HYNES & HOWES INSURANCE COUNSELORS, INC.
                          Notes to Financial Statements
                           September 30, 1997 and 1996



Note 2.  Indeterminable Value of Investments in Affiliated Companies

         Basis for carrying value of these investments is detailed in Note 5 of
         this report.  However, these values may be substantially affected by
         the operations of affiliated companies in whom the company has direct
         or indirect investments.  Future intercompany transactions may also
         affect the value of these investments.

Note 3.  Sale of Agencies

         At December 31, 1979, the Company owned three insurance agencies, two
         of the agencies were sold during the year ended September 30, 1980, and
         the other agency was sold during the year ended September 30, 1981.
         The equity in the two agencies sold during 1980 was $47,896 at the date
         of sale.  The sale price was $163,000 resulting in a gain to the
         Company of $115,104 (See Note 4A), the equity in the agency sold during
         1981 was $146,542 at the date of sale.  The sale price was $226,936
         resulting in a gain to the Company of $80,394.  (See Note 4A)