                                 136,805    (23,203)   (75,380)
(De)increase in accounts payable and                                    
accrued expenses                            4,784    (18,817)    43,227 
(De)Increase in deferred income               --     (27,000)    27,000 
                                         ---------  ---------  ---------
Net cash provided by operatg.activities  1,190,182   131,924    231,823 
Investing Activities                                                    
Additions to capitalized software         (127,693)  (42,499)   (60,126)
Purchases of property, plant & equipment    (7,116) (116,355)  (151,143)
                                         ---------  ---------  ---------
Net cash utilized in investg. activities  (134,809) (158,854)  (211,269)
Financing activities                                                    
Proceeds from shareholder advances             --     36,050        --  
Principal payment on credit lines,notes                                 
payable and capital lease obligations      (48,713)  (27,272)  (18,382) 
                                          --------- --------- --------- 
Net cash (utilized) provided by                                         
financing activities                       (48,713)    8,778   (18,382) 
(De)increase in cash                     1,006,660   (18,753)    2,172  
Cash at beginning of year                    1,246    19,999    17,827  
                                        ----------- --------- --------- 
Cash at end of year                     $1,007,906  $  1,246  $ 19,999  
                                        =========== ========= ========= 


Supplemental disclosure of cash flow information:                       
                                            1996      1995     1994     
                                          -------   --------  --------  
Cash paid during the year for                                           
                                                                        
Interest                                  $16,808    12,098   $ 2,921   
Income taxes                                   62        25        25   

[FN]                                                                            
See accompanying notes to financial statements                          

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INSTRUCTIVISION, INC.         
NOTES TO FINANCIAL STATEMENTS       
September 30, 1996        

NOTE 1. Formation and Nature of Business                                        

Instructivision, Inc. operates in the educational service industry        
and produces educational software, workbooks, and video programs, and           
provides video production services, primarily directed at students,             
teachers, administrators and local businesses for in-house training             
purposes.                                                                       

NOTE 2. Summary of Significant Accounting Policies                              

a. Inventory                                                                    
------------                                                                    
Inventory is valued at the lower of cost, determined on a first-      
in, first-out basis, or market value.                                           

b. Property and Equipment                                                       
-------------------------                                                       
Property and equipment is stated at cost. Expenditures for maint-     
enance and repairs are charged to expenses as incurred and major                
renewals and betterments are capitalized. Depreciation is provided              
on the straight-line basis over the estimated useful lives of the               
related assets.                                                                 

c. Income Taxes                                                                 
---------------                                                                 
Effective October 1, 1993, the Company adopted Statement of           
Financial Accounting Standards (SFAS) No. 109 "Accounting for                   
Income Taxes" which requires the liability method of accounting for             
deferred income taxes. Deferred income taxes are recognized for the             
effect of temporary differences between financial and tax reporting.            
In addition, SFAS No. 109 requires the recognition of future tax                
benefits, such as net operating loss carryforwards to the extent that           
realization of such benefits are more likely than not. (See Note 8 -            
Income Taxes)                                                                   

d. Capitalized Software Costs                                                   
-----------------------------                                                   
Product development includes all expenses related to future re-       
leases and enhancements of the products, including research, develop-           
ment, porting of software to new operating systems and platforms,               
documentation, development of training programs, less allowable                 
capitalized software development costs.                                         

In accordance with Statement of Financial Accounting Standards        
No. 86, "Accounting for the Costs of Computer Software to be Sold,              
Leased or Otherwise Marketed," the Company capitalizes the direct               
costs and allocated overhead associated with the development of                 
software products. Initial costs are charged to operations as                   
research prior to the development of a detailed program design or a             
working model. Costs incurred subsequent to the product release, and            
research and development performed under contract are charged to                
operations.                                                                     

Capitalized costs are amortized over periods not exceeding five       
years on the straight line basis. Unamortized costs are carried at the          
lower of book value or net realizable value. Research and development           
costs incurred were insignificant for the years ending September 30,            
1996, 1995 and 1994 and have been expensed.                                     

