FORM 10-K

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

(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED MAY 31, 1998.

                                       OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM  _____ TO _____.

                        STRATFORD ACQUISITION CORPORATION
             (Exact name of registrant as specified in its charter)

Minnesota                       0-26112                  41-1759882     
(State of Jurisdiction)   (Commission File Number) (IRS Employer ID No.)

67 Wall Street, Suite 2411,  New York, New York              10005        
(Address of Principal Executive offices)                   (Zip Code)

Registrant's telephone number, including area code 212-825-9292

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

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

                                             Name of each exchange on
     Title of each class                         which registered    

Common Stock $.001 par value             NASD OTC Electronic Bulletin Board

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Section  13 or 15(d) of the  Securities  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 filing  requirements for the
past 90 days. Yes X No ___

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

Based on the closing sale price of $.40 on May 31, 1998,  the  aggregate  market
value  of  the  voting  stock  held  by  nonaffiliates  of  the  registrant  was
$3,534,334.  The number of shares outstanding of the registrant's  common stock,
$.001 par value was 11,965,646 on May 31, 1998.


<PAGE>


                       DOCUMENTS INCORPORATED BY REFERENCE

Location in Form 10-K                                 Incorporated Document
                                           
Part IV, Item 14                                      Form 8-K filed on
                                                      August 27, 1997
                                           
Part IV, Item 14                                      Form 8-K filed on
                                                      November 3, 1997
                                           
Part IV, Item 14                                      Form 8-K filed on
                                                      November 17, 1997
                                           
                                   

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                        STRATFORD ACQUISITION CORPORATION

                                Table of Contents



                                                                        Page No.
                                                                        --------
Part I   

Item 1.        Business                                                    1
               a. Risk Factors                                             3

Item 2.        Properties                                                  9

Item 3.        Legal Proceedings                                          10

Item 4.        Submission of Matters to a Vote of Security                11
               Holders
Part II

Item 5.        Market for Registrant's Common Equity and                  11
               Related Stockholder Matters

Item 6.        Selected Financial Data                                    12

Item 7.        Management's Discussion and Analysis of                    12
               Financial Condition and Results of Operations

Item 8.        Financial Statements and Supplementary Data                14

Item 9.        Changes in and Disagreements with Accountants              15
               on Accounting and Financial Disclosure

Part III

Item 10.       Directors and Executive Officers of the                    15
               Registrant

Item 11.       Executive Compensation                                     16

Item 12.       Security Ownership of Certain Beneficial                   18
               Owners and Management
               a.  Section 16(a) Beneficial Ownership                     19
                   Reporting Compliance

Item 13.       Certain Relationships and Related Transactions             19

Part IV

Item 14.       Exhibits, Financial Statement Schedules, and
               Reports on Form 8-K                                        20


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                                     PART I

Item 1. Business

     a. General Development of Business

The Company is a  corporation  formed  under the laws of  Minnesota  and has its
principal  place of business and  executive  offices  located at 67 Wall Street,
Suite 2411, New York, New York 10005, telephone  212-825-9292.  The Company also
has a wholly-owned  operating  subsidiary,  Novacrete  Technology (Canada) Inc.,
which is a company  registered  pursuant to the laws of the Province of Ontario,
Canada and is located at 2525 Tedlo  Street,  Unit B,  Mississauga,  Ontario L5A
4A8, telephone 905-566-0716 ("Novacrete Canada").

Prior to August 15, 1995, the company was a dormant  corporation.  On August 15,
1995, upon acquiring the exclusive right to manufacture and market a proprietary
admixture for the enhancement of cementitious  products ("Novacrete  Admixture")
the  company's  plan was to conduct  further  research  and  development  of the
Novacrete  Admixture with the intention of marketing the Novacrete Admixture and
a line of pre-packaged  concrete  repair products using the Novacrete  Admixture
(Novacrete Repair Products). (See also Legal Matters Historical).

The  Novacrete  Admixture is a blend of various  materials  that when mixed with
portland  cement and water  causes a chemical  reaction  that  creates a calcium
silicate  hydrate  (CSH)  paste  binder that has a very dense  microscopic  pore
structure.  This  change in the  molecular  matrix of the  cementitious  product
increases the bonding  between the CSH paste and the  aggregates  that are mixed
into the formula to create a mortar or concrete product. By having a denser pore
structure,  the end product  becomes more durable and resistant to chemicals and
water penetration.  To enhance the handling and physical  characteristics of the
finished products,  the Novacrete Admixture also contains rheological modifiers,
surface activation agents and cellulose lubricants.

As such, the Novacrete  Admixture  causes cement to chemically react in a manner
that  ultimately  produces  higher  compressive,  bonding,  flexural and tensile
strengths,  reduces  shrinkage,  increases  workability  and, most  importantly,
because  of its  dense  pore  structure  results  in a  product  having a higher
resistance to  penetration of water and chloride ions from de-icing  salts.  The
formulae used by the company to manufacture  the Novacrete  Repair Products have
been  independently  tested by outside testing  laboratories and the performance
characteristics  of the  tested  products  as  measured  by tests  conducted  in
accordance  with the  industry  standards  - American  Society  for  Testing and
Materials  (ASTM)  - place  them in the  highest  category  of  concrete  repair
products. In addition,  the company has also had several ASTM tests conducted by
outside  testing  laboratories  on other  cement  products  and  found  that the
inclusion of the Novacrete Admixture at levels equal to 5% of the cement- volume
in the product resulted in increased performance characteristics.

To expedite the company's  research and  development of the Novacrete  Admixture
for the purpose of more  accurately  accessing the  application of the Novacrete
Admixture on various  types of concrete mix designs the company has  constructed
an internal laboratory and on August 24, 1998 it has hired a cement chemist with
over 25 years of research and development  experience with cementitious products
to conduct a comprehensive study on the potential applications for the Novacrete
Admixture with special emphasis on usage in concrete.

Thus, the Company evolved from a dormant stage from its date of incorporation by
acquiring the technology that is now known as the Novacrete Admixture from

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the inventor, Dr.O. A. Battista on August 15, 1997. From August 15, 1995 through
November,  1997 the company had undergone a series of management  changes and in
this two and a half year  period,  it  generated no revenues and had incurred an
accumulated  deficit  of  approximately  $3,000,000  and was  still in the early
development stage.

On November 17, 1997, the company made a major change in its business plan which
has  resulted  in  significant  advancements  in all  aspects  of the  company's
operations.  With the implementation of a 60 Day Business  Development Plan that
was announced in December,  1997, the company's new management has increased the
number and caliber of its board of directors  and senior  management,  installed
industrial level manufacturing and packaging equipment and warehousing equipment
for raw materials and finished goods,  refurbished its executive  offices at its
operating plant,  constructed an internal testing  laboratory,  opened its first
U.S.  sales  office New Jersey and  closed on a working  capital  financing  for
$550,000.  The  result  of  this  business  plan  has  allowed  the  company  to
manufacture and package its products,  execute a sales and marketing  program in
Canada and the East Coast of the United States and most importantly, allowed the
company to book its first sale of Novacrete Repair Products.  In April, 1998 the
company sold its first order of pre-  packaged  Novacrete  Repair  Products to a
distributor  of  construction  products in Canada and in May,  1998, it sold its
first truckload of product to a construction  product  distributor in the United
States,  however the order was not  shipped  until June,  1998.  A truckload  of
product has a weight capacity of 44,000 lbs. and can vary in dollar amount based
on the type of Novacrete  product that has been shipped and whether the shipment
is to a wholesale distributor, standard distributor (sell directly to end-users)
or an end-user.

