UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                                FORM 10-K

[ x ]     Annual Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934 [Fee Required]
               For the fiscal year ended DECEMBER 31, 2000

[   ]     Transition Report Pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934 [Fee Required]

           For the transition period from   N/A   to   N/A
                                           -------   -------

                 Commission File Number          0-13817
                                        ----------------

                        MARGATE INDUSTRIES, INC.
         (Exact Name of Registrant as specified in its Charter)

              DELAWARE                               84-8963939
   ------------------------------            ----------------------------
   State or Other Jurisdiction of            (IRS Employer Identification
    Incorporation or Organization                     Number)

              129 NORTH MAIN STREET, YALE, MICHIGAN  48097
          -----------------------------------------------------
          (Address of Principal Executive Offices)   (Zip Code)

   Registrant's Telephone Number, including area code  (810) 387-4300


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


    Securities registered pursuant to Section 12(g) of the Act:

                      COMMON STOCK, $.015 PAR VALUE
                             Title of Class

Indicate by check mark whether 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
                             -----        -----


At March 9, 2001, 1,879,542 shares of Common Stock, $.015 per share, were
outstanding.  The aggregate market value of the Common Stock held by non-
affiliates of the Registrant on that date was approximately $2,217,184.

Documents incorporated by reference:  Portions of Registrant's Proxy
Statement for use in conjunction with its Annual Meeting of Shareholders to
be held on June 20, 2001 to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A not later than May 30, 2001 are
incorporate by reference (Items 10(a), 11, 12 and 13 of this Report).

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 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
                             -----        -----


Page 1 of 44 pages                       Exhibits are indexed on page 20.
<PAGE>
                                 PART I

ITEM 1.   DESCRIPTION OF BUSINESS
---------------------------------

GENERAL DEVELOPMENT OF BUSINESS

     Margate Industries, Inc. (the "Company" or "Margate"), was formed
under the laws of the State of Delaware on April 4, 1984.  The Company sold
4,000,000 Units, at $0.02 per Unit, for total proceeds of $80,000 in a
public offering which closed in May of 1985.  Each Unit consisted of one
share of common stock of the Company and one Warrant to purchase an
additional share of common stock.  The Warrants expired by their terms
unexercised.  On November 17, 1986, the Company issued an additional
12,515,580 shares of its $.015 par value common stock to the holders of
100% of the outstanding common stock of New Haven Foundry, Inc., ("NHF") in
a merger transaction in which NHF became a wholly owned subsidiary of the
Company.  The shares of common stock issued to the shareholders of NHF
represented approximately 70% of the Company's common stock outstanding
after the completion of the transaction.

     On July 19, 1990, the Company sold 55% of the common stock of NHF to
Wesley Industries, Inc., ("Wesley"), for $1,589,000 consisting of
$1,500,000 cash and an $89,000 five-year Promissory Note.  Wesley was 50%-
owned by Mr. Delbert W. Mullens, currently a Director of the Company and
50%-owned by Ms. Lula Mullens.  The promissory note called for interest at
2% over the prime rate, with no principal payments required until September
1991.  The Company extended the term of the note and payments began in
April 1994.  Upon repayment of the promissory note, Wesley had the right to
purchase an additional 20% of the shares of NHF held by the Company for
$800,000 or the then current book value, whichever was greater.  Upon such
purchase, the Company could require Mr. Mullens to purchase the remaining
shares for $1,800,000 or the then current book value, whichever was greater.

     The terms of the sale also provided for an annual commission contract
between NHF and the Company and between NHF and Wesley relating to sales in
excess of $35,000,000 annually.  The Company received $150,000 each year
plus 3% on the difference between actual sales in excess of $35,000,000 but
less than $40,000,000 plus 2% on actual sales that exceed $40,000,000.
This commissions contract would be in effect for a period of not less than
fifteen (15) years.  Also, for a minimum period of fifteen (15) years, the
Company and its subsidiaries would provide cleaning services on all
castings produced by NHF on an exclusive basis, so long as the Company
retained an ownership interest in NHF.

     Pursuant to the sale, Mr. Mullens was elected to the Company's Board
of Directors.  Conversely, the Company had representatives that account for
forty five percent (45%) of the Directors/Voters on the NHF Board of
Directors.  In addition, Mr. Mullens was restricted from transferring his
interest in NHF stock without the consent of the Company and also he had a
first right of refusal to purchase the balance of the NHF common stock in
the event the Company wished to sell or transfer any of its remaining NHF
stock.  In addition, Mr. Mullens had an option to purchase 33,334 shares of
the Company's common stock at $4.50 per share and an additional 33,334
shares at $7.50 per share upon purchase of the first 33,334 shares.  Mr.
Mullens' shares subject to option and the exercise price thereof were
adjusted to reflect the reverse stock splits described below. With the sale
of the remaining 45% of NHF in March 1998 the options were canceled.

                                   -2-
<PAGE>
     In November 1995, the Company established a wholly owned subsidiary,
Fort Atkinson Industries, which provides finishing services on castings
manufactured in the Iowa-Wisconsin area.  Operations began on March 1,
1996.  In August 1996, the Company consolidated one of its subsidiaries,
Michigan Casting Corporation, which was formed in 1987, with Yale
Industries and currently operates as one company.

     On March 24, 1998, the Company sold its remaining 45% interest in NHF
to Wesley Industries, Inc., which owned the other 55%.  Terms of the
agreement included a purchase price of $2,200,000 with $1,500,000 paid at
closing and the $700,000 balance, including interest, due in the form of a
promissory note payable in quarterly installments of $35,000.  The
promissory note is secured by the shares of NHF.  In addition, the Company
entered into a new cleaning contract with NHF which includes a per piece
price and a service fee of $2,800,000 paid in quarterly installments of
$140,000 over five (5) years.  The gain on sale is reported on the
consolidated income statement net of legal fees.  NHF is currently in
default on these obligations as is discussed elsewhere in this report.

     On November 13, 1998, following a vote at a Special Meeting of
Shareholders, the Company approved a one for three reverse split of the
outstanding shares of the Company.  Unless otherwise indicated, information
in this report reflects the one for three reverse split of the Company's
Common Stock effective in November 1998.  At the June 10,1999 annual
meeting the Company approved an amendment to lower the authorized shares
from twenty five million (25,000,000) shares to five million (5,000,000)
shares of common stock and increased the par value to $.015 per share.

     On July 10, 2000, the Company entered into an agreement and plan of
merger with c-Spectra, Inc. (previously named B2B Euro Wireless.com).  The
original agreement was terminated by the mutual consent of the parties and
a new modified agreement is currently being negotiated.  It is anticipated
Margate and c-Spectra will enter into a definitive merger agreement whereby
c-Spectra will merge with a newly created subsidiary of Margate, known as
Seagull.  c-Spectra, as the surviving corporation, will then become a
wholly owned subsidiary of Margate.  c-Spectra shareholders will receive
Margate's "restricted" common stock in exchange for their c-Spectra common
stock.  Following the merger, existing Margate shareholders will own 10.6%
of the outstanding shares of Margate's common stock and c-Spectra
shareholders will own approximately 89.4% of the outstanding shares of
Margate common stock.  Additionally, Margate shareholders will be asked to
approve certain amendments to the Margate Articles of Incorporation
increasing the amount of Margate authorized common stock and changing the
existing name of the corporation to c-Spectra.

     c-Spectra, Inc. is a provider of broadband wireless telecommunications
and Internet access systems used to deliver wireless, high speed data
connections between telecommunications service providers and business and
residential subscribers.  c-Spectra is developing and  marketing a
technologically advanced global wireless Internet access network utilizing
satellite base stations and multiple wireless antenna receivers to provide
"last mile" solutions to bridge the gap between service providers and their
subscribers.  c-Spectra believes that its network solution offers the most
rapid and cost-effective solution for the delivery of telecommunications
and Internet service to users in underdeveloped regions where wire-based
telecommunications infrastructure is lacking.  Initial deployment of its
network has begun with the installation of facilities in Buenos Aires,
Argentina.  After the merger, c-Spectra plans to expand its network in
major markets in South America and Europe.

                                   -3-
<PAGE>
     Margate's finishing and cleaning operations will continue as a
separate division of c-Spectra and will have separate management including
William H. Hopton and David A. Widlak, current Officers and Directors of
the Company.  Messrs. Hopton and Widlak will also remain as members of the
Board of Directors following the merger with c-Spectra.

NARRATIVE DESCRIPTION OF BUSINESS

GENERAL

     Margate Industries, Inc. was formed under the laws of the state of
Delaware on April 4, 1984.  Margate performs finishing operations on grey
iron castings for the foundry industry and machine shops in Michigan and
Wisconsin.  Margate's primary services include finishing, chipping and
grinding, cleaning, shot blasting and testing of castings produced by
Margate's customers for the automotive industry and other component
manufacturers in the United States and Canada.  Margate currently maintains
its corporate headquarters at its Yale division, in Yale, Michigan.
Margate has two wholly owned subsidiaries, Brown City Casting Corporation,
doing business as Yale Industries and Fort Atkinson Industries.

     In recent years, automobile manufacturers have begun to require that
additional finishing work and water testing be done on castings prior to
shipment.  As a result of these additional requirements, foundries must
spend increased time and labor performing the additional finishing and
water testing.  Margate believes that its two subsidiaries, Yale Industries
and Fort Atkinson Industries, can provide the additional finishing work and
water testing on a more cost effective basis than the foundries that
actually manufacture the castings, such as NHF.  Management believes that
this is due to the fact that Margate, with separate facilities at Yale and
Fort Atkinson, can devote its entire operation to finishing work and water
testing.

     Margate's primary customer is NHF, which manufactures castings and
cylinder heads for Daimler Chrysler Corporation and other major automotive
customers. NHF is a former subsidiary of Margate, which was sold to Wesley
Industries in 1990.  NHF is currently controlled by one of Margate's
directors, Delbert W. Mullens who is also a major shareholder of Wesley
Industries.  NHF uses the Company for approximately 80% of its cleaning
operations for the castings and cylinder heads it manufactures.  NHF
transports the unfinished cylinder heads from New Haven, Michigan to Yale,
Michigan by truck, then on to its customers after the cleaning and testing
is completed.  Due to NHF's heavy use of the Company, NHF is Margate's
largest customer, accounting for approximately 48% of Margate's revenue in
the last fiscal year.