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INSTRUCTIVISION, INC.           
NOTES TO FINANCIAL STATEMENTS--(Continued)      
September 30, 1996          

e. Earnings Per Share                                                           
---------------------                                                           
Earnings per share are based on the weighted average number of        
common shares and common equivalent shares, if any, outstanding. The            
weighted average number of common shares used in computing earings per          
share was 3,350,000 for each of the years ended September 30, 1996,             
1995, and 1994. There were no common equivalent shares outstanding              
for any of those years.                                                         

f. 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 these estimates.                                              

NOTE 3. Inventory                                                               

                                                                [Download Table]
     The components of inventory are as follows:               
                                            1996        1995   
                                          --------    ---------
                                                               
Work in Process (video production cost)   $ 19,783    $ 81,433 
Finished Goods (video)                     183,869     241,787 
Finished Goods (workbooks)                  76,426      88,698 
                                          --------    -------- 
                                          $280,078    $411.918 
                                          ========    ======== 


NOTE 4. Property and Equipment                                                  

At September 30, 1996 and 1995 property and equipment is comprised    
of the following:                                                               

                                                                [Download Table]
                               Life (yrs)     1996        1995    
                               -----------  ----------  ----------
                                                                  
Furniture and fixtures           3 - 8      $   34,599  $   36,401
Video equipment and computers    3 - 10      1,262,299   1,345,827
Automobile                           3          49,927      49,927
Leasehold improvements           5 - 10        109,520     109,520
                                            ----------  ----------
                                             1,456,345   1,541,675
Less accumulated depreciation                1,156,321   1,115,934
                                            ----------  ----------
Net                                         $  300,024     425,741
                                            ==========  ==========

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[CAPTION]                                                                       
INSTRUCTIVISION, INC.           
NOTES TO FINANCIAL STATEMENTS --(continued)         
September 30, 1996              

NOTE 5. Capitalized Software                                                    

For the years ended September 30, 1996 and 1995, accumulated          
amortization of costs related to computer software products held for            
sale was $307,003 and $261,034, respectively.                                   

NOTE 6. Notes Payable                                                           

Notes payable at September 30, 1996 and 1995 consist of the             
following:                                                                      

                                                                [Download Table]
                                                 1996       1995      
                                               ---------- ---------   
                                                                      
Installment loan with Sony Electronics Inc.                           
maturing March 1998, payable monthly with                             
interest at 11 1/2%. The loan is collater-                            
alized by equipment of the Company             $  60,455   $ 95,363   

Installment loan with First Fidelity Bank                             
maturing June 2000, payable monthly, with                             
interest of approximately 10.5%. This loan                            
is collateralized by an automobile of the                             
Company                                           26,497     31,419   

Installment loan with Fleet Bank                                      
commencing January 1994, payable in                                   
24 monthly installments with interest of                              
approximately 9.5%                                   0        3,333   
                                               --------    --------   
                                                 86,952     130,115   
Less current portion                             45,594      43,633   
                                               --------    --------   
Amount due after one year                      $ 41,358    $ 86,482   
                                               ========    ========   

     The following are the maturities of long term debt outstanding at
September 30, 1996:                                                   

                                                                      
1997        45,594                                                    
1998        27,953                                                    
1999         7,364                                                    
2000         6,042                                                    

NOTE 7. Related Party Transactions (See Note 11)                                

a. Pursuant to a promissory note dated June 1, 1987, the principal      
stockholder has agreed to make short term cash advances to the Company.         
The advances are to be repaid upon demand with interest payable monthly         
at 4% above the First Fidelity Bank's floating base commercial lending          
rate. The note is collateralized by specific equipment owned by the             
Company.  The maximum advance amount is $75,000. The balance owed at            
September 30, 1996 and 1995 was $45,000 and $50,550, respectively.              

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[CAPTION]                                                                       
INSTRUCTIVISION, INC          
NOTES TO FINANCIAL STATEMENTS --(Continued)     
September 30, 1996            

b. The Company is affiliated with a major customer of the Company,    
whose Associate Executive Director is a Director of the Company.                

c. The Company has a three year employment agreement with Rosemary    
Comras, President and principal stockholder of the Company, to employ           
Ms. Comras at a salary of $75,000 per year which commenced on September 1,      
1996, with rate increases to $78,500 on September 1, 1997 and $83,000 on        
September 1, 1998. Ms. Comras receives a 2.5% bonus of the Company's net        
profit before taxes, commencing September 1, 1996.                              