     B. Financial Information About Industry Segments

Since  August,  1995 until April,  1998 the company has been in the  development
stage and has generated no revenue other than for $140,741 that was generated in
the fiscal year ending May 31, 1996,  as a licensing  fee that paid as part of a
transaction between the company and a manufacturer of commentates  products that
the company attempted to acquire.  This transaction never  materialized and both
parties mutually terminated the negotiations.

On account of the company's only being operational since March, 1998 and that it
has only a limited  product line as of the filing of this Form 10-K, it does not
presently account for its business operations in separate industry segments. The
company  operates on plant in  Mississauga,  Ontario.  The assets,  revenues and
operating  expenses  are  all  part  of the  company's  sole  operation  and are
dedicated  to one business  segment -- the  manufacturing  and  marketing of the
Novacrete Admixture and Novacrete Repair Products.

On account of its current state of operations and its operating activity for the
past three fiscal years, the company believes that its financial  information is
adequately presented in its audited financial statements and is cross-referenced
herein to the company's  Consolidated Balance sheet and Consolidated  Statements
of Operations appearing on pages F-3 and F-4, respectively.

                                  RISK FACTORS

Although the company has recorded sales for the 1998 fiscal year, it technically
is still in the  development-stage  and any  evaluation  of the  Company and its
business  should only be made after having given  careful  consideration  to the
following risk factors,  in addition to those  appearing  elsewhere in this Form
10-K.

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<PAGE>


     Limited  Operating  History.  From its  inception  until March,  1998,  the
company has had essentially no operating history. From August, 1995, the company
has been engaged principally in research and development  activities relating to
the development of a  mineral-based  additive to be used for enhancing the basic
properties  of  cementitious  products  (cements,  mortars  and  concrete).  The
company's  efforts to emerge from the development stage were further delayed due
to the  management  transitions  in 1996 and 1997.  Accordingly,  the  company's
operations  are  subject to the risks  inherent  in the  establishment  of a new
business  enterprise;  specifically,  the  complications,  delays and  resulting
expenses  often   encountered  in  the  marketing  of  a  new  technology,   the
uncertainties  of  developing  and  marketing  new or related  products  and the
difficulties in recruiting and retaining qualified personnel.  (See Management's
Discussion and Analysis of Financial Condition and Results of Operations).

     Lack of Profitability. The company has recorded net losses for each year of
operation (1994-1998) and has incurred an accumulated deficit of $3,932,684.  In
the year ending May 31,  1998,  the company  had a net loss from  operations  of
$1,112,594.

     Uncertain  Market  Acceptance.  Since  1994,  the  company  has focused its
product  development  efforts on the  development  of a  mineral-based  additive
mixture  that is  blended  into  cementitious  products  to  improve  the  basic
properties  of  these  products.  The  company  is also a line  of  cementitious
concrete  repair  products  that will be marketed  and sold under the brand name
Novacrete. Although there is an existing market for the company's products there
is a risk that the end-users of the company's  products may not  appreciate  the
benefits or recognize the  potential  applications  of the  company's  products.
Market acceptance of the company's products will depend, in large part, upon the
ability  of  the  company  to  demonstrate  to  the  industry  the   performance
characteristics and cost effectiveness of the products.

     Limited  Product Line.  The  company's  revenues will depend on its limited
product line.  Although the company plans to expand its line of products in late
1998 its current product line is limited.

     Limited Marketing Organization. Commercialization of the company's products
will be  substantially  dependent  on the  company's  ability  to develop a full
marketing and sales  organization  and enter into  distribution  agreements with
established  distributors  of cementitious  products.  There can be no assurance
that the company can  develop or acquire a marketing  organization,  however the
company has hired three  marketing  personnel and has entered into  distribution
arrangements with two distributors

     Need for  Additional  Capital.  The company may  require  additional  funds
throughout  the year for  working  capital.  Funds  for  these  purposes  may be
obtained  from a number of sources,  including,  revenues  from sales,  sales of
equity and debt  instruments,  bank financing and joint ventures.  However,  the
company  currently has no arrangements  for such financing,  and there can be no
assurance that any additional financing can be obtained or, if obtained, that it
will be of a sufficient  quantity to meet the  company's  immediate  needs or on
reasonable terms. (See Working Capital)

     Uncertainty  of  Protection  Offered  by  Patents  and Trade  Secrets.  The
company's  technology is not protected by patents. In addition,  there can be no
assurance  that the  company's  technology  or products  will not  infringe on a
patent that may be owned by another person.  To the extent the company currently
relies on  unpatented  proprietary  technology,  processes  and know-how and the
protection  of such  property  by  confidentiality  agreements,  there can be no
assurance  that others may not  independently  develop  similar  technology  and
know-how or that the confidentiality will not be breached by an unrelated

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<PAGE>

party.

     The  company   relies  upon  trade  secret   protection  for  much  of  its
confidential and proprietary  technology and know how. There can be no assurance
that  competitors  will  not  independently  develop  substantially   equivalent
proprietary information and techniques or otherwise gain access to the company's
trade secrets.  Even if there is an  infringement  of any of the company's trade
secrets,  the cost of enforcing  its rights in an  infringement  action could be
substantial  and would  divert  funds and  resources  that  would  otherwise  be
available for other aspects of the Company's operations.

     C. Description of Business

     1. Business

The company's  current plan of operation is to two-fold.  First, the company has
taken  affirmative steps this past year, and principally from November 17, 1998,
to develop an operating  facility and  management  organization  to  effectively
oversee the development  and marketing of its Novacrete  Admixture and Novacrete
Repair  Products.  In  particular,  the company has hired the  services of three
outside  testing  laboratories  to conduct  various  ASTM tests on  cement-based
products using the Novacrete Admixture. This testing work is an integral part of
the  company's  research  and  development  program  on  uses  of the  Novacrete
Admixture in various  types of products and under  different  field  conditions.
Since the company's has received  favorable test results on its Novacrete Repair
Products that are completed and on tests done in outside  laboratories  in which
the Novacrete  Admixture has increased the  performance  characteristics  of the
tested  product  sample,  it believes the Novacrete  Admixture  could be used in
various concrete mix designs and marketed to manufacturers of: cement, ready-mix
concrete, block, pavers and pre-cast products. Use of the Novacrete Admixture in
these  applications  would  dramatically  expand  the  potential  market for the
Novacrete  Admixture.  However,  although  the  preliminary  test results on the
Novacrete   Admixture  and  Novacrete   Repair  Products  have  been  favorable,
substantial   research  and  development   must  be  completed  before  a  final
determination  can be made about the widespread use of the Novacrete  Admixture.
In addition, and notwithstanding the final results of the company's research and
development  program,  all  prospective  uses of the  Novacrete  Admixture  in a
previously untested product will require additional laboratory testing to ensure
that the  components  in the new  product  test  sample  do not have an  adverse
reaction when blended with the Novacrete  Admixture.  Because of the substantial
liability  that  will  ensure  if a  product  fails  after it has been used on a
construction  project the company will be required to conduct  preliminary tests
of all product samples using the Novacrete Admixture pursuant to ASTM standards.