     Margate's other wholly owned subsidiary, Fort Atkinson Industries
("Fort Atkinson"), provides similar finishing work, testing and cleaning
services on castings as those provided by Yale Industries. Fort Atkinson,
located in Wisconsin, provides its services to foundries and other
customers in the Iowa-Wisconsin area.  Fort Atkinson allows us to diversify
the Company's customer base and geographic presence.

     The Company has attempted in recent years to improve the quality of
its finishing operations, efficiency in the cleaning process, and
investments in new equipment and technology.  During the year end 2000, the
Company expended $149,022 in capital improvement to increase the automation
of its operations and lower labor costs.  As a result, the number of

                                   -4-
<PAGE>
cylinder heads cleaned and tested have increased and the number of
deficiencies due to imperfections decreased.

     While NHF currently represents 48% of Margate's revenue for the latest
fiscal year, Margate believes that there may exist a significant potential
for additional sales volume for finishing operations from non-affiliated
foundries as Margate and its subsidiaries grow and diversify into the non-
automotive industries.

MAJOR CUSTOMERS

     Margate's customers are primarily involved in the automotive industry
and other component manufacturing in the United States and Canada who
require finishing, cleaning and testing of castings.  As discussed above,
Margate's primary customer is NHF, which produces castings and cylinder
heads for the automotive industry and other component manufacturers in the
United States and Canada.  NHF accounted for 48% of Margate's revenue in
the fiscal year ended 2000, totaling $5,137,751.  Due to Margate's heavy
reliance on NHF as its principal customer, management believes that the
loss of this customer would have a material adverse effect on Margate.
Other customers for whom Margate performs finishing operations are:

     *    Waupaca Foundry, Inc.;
     *    Navistar International:
     *    Aarrowcast, Inc.; and
     *    Brillion Iron Works, Inc.

     The loss of any of these customers would also have a material adverse
effect on Margate's business.  In addition, in recent years Margate has a
limited customer base in foreign countries, having sales to Ford of Canada.

COMPETITION

     Margate's domestic competition is limited primarily to other foundries
who perform cleaning operations for the automobile industry.  For the most
part these foundries have higher labor costs and are willing to outsource
some of their cleaning operations.  However, in the event of a downturn in
the economy it will result in less outsourcing of cleaning operations.


     *    Waupaca Foundry, Inc.;
     *    Brillion Iron Works, Inc;
     *    Grede Foundries, Inc.; and
     *    Automotive Foundries.

     Internationally, Margate faces strong competition from companies with
similar operations to its own, located in Europe, South America and Mexico.
The most serious threat of competition is from state-of-the-art operations
located in Mexico and Brazil.  Margate's Brazilian competitors present a
competitive threat because they receive subsidies from the Brazilian
government, have labor cost advantages and very modern facilities.
Margate's international competitors include:

     *    Linamar, Inc.

                                   -5-
<PAGE>
     *    Ford Motor Company; and
     *    General Motors, Inc.

GOVERNMENTAL REGULATION

     Margate is subject to various federal, state and local laws regarding
environmental matters and the discharge of materials into the environment.
These laws and regulations govern the management of solid and hazardous
waste, the discharge of pollutants into the air and into surface and ground
waters and the storage and disposal of hazardous and non-hazardous
substances generated by ongoing operations.  Margate believes that it is
currently in substantial compliance with the applicable environmental
requirements.  However, the Company has a commitment to purchase a dust
collecting system for its Fort Atkinson facility in the year 2001 with an
estimated cost of between $200,000 and $500,000.  Nevertheless, if a
release of hazardous substances located on Margate's property occurs,
Margate may be held liable and may be required to pay the cost of remedying
the problem.  The amount of any such liability and remedial cost could be
material.

     Although, Margate does not believe that its business operations
presently impair environmental quality, compliance with the federal, state
and local environmental laws could have an adverse effect upon its capital
expenditures, earnings and competitive position.  Since its inception,
Margate has not been required to make any material capital expenditures for
environmental control facilities other than that mentioned above, and the
Company does not expect to be required to make any such expenditures in the
near future.  Margate's facilities have dust collecting systems that
contain material within and do not discharge into the environment, thus
Margate is not required to obtain air emissions permits at its facilities.
However, the 1990 amendments to the federal Clean Air Act are expected to
have a major impact on the compliance costs of many U.S. companies,
including foundries of the type Margate operates.  Until final regulations
implementing those amendments are adopted by the federal and state
governments, it is not possible to estimate these costs.

     COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT
OF 1980.  CERCLA , also known as the Superfund Act, addresses cleanup of
sites at which there has been or may be a release of hazardous substances
into the environment.  CERCLA assigns liability for costs of cleanup and
damage to natural resources to any person who, currently or at the time of
disposal of a hazardous substance, owned or operated any facility at which
hazardous substances were deposited; to any person who by agreement or
otherwise arranged for disposal or treatment, or arranged with a
transporter for transport of hazardous substances owned or possessed by
such person for disposal or treatment; and to any person who accepted
hazardous substances for transport to disposal or treatment facilities or
sites from which there is a release or threatened release of hazardous
substances.  CERCLA authorizes the Federal government either to clean up
these sites itself or to order persons responsible for the situation to do
so.  CERCLA created a fund to be used by the Federal government to pay for
the cleanup efforts.  Where the Federal government expends money for
remedial activities, it must seek reimbursement from the potentially
responsible parties.  Where the EPA performs remedial work with superfund
dollars, it frequently sues potentially responsible parties for
reimbursement under the "cost recovery" authority of Section 107 of CERCLA.
The EPA may also issue an administrative order seeking to compel
potentially responsible parties to perform remedial work with their own
funds under the "abatement" authority of Section 106 of CERCLA.  In lieu of
instigating such actions, the

                                   -6-
<PAGE>
EPA may also seek through negotiations to persuade such parties to perform
and/or pay for any and all stages of remedial action at a site in discharge
of their liabilities under CERCLA.

     CERCLA provides that transporters and persons arranging for the
disposal of hazardous waste may be jointly and severally liable for the
costs of remedial action at the site to which the hazardous waste is taken.
While Margate attempts to minimize such exposure by contracting only with
qualified hazardous waste transporters meeting certain minimum insurance
requirements and by having the generator select the disposal site and
method, there can be no assurances that the Company will be successful in
so limiting such exposure.  Under Section 101(20)(B) of CERCLA, when a
common or contract carrier delivers a hazardous substance to a site
selected by the shipper, the carrier is not considered to have caused or
contributed to any release at such disposal facility resulting from
circumstances or conditions beyond its control.

     The Superfund Amendments and Reauthorization Act ("SARA") was enacted
in 1986 and authorized increased Federal expenditure and imposed more
stringent cleanup standards and accelerated timetables.  SARA also contains
provisions which expand the enforcement powers of the EPA.

     Management believes that industry and governmental entities will
continue to try to resolve hazardous waste problems due to their need to
comply with other statutory requirements and to avoid liabilities to
private parties.  Although the liabilities imposed by CERCLA are more
directly related to Margate's customers, they could under certain
circumstances apply to some of Margate's activities, including failure to
properly design or implement a cleanup, removal or remedial action plan or
to achieve required cleanup standards and activities related to the
transport and disposal of hazardous substances.  Such liabilities can be
joint and several where other parties are involved.

     CLEAN AIR ACT AND 1990 AMENDMENTS (THE "CLEAN AIR ACT").  The Clean
Air Act requires compliance with ambient air quality standards and empowers
the EPA to establish and enforce limits on the emission of various
pollutants from specific types of facilities.  The 1990 amendments modify
the Clean Air Act in a number of significant areas.  Among other things,
they establish emissions allowances for sulfur and nitrogen oxides,
establish strict requirements applicable to ozone emissions and other air
toxics, establish a national permit program for all major sources of
pollutants and create significant new penalties, both civil and criminal,
for violations of the Clean Air Act.

     Included within the scope of the Clean Air Act are rules issued by the
EPA known as National Emissions Standards for Hazardous Air Pollutants
("NESHAP").  NESHAP specifically regulates the emission of asbestos during
manufacturing and waste disposal operations and the renovation and
demolition of certain facilities.  Authority to implement and enforce
NESHAP standards has been delegated to the various states which have
implemented licensing requirements, notice requirements and procedures with
respect to asbestos abatement and other rules governing the handling and
disposal of asbestos.

     CLEAN WATER ACT OF 1972 ("CWA").  Originally enacted as the Federal
Water Pollution Control Act, but renamed as the Clean Water Act in 1977,
CWA regulates the discharge of pollutants into the surface waters of the
United States.  CWA established a system of minimum national efficiency
standards on an industry-by-industry basis, water quality standards, and a
discharge permit program.

                                   -7-
<PAGE>
     OTHER REGULATIONS.  In addition to a broad array of environmental
regulations relating to Margate's operations, the Company's business is
subject to a variety of non-environmental regulations.  Included in the
regulations which may effect its current business are regulations governing
occupational safety and health, wage, overtime and other employment matters
and dealings with state and local governmental agencies.

     COMMUNITY DEVELOPMENT GRANT.  Margate agreed to administer the
expenditure of $253,000, which the city of Yale, Michigan received as a
community development block grant to perform an investigation to determine
the extent of contamination at the Company's Yale plant site and to clean-up
soil contamination left by the site's previous owners and operators.  The
cost of administering the grant was less than $50,000.  As a result of
the Company's agreement to perform these procedures and to hold the city
harmless for any existing conditions at the site, the city of Yale,
Michigan agreed to transfer the property to the Company for its finishing
work, cleaning and testing of castings performed by the Company's Yale
subsidiary.

EMPLOYEES

     As of December 31, 2000, Margate employed approximately 170 hourly
employees and 22 salaried employees.  None of its employees are represented
by a union.

     Salaried employees retiring from the Company are entitled to post-
retirement health and life insurance benefits.  The amount of these
benefits is based on years of credited service and the age of the employee
at retirement.  In addition, the Company maintains a 401K plan covering all
employees and matches 25% (maximum 2% of each employee's contribution)

PROPERTIES

     Margate's facilities consist of its two operating subsidiaries, Yale
Industries and Fort Atkinson Industries.  Yale Industries' facilities
consist of a plant and corporate offices located in Yale, Michigan,
totaling approximately 70,000 square feet.  As discussed above, the plant
site was given to Margate as a block grant in consideration of Margate
administering the expenditure of $253,000 for the investigation and cleanup
of environmental contamination at the plant site.  Margate believes the
Yale facility is suitable for present and future needs of Margate's Yale
subsidiary.