NOTE 8. Fair Value of Financial Instruments                                     

The Company has a number of financial instruments, none of which      
are held for trading purposes. The Company estimates that the fair              
value of all financial instruments at September 30, 1996, does not              
differ materially from the aggregate carrying values of its                     
financial instruments recorded in the accompanying balance sheet.               
The estimated fair value amounts have been determined by the Company            
using available market information and appropriate valuation                    
methodologies. Considerable judgment is necessarily required in                 
interpreting market data to develop the estimates of fair value and,            
accordingly, the estimates are not necessarily indicative of the                
amounts that the Company could realize in a current market exchange.            

NOTE 9. Income Taxes                                                            

Effective October 1, 1993, the Company adopted the provisions of      
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting         
for Income Taxes." The cumulative effect of adopting SFAS No. 109 was           
to increase the net income by $188,000 or $.06 per share for the year           
ended September 30, 1994.                                                       

Deferred income taxes reflect the net tax effects of temporary        
differences between the carrying amounts of assets and liabilities              
for financial reporting purposes and the amounts used for income tax            
purposes.  Significant components of the Company's deferred tax                 
liabilities and assets as of September 30, 1996 and 1995 are as                 
follows:                                                                        
                  1996          1995
                     -----------  ------------
[S]                                   [C]           [C]                         
Deferred tax liabilities :                                                      
Depreciation                         $  27,000     $  28,000                  

Deferred tax assets:                                                            
Net operating loss carryforwards       146,000       151,000                  
Tax credit carryforwards                35,000        35,000                  
Alternate minimum tax paid credit       40,000            --                  
Valuation allowance                   (107,000)      (40,000)                 
                     ---------     ---------
Deferred tax assets                     114,000       146,000                   
                     ---------     ---------
Net deferred tax assets                $ 87,000      $118,000                   
                     =========     =========

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[CAPTION]                                                                       
INCTRUCTIVISION, INC.             
NOTES TO FINANCIAL STATEMENTS --(Continued)         
September 30, 1996                

The valuation allowance for deferred tax assets was increased       
by $3,000 for the year ended September 30, 1995 due to the                      
expectation of State net operating loss carryforwards expiring unused.          
For the year ended September 30, 1996 the valuation allowance was               
decreased by $5,000 for the year ended due to expiration of State net           
operating loss carryforwards of and increased by $72,000 due to                 
uncertainty of realization with respect to Federal net operating loss           
carryforwards.                                                                  

Significant components of the provision for income taxes are as       
follows:                                                                        

                                                                [Download Table]
                                         1996     1995       1994    
                                      --------   -------  ---------  
                                                                     
Current:                                                             
 Federal                              $(22,000)    $   --  $     --  
 State                                      --         --        --  
                                       --------   --------  -------  
Total current                          (22,000)       --         --  
Deferred:                                                            
 Federal                                26,000      3,000    52,000  
 State                                   5,000      6,000     9,000  
                                       --------   -------   -------  
Total deferred                          31,000      9,000    61,000  
                                       --------   -------   -------  
Total income tax expense*              $ 9,000    $ 9,000   $61,000  
                                       ========   =======   =======  
*)Excluding 1996 extraordinary item.                                 

     The reconciliation of income tax from continuing operations     
computed at statutory rates to the Company's effective tax rate is as
follows:                                                             

                                        1996       1995      1994    
                                       ------     ------    ------   
                                                                     
Statutory rate                          (30)%       30%       30%    
State income tax                        ( 9)         9         9     
Non-deductible expenses                  36         35        37     
Net operating loss                      (50)       (53)      (20)    
Changes in valuation allowance           61         11       (14)    
                                        ----       ----      ----    
  Total                                   8%        32%       42%    
                                        ====       ====      ====    

The Company has available for Federal and State income tax            
purposes operating loss caryforwards and unused investment tax credits          
which may provide future tax benefits in the approximate amounts                
expiring as follows:                                                            