Second,  the company will seek to acquire  products and  companies to expand the
company's array of products. Since November, 1997, the company has reviewed four
potential  acquisition  possibilities  and has  terminated  discussions on three
acquisition  prospects and believes it will close one acquisition  after May 31,
1998. In July,  1998,  the company's  operating  subsidiary,  Novacrete  Canada,
entered into a definitive agreement to purchase all the outstanding common stock
of a manufacturerer of polypropylene  fibres,  ARM PRO, Inc. ARM PRO has been in
the business of  manufacturing  the FIBERFORCE  line of fibres for ten years and
sells it fibres in the  United  States  and  Canada.  Polypropylene  fibres  are
blended into cement-based products to provide secondary reinforcement and reduce
cracking  during the plastic  (hardening)  stage of the  product.  Polypropylene
fibres can be classified as a cement admixture,  and will be a natural extension
to the company's  existing  product line.  The company  anticipates  closing the
transaction on September 15, 1998. (See Subsequent Events)


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To effect its two-fold  business plan the company sold a 10% $550,000  debenture
in February to raise the initial working capital  required to make the following
improvements  to its  Mississauga,  Ontario  operating  plant.  (See  Management
Discussion and Analysis Financial Condition and Results of Operation)

In February,  1997, the company purchased and installed a double-ribbon blending
machine that has the capacity to blend 6,000 lbs. of Novacrete  Repair Products,
and because of its low  density,  3,000 lbs. of Novacrete  Admixture  per batch.
Each batch requires  approximately one hour. To package its products the company
installed a compressed  air bagging system that can bag  approximately  300 bags
weighing  55  lbs.each  on an  hourly  basis  and  built in an  industrial  dust
collection system that maintains a quality and safe working  environment for all
production  personnel.  To facilitate an efficient  manufacturing  process a new
inventory  racking system was installed for raw materials and finished  product.
These  improvements  will give the  company  a single  shift  weekly  production
capacity of 210,000  lbs.of  Novacrete  Repair  Product  per week,  which is the
equivalent of 3,818 bags (55lbs. each). Annually,  this level of production will
produce 198,536 bags of Novacrete  Repair Products which range in price from $11
to $36. On an annual  basis,  the company  believes it has adequate  capacity to
meet foreseeable demands over the 1999 fiscal year.

In addition to the development of its production facility, since February, 1998,
the company made approximately $20,000 of leasehold  improvements to its offices
that  are  part of its  manufacturing  facility  in  Mississauga,  Ontario  (See
Properties).  This  investment  has  equipped the company with a new offices and
conference rooms and new computer  hardware and software  technology.  While the
offices  have  provided  the  company  with a more  modern  environment  that is
conducible  to the type of business  that the company  intends to conduct it was
principally  designed  to allow  the  company  to  expand  its  office  space to
accommodate  additional  personnel  that  will  join the  company  as it  closes
anticipated acquisitions.

To facilitate its quality control and quality assurance  programs and to conduct
its  research  and  development  the  company  built a 400 square  foot  testing
laboratory at its  Mississauga,  Ontario  plant.  To enhance sales in the United
States the  company  opened a sales  office in Cedar  Grove,  New  Jersey.  (See
Properties). This sales office is located in the corporate offices of one of the
testing laboratories that the company employed.

As part of its plan of  operation  which began in  February,  1998,  the company
hired:  (I) a  civil  engineer  that  has  over  20  years  of  experience  with
construction products and prior to joining the company was director of sales and
marketing for a leading Canadian  manufacturer of  polypropylene  fibres and has
substantial  knowledge  of fibre  market in Canada  and the U.S.,  (ii) a cement
technologist who was principally responsible for all new product development and
secondarily  employed to assist  with sales of the  Novacrete  Repair  Products,
(iii)  a new  plant  supervisor  having  fifteen  years  of  experience  in  the
manufacturing   of   commentates   products  and  with  shipping  and  receiving
responsibilities,  and (iv) a salesperson  based in Cedar Grove, New Jersey that
has  thirty  years of  experience  in the  construction  products  filed and was
formerly employed by a company that marketed  polypropylene fibres in the United
States, and (v) in August,  1998, the company hired a cement chemist having over
twenty-five  years of experience  in research and  development  of  cementitious
products and monitoring quality control programs.  (See Directors and Officer of
the Registrant)

Upon the closing of the ARM PRO acquisition which is scheduled for September 15,
1998,  the company  will expand its  personnel  by adding one  additional  sales
person and two plant  employees.  To better  position  the company to  maximized
sales of ARM PRO fibres (post-closing) and the Novacrete line of products, the

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company intends to recruit at least one additional  salesperson with ten or more
years of experience in selling fibres and concrete-related products and who will
be located in the southeastern portion of the United States and four agents that
will market the company's products on a commission basis.

Since February,  1998, the company has undertaken a comprehensive  evaluation of
its  Novacrete  Admixture  that has  involved  the  expertise  of its  technical
personnel and three independent testing  laboratories.  From February to May 31,
1998, the company completed all the internal laboratory tests and field tests to
market its finished products:  Novacrete MP, Novacrete MAR., Novacrete Floorcap.
The company is currently using its Novacrete Admixture in these products and has
manufactured several thousand pounds for sale to end-users.  As of May 31, 1998,
the company has also developed trial  formulations of its products Novacrete FC,
Novacrete GEL, Novacrete Duratop and Novacrete Flexcoat,  however these products
are substantially  completed but are still subject to independent laboratory and
field tests before they can be marketed. (See Working Capital)

The Novacrete  Admixture is manufactured at the company's  operating facility in
Mississauga,  Ontario under the guidance of trained  professional cement chemist
professionals  to  maintain  high  standards  of quality  control  and to ensure
confidentiality over the proprietary  formulae.  Immediately after the Novacrete
Admixture  is blended it is stored in large  containers  to be used in Novacrete
Repair  Products or for bulk  shipments to end-users and certain  quantities are
packaged in 22lb. bags.

In addition to the Novacrete  Admixture,  the company  manufactures and packages
into 55lb.  bags the Novacrete  Repair  Products all of which contain  different
percentages  of the  Novacrete  Admixture.  (See  Product  section  below).  The
Novacrete   Repair   Products  are  designed  to  provide   lasting  repair  and
rehabilitation of various types of deteriorating  concrete. The Novacrete Repair
Products are  generally  classified as  state-of-the  art products on account of
their being single component  products (just add water).  Users of the Novacrete
Repair  Products  are  required  to  only  add  water  pursuant  to the  written
instructions  printed  on the face of the bag for each of the  various  types of
Novacrete  Repair Products.  As a single  component  product the end-user is not
required  to  purchase  any other  materials  to use the  product and needs only
access to potable water. This single step process eliminates costs and labor and
substantially  reduces  the  possibility  of  ruining  a  product  by  over-  or
under-applying additional materials.