     Fort Atkinson's facilities are located in Fort Atkinson, Wisconsin.
Margate leases facilities covering approximately 73,000 square feet.
Margate's lease, which it entered into in December of 1995, is for a ten-year
period.  Base rent under the lease is $12,813 per month.  Margate
believes that the Fort Atkinson site is suitable for Margate's present and
future needs at the Fort Atkinson location.

LEGAL PROCEEDINGS

     Margate knows of no pending or threatened legal proceeding to which it
is or will be a party which, if successful, might result in a material
adverse change in the business, properties, or financial condition of
Margate or its subsidiaries.

                                   -8-
<PAGE>
CERTAIN RISKS

     The following risks pertain to Margate and its cleaning and finishing
operations.

THE COMPANY HAS SENT NOTICES OF DEFAULT TO ITS MAJOR CUSTOMERS AND NON
PAYMENT COULD RESULT IN A LOSS OF REVENUES.

     On October 2, 2000, the Company sent a notice of default to the
Company's major customer NHF and its parent, Wesley Industries, Inc., an
entity controlled by Delbert Mullens, one of the Company's directors.  The
Company is seeking past due payments in connection with a promissory note
and on its cleaning contract with NHF.  Currently, the amount due and owing
with these obligations is approximately $900,000 as of March 23, 2001.  In
the event NHF is unable to pay the amounts due, the Company's revenues and
profitability will be significantly impacted.  Although NHF has made
representations that payments will occur during the Company's second
quarter, there can be no assurances that they will occur, thereby forcing
the Company to pursue legal action.

MARGATE DEPENDS UPON THE STRENGTH OF THE AUTOMOTIVE INDUSTRY, AND MAY
SUFFER FROM ANY DECLINE IN AUTOMOBILE PRODUCTION.

     Margate's principal operations are directly related to domestic
automotive vehicle production.  Automotive sales and production are very
cyclical and somewhat seasonal and can be affected by the strength of a
country's general economy and other potential factors outside of the
Company's control.  The Company has been notified that Daimler Chrysler
Corporation is going to institute significant cut backs in its domestic
auto production which utilize gray iron cylinder heads.  This will directly
effect NHF and indirectly the Company in that NHF is one of the Company's
major customers.  In addition, automotive production and sales can be
affected by labor relations issues (including strikes and other work
stoppages), regulatory requirements, trade agreements, consumer spending
trends and other factors.  A sustained decline in overall automotive sales
and their production could result in a decline in Margate's finishing and
cleaning operations thereby effecting the Company's results of operations
or financial condition.

MARGATE'S BUSINESS IS CYCLICAL AND ITS ANNUAL RESULTS WILL FLUCTUATE AS A
RESULT OF GENERAL ECONOMIC CONDITIONS AND CHANGES IN AUTOMOBILE AND TRUCK
PRODUCTION LEVELS.

     Margate's business is subject to cyclical fluctuations based on
general economic conditions, including interest rates, fuel costs, and
inflation factors specific to the automobile industry.  For example, a down
turn in the economy or a rise in interest or fuel costs has the effect of
decreasing the demand for automobiles and trucks.  If consumer demand goes
down for high price consumer items, the automotive industry will decrease
production and will decrease their need for Margate's cleaning operations.

MARGATE FACES STRONG COMPETITORS AND MAY NOT BE EFFECTIVE IN COMPETING IN
ITS MARKETS.

     Margate faces strong competitors for cleaning and furnishing services
in most of its markets.  Significant competitive factors include price,
delivery and quality of furnished product.  However, breadth of
capabilities and attention to customers service needs have become
increasingly important in remaining competitive.  Some of Margate's
competitors have greater financial resources and have the ability to offer
lower costs.  Existing or potential competitors

                                   -9-
<PAGE>
may substantially increase their resources devoted to automation and labor
to be competitive.  Competitors in regions such as Mexico, South America
and Europe may have lower costs, including labor costs which gives them a
competitive advantage over companies operating in the United States.

ANY ADVERSE DEVELOPMENT IN MARGATE'S RELATIONSHIP WITH THE SMALL NUMBER OF
CUSTOMERS ON WHICH MARGATE DEPENDS MAY PREVENT ITS CONTINUING PROFITABILITY.

     Historically, a small number of customers accounted for a substantial
percentage of Margate's net revenues.  This continues to be the case.  In
the fiscal year ended December 31, 2000, NHF, a former subsidiary of
Margate, accounted for approximately 48% of Margate's total revenue.  As
noted above, NHF is experiencing difficulty in making payments due under
existing cleaning agreements.  A significant reduction in business from NHF
or continued delays in the payment of invoices or the occurrence of similar
problems with any of our other major customers could cause Margate to
become less profitable or become unprofitable.

THE COST OF COMPLIANCE WITH ENVIRONMENTAL AND OTHER LAWS MAY BE PROHIBITIVE.

     Margate is subject to numerous laws and regulations that govern
environmental issues, workplace safety, equal employment opportunities and
other aspects of its business.  Margate believes that it complies with the
applicable environmental laws and regulations and is not aware of any
outstanding violation or citations with respect to environmental matters at
any of our facilities.  However, the Company has a commitment to purchase
a dust collection system for its Fort Atkinson facility in the year 2001
with an estimated cost of between $200,000 and $500,000.  The Company's
operations entail the continued risk of future noncompliance with
environmental and other governmental regulations.  The chief environmental
issues for the Company's cleaning operations are air emissions and waste
disposal.  The cost of complying with various environmental regulations is
likely to increase over time, and the cost of compliance may cause the
Company to suffer losses or reduced levels of profitability.

MARGATE DEPENDS ON ITS KEY PERSONNEL TO MANAGE ITS BUSINESS, AND MAY BE
UNPROFITABLE IF IT FAILS TO ATTRACT AND RETAIN EFFECTIVE MANAGERS.

     Margate depends on certain key personnel, including William H. Hopton
and David A. Widlak to manage the Company.  Accordingly it is contemplated
that Margate will enter into employment agreements with these individuals
for a three year term.  However, Margate's ability to maintain its
competitive position will depend on the Company's ability to retain key
personnel, including Messrs. Hopton and Widlak and to attract and retain
other highly qualified managerial and manufacturing personnel.  Should
Margate fail to recruit and retain such personnel, it may not be profitable.

MARGATE'S LABOR RELATIONS AND THOSE OF ITS MAJOR CUSTOMERS ARE IMPORTANT TO
ITS BUSINESS SUCCESS.

     Although Margate believes that its labor relations are good, attempts
to unionize its  operations and possible work stoppages may occur in the
future.  Any work stoppages would reduce Margate's revenues and ability to
serve its customers.  There can also be no assurance that labor problems at
NHF, which is unionized, or a work stoppage, would not have a material
adverse effect on Margate's financial condition and results of operations.

                                  -10-
<PAGE>
MARGATE HAS A LIMITED PUBLIC MARKET AND PRICES OF SHARES OF ITS COMMON
STOCK ARE VOLATILE.

     The prices of securities of publicly traded corporations, including
Margate, tend to fluctuate widely and as of the date of this Report the
general market conditions have been in a steep decline.  It can be expected
that trading in Margate's common stock may continue to have wide
fluctuations in price due to the limited volume in the Company's stock and
limited number of market makers.  Such volatility is expected to be
increased by the inclusion of telecommunications-based business after the
merger with c-Spectra described elsewhere in this Report.  The limited
market for Margate's common stock, fluctuations in trading interest and
changes in Margate's operating results, financial condition and future
prospects in the automotive industry could have a significant impact on the
market prices for Margate's common stock.

ITEM 2.   PROPERTIES
--------------------

     Yale Industries' facilities, which consist of a plant and the
Company's corporate offices, are located in Yale, Michigan. and are
provided by the city of Yale, Michigan in consideration of the Company
administering the expenditure of $253,000 for the investigation and cleanup
at the plant site.  The Company believes its plant at Yale is suitable for
its present and future needs.  The plant consists of approximately 70,000
square feet.

     Fort Atkinson's facilities are located in Fort Atkinson, Wisconsin.
It leases facilities covering approximately 73,000 square feet.  The
Company has leased this facility for a ten (10) year period beginning in
December 1995.  Base rent is $12,813 per month for the facility.  The
Company believes the plant is suitable for its present and future needs.

ITEM 3.   LEGAL PROCEEDINGS
---------------------------

     The Company knows of no pending or threatened legal proceeding to
which it is or will be a party which, if successful, might result in a
material adverse change in the business, properties, or financial condition
of the Company or its subsidiaries.

ITEM 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
-----------------------------------------------------------

     No response required.



                                  -11-
<PAGE>
                                 PART II

ITEM 5.   MARKET PRICE AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND
          -------------------------------------------------------------
          RELATED STOCKHOLDER MATTERS
          ---------------------------

PRINCIPAL MARKET OR MARKETS

     The Company's common stock is traded on the over-the-counter market
and, commencing on January 28, 1987, has been listed on the National
Association of Securities Dealers, Inc., Automated Quotation System
("NASDAQ") under the symbol, "CGUL".  The following tables set forth the
range for high and low bid quotations for the Company's common stock, as
reported by NASDAQ for the periods indicated.  These prices are believed to
be representative of inter-dealer quotations, without retail markup,
markdown or commissions, and may not represent actual transactions.

                                                        BID PRICE
                                                    HIGH          LOW
                                                   ------        -----

Calendar Year 2000
------------------
     Quarter ended March 31, 2000                   $9.50        $1.38
     Quarter ended June 30, 2000                    $5.94        $2.13
     Quarter ended September 30, 2000               $5.97        $3.91
     Quarter ended December 31, 2000                $4.78        $2.03

Calendar Year 1999
------------------
     Quarter ended March 31, 1999                   $1.91        $0.71
     Quarter ended July 30, 1999                    $2.02        $1.43
     Quarter ended September 30, 1999               $1.83        $1.58
     Quarter ended December 31, 1999                $1.97        $1.13

Calendar Year 1998
------------------
     Quarter ended March 31, 1998                   $2.06        $1.13
     Quarter ended June 30, 1998                    $2.53        $1.50
     Quarter ended September 30, 1998               $2.67        $1.31
     Quarter ended December 31, 1998                $1.88        $1.25


APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK

     The approximate number of holders of record of the Company's common
stock at March 9, 2001 was 402 directly and approximately 2,000 in broker's
street name.