                                                                [Download Table]
                               Federal                  State         
                   ----------------------------------   --------------
Year of            Operating Loss    Investment Tax     Operating Loss
Expiration         Carryforward    Credit Carryforward  Carryforward  
---------------    --------------  -------------------  --------------
                                                                      
1998                      --                 --             9,000     
2000                      --              1,000                --     
2001                      --             34,000                --     
2002                  249,000                --            63,000     
2003                      --                 --                --     
2004                  144,000                --                --     
2006                   15,000                --                --     
2008                   63,000                --                --     
                    ---------        ----------         ---------     
                    $ 462,000        $   35,000         $  72,000     
                    =========        ==========         =========     

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[CAPTION]                                                                       
INSTRUCTIVISION, INC. 
NOTES TO FINANCIAL STATEMENTS --(continued)   
September 30, 1996    

NOTE 10. Commitment and Contingencies                                           

a. Leases                                                                       
---------                                                                       
The Company currently leases space at 3 Regent Street, Livingston,    
New Jersey, to June 2001.  Rent expense, including escalation on                
certain contingent expenses, was $152,597 in 1996, $154,287 in 1995,            
and $162,595 in 1994, respectively. Future minimum rental commitments,          
not including escalation on certain contingent expenses, for the years          
ended September 30th, are as follows:                                           

[S]             [C]        [C]                                                  
1997       109,605                              
1998       109,605                              
1999       109,605                              
2000       109,605                              
2001        82,204                              

b. Royalties                                                                    
------------                                                                    
The Company has entered into royalty agreements with certain          
individuals who have participated in developing certain Company                 
products. In general, the royalties are only due after all costs,               
per each contract, are recovered by the Company.  The amount of future          
royalties due is directly dependent on the Company's revenue on each            
particular contract.                                                            

c. Concentration of Credit Risk                                                 
-------------------------------                                                 
Financial instruments which potentially subject the Company to        
concentration of credit risk consist principally of cash and trade              
receivables. Concentration of credit risk with respect to trade                 
receivables is limited due to the large number of customers comprising          
the Company's customer base. The Company maintains cash balances at             
various financial institutions. Accounts at each institution are                
secured by the Federal Deposit Insurance Corporation up to $100,000.            
Uninsured balance are approximately $900,000 at September 30, 1996.             

NOTE 11.  Extraordinary Item                                                    

In August of 1996 the President of the Company, since inception,      
passed away. During his tenure as president the Company maintained a            
$1,000,000 term life insurance policy on his life. The insurance                
proceeds have been reflected as an extraordinary item in the                    
accompanying financial statements.                                              

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                                                                [Download Table]

                                                SCHEDULE V              
                       INSTRUCTIVISION, INC.                            
                   PROPERTY, PLANT AND EQUIPMENT                        
              For the Three Years Ended September 30, 1996              

                        Balance at  Additions at             Balance at 
Classification          beginning   cost purchased  Retire-  end of     
                        of period   by Company      ments    period     
---------------         ----------  --------------  -------- -----------
                                                                        
Year ended                                                              
September 30, 1994                                                      
Furniture & fixtures    $   33,725   $     ---      $    --   $   33,725
Video equip.& computers    983,054     146,389           --    1,129,443
Automobile                  17,246          --           --       17,246
Leasehold improvements      95,497       4,754           --      100,251
                        ----------   ---------      -------   ----------
    Total               $1,129,522   $ 102,786      $    --   $1,280,665
                        ==========   =========      =======   ==========

Year ended                                                              
September 30,1995                                                       
Furniture & fixtures    $   33,725    $  2,676      $    --   $   36,401
Video equip.& computers  1,129,443     216,384           --    1,345,827
Automobile                  17,246      32,681           --       49,927
Leasehold improvements     100,251       9,269           --      109,520
                       -----------    --------       ------   ----------
    Total              $1,280,665     $261,010       $   --   $1,541,675
                       ==========     ========       ======   ==========

Year ended                                                              
September 30, 1996                                                      
Furniture & fixtures   $   36,401     $     --      $ 1,802   $   34,599
Video equip.& computers 1,345,827        7,116       90,644    1,262,299
Automobile                 49,927           --           --       49,927
Leasehold improvements    109,520           --           --      109,520
                       ----------     --------      -------   ----------
                       $1,541,675     $  7,116      $92,446   $1,456,345
                       ==========     ========      =======   ==========