The company  intends to distribute  the Novacrete  Repair  Products  principally
through distributors of construction  products and will assist in establishing a
market for the products by marketing the products to engineers,  architects  and
contractors.  In  addition,  wherever  a  distributor  is not  established  in a
territory the company will seek to sell its Novacrete  Repair Products direct to
the end-user.  However,  the company  intends to market its Novacrete  Admixture
directly  to  ready-mix  concrete  producers,   brick,   cinderblock  and  paver
manufacturers  and to end-user such as architects,  engineers,  contractors  and
construction  managers who will either use the Novacrete  Admixture,  or specify
its use in a construction project.

     2. Subsequent Events

In July, 1998, Novacrete Canada signed a definitive agreement to acquire all the
outstanding  common  stock of ARM PRO,  Inc.  ARM PRO is located  in  Teeswater,
Ontario  and  is  affiliated  with  Teeswater  Ready-Mix  Corporation.  ARM  PRO
manufacturers  a line of  polypropylene  fibres  (FIBERFORCE)  that  are used in
cement-based  products and are currently  being used in the company's  Novacrete
MAR. product, which is a fibre-reinforced multi-purpose concrete repair product.
The closing of this  transaction  has been scheduled for September 15, 1998. The
purchase price is $891,000 (CAN) and will be paid for

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from the  proceeds  received  by the  company  from  its  sale of a 9%  $800,000
Debenture  that matures on September 4, 2000.  To complete  this  financing  the
company was  required to issue to the  investor a warrant to purchase  1,500,000
warrants  having an  exercise  price of $.45 per share  and an  exercise  period
commencing  upon issuance and  terminating on September 4, 2000. As part of this
financing which was with an entity that purchased $500,000 of the Debenture that
was sold by the  company in  February,  1998,  the holder  agreed to convert the
$500,000  principal  amount of that Debenture which matures on October 31, 1998,
into the  company's  common  stock at a rate equal to the  average of the eleven
lowest closing trading prices during the month of October, 1998.

Upon the closing of the ARM PRO  acquisition the company will relocate ARM PRO's
production and packaging equipment to its Mississauga, Ontario, facility.

     3. Product Description - Novacrete Admixture

The  admixture  and concrete  repair  product  businesses  are  well-established
throughout  the world.  There are various  types of admixture  products that are
used in  construction  products and the  applications  for these  admixtures are
extensive.  The Novacrete  Admixture is a non-metallic,  powder-based  admixture
that  consists of various raw materials  that when  combined  together and mixed
with cement and water provides a chemical reaction which gives the final product
increased compressive and flexural strength, reduced shrinkage,  greater density
and therefore better resistance to water and deicing salt  penetration,  greater
flow and workability and improves the bonding  characteristics  and setting time
for the product to fully-cure.

The Novacrete  Admixture  has the physical  characteristics  of a  greyish-white
powder.  Admixtures can be in powder form or liquid and can be used for multiple
or limited  purposes  such as  slowing  or  increasing  the  setting  time for a
product.  Because of the reactive  effect of the raw  materials in the Novacrete
Admixture, the Novacrete Admixture should only be incorporated into cement-based
products where the other  materials in the product are know and generally,  only
after a sample  test has been  conducted  to  determine  the  appropriate  level
(dosage rate) of Novacrete  Admixture  that should be used in the final product.
This approach  substantially reduces the risk of improperly mixing the Novacrete
Admixture with chemically adverse substances that could cause product failure.

The Novacrete Admixture is manufactured at the Company's  wholly-owned operating
subsidiary,  Novacrete  Canada,  and is directly marketed by the company's sales
personnel in 22lb.  bags or in bulk  quantities to  end-users,  which range from
manufacturers  of  cementitious  products such as ready-mix  concrete,  pre-cast
concrete,  brick,  paver,  cinder block and other  manufacturers of cement-based
pre-packaged  products.  The company also blends  another  admixture,  synthetic
polypropylene  fibres,  into its  Novacrete  MPR product.  Polypropylene  fibres
provide   secondary-reinforcement  to  cement-based  products  and  help  reduce
internal cracking (map cracking) of a product that derives from the heat that is
created within a cementitious product during the hydration process.

Upon the  completion  of its research and  development  program on the Novacrete
Admixture,  and assuming the test  results  support the use of the  admixture in
industry  applications that require the use of high-performance  concrete (HPC),
the company will seek to implement a marketing  strategy to penetrate the market
for HPC. HPC can be defined as concrete that has high  compressive  and flexural
strengths and high resistance to chloride and water  penetration.  Use of HPC is
increasing as federal and state agencies demand greater product life

                                        7

<PAGE>


and ultimate  product strength for high-end uses such as roads,  bridges,  dams,
ports and other concrete  applications that have exceptionally high load bearing
requirements like building foundations, parking garages and bridge decks.

Following is a list of the  Novacrete  products by category and if a product was
not available for sale on May 31, 1998, the date appearing in parenthesis is the
internal date set by the company for the initial release of the product.

     I. PRODUCTS

ADMIXTURES

Novacrete Adment 77-A (Novacrete Admixture formulation)

STRUCTURAL MORTARS AND GELS

Novacrete MP - multi-purpose concrete and masonry repair mortar

Novacrete MAR. - synthetic fibre-reinforced repair mortar

Novacrete FC  -  fast-setting repair mortar (July 15,1998)

Novacrete GEL -  lightweight  gel repair for overhead  repairs and horizontal
                 applications (July 15, 1998)

FLOORING SYSTEMS

Novacrete Duratop - heavy-duty  floor  topping to provide  abrasion and chemical
                    resistance  in  aggressive  service  environments  (July 15,
                    1998)

Novacrete Floorcap -  self-leveling flooring product to ease installation and
                      reduce labor costs

Novacrete  Flexcoat - flexible coating for the protection for
                      new  concrete  and  as an  aesthetic  coating  for
                      restored concrete (July 15, 1998)

     II. Product Status

For those  products  that are not complete as of May 31,  1998,  the company has
developed trial formulas for each product that need to be  independently  tested
and  subject  to field  tests to ensure  that the  product  meets  the  designed
specifications  for the  product  and can be  used in a  commercial  environment
without a foreseeable risk of failure. Although the company internally tests all
its products  before they are approved for sale and will continue to monitor the
manufacturing  of its products  through  quality  control and quality  assurance
programs,   all  products   undergo  test  procedures  by  independent   testing
laboratories  to validate the company's tests results and for more exacting ASTM
testing procedures that are not currently available due to the company's lack of
equipment.  The tests conducted for each product comport with ASTM standards and
are monitored each 1-3-7-28 day period in accordance with industry practice.

Although the company has stated in past filings with the Commission that certain
products had  undergone  testing  procedures,  with the hiring of new  technical
personnel  in  February  and March the  company  has  undertaken  a new  product
development  program which has resulted in  additional  testing of all Novacrete
products  and certain  technical  modifications  to the  Novacrete  Admixture to
enhance its performance capabilities. To complete the testing

                                        8

<PAGE>


for the Novacrete Repair Products that are not completed as of May 31, 1998, the
company is  allocating  approximately  $2,500 to $5,000 per  product for outside
testing  services.  The company  does not  anticipate  there being any  material
modifications to the formulae.  Additionnally the company anticipates  incurring
costs to test the Novacrete Admixture in various design mixes that are submitted
to the  company for  special  applications.  In  instances  where the  Novacrete
Admixture  is  believed  to  enhance  the  performance   characteristics   of  a
cement-based  product the company will retain an independent  testing laboratory
to test a sample of the mix design that is submitted by the end-user  (engineer,
contractor,  architect,  property  owner) to  determine  the  precise  amount of
Novacrete  Admixture that should be blended into the mix design (dosage rate) to
achieve the intended result.