DIVIDENDS

     The Company began paying quarterly dividends of $.00625 per share in
August of 1991.  Subsequently in August 1992 the Board of Directors
increased the dividend to $.0075 and in August 1993, the quarterly dividend
was increased to $.01 per share.  On November 15, 1993 the quarterly
dividend was increased to $.0125. On February 15, 1995 the quarterly
dividend was increased to $.0150. On September 21, 1995 the quarterly
dividend was suspended and will be

                                  -12-
<PAGE>
decided at the Annual Meeting in June of each year if, or when, the Company
will pay a dividend.

     On November 15, 1999 the Company paid a 5% stock dividend to
shareholders of record as of December 15, 1999.

     On July 11, 2000, the Company announced a special cash dividend of $0.50
per share on all outstanding shares of common stock for those shareholders
of record on July 24, 2000.  The dividend was paid on August 25, 2000.


ITEM 6.   SELECTED FINANCIAL DATA
---------------------------------

     The following table sets forth certain selected financial data with
respect to the Company.

(In Thousands, Except for Share Data)

                                    YEAR ENDED DECEMBER 31
                                 ----------------------------
                         2000      1999      1998      1997      1996
                        ------    ------    ------    ------    ------

Net sales              $10,757   $ 9,615   $ 9,628   $10,472   $ 9,442

Net income (loss)      $   695   $   332   $ 1,971   $   149   $  (773)

Net income (loss) per
  common share         $   .40   $   .22   $  1.30   $  0.10   $ (0.51)

Stock dividend declared
  per common share     $     0        5%   $     0   $     0   $     0

Dividends declared per
  common share         $  0.50   $     0   $     0   $     0   $     0

Total assets           $ 7,924   $ 7,896   $ 7,562   $ 6,221   $ 6,195

Long-term debt         $    81   $   125   $   192   $   412   $   344

Stockholders' equity   $ 6,277   $ 6,103   $ 5,716   $ 3,811   $ 3,662



                                  -13-
<PAGE>
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-------------------------------------------------------------------------
          RESULTS OF OPERATIONS
          ---------------------

FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE

     Statements made in this report which are not based on historical facts
are forward-looking and, accordingly, involve risks and uncertainties that
could cause actual results to differ materially from those discussed.
Forward-looking statements may be identified by the use of forward-looking
words such as "believes," "may," "intends," "anticipates," "plans,"
"estimates" and analogous or similar expressions.  Any forward-looking
statements are intended to be as of the date on which such statement is
made.  In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, we are providing a number of
important factors that could cause actual results to differ materially from
provided forward-looking information.  These important factors include
future economic conditions in the regional and national markets, state and
federal regulation, financial market conditions (including, but not limited
to, changes in interest rates), inflation rates, increased competition
(including, but not limited to, the entry of new competitors), ability to
carry out marketing and sales plan, ability to achieve planning goals,
ability to enter new markets successfully and capitalize on growth
opportunities, adverse changes in applicable laws, regulations or rules
governing the automotive service industry and tax or accounting matters.
This list of factors may not be all-inclusive since it is not possible for
us to predict all possible factors.

     The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial condition
and results of operations during the periods included in the accompanying
consolidated financial statements.

GENERAL

     Margate performs finishing, cleaning and testing operations on grey
iron castings for the automotive industry.  Margate currently conducts its
operations through its two wholly owned subsidiaries, Brown City Casting
Corporation, doing business under the name Yale Industries, and Fort
Atkinson Industries.  These subsidiaries perform cleaning, grinding and
testing of castings prior to shipment to end purchasers.  The Company's
primary customer is NHF, which produces castings for the automotive
industry and other component manufacturers in the United States and Canada.
Other customers for which Margate performs finishing operations include
Waupaca Foundry, Inc., Navistar International, Aarowcast, Inc., and
Brillion.  Margate has benefited in recent years from the increased
finishing and testing requirements on automotive suppliers, leading many of
those suppliers to move their finishing operations from in-house to outside
providers, such as Margate.  With the current slowdown in the economy some
foundries such as Brillion has stopped outsourcing some of its cleaning
operations. Because of sales reductions mainly at Fort Atkinson in
Wisconsin the Company is considering selling the facility. If unable to
sell or obtain new business the Company may cease operations in Wisconsin.

RECENT DEVELOPMENTS

     On July 10, 2000, the Company entered into an agreement and plan of
merger with c-Spectra (previously named B2B Euro Wireless.com).  The
original agreement was terminated by the mutual consent of the parties and
a new modified agreement is currently being negotiated.  It is anticipated
Margate and c-Spectra will enter into a definitive merger agreement whereby
c-

                                  -14-
<PAGE>
Spectra will merge with a newly crated subsidiary of Margate, known as
Seagull.  c-Spectra, as the surviving corporation, will then become a
wholly owned subsidiary of Margate.  c-Spectra shareholders will receive
Margate's "restricted" common stock in exchange for their c-Spectra shares
of common stock.  Following the merger, existing Margate shareholders will
own approximately 10.6% of the outstanding shares of Margate's common stock
and c-Spectra shareholders will own approximately 89.4% of the outstanding
shares of Margate common stock.  Additionally, Margate shareholders will be
asked to approve certain amendments to the Margate Articles of
Incorporation increasing the amount of Margate's authorized common stock
and changing the existing name of the corporation to c-Spectra.

     Following the merger, the holding company's board of directors will
consist of five (5) members with three (3) members from c-Spectra and two
(2) from the Company. Margate's present board of directors will remain the
same, with the addition of one director appointed by c-Spectra.  Prior to
closing, c-Spectra will contribute $4.0 million in cash for working capital
to the Company subject to a portion of these funds being used for funding
costs and expenses related to business development.  The agreement is
subject to shareholder approval and a fairness opinion will be obtained
from Chartered Capital Advisers, Inc. for use by the Board of Directors to
assist them in evaluating the transaction prior to submitting the merger
proposal to the shareholders.  The transaction is expected to be completed
and the closing to occur by the second quarter of 2001.

     Margate's Board of Directors will recommend the proposed merger with
c-Spectra be approved by shareholders because they believe the merger
allows the Company to participate in an attractive early-stage broadband
wireless telecommunications business, diversifies the Company's operations,
may attract outside capital financing and enhances shareholder value.

     On October 2, 2000, the Company sent a Notice of Default to Wesley
Industries, Inc. ("Wesley") and NHF, one of Margate's primary customers.

     The Notice of Default sent to NHF states that NHF is in default under
the terms of a Cleaning Contract dated March 24, 1998, for the failure to
pay the quarterly service fees of $140,000 due on July 1, 2000 and October 1,
2000.  In addition, the Notice states that interest at a rate of 18% per
annum is due on the unpaid fees from July 1, 2000.  The Notice states that
it constitutes the Default Notice pursuant to the Pledge Agreement dated
March 24, 1999 between Wesley and Margate.  The Notice commence Margate's
Cure Period as set forth in the Pledge Agreement with respect to the rights
and remedies regarding the Pledged Shares and the other rights and remedies
as set forth in the Pledge Agreement.  Wesley's right to vote the Pledged
Shares is terminated pursuant to the Pledge Agreement.

     Because of the above action, on October 2, 2000, William H. Hopton and
David A. Widlak resigned from the Board of Directors of NHF, effective
October 2, 2000.  As of the date of this Report, Wesley and NHF remain in
default.

LIQUIDITY AND CAPITAL RESOURCES:

     The Company assesses its liquidity in terms of overall ability to
generate sufficient cash to support business needs and to fund growth.  The
Company relies primarily upon cash flow from operations and lines of credit.

                                  -15-
<PAGE>
     The current and quick ratios, which provide an indication of the
Company's short-term assets in relation to its short-term obligations, for
the comparable periods are as follows:

                                            2000              1999
                                         ----------        ----------

 Working Capital                         $3,120,123        $2,481,095

 Current Ratio                            4.97 : 1           3.74 : 1

 Quick Assets (Cash, Securities
   and Receivables)                      $3,281,825        $2,830,457

 Quick Ratio                              4.18 : 1           3.13 : 1

       As noted by the above computations, the current ratio has increased
from 3.74:1 to 4.97:1 and working capital has increased by $639,028 for the
period from December 31, 1999 to December 31, 2000.  The quick ratio has
increased from 3.13:1 to 4.18:1.  The largest single factor contributing to
the increase in working capital is the profitability of the Company.

       Trade receivables increased by $830,116 from December 31, 1999 to
December 31, 2000.  The increase was due primarily to increased sales and
in the prior year (1999) $700,000 of accounts receivable were converted to
a note receivable.

       The Company has a facility line of credit of $1,300,000, with monthly
interest payments at 1/2 below the prime rate.  This line of credit is
collateralized by substantially all the assets of the Company.  The
Company's borrowings as of December 31, 2000 were zero.

       The Company believes its cash flow from operations is sufficient to
fund its current level of operations.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 VS. YEAR ENDED DECEMBER 31, 1999
-------------------------------------------------------------

       Sales increased by $1,141,572 or 11.9% from December 31, 1999 to
December 31, 2000.  The Company added the Waupaca Foundry as a new major
customer.  This customer generated sales of approximately $2.1 million in
new sales during the year.  The Company's net income increased by $363,563
over the prior year's net income of $331,839.  Increased net sales,
improved efficiency with the use of more automated equipment, and cost
reductions with less employees are the primary reasons for the increase
along with interest income.

       Cost of sales as a percentage of sales was 83.3% for the year ending
December 31, 2000 as compared to 89.1% for the year ending December 31,
1999.  The major reason for the decrease was increased efficiency in labor
costs, the use of more automated equipment which has improved the quality
of the Company's cleaning operations and additional sales which carry a
lower labor cost.

       Selling, General and Administrative expenses as a percentage of sales
was 9.9% for the year ending December, 2000 as compared to 8.5% for the
year ending December 31, 1999.  The

                                  -16-
<PAGE>
major reasons for the increases were bonuses to officers, higher accounting
fees due to new requirements by the SEC which now require a quarterly
review, and an increase in the cost of professional services and travel
costs associated with obtaining new customers.  In prior years, the Company
utilized outside sales representatives to obtain new customers on a
commission basis.  The Company now utilizes its own salesperson who is
responsible for monitoring existing customers and locating new business
opportunities.

       Interest income (net of interest expense) for the year ending
December 31, 2000 increased $75,237.  The increase is the result of increased
interest income from notes receivable from NHF.