[FN]                                                                            
See accountant's report on supplemental schedules       

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                                                                [Download Table]
                                                    SCHEDULE VI      
                           INSTRUCTIVISION, INC.                     
                 ACCUMULATED DPRECIATION, DEPLETION AND              
               AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT         
              For the Three Years Ended September 30, 1996           

                         Balance at  Additions             Balance at
 Classification          beginning   charged to   Retire-  end of    
                         of period   cost & exp.  ment     period    
---------------         ----------   ------------ -------- ----------
                                                                     
Year ended                                                           
September 30,1994                                                    
Furniture & fixtures    $   29,996   $   1,688    $  --    $   31,684
Video equip.& computers    807,581      64,846       --       872,427
Automobile                  17,246          --       --        17,246
Leasehold improvements      72,688       9,536       --        82,224
                        ----------   ---------    -------  ----------
           Total        $  927,511   $  76,070    $  --    $1,003,581
                        ==========   =========    =======  ==========
Year ended                                                           
September 30,1995                                                    
Furniture & fixtures    $   31,684   $     905    $  --    $   32,589
Video equip.& computers    872,427      99,365       --       971,792
Automobile                  17,246         906       --        18,152
Leasehold improvements      82,224      11,177       --        93,401
                        ----------   ---------    -------  ----------
          Total         $1,003,581   $ 112,353    $  --    $1,115,934
                        ==========   =========    =======  ==========
Year ended                                                           
September 30, 1996                                                   
Furniture & fixtures    $   32,589   $     860    $ 1,802  $   31,647
Video equip & computer     971,792     112,265     90,644     993,413
Automobile                  18,152      12,712        --       30,864
Leasehold improvements      93,934     132,833        --      100,397
                        ----------   ---------    -------  ----------
                        $1,115,934   $ 132,833    $92,446  $1,156,321
                        ==========   =========    =======  ==========

[FN]                                                                            
See accountant's report on supplemental schedules             

                                                                [Download Table]
                                                                SCHEDULE x
                          INSTRUCTIVISION, INC.                           
                   SUPPLIEMENTAL INCOME STATEMENT INFORMATION             
            For each of the Three Years Ended September 30, 1996          

                                                                          
For the year ended September 30, 1994                                     
Amortization                                   $ 28,225                   
Maintenance and repairs                           9,883                   
Royalties                                        47,318                   
Advertising                                      16,438                   

For the year ended September 30, 1995                                     
Amortization                                     38,556                   
Maintenance and repairs                           3,095                   
Royalties                                        28,297                   
Advertising                                      20,725                   

For the year ended September  30, 1996                                    
Amortization                                     45,969                   
Maintenance and repairs                           9,971                   
Royalties                                        40,607                   
Advertising                                      15,725                   


[FN]                                                                            
See accountants report on supplemental schedules.               

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SIGNATURES                

Pursuant to the requirement of the Securities Exchange Act of         
1934, the registrant has duly cause this report to be signed on its             
behalf by the undersigned thereunto duly authorized.                            

           INSTRUCTIVISION, INC.
Registrant

December 30, 1996                  Rosemary Comras                              
President,

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

Signature          Title and Capacity                  Date                     
----------------   ------------------                  --------                 

Rosemary Comras    President, Secretary/Treasurer      12/30/96                 

Thomas F.Koerner   Director                            12/30/96                 

Marcus Ruger       Director                            12/30/96                 

David Sousa        Director                            12/30/96                 

Dates Referenced Herein   and   Documents Incorporated by Reference

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		9/1/97		13		26
Filed on:		1/2/97
		12/30/96		2		31			8-K/A
		12/20/96		18					8-K
For Period End:		9/30/96		1		30			10-K/A,  DEF 14C
		9/4/96		12
		9/1/96		13		26
		8/2/96		11		14
		9/30/95		10		30			10-K,  DEF 14C
		12/28/94		17
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		10/1/93		23		26
		3/1/92		10
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