Since March,  1998,  the company  engaged the  services of a U.S.-based  testing
laboratory to conduct tests using various dosage rates of Novacrete Admixture in
a cement-based product and anticipates having tests conducted on a monthly basis
at an average cost of $2,500 per month.  Although the company incurs the cost to
have the mix  designs  tested it intends to recoup  these costs over time as the
Novacrete Admixture begins to be used in projects, although no guarantees can be
made that the Novacrete Admixture will be sold to prospective customers.

     III. Raw Materials

An important  aspect of the Company's  business is having an adequate  supply of
raw materials to produce the Novacrete  Additive,  which is a key  ingredient in
all the Novacrete Repair Products.  The raw materials used in manufacturing  the
Novacrete  Admixture  and the  Novacrete  Repair  Products are  available in the
United  States  and  Canada,  and there are no known  substitutes  for these raw
materials.  The Company  currently  purchases the most of its raw materials from
five principal  suppliers located in Canada and has access to numerous suppliers
in the United States.  The raw materials are purchased on an as needed basis and
at market prices at the time of purchase.  The Company does not anticipate  that
the prices and supplies of the raw materials will fluctuate  substantially since
the majority of the raw materials are commodity  items such as sands and cement.
The company  currently  owns a substantial  supply of the main  component of its
Novacrete  Admixture  that its warehouses in its  Mississauga  facility and in a
public commercial  warehouse.  Assuming the company uses the entire inventory of
its  primary  raw  material in its  Novacrete  Repair  Products it will have the
capacity to produce over 20,000,000 lbs. of product.

     IV. Intellectual Property Rights

The Company does not have patents on any of its technology or its products.  The
Company  received a  certificate  of  registration  for the use of the trademark
Novacrete from the Canadian  Intellectual  Property Office on June 15, 1997. The
Certificate  remains  in effect  until  June 5, 2012 and can be  renewed  by the
company.  On March 3, 1998,  the company  received a  Certificate  of  trademark
Registration No. 2,140,062 to use the trademark  Novacrete in the United States.
The  term of the U.S.  trademark  registration  is for ten  years.  However,  an
affidavit  alleging use of the trademark in commerce must be filed in the Patent
and Trademark  office between the fifth and sixth year following the granting of
the  registration  in  order  to keep the  registration  in  force  for the full
ten-year term. The  registration  may then be renewed for an additional ten year
terms provided that the mark is still being used in commerce at the time renewal
is sought.

The  Company  has not  filed  an  application  for a patent  on its  proprietary
technology.  The Company believes that the trademark of its brand name Novacrete
will be more useful in the commercialization of its products. The

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<PAGE>


core  technology  that is used in each of the  company's  products is not easily
replicated  and if patented  will  ultimately  become  public  information.  The
company has developed  internal controls to protect the  confidentiality  of its
technology  and does not believe that the lack of legal patent  protection  will
impair its  ability  to  effectively  compete  with  other  competitors  of like
products  or  cause  the  company  to  incur  unnecessary  risk  of  loss of the
technology.

Since the company  owns the  trademark,  Novacrete,  for fourteen and ten years,
respectively,  in Canada and the the United States,  with each country  allowing
for additional  extensions of time, the company believes that it will have ample
time to establish brand recognition of the Novacrete name and product line. Even
if the company had patent  portection over its technology,  it still assumes the
risk that a  competitor  may  misappropriate  the  technology  and that its only
recourse  would  be to  commence  costly  and  time  consuming  litigation.  The
existence or absence of a patent poses no commercial  disadvantage  to marketing
the Novacrete products.

     V. Seasonality

As part of the  construction  business,  the  company  is  currently  subject to
seasonal cycles which results in a major slow down in its operations  during the
months of  November  through  February.  March  begins the  increase in business
activity  which  continues  through  November,  with the peak sales months being
April through September.  This seasonal cycle is attributable to the slowdown in
outdoor  construction  activity  in Canada and the  northeastern  portion of the
United States  during the winter  months.  On account of the  company's  current
operating  status it will be  subject  to the  seasonal  effects  of the  winter
months,  however the company  has  already  begun to recruit  agents to sell its
products  in the  southeastern  portion  of the U.S.  and will  engage in a very
active  recruiting  program  to  enroll  agents  in this  territory  to sell the
Novacrete  Admixture  and ARM PRO fibre  product upon the closing of the ARM PRO
transaction  later  this  year.  The  company's  plan is to have  at  least  two
full-time  experienced  salespersons,   four  agents  and  at  least  two  major
distributors by the end of November, 1998 to help sell the company's products in
this southeastern U.S. territory.

     VI. Working Capital Requirements

Since the company's  principal market for the foreseeable future will consist of
the seven  southern  provinces of Canada and the East Coast of the United States
it  will  experience  cash  flow  fluctuations  that  will  track  the  seasonal
fluctuations in the company's  business due to the construction  slowdown in the
winter months.  From March to September the company will  experience its highest
level of working  capital  requirements to sustain higher levels of inventory to
meet the anticipated demand for finished products during these months.  With the
slowdown of  construction  in the winter months the company  anticipates it will
generally  require less than  one-half of the amount of working  capital,  since
sales will likely  decrease to one-half to one-third of average monthly sales in
the  peak  months.  For the  period  ending  May 31,  1998 the  company  did not
experience a fluctuation in its working capital  requirements  since it was just
emerging from the development stage and did not have a major production  demand.
However,  for the fiscal  year  ending May 31,  1999,  the  company  will likely
experience a  fluctuation  in its working  capital  requirements  to finance its
inventory.  To offset its  working  capital  demands in 1999,  the  company  can
leverage off of the 600,000 lbs. of the most  significant  raw material  that it
uses in its Novacrete  Admixture,  which in turn is used in the Novacrete Repair
Products.  This raw material  was paid for in 1997.  At the close of this fiscal
year end the company has $45,418 of finished good inventory,  which has a market
value of approximately $120,000

                                       10

<PAGE>


assuming  all the  inventory is sold  through  distributors  versus to end-users
which commands a higher price.

In the  fiscal  year  1998 the net cash  used in the  company's  operations  was
$742,237. The amount was needed to fund the company's expansion of its operating
facility and for operating expenses for: rent, payroll, new operating equipment,
research and development,  professional  fees and trade debts. On account of the
company having a sufficient  supply of its most needed raw material,  other than
for  ordinary  packaging  supplies,  approximately  $180,000 of the $742,237 was
incurred on a consistent monthly basis up to February,  1998. Since March, 1998,
the company  purchased  $105,000 of production  equipment and making  $17,000 of
leasehold  improvements to the adjacent  corporate  offices.  In addition,  from
February,  1998 through May 31, 1998, the company hired 6 new people to fill two
management level positions,  one administrative  position,  and three persons to
manufacture  the  company's  products.  With the  hiring  of the  aforementioned
personnel and the increase in operating activity,  since March, 1998 the company
has increased its monthly operating budget to $75,000.