       Related party services and sales commissions decreased from $1,966 in
1999 to $0 in 2000.  The decrease was in sales volume from customers from
outside sales representatives.  As noted above, the Company now employs its
own salesperson to serve this function.

YEAR ENDED DECEMBER 31, 1999 VS. YEAR ENDED DECEMBER 31, 1998
-------------------------------------------------------------

       Sales decreased by $12,040 from December 31, 1998 to December 31,
1999.  The Company's net income before deduction of an extraordinary item
relating to sale of equity investee increased by $351,937 over the prior
year's net loss of  $(20,098).  Improved efficiency and cost reductions are
the primary reasons along with interest income.

       Cost of sales as a percentage of sales was 89.1% for the year ending
December 31, 1999 as compared to 91.9% for the year ending December 31,
1998.  The major reasons for the decrease was increased efficiency in labor
costs.

       Selling, general and administrative expenses decreased by $22,134 from
1998 to 1999.

       Interest income (net of interest expense) for the year ending
December 31, 1999 increased by $52,201 from 1998.  This increase is the
result of the pay down of debt.  The Company had very minor borrowings on
its line of credit during 1999.

       Related party services and sales commissions decreased from $4,232 in
1998 to $1,966 in 1999.  This decrease was in sales volume from customers
from outside sales representatives.

EFFECTS OF CHANGES IN PRICES

       When possible, the Company attempts to adjust the selling prices of
its services in response to increases or decreases in its costs of labor,
raw materials and capital.  However, the market served by the Company is
highly competitive and that competition has limited the Company's abilities
to decrease overall prices.

       During 2000, 1999 and 1998 there were no significant changes in
prices, however the Company has been successful in lowering its overall
labor costs.

       The Company has a commitment to purchase a dust collection system for
its Fort Atkinson facility in the year 2001 with an estimated cost of
between $200,000 and $500,000.

                                  -17-
<PAGE>
ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-----------------------------------------------------

       Information with respect to this item is contained in the financial
statements appearing on Item 14 of this Report.  Such information is
incorporated herein by reference.

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------------------------------------------------------------------------
            FINANCIAL DISCLOSURE
            --------------------

       None.









                                  -18-
<PAGE>
                                PART III

       The information required by Part III of Form 10-K is incorporated
herein by reference to Registrant's definitive Proxy Statement to be filed in
connection with the Annual Meeting of Shareholders to be held on June 20, 2001.









                                  -19-
<PAGE>
                                 PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------

(a)    (1). The following Financial Statements are filed as part of this Report:

                                                                     Page
                                                                     ----

       Independent Auditors' Report                                   F-1

       Consolidated Balance Sheets, December 31, 2000 and 1999        F-2

       Consolidated Statements of Income, Years ended
       December 31, 2000, 1999 and 1998                               F-3

       Consolidated Statements of Stockholders' Equity For the Years
       ended December 31, 2000, 1999 and 1998                         F-4

       Consolidated Statements of Cash Flows, Years ended
       December 31, 2000, 1999 and 1998                         F-5 - F-6

       Notes to Consolidated Financial Statements                     F-7


(a)    (3)  Exhibits:

       10.3 Merger Agreement between the Registrant and c-Spectra
            incorporated by reference to Form 8-K dated July 10, 2000.

(b)    Reports on Form 8-K:

       None



                                  -20-
<PAGE>




                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                                ________

                          FINANCIAL STATEMENTS
                                   AND
                      INDEPENDENT AUDITORS' REPORT
                                ________

                            DECEMBER 31, 2000



<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES


                              - CONTENTS -










                                                              PAGE NUMBER
                                                              -----------

Independent Auditors' Report                                       1


Financial Statements:

       Consolidated Balance Sheet                                  2

       Consolidated Statement of Income                            3

       Consolidated Statement of Changes in Stockholders' Equity   4

       Consolidated Statement of Cash Flows                      5 & 6

       Notes to Consolidated Financial Statements                7 - 20









<PAGE>
                      Independent Auditors' Report
                      ----------------------------


To the Board of Directors
Margate Industries, Inc. and Subsidiaries
Yale, Michigan


We have audited the accompanying consolidated balance sheet of MARGATE
INDUSTRIES, INC. AND SUBSIDIARIES as of December 31, 2000 and 1999, and the
related consolidated statements of income, changes in stockholders' equity
and cash flows for each  of the  three  years  in the  period ended
December 31, 2000.  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 audit.

We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audit
provides 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 MARGATE INDUSTRIES,
INC. AND SUBSIDIARIES at December 31, 2000 and 1999 and  the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 2000 in conformity with generally accepted accounting
principles.


PERRIN, FORDREE & COMPANY, P.C.

/s/ PERRIN, FORDREE & COMPANY, P.C.

Troy, Michigan
February 12, 2001

<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEET





                                 ASSETS
                                 ------
<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                                 ----------------------------
                                                                    2000             1999
                                                                 -----------      -----------

<S>                                                              <C>              <C>
CURRENT ASSETS:
  Cash and cash equivalents                                      $ 1,099,082      $ 1,620,120
  Accounts receivable:
    Trade (net of allowance for doubtful accounts
      of $81,000 in 2000 and $-0- in 1999                          1,898,943        1,068,827
    Other                                                            283,800          141,510
  Current portion of notes receivable                                509,132          428,305
  Inventories                                                         32,000           42,000
  Prepaid expenses and other                                          75,112           79,119
  Deferred tax assets                                                  8,000            6,800
                                                                 -----------      -----------
          Total current assets                                     3,906,069        3,386,681

PROPERTY, PLANT AND EQUIPMENT - At cost,
  net of accumulated depreciation and
  amortization of $2,333,824 and $1,998,414 at
  December 31, 2000 and 1999, respectively                         3,530,156        3,734,803

OTHER ASSETS:
  Long-term notes receivable                                         324,726          739,552
  Capitalized acquisition costs                                      149,911               -
  Deposits                                                            13,041           34,833
                                                                 -----------      -----------
                                                                     487,678          774,385




                                                                 -----------      -----------
                                                                 $ 7,923,903      $ 7,895,869
                                                                 ===========      ===========
</TABLE>

<PAGE>
                  LIABILITIES AND STOCKHOLDERS' EQUITY
                  ------------------------------------

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                                 ----------------------------
                                                                    2000             1999
                                                                 -----------      -----------

<S>                                                              <C>              <C>

CURRENT LIABILITIES:
  Line-of-credit                                                 $       -        $   217,000
  Current portion of long- term debt                                  43,720           42,009
  Current portion of capital lease obligations                         4,408           15,609
  Accounts payable:
    Trade                                                            280,672          269,383
    Other                                                             19,597           30,326
  Accrued expenses:
    Salaries and wages                                               106,941           91,042
    Payroll taxes                                                        -             43,535
    Income taxes                                                     259,300          153,000
    Other                                                             71,308           43,682
                                                                 -----------      -----------
          Total current liabilities                                  785,946          905,586

LONG-TERM DEBT                                                        80,771          124,489

CAPITAL LEASE OBLIGATIONS                                                -              9,492

DEFERRED TAX LIABILITIES                                            236,800           259,800

OTHER POSTRETIREMENT BENEFITS                                       542,992           493,282

STOCKHOLDERS' EQUITY:
  Common stock - $.015 par value:
    Authorized - 5,000,000 shares
    Issued and outstanding -
      1,879,542 and 1,597,542
      at December 31, 2000 and
      1999, respectively                                             28,193            23,959
  Paid-in for common stock in excess of
    par value                                                     7,942,716         7,523,674
  Accumulated deficit                                            (1,693,515)       (1,444,413)
                                                                -----------       -----------
                                                                  6,277,394         6,103,220
                                                                -----------       -----------

                                                                $ 7,923,903       $ 7,895,869
                                                                ===========       ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                   -2-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENT OF INCOME
              YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                         2000           1999           1998
                                                       --------       --------       --------
<S>                                                   <C>            <C>            <C>
NET SALES (Including related party sales and
  commissions of $-0-, $-0- and $1,889,000 in
  2000, 1999 and 1998, respectively)                  $10,757,042    $ 9,615,470    $ 9,627,510

COST OF SALES                                           8,959,043      8,568,312      8,851,386
                                                      -----------    -----------    -----------

GROSS PROFIT                                            1,797,999      1,047,158        776,124

SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES                                              1,065,076        813,439        835,573

RELATED PARTY SERVICES AND SALES
  COMMISSIONS                                                 -            1,966          4,232
                                                      -----------    -----------    -----------

OPERATING INCOME (LOSS)                                   732,923        231,753        (63,681)

OTHER INCOME (EXPENSE):
 Dividend and interest income                             156,902        103,643         87,893
 Interest expense                                          (9,467)       (31,445)       (67,896)
 Loss on abandonment of leasehold improvements                -              -         (143,214)
 Other income                                             214,728        210,588        156,800
                                                      -----------    -----------    -----------
                                                          362,163        282,786         33,583
                                                      -----------    -----------    -----------

INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                                   1,095,086        514,539        (30,098)

PROVISION (BENEFIT) FOR FEDERAL INCOME
  TAXES                                                   399,684        182,700        (10,000)
                                                      -----------    -----------    -----------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM                   695,402        331,839        (20,098)

EXTRAORDINARY ITEM - gain on sale of equity
  investee (net of applicable income taxes of $84,000)        -              -        1,991,214
                                                      -----------    -----------    -----------

NET INCOME                                            $   695,402    $   331,839    $ 1,971,116
                                                      ===========    ===========    ===========

BASIC EARNINGS (LOSS) PER SHARE:

  INCOME BEFORE EXTRAORDINARY ITEM                    $       .40    $       .22    $      (.01)

  EXTRAORDINARY ITEM                                          -              -             1.31
                                                      -----------    -----------    -----------

  NET INCOME                                          $       .40    $       .22    $      1.30
                                                      ===========    ===========    ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                   -3-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
              YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998




<TABLE>
<CAPTION>
                               COMMON STOCK         PAID-IN FOR
                           --------------------     COMMON STOCK                    TOTAL
                           NUMBER OF                IN EXCESS OF   ACCUMULATED   STOCKHOLDERS'
                            SHARES      AMOUNT       PAR VALUE       DEFICIT        EQUITY
                           --------    --------     -----------     ---------      --------
<S>                       <C>         <C>          <C>             <C>            <C>
Balance December 31,
  1997                    1,524,546   $  22,868    $7,410,725      $(3,622,126)   $3,811,467