To cover its  working  capital  requirements  in 1998,  the  company  sold a 10%
Debenture  in February of $550,000  and a 90 day note in May,  1998 for $40,000.
From April,  1998,  the company  sold $9,000 of product  before the year end and
received  a purchase  order just prior to the close of the year end for  another
$11,000 of product  that was  shipped in June.  Had the company not been able to
sell the debenture to generate  working  capital it would have had a substantial
negative cash flow and would likely have had to formally reorganize or cease its
operations.

On September 4, 1998 the company sold a 9% $800,000 Debenture that matures on on
September 4, 2000 and a warrant to purchase  1,500,000 shares of common stock at
$.45 per share for a period  expiring on September 4, 2000.  From these proceeds
the  company  intends  to use  $600,000  to  purchase  ARM PRO and  reserve  the
remaining  $200,000 for working  capital.  Upon closing the ARM PRO transaction,
pursuant  to the  definitive  purchase  agreement,  ARM PRO is  required to have
approximately  $175,000  of cash,  $100,000 in account  receivable,  $100,000 in
inventory and total liabilities not to exceed $50,000.

Although the company's  general credit policy will be to invoice  customers on a
thirty day payment basis, to encourage customers to take larger volume orders it
may in limited  circumstances  allow for payment of an invoice in sixty days. In
addition, although invoices are stated as being due in thirty days, it is fairly
common practice in the construction  products industry for contractor  customers
to pay outstanding  accounts payable over a sixth day period. This delay results
from the contractor  having to submit invoices for work completed which includes
the cost of  materials  used on the  project.  Although the company will be very
aggressive in allowing extending payment terms to customers where it will result
in  additional  sales of the  company's  products,  extended  payment terms will
generally be discouraged.

     VII. Customer Dependence

On account of the company  having just started to sell its  products  during the
later part of this fiscal period it cannot be deemed as dependent  upon a single
customer,  although  the company did only sell  product to one  customer in this
period.  In the future the company will not be  dependent on one customer  since
its marketing strategy is to diversify its sales through major distributors that
are located in various  geographical areas and to a large number of construction
professionals, such as engineers, architects, contractors, construction managers
and  end-users  all of whom will likely be  involved  in  separate  construction
projects.  Although it is anticipated that distributors of construction products
will represent the majority of sales of

                                       11

<PAGE>



Novacrete Finished Mortar Products, the company anticipates it will have four to
five distributors  stocking  Novacrete  products in Canada and at least the same
number on the East Coast of the United  States.  Although  the company  does not
have any  historical  information  relating to sales of its products it does not
anticipate  that any customer will account for ten percent or more of its annual
sales.

     VIII. No Backlog Orders

The company does not have any backlog  orders,  but did complete the sale of one
truckload order in June in which the purchase order was submitted to the company
just prior to the year end. This order was shipped in early June.

     IX. Government Contracts

The company  does not have any material  contracts  with the  Government  or any
government  agency and  therefore  does not have any  exposure to these types of
agreement.

     X. Competition

The  construction  products  industry  is  a  mature,  worldwide  industry  with
competitors  ranging  from  multi-national  companies  to local  single  product
manufacturers and marketers.  The concrete repair products and admixture sectors
are two major sectors within the construction products industry with each sector
being very  competitive.  The competition in these sectors is generally based on
price, service and the performance characteristics of the product being sold. As
a new  entrant to these,  two sectors  the  company  has no  empirical  basis to
categorize  itself as  competitive  other than to rely on the  independent  test
results relating to the performance  characteristics  of the company's  products
and  price  both of  which  the  company  believes  very  competitive  based  on
comparisons to like products.  In the concrete repair sector where the Novacrete
Finished  Mortar  products  will  compete,  the company will seek to execute its
strategy to have its products  distributed by major distributors of pre-packaged
products while the company's  sales  personnel will focus in creating the demand
for the products by marketing them to the specification community which consists
of  engineers,   architects  and  contractors.   The  Novacrete   products  have
performance  characteristics that place them in the highest category of products
that are  intended for high-end  uses such as road  repairs,  bridge and parking
deck  repairs,  sidewalks,  industrial  and  commercials  floors.  As such these
products will be marketed to professional  contractors for use in these types of
projects. The market for these products is complex and consists of various sized
competitors.  Despite these considerations the company will seek to exploit what
it  believes  to  be  three   competitive   advantages.   First,  the  company's
pre-packaged products are classified as state-of-the-art in that they are single
component,  which means you only need to add water. The ease of use will aid the
installer  dramatically  when  using  Novacrete  products  and cut down on labor
costs.  Secondly,  the company does not have an excessive  overhead and will use
this cost flexibility to be very  competitive in pricing.  After having reviewed
the market for  pre-packaged  concrete repair products  similar to the company's
line of Novacrete  Repair  Products the company has concluded that the Novacrete
line is priced very competitively and can withstand further price competition.

Third, the company will continue to provide on-site technical expertise to users
of Novacrete  products.  The company believes that providing  on-site  technical
advisory services to customers will reinforce  existing  customer  relationships
and stimulate use of the  company's  products.  Although  other  companies  also
provide technical services to their customers, the company

                                       12

<PAGE>


plans to be more pro-active in this area than its competition.

     XI. Research and Development

In each of the past  three  fiscal  years  the  company  has  incurred  expenses
relating  to the  research  and  development  of  its  Novacrete  Admixture  and
Novacrete  Finished Mortar Products.  In fiscal year 1998, and principally after
January, 1998 the company spent approximately $35,000 on fees payable to outside
independent  testing  laboratories  that were  engaged to conduct  various  test
procedures  to improve the  Novacrete  MP and  Novacrete  MAR.  products and for
original tests on the Novacrete FC and Novacrete Floorcap products. In addition,
the company incurred  approximately  $35,000 in salaries paid to two individuals
that had dedicated  substantial time to new product development.  In fiscal year
1997 the company spent approximately  $20,000 on fees payable to outside testing
laboratories to advance testing of the Novacrete MP and Novacrete MAR. products.
Other than for a brief period in 1997 in which the company employed the services
of a cement technology  consultant for approximately  three months,  the company
did not have technical  personnel on staff from January,  1997 through February,
1998 to conduct  research and development on new products.  In 1996, the company
spent less than  $20,000 on fees  payable to  outside  testing  laboratories  to
advance  testing of the  Novacrete  MP and an old  formulation  for a  Novacrete
Fast-Set  product that the company has since  abandoned  and replaced with a new
formulation that will be marketed under the name Novacrete FC.

     XII. Environmental Compliance

The company does not  manufacture  products or use raw materials in its products
that are deemed to be subject to rules or regulations  relating to the discharge
of certain materials into the environment.  Although the company has installed a
compressed-air  dust control system in its facility to maintain a higher quality
of air in its operating plant this system is not mandatory.  The system cost the
company  approximately  $20,000 and operates  during the  processing  of certain
products  that contain raw  materials  that have a very low density and have the
physical characteristics of dust-like particles.

With all shipment of product the company issues a material safety and data sheet
(MSDS) which describes the product and its components and precautionary measures
when using the product. Since the company's products are environmentally safe it
expects to expend a nominal  percentage of its operating budget on environmental
compliance for the next fiscal year and for the foreseeable  future,  unless new
regulations are adopted by the governments of Canada or the United States.

     XIII. Number of Employees

As of May 31, 1998, the company, on a consolidated basis ,employed ten full-time
employees.  Of the ten  employees,  two were located in the company's  principal
executive  offices in New York City,  one was  located  at the  company's  Cedar
Grove, New Jersey sales office and seven were located at the company's operating
subsidiary,  Novacrete  Canada.  Of the  ten  employees:  five  persons  were in
management  positions,  three  persons were in plant  operations  and two person
occupied administrative assistant positions.

                                    13

<PAGE>


     D. Financial  Information About Foreign and Domestic  Operations and Export
Sales.

Although the company manufactured its products through a wholly-owned  operating
subsidiary  located in Canada it does not believe that it will be subject to any
material  risks  attendant  with it  being a  foreign  operation.  The  Canadian
government  is stable  and  democratic  and the  company  does not  foresee  any
changing  conditions  that would  adversely  impact the company.  (See Section B
Financial Information about Industry Segments). To the contrary, with the recent
reduction of the Canadian  dollars to the U.S. dollar the company has benefitted
by preferential exchange rates and lower cost of operation.

Item 2. Properties

In November, 1997 the company's principal executive offices were relocated to 67
Wall  Street,  Suite 2411,  New York,  New York 10005,  telephone  212-825-9292,
pursuant to a month-to-month  subletting  agreement with the laws firm of Dowe &
Dowe which the company's current president is a partner. There was no charge for
the use of this office during the period  November,  1997 through  March,  1998.
When the began occupying an additional office in the Dowe & Dowe office suite in
March,  1998 it was charged a monthly rent of $1,500 for use of the office space
and conference room facilities. The rent charge is a pass-through charge by Dowe
& Dowe which  sublets the space to the company for the same costs it pays to its
landlord.

In  April,  1997,  Novacrete  Canada  entered  into  a  five  year  lease  for a
manufacturing  and  office  facility  located  at  2525  Tedlo  Street,  Unit B,
Mississauga, Ontario, Canada L5A 4A5, telephone (905)-566-0716. This facility is
subject to a five year lease commencing on May 1, 1997 and expiring on April 30,
2002. The annual lease payments are $62,500 (CAN).  The company has the right to
sublease  the  facility  in the event its  operating  needs  expands  beyond the
current facilities capacity.

In June,  1998 the  company  entered  into a lease  agreement  to lease  offices
located at 98 Sand Park Road,  Cedar Grove,  New Jersey,  March,  telephone 973-
xix-June, for a monthly sum of $500. This lease is on a month-to-month basis.

Item 3.  Legal Matters

Legal Proceedings

On August 26,  1997,  the  Company  filed a lawsuit in  Federal  District  Court
located in Minnepin  County,  Minnesota,  Stratford  Acquisition  Corporation v.
10222  Investments,  et. al.,  Index No.  97-1954  DSD/JMM,  against 49 separate
defendants  to cancel common  stock,  stock options and stock  warrants that the
company believes were issued either  unlawfully or without  consideration and to
cancel  certain   consulting  and  distribution   agreements  that  the  company
previously  entered into and which are now deemed to be null and void.  From the
filing of the lawsuit until August 12, 1998 the company  entered into settlement
agreements  whereby it was able to cancel  613,750  shares of common  stock.  On
August 12,  1998 the court  acting upon a motion to dismiss the lawsuit for lack
of jurisdiction  dismissed the action. With respect to the remaining  defendants
the company is  considering  joining them in the  following  lawsuit in Ontario,
Canada,  to  avoid  future  challenges  by  the  defendant  shareholders  as  to
jurisdictional grounds.

In the interim,  the company has  authorized  its  transfer  agent to place stop
transfer orders restricting the transfer of all shares of common stock

                                       14

<PAGE>


subject to the lawsuit until it has been adjudicated.

In August,  1997,  a company  shareholder,  Mel  Greenspoon,  filed a lawsuit in
Canada  against the  Company  and one  director,  Mr. A. Roy  MacMillan,  Mel B.
Greenspoon v. Stratford  Acquisition  Corporation and A. Roy MacMillan,  Ontario
Court General  Division,  Court File No.  97-CV-129814,  to secure  unrestricted
stock  certificates for shares of restricted  common stock he currently owns and
for damages. Mr. Greenspoon is one of the shareholders that is being sued by the
company to cancel his common stock holdings (See above  paragraph).  The company
does not believe that the lawsuit will  ultimately be successful in light of the
company's counterclaims,  nor should it have any materially adverse consequences
to the Company if it is successful.

On July 17, 1998,  the company and all the  defendants in the lawsuit  Stratford
Acquisition  Corporation  v. Jan  Sulkiewicz,  et. al.,  Ontario Court  (General
Division),Court File No. 97-CV-126925 entered into a global settlement agreement
which allowed the company to cancel  130,000 common shares of the 500,000 shares
that were  originally  issued to one of the defendants in exchange for which the
remaining  370,000  shares  were  released  to cover a short  position  that was
created by the defendant  having sold the stock, to a bona fide purchaser at the
average  market  price of $.30 per share,  which was subject to a stop  transfer
order. In addition one defendant,  Mr. Jan Sulkiewicz received  authorization to
use certain  technology for one type of concrete repair product which he alleges
to have  developed  outside of the company and the parties  entered  into mutual
releases for any and all claims  arising  prior to the  settlement  date,  which
resulted in seven  defendants  being  dismissed  from the above lawsuit that was
filed in federal district court of Minnesota.

In the  matter of Barbara  Robinson  v. The  Canadian  Bar  Association,  et.al.
Stratford  Acquisition  Corporation,  the  plaintiff,  formerly a  director  and
officer of the company  filed a claim  against the  defendant  alleging that the
defendant improperly denied her claim for disability benefits which she believes
are due to her for a partial  period that covered her employment at the company.
The defendant filed a third-party  complaint  against the company  alleging that
the application for insurance was improperly prepared and therefore they are not
liable for the claim.  Both the defendant and the company believe that the claim
is frivolous and that it is unlikely to result in a materially  adverse judgment
against the company.

Other Legal Matters

The SEC has made  inquiries of the Company  relating to certain  accounting  and
financial  reporting  issues as reported in its  quarterly  filings for 1996 and
1995. In addition the SEC has requested that the company  respond to comments it
raised about the  Company's  Form 10-K filing for the fiscal year ending May 31,
1997 and that the company has since filed a response  and an amended Form 10-K/A
for the period.  The SEC has further  responded with additional  comments to the
company's  first  response  and 1997 Form  10-K/A  which the  company  has since
responded to in writing.  The SEC has provided the company with oral  assurances
that the issues raised with respect to the 1997 Form-K/A are now resolved.

On June 3, 1997, at a meeting of the Board of  Directors,  the Board adopted the
first official set of By-laws for the Company.  Although there had been numerous
allegations  that the  Company  had duly  authorized  By-laws,  a search  of all
corporate  records,  revealed  only an  unsigned  set of  By-laws  that were not
believed to have been adopted by the Company's incorporators, by its first board
of directors  or by the  shareholders  at an annual  meeting.  With  interest in
correcting all legal,  financial and  operational  problems that the Company has
been beset with, the Board adopted the By-laws and will provide

                                       15

<PAGE>


the  shareholders  with the  right  to vote on the  By-laws  at the next  annual
meeting of  shareholders.  The newly adopted  By-laws provide for the removal of
directors.  In accordance with this provision,  the majority of the Board voted,
to remove G. Colin Rainier from the Board.