Shares reacquired           (35,332)       (530)      (65,687)             -         (66,217)

Net income                      -           -             -          1,971,116     1,971,116
                         ----------   ---------    ----------      -----------    ----------
Balance - December 31,
  1998                    1,489,214      22,338     7,345,038       (1,651,010)    5,716,366

Shares issued to directors   25,000         375        44,125              -          44,500

Shares issued for services    6,000          90        10,425              -          10,515

Stock dividend - 5%          77,328       1,156       124,086         (125,242)          -

Net income                      -           -             -            331,839       331,839
                         ----------   ---------    ----------      -----------    ----------
Balance - December 31,
 1999                     1,597,542      23,959     7,523,674       (1,444,413)    6,103,220

Shares reacquired           (10,000)       (150)      (20,854)             -         (21,004)

Stock options exercised     280,000       4,204       420,752              -         424,956

Stock issued for services    12,000         180        19,144              -          19,324

Dividends paid                  -           -             -           (944,504)     (944,504)

Net income                      -           -             -            659,402       695,402
                         ----------   ---------    ----------      -----------    ----------
Balance - December 31,
 2000                     1,879,542   $  28,193    $7,942,716      $(1,693,515)   $6,277,394
                         ==========   =========    ==========      ===========    ==========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                   -4-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF CASH FLOWS
              YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                         2000           1999           1998
                                                       --------       --------       --------
<S>                                                   <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Cash received from customers                        $ 9,917,972    $ 9,489,334    $10,079,104
  Cash paid to suppliers and employees                 (9,521,359)    (8,758,215)    (9,526,810)
  Interest and dividends received                         169,312         98,404         79,322
  Interest paid                                           (10,467)       (32,104)       (67,896)
  Income taxes paid                                      (317,584)           -          (33,000)
                                                      -----------    -----------    -----------
          Net cash from operating activities              237,874        797,419        530,720

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equity investment                     -              -        1,475,214
  Proceeds from sale of equipment                          11,801            -              -
  Payments received on notes receivable                   333,999         80,714         69,230
  Deposits refunded                                        21,792          4,967         16,964
  Capitalized acquisition costs paid                     (149,911)           -              -
  Purchase of property, plant and equipment              (175,666)      (337,782)      (192,624)
                                                      -----------    -----------    -----------
          Net cash from (to) investing activities          42,015       (252,101)     1,368,784

CASH FLOWS FROM FINANCING ACTIVITIES:
  Purchase of treasury stock                              (21,004)           -          (66,217)
  Issuance of common stock                                444,280            -              -
  Dividend payments                                      (944,504)           -              -
  Net repayments on line-of-credit                       (217,000)      (368,212)       (40,788)
  Principal payments under long-term
    obligations                                           (62,699)       (61,711)      (398,596)
                                                      -----------    -----------    -----------
          Net cash to financing activities               (800,927)      (429,923)      (505,601)
                                                      -----------    -----------    -----------

NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                                 (521,038)       115,395      1,393,903

CASH AND CASH EQUIVALENTS:
  BALANCE - beginning of year                           1,620,120      1,504,725        110,822
                                                      -----------    -----------    -----------

  BALANCE - end of year                               $ 1,099,082    $ 1,620,120    $ 1,504,725
                                                      ===========    ===========    ===========

        SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING TRANSACTIONS
        -----------------------------------------------------------------------

EQUIPMENT ACQUIRED UNDER CAPITAL
  LEASE OBLIGATION                                    $       -      $       -      $    25,913
                                                      ===========    ===========    ===========

NOTE RECEIVABLE ACQUIRED FROM SALE
  OF INVESTEE                                         $       -      $       -      $   600,000
                                                      ===========    ===========    ===========

ISSUANCE OF STOCK DIVIDEND                            $       -      $   124,816    $       -
                                                      ===========    ===========    ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                   -5-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED
              YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


   RECONCILIATION OF NET INCOME TO NET CASH FROM OPERATING ACTIVITIES
   ------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                         2000           1999           1998
                                                       --------       --------       --------
<S>                                                   <C>            <C>            <C>

NET INCOME                                            $   695,402    $   331,839    $ 1,971,116
  Adjustments to reconcile net income
    to net cash from operating
    activities:
      Depreciation and amortization                       374,904        366,881        350,399
      (Gain) loss on sale of property, plant
        and equipment                                      (6,392)           -          143,214
      Gain on sale of equity investee                         -              -       (2,075,214)
      Deferred income tax provision                       (24,200)         8,000         21,700
      Allowance for doubtful accounts                      81,000            -              -
      Stock issued for directors fees
        and services                                          -           55,015            -
  Changes in assets and liabilities which
    (increase) decrease cash flows:
      Accounts receivable                              (1,040,996)      (340,891)       294,794
      Inventories                                          10,000          1,000         (1,009)
      Prepaid expenses                                     (8,403)       (19,070)       (22,655)
      Accounts payable                                        559         87,404       (213,440)
      Accrued income tax                                  106,300        174,700         19,300
      Accrued expenses                                        (10)        91,334         10,296
      Accrued retiree health benefits                      49,710         41,207         32,219
                                                      -----------    -----------    -----------

NET CASH FROM OPERATING ACTIVITIES                    $   237,874    $   797,419    $   530,720
                                                      ===========    ===========    ===========
</TABLE>



The accompanying notes are an integral part of the financial statements.

                                   -6-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
                            DECEMBER 31, 2000




NOTE 1 -  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

          This summary of significant accounting policies of Margate
          Industries, Inc. (the Company) is presented to assist in
          understanding the Company's financial statements.  The financial
          statements and notes are representations of the Company's
          management which is responsible for their integrity and
          objectivity.  These accounting policies conform to generally
          accepted accounting principles and have been consistently applied
          in the preparation of the financial statements.

          BUSINESS ACTIVITY
          -----------------

          Margate Industries, Inc. is a holding company for subsidiaries
          involved in the cleaning of small and medium-sized grey iron
          castings that are sold primarily to the North American automobile
          industry.

          PRINCIPLES OF CONSOLIDATION
          ---------------------------

          The consolidated financial statements include the accounts of the
          Company and its wholly-owned subsidiaries Margate Land
          Acquisition Company, Brown City Castings Corporation d/b/a Yale
          Industries (Yale), and Fort Atkinson Industries, Inc. (FAI).  All
          intercompany accounts and transactions have been eliminated in
          the accompanying consolidated financial statements.

          CASH AND CASH EQUIVALENTS
          -------------------------

          The Company considers all highly liquid investments purchased
          with an original maturity date of three months or less to be cash
          equivalents.

          INVENTORIES
          -----------

          Inventories,  consisting  primarily  of  grinding  wheels,  are
          stated at the lower of cost or market, determined by the first-in,
          first-out (FIFO) method

          PROPERTY, PLANT AND EQUIPMENT
          -----------------------------

          Property, plant and equipment are recorded at cost.  Costs of
          maintenance and repairs that do not materially extend the life of
          the asset are charged to expense when incurred.

                                   -7-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000



NOTE 1 -  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
          CONTINUED:

          PROPERTY, PLANT AND EQUIPMENT - CONTINUED
          -----------------------------------------

          Depreciation and amortization of plant and equipment is recorded
          using the straight-line method over the estimated useful lives of
          the assets.  Depreciation and amortization expense totaled
          $374,904, $366,881 and $350,399 in 2000, 1999 and 1998,
          respectively.  Estimated useful lives of assets in the various
          classes of property, plant and equipment are as follows:

          Buildings and improvements                        40 years
          Machinery and equipment                           12 years
          Furniture and fixtures                            12 years
          Automobiles                                        5 years

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

          Income taxes are provided for the tax effects of transactions
          reported in the financial statements and consist of taxes
          currently due plus deferred taxes.  Deferred taxes are recognized
          for differences between the basis of assets and liabilities for
          financial statements and income tax purposes.

          The deferred tax asset and liability represent the future tax
          return consequences of those differences, which will either be
          taxable or deductible when the assets and liabilities are
          recovered or settled.

          REVENUE RECOGNITION
          -------------------

          Revenues derived from the cleaning of castings are recognized as
          services are provided.

          Sales commissions are recognized as revenue when earned.

          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 at the date of the financial statements
          and the reported amounts of revenues and expenses during the
          reporting period.  Actual results could differ from those estimates.

          RECLASSIFICATIONS
          -----------------

          Certain amounts in 1998 and 1999 have been reclassified to
          conform with the  2000 financial statement presentation.

                                   -8-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000



NOTE 2 -  RELATED PARTY TRANSACTIONS:

          The Company provides cleaning services to New Haven Foundry (NHF)
          for products manufactured by that company.  Pursuant to the July
          1990 agreement for the sale of NHF common stock, the Company
          provided exclusive cleaning services on all castings produced by NHF.

          Pursuant to the sale of the Company's  equity  interest in NHF
          on March 24, 1998 a new cleaning contract superseded and replaced
          the 1990 casting cleaning agreement.  This new agreement grants
          the Company the exclusive right to clean all production castings
          produced by NHF for a minimum period of seven years commencing
          March 24, 1998.  In the event of the Management and Option
          Agreement, as described in Note 15,  being extended beyond its
          six year term, the term of this agreement shall extend for one
          year beyond the termination date of the Management and Option
          Agreement.  This contract may be terminated upon the exercise of
          NHF's option to purchase the Yale Industries, Inc. facility in
          accordance with the terms of the Management and Option Agreement.
          Additionally, this contract may be terminated in the event that
          the operations of the Yale facility are no longer being managed
          by the Operations Manager as noted in the Management and Option
          Agreement.

          The terms of the 1990 sale also provided for a commission
          contract between NHF and the Company.  The Company received a
          minimum of $150,000 per year, plus 3% of actual sales in excess
          of $35,000,000 but less than $40,000,000, plus an additional 2%
          on the actual sales that exceeded $40,000,000.  Pursuant to the
          sale of the Company's equity interest in NHF on March 24, 1998,
          a new service fee contract superseded and replaced the 1990
          commission agreement.  The Company will receive quarterly service
          fee payments of $140,000 beginning on April 1, 1998, until
          January 1, 2003, for a  total of $2,800,000 from NHF.  The
          Company earned commissions and service fees from NHF amounting to
          $560,000, $560,000 and $564,807 in 2000, 1999 and 1998, respectively

          Any unpaid balances of the aforementioned amounts are included on
          the accompanying balance sheet.



                                   -9-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                 NOTES TO FINANCIAL STATEMENTS-CONTINUED
                            DECEMBER 31, 2000



NOTE 3 -PROPERTY, PLANT AND EQUIPMENT:

     Property, plant and equipment are summarized as follows as of December 31:

<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>


          Building and improvements                        $1,780,495          $1,736,227
          Machinery and equipment                           3,818,412           3,732,444
          Automotive equipment                                121,532             123,649
          Furniture and fixtures                              143,541             140,897
                                                           ----------          ----------
               Total cost                                   5,863,980           5,733,217
          Less accumulated depreciation and
            amortization                                    2,333,824           1,998,414
                                                           ----------          ----------

                Net property, plant and
                 equipment                                 $3,530,156          $3,734,803
                                                           ==========          ==========
</TABLE>



NOTE 4 -  NOTES RECEIVABLE:

          Notes receivable - consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>

          Wesley Industries, Inc. - collateralized note
          receivable, as a result of the sale of 45% of
          New Haven Foundry (refer to Note 15),
          non-interest bearing, due in monthly
          installments of $35,000 of principal payments
          through March 2003.  (Net of discount at
          an effective interest rate of 6.0%).             $  293,571          $  467,857

          NHF - unsecured note receivable, due in
          monthly installments of $32,250, including
          interest at 8%, through February 2002.              415,743             700,000

          Stockholders - unsecured notes receivable,
          due in quarterly installments of $3,000
          each including interest at 6%, through
          June 2007.                                          124,544                 -
                                                           ----------          ----------
                                                              833,858           1,167,857
          Less current portion                                509,132             428,305
                                                           ----------          ----------

                                                           $  324,726          $  739,552
                                                           ==========          ==========
</TABLE>

                                  -10-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                 NOTES TO FINANCIAL STATEMENTS-CONTINUED
                            DECEMBER 31, 2000





NOTE 5 -  LINE-OF-CREDIT:

          The Company maintains a  bank line-of-credit of $1,300,000 for
          working capital requirements.  The interest rate on this line is
          at 1/2% below  the bank's prime rate, and was 9.0% and 8% at
          December 31, 2000 and 1999, respectively.  The line-of-credit is
          secured by all accounts receivable, inventories and equipment of
          the Company.  The Company had borrowings against the line of $ -0-
          and $217,000 at  December 31, 2000 and 1999, respectively.
          The Company is required to maintain a working capital balance of
          at least  $1,500,000 and maintain a ratio of its total
          liabilities to tangible net worth of at least .75 as covenants
          under this credit agreement.  For the years ended December 31,
          2000 and 1999 the Company was in compliance with its covenants.

          The Company also maintains a $350,000 equipment purchase line-of-
          credit.  The interest rate is negotiated with each equipment
          purchase for a term up to 60 months.  This line is secured by the
          same assets as the working capital line-of-credit.


NOTE 6 -  LONG-TERM DEBT:

          Long-term debt consists of the following at December 31:

<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>
          Note payable, due in monthly installments
          of $3,992, including interest at 4% through
          July 2003, collateralized by equipment.          $  124,491          $  166,498

          Less current portion                                 43,720              42,009
                                                           ----------          ----------

                                                           $   80,771          $  124,489
                                                           ==========          ==========
</TABLE>

          Maturities of long term debt obligations are as follows:
<TABLE>
<CAPTION>
          <S>                                              <C>

          Year ending December 31:
            2001                                           $   43,720
            2002                                               45,501
            2003                                               35,270
                                                           ----------

                                                           $  124,491
                                                           ==========
</TABLE>

                                  -11-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED

                            DECEMBER 31, 2000


NOTE 7 -  CAPITAL LEASES:

          The Company periodically acquires assets under capital lease
          obligations.  The  capitalized cost of assets acquired under
          capital lease obligations of  $22,774 less accumulated
          amortization of $6,484 and $4,586 at December 31, 2000 and 1999,
          respectively, is included in machinery and equipment in the
          accompanying financial statements.  Amortization of these assets
          is included in depreciation expense.

          The following is a schedule of future lease payments under
          capital leases:

<TABLE>
<CAPTION>
          <S>                                              <C>

          Year ending December 31 -
            2001                                           $    4,935

          Less amounts representing interest at 17.9%             527
                                                           ----------

          Present value of future minimum payments         $    4,408
                                                           ==========
</TABLE>


NOTE 8 -  FAIR VALUES OF FINANCIAL INSTRUMENTS:

          The estimated fair values of the Company's financial instruments,
          none of which are held for trading purposes, are as follows at
          December 31, 2000 and 1999:

          The carrying values of cash and equivalents approximate fair
          values.  The notes receivable to NHF bear interest at a rate that
          approximates prime and the notes receivable  to Wesley Industries
          and stockholders are discounted at an imputed rate that
          approximates an interest rate between independent parties.
          Therefore, the carrying values of these notes approximate fair value.

          It is currently not practicable to estimate the fair value of the
          long-term debt obligations.  Because these note agreements
          contain unique terms, conditions, covenants and restrictions
          which were negotiated at arm's-length with the Company's lenders,
          there is no readily determinable similar instrument on which to
          base an estimate of fair value.  Accordingly, no adjustment to
          fair value has been determined.

          The postretirement benefits obligation has been determined by an
          outside actuary based on the actuarial present value of the
          expected benefits' liability.  As such, the carrying value
          approximates the fair value of this financial instrument.

                                  -12-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000


NOTE 9 -EARNINGS PER SHARE:

     In November 1998, the Company announced a reverse stock split,
     effectively reducing the number of shares outstanding by one-third and
     increasing the par value from $0.005 to $.015 per share of common
     stock.  The weighted average number of shares, total shares
     outstanding and earnings per share have been adjusted for 1998.
     Earnings  per  share (EPS)  for  the  years  ended December 31, 2000,
     1999 and 1998 are computed as follows:
<TABLE>
<CAPTION>
                                                                                    PER-SHARE
                                                       INCOME         SHARES         AMOUNT
                                                       ------         ------         ------
          <S>                                         <C>            <C>            <C>

          December 31, 1998 -

          Income from continuing operations
           before extraordinary items                 $  (20,098)    1,514,342      $     (.01)
                                                      ==========     =========      ==========

          December 31, 1999 -

          Income from continuing
           operations                                 $  331,839     1,512,670      $      .22
                                                      ==========     =========      ==========

          December 31, 2000 -

          Income from continuing
           operations                                 $  695,402     1,758,316      $      .40
                                                      ==========     =========      ==========
</TABLE>

          For the years ended December 31, 1999  and 1998, options on
          280,000 and 66,666 shares of common stock, respectively, were not
          included in computing diluted EPS because their effects were
          antidilutive.


NOTE 10 - INCOME TAXES:

          As of December 31, 2000 and 1999, the components of deferred
          income taxes consisted of the following:
<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>


          Current deferred taxes:
            Gross assets                                   $  14,100           $  13,800
            Gross liabilities                                 (6,100)             (7,000)
                                                           ---------           ---------

               Net current deferred tax assets                 8,000               6,800

          Noncurrent deferred taxes:
            Gross assets                                     210,100             167,700
            Gross liabilities                               (446,900)           (427,500)
                                                           ---------           ---------

               Net noncurrent deferred tax liabilities      (236,800)           (259,800)
                                                           ---------           ---------

          Total deferred tax liabilities                   $(228,800)          $(253,000)
                                                           =========           ==========
</TABLE>

                                  -13-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000




NOTE 10 - INCOME TAXES - CONTINUED:

          Deferred income taxes, included in the accompanying balance
          sheet, result from temporary differences related to the following
          items which are treated differently for financial reporting and
          tax reporting purposes.

<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>

          Depreciation and amortization                    $(438,700)          $(411,800)
          Installment gain on the sale of NHF                (14,300)            (22,700)
          Other postretirement benefits                      184,600             167,700
          Allowance for doubtful accounts                     25,500                 -
          Accrued vacation                                    14,100              13,800
                                                           ---------           ---------

               Total                                       $(228,800)          $(253,000)
                                                           =========           =========
</TABLE>

          The components of the provision for income taxes are as follows
          for the years ended December 31:
<TABLE>
<CAPTION>
                                            2000         1999         1998
                                           ------       ------       ------
          <S>                             <C>          <C>          <C>


          Current tax expense             $ 423,900    $ 203,600    $  68,500
          Deferred tax expense              (24,200)       8,000       21,700
          Capital and operating loss
            carryforwards                       -        (28,900)     (16,200)
                                          ---------    ---------    ---------

          Provision for income taxes      $ 399,700    $ 182,700    $  74,000
                                          =========    =========    =========
</TABLE>

          A reconciliation of the statutory tax rate to the effective tax
          rates recorded as follows:

                                                2000         1999        1998
                                               ------       ------      ------

         Statutory rate                         34%          34%          34%
         Recognition of capital and
            operating loss carryforward          -           (4)         (30)
         Penalties                               1            3
         Other                                   1            3            -
                                              -----        -----        -----

         Effective rate                         36%          36%           4%
                                              =====        =====        =====

                                  -14-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000



NOTE 11 - STOCK OPTIONS:

          In 1999, the Company adopted a fixed director and employee stock-
          based compensation plan.  Under the Plan, the Company  granted
          options for 280,000 shares of common stock, 130,000 to employees
          and 150,000 to directors, vesting immediately.  The exercise
          price of each option is equal to the market price of the
          Company's stock on the date of the grant.  The term for all of
          the options is 5 years, expiring on November 15, 2004.

          Pursuant to the agreement for the sale of 55% of NHF (in 1990),
          stock options were granted to the owner of Wesley Industries for
          33,333 shares at a price of $4.50 and 33,333 shares at a price of
          $7.50.  The options were exercisable at any time, provided that
          the owner of Wesley Industries holds a minimum 55% ownership
          interest in NHF and the Company also holds an ownership interest
          in NHF.  Pursuant to the sale of the Company's interest in NHF on
          March 24, 1998, the remaining 66,666 stock options were no longer
          exercisable as the Company no longer maintained an ownership
          interest in NHF.

          The fair value of each option granted is estimated on the grant
          date using the Black Scholes Model.  The following assumptions
          were used in estimating fair value:

            Assumption                                 Fixed Plan
            ----------                                 ----------

            Dividend yield                                    0%
            Risk-free interest rate                        5.57%
            Expected life                                 5 years
            Expected volatility                              20%

          The Company applies APB Opinion 25 in accounting for its stock
          compensation plans.  Accordingly, no compensation has been
          recognized for the Plan in 1999.  Had cost been determined on the
          basis of fair value pursuant to SFAS No. 123, net income and
          basic earnings per share would have been reduced as follows:

          Net income                                               1999
          ----------                                             --------

          As reported                                            $331,839
                                                                 ========

          Pro forma                                              $241,550
                                                                 ========

          Basic earnings per share
          ------------------------

          As reported                                            $   0.22
                                                                 ========

          Pro forma                                              $   0.16
                                                                 ========

                                  -15-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000







NOTE 11 - STOCK OPTIONS - CONTINUED:


<TABLE>
<CAPTION>
                                   2000                     1999                    1998
                            -------------------      --------------------    --------------------
                                       EXERCISE                  EXERCISE                EXERCISE
                            NUMBER      PRICE        NUMBER       PRICE      NUMBER       PRICE
                            ------     -------       ------      -------     ------      -------
<S>                        <C>         <C>          <C>          <C>        <C>          <C>
Stock options outstanding
  at the beginning of the
  year                      280,000    $ 1.625           -       $   -        66,666     $  6.00

Stock options granted           -          -         280,000       1.625         -           -

Stock options exercised    (280,000)     1.625           -           -           -           -

Stock options canceled          -          -             -           -       (66,666)        -
                           --------   --------      --------     -------    --------    --------

Stock options outstanding
  at the end of the year        -     $    -        280,000      $ 1.625         -      $    -
                           ========   ========     ========      =======    ========    ========


Weighted average fair value
  of options granted                                             $   .50
                                                                 =======

At December 31, 2000, there were no outstanding stock options.
</TABLE>









                                  -16-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000



NOTE 12 - LEASE COMMITMENTS:

          The Company leases the building for the Fort Atkinson subsidiary
          under an operating lease agreement that expires in December,
          2005.  This lease requires the Company to pay all maintenance and
          insurance expenses.  The Company also leases certain vehicles
          under two or three year agreements.

          Minimum payments under these leases are as follows:

          Year ending December 31:
               2001                                              $182,722
               2002                                               163,075
               2003                                               155,096
               2004                                               153,750
               2005                                               153,750
                                                                 --------

                                                                 $808,393
                                                                 ========

          Rental expense in 2000, 1999 and 1998, was approximately
          $177,064, $170,328 and $257,800, respectively.


NOTE 13 - OTHER POSTRETIREMENT BENEFITS:

          Salaried employees retiring from the Company are entitled to
          postretirement health and life insurance benefits. The amount of
          these benefits is based on years of credited service and the age
          of the participant.  The Company may amend or change the Plan
          periodically.

          The Company accounts for these benefits in accordance with
          Statement of Accounting Standards No. 106, "Accounting for
          Postretirement Benefits Other Than Pensions."  A Plan amendment
          effective January 1, 1998 resulted in a negative prior service
          cost of $109,240 being amortized over 20 years.  The amount of
          annual amortization is $5,462.



                                  -17-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000


NOTE 13 - OTHER POSTRETIREMENT BENEFITS - CONTINUED:

          The following table sets forth the Plan's funded status as of
          December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>
          Accumulated postretirement benefit
            obligation:
              Fully-eligible active Plan
                participants                               $ 181,010           $ 172,981
              Other active Plan participants                 278,040             208,071
                                                           ---------           ---------

          Accrued postretirement benefit
            obligation in excess of Plan assets              459,050             381,052
          Unrecognized net gain (loss)                        (8,912)             13,914
          Unrecognized prior service costs
            from Plan amendment                               92,854              98,316
                                                           ---------           ---------

          Accrued postretirement benefit cost              $ 542,992           $ 493,282
                                                           =========           =========
</TABLE>

          The Company's postretirement healthcare and life insurance plan
          is unfunded as the Company provides benefits on a pay as incurred
          basis. There were no cash benefits paid under this Plan for 2000
          or 1999.

          Net periodic postretirement benefit costs included the following
          components for the years ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                              2000                1999
                                                            --------            --------
          <S>                                              <C>                 <C>

          Service cost - benefits earned                   $  28,697           $  24,724
          Interest cost                                       26,463              21,931
          Amortization of net gain (loss)                         12                  14
          Amortization of prior service costs                 (5,462)             (5,462)
                                                           ---------           ---------
          Net periodic other postretirement
            benefit cost                                   $  49,710           $  41,207
                                                           =========           =========
</TABLE>

          For measurement purposes, a 6.25% and 6.60% annual rate of
          increase in the per capita cost of covered healthcare benefits
          was assumed for 2000 and 1999, respectively. The rate was assumed
          to drop to 5.25% by 2007 and remain at that level thereafter.
          The healthcare cost trend rate assumption has a significant
          effect on the amounts reported.  To illustrate, increasing the
          assumed healthcare cost trend rate by 1 percentage point in each
          year would increase the accumulated postretirement benefit
          obligation as of December 31, 2000 and 1999 by $112,185 and
          $91,148, respectively, and the aggregate of the service and
          interest cost components of net periodic postretirement benefit
          cost for  the years then ended by $15,500 and $13,421, respectively.

                                  -18-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000


NOTE 13 - OTHER POSTRETIREMENT BENEFITS - CONTINUED:

          The discount rate used in determining the accumulated
          postretirement benefit obligation was 6.5% as of December 31,
          2000 and 1999.


NOTE 14 - EMPLOYEE BENEFIT PLANS:

          The Company maintains a 401(k) plan covering all employees that
          satisfy the Plan's eligibility requirements.  The Company is
          required to match 25% (maximum 2%) of each employee's
          contribution, not to exceed 8% of the participant's compensation.
          The employer's contribution, including administrative expenses,
          for the years ended December 31, 2000, 1999 and 1998 was
          $32,938, $29,543  and $17,055, respectively.

          The Company also maintains a Defined Contribution Plan covering
          substantially all employees that satisfy the Plan's eligibility
          requirements.  Under the provisions of the Plan, Margate is
          required to make an annual contribution of 5% of each
          participant's eligible compensation.  Plan contributions for the
          years ended December 31, 2000, 1999 and 1998, were $65,154,
          $49,867, and $28,522, respectively.


NOTE 15 - GAIN ON SALE OF NEW HAVEN FOUNDRY:

          On March 24, 1998, the Company sold its 45% ownership interest in
          New Haven Foundry to Wesley Industries, Inc. who owned the
          remaining 55% interest.  The sales price totaled $2,100,000 of
          which $1,500,000 was received in cash and a $600,000 note
          receivable, payable over five years.  Legal fees relating to this
          transaction amounted to $24,786, which resulted in a $2,075,214
          gain on sale as the equity interest in NHF was written down to
          zero in 1996.

          As noted under related party transactions  (Note 2), this sale
          resulted in a new casting cleaning and service fee agreement.
          Additionally, there is also a Management and Option Agreement
          ("Agreement") entered into between Yale Industries, Inc., Margate
          Industries, Inc., New Haven Foundry and Wesley Industries, Inc .
          as a result of this sale.  This agreement established an
          Operations Manager responsible for the production operations at
          Yale and reports to NHF.  This agreement also granted Wesley the
          right to purchase 100% of the stock of Yale or substantially all
          of the assets related to the Yale business, at Wesley's option,
          at any time within six years of this agreement.  The purchase
          price under this option shall be Yale's earnings before interest
          and taxes (EBIT) as defined in the agreement for the 12 month
          period recently ended, multiplied by five, and in no event shall
          the purchase price under the option be less than $4,000,000 or
          more than $5,000,000 in cash, plus in the event of an asset
          purchase, the assumption of liabilities of Yale.

                                  -19-
<PAGE>
                MARGATE INDUSTRIES, INC. AND SUBSIDIARIES
                NOTES TO FINANCIAL STATEMENTS - CONTINUED
                            DECEMBER 31, 2000



NOTE 16 - CONCENTRATIONS OF CREDIT RISK:

          The Company has cash deposits in financial institutions in excess of
          the amount insured by agencies of the federal government in the
          approximate amounts  of  $1,033,174  and  $1,466,000  for   the
          years ended December 31, 2000 and 1999 respectively.

          The Company performs grinding and blasting services in the states of
          Michigan and Wisconsin.  Credit is granted to certain customers, which
          is made up of entirely commercial establishments.  The Company
          performs periodic credit evaluations of  customers' financial
          condition and generally does not require collateral.  Amounts due from
          one customer represented  approximately  67% and 49%  of  trade
          accounts  receivable  as of December 31, 2000 and 1999, respectively.
          Also, sales to this customer represented 48%, 61% and 72% of total
          Company revenues for the years ended December 31, 2000, 1999 and 1998,
          respectively.  Sales to three other major customers represented 44%
          and 17% of total Company revenues for the years ended December 31,
          2000 and 1999, respectively.


NOTE 17 - COMMITMENTS:

          The Company has a commitment to purchase a dust collection system
          for its Fort Atkinson facility in the year 2001, with an
          estimated cost between $200,000 and $500,000.


NOTE 18 - ACQUISITION:

          In March 2000, the Company initiated a merger with C-Spectra,
          Inc., a telecommunications company based in New York.  The
          Company is currently in the process of negotiating the terms of
          the merger, which will be subject to stockholder approval.  Costs
          of $149,911 have been capitalized for professional services
          incurred in association with this transaction, which will be
          amortized over a period of 60 months upon completion of the merger.



                                  -20-
<PAGE>
                               SIGNATURES

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


                                        MARGATE INDUSTRIES, INC.



Dated: March 28, 2001                   By: /s/ William H. Hopton
                                           -----------------------------
                                             William H. Hopton


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


     Signature                     Title                        Date
     ---------                     -----                        ----



/s/ Frederick G. Schriever     Director                     March 28, 2001
----------------------------
Frederick G. Schriever



/s/ Delbert W. Mullens         Director                     March 28, 2001
----------------------------
Delbert W. Mullens



/s/ William H. Hopton          President, Chief Financial   March 28, 2001
----------------------------   Officer, Treasurer and Director
William H. Hopton



/s/ David A. Widlak            Secretary and Director       March 28, 2001
----------------------------
David A. Widlak



/s/ Denis R. LeDuc             Treasurer and Director       March 28, 2001
----------------------------
Dennis R. LeDuc



                                  -21-