Historical Background

Stratford  Acquisition  Corporation  ("the Company") was incorporated  under the
laws of the State of  Minnesota  on February  17,  1966.  From its  inception to
August 15, 1995, the Company had limited  operations  and was primarily  dormant
prior to its acquisition of Supercrete N.A.,  Limited,  a corporation  organized
under  the  laws  of  the  Turks  and  Caicos   Islands,   British  West  Indies
("Supercrete").  On August 15, the  Company  executed a  definitive  acquisition
agreement with Supercrete and acquired all of the issued and outstanding  shares
of Supercrete in exchange for 22,800,000 share of the Company's common stock, of
which 21,000,000 shares were exchanged back to the company.  Supercrete owned an
exclusive   license   ("Supercrete   License")  to  manufacture  and  distribute
Supercrete products ("Supercrete Products").  Supercrete acquired the Supercrete
License from AMR Investments,  Ltd. ("AMR"),  a corporation  organized under the
laws of the Turks and Caicos  Islands,  British  West  Indies.  AMR acquired the
Supercrete License pursuant to an agreement dated July 24, 1994 amongst AMR, the
late Dr. O.A. Battista  ("Battista Estate") who was the original inventor of the
technology  and  processes  for  making  Supercrete  Products  and a company  he
controlled,   Resources  Services   Corporation   ("RSC"),   which  is  a  Texas
corporation.  In accordance with the agreement  between AMR, the Battista Estate
and RSC,  both the  Battista  Estate and RSC notified  AMR,  and all  subsequent
assignees of the Supercrete License,  including the Company,  that the agreement
had been breached for failure to pay  royalties on sales of Supercrete  Products
and consulting fees to the Battista Estate and RSC. On May 13, 1997, RSC and the
Battista  Estate  presented  a final  written  notice  to the  Company  that the
Supercrete  License and all rights thereto,  had been terminated.  In June 1997,
the Company after  negotiations with  representatives of the Battista Estate and
RSC,  entered into a new  licensing  agreement  with the  Battista  Estate ("the
Stratford  Agreement").  The Stratford  Agreement  provides that in exchange for
granting the Battista Estate the right to retain the original  500,000 shares of
the Company's  common stock they received upon entering the licensing  agreement
with AMR and the right to receive a future  royalty fee of 2% of the gross sales
of all Supercrete  Products,  which royalty fee shall not exceed  $500,000 (USD)
over the life of the Stratford Agreement,  the Company was granted the exclusive
and  definitive  right and title to the  Supercrete  License.  In the event of a
default on any  royalty  fee  payment the  Battista  Estate  shall,  at its sole
option,  receive a promissory  note or common stock for the unpaid full value of
the unpaid royalty fee.

In addition to the foregoing,  on December 20, 1996,  Supercrete  granted to the
company  an  unconditional  right and title to the  Supercrete  License  and was
subsequently  deregistered  from the  Registrar of  Companies  for the Turks and
Caicos Islands,  and is no longer a wholly-owned  subsidiary of the Company. The
deregistration of Supercrete was intended to eliminate any unnecessary costs and
fees being incurred by Supercrete, which had no operations when deregistered.

In  addition,  on or about  January  8,  1997,  the  Company  provided  Globesat
Infrastructure  Technologies  Corporation  ("Globesat") with written notice that
the Supply and Distribution Agreement entered into on July 31, 1996, amongst the
Company, Globesat and Supercrete (the "Globesat Agreement") was terminated.  The
Company believes that the Globesat  Agreement was never entered into on an arm's
length basis and that Globestat has not fulfilled any of its  obligations  under
the agreement.

                                       16

<PAGE>


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

No matters were known by the current management to have been submitted to a vote
of security holders during the fourth quarter of the fiscal year covered by this
report.  Upon the  filing  of this Form 10-K the  company  intends  to notice an
annual meeting of its shareholders to be held in late October, 1998.

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

The Company's common stock,  $.001 par value, is traded on the  Over-the-Counter
Bulletin  Board  ("OTC")  operated by the  National  Association  of  Securities
Dealers  under the  ticker  symbol  HARD.  The tables  present  its high and low
closing  bid prices for each of the four  quarters in the fiscal year ending May
31, 1998.  The quotations  reflect  interdealer  prices without retail  mark-up,
mark-down or commissions and may not necessarily  represent actual transactions.
The  Company's  common stock became  actively  traded in July,  1995. On May 31,
1998,  the closing bid price was $.40. The Company has paid no cash dividends in
1998 and does not  expect  to change  its  dividend  policy  in the  foreseeable
future.

                                     Quarterly Common Stock Bid Price Ranges

Quarter           High              Low              Last Day of Quarter
-------           ----              ---
1st               $.43             $.24              August 31, 1997
2nd               $.52             $.25              November 30, 1997
3rd               $.28             $.19              February 28, 1998
4th               $.77             $.20              May 31, 1998

Quarter           High              Low              Last Day of Quarter
-------           ----              ---
1st               $5.75            $1.12             August 31, 1996
2nd               $2.00            $ .06             November 30, 1996
3rd               $ .60            $ .16             February 28, 1997
4th               $ .75            $ .25             May 31, 1997

The number of shares of common stock issued and  outstanding  as of May 31, 1998
and May 31, 1997 were 11,965,646 and 10,113,381 respectively. On a fully diluted
basis,  the number of shares of common stock issued and  outstanding  on May 31,
1998 was 15,695,422.  The company has approximately  1,200 shareholders  holding
stock in record and nominee name.

                                       17

<PAGE>


Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                                         Year End May 31,              Cumulative
                         ------------------------------------------    Jan. 1 thru
                             1998          1997            1996        May 31, 1998
                         ------------  ------------    ------------  -------------
1998
----
<S>                      <C>            <C>              <C>          <C>         
Net Revenues(1):              $9,073             $0       $140,741       $149,814 

Income (loss from
continuing operations:   ($1,112,594)   ($2,303,778)     ($375,361)   ($3,932,684)

Income (loss) from
continuing operations
per weighted-average
share of common stock
outstanding:                   ($.10)         ($.24)         ($.07)         ($.68)


Total Assets:               $318,540       $219,533       $479,615            N/A


Long-Term Obligations:            $0       $315,000             $0             $0


Cash Dividends:                   $0             $0             $0             $0


</TABLE>


Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Results of Operations

1998 vs. 1997

After the senior management change in November,  1997, the company significantly
advanced its plans to move from the development stage to the operating stage. On
March 15, 1997 the company  officially began commercial  levels of production of
its Novacrete  products and recorded its first truckload  shipment of product in
April,  1998,  which was to a construction  products  distributor in Canada.  In
addition in May,  1998,  the company  sold its first  truckload  of product to a
distributor in the United States. As a result of this activity, which began just
two and  one-half  months  prior to the close of this  fiscal  year the  company
recorded $9,073 in gross revenues for the one truckload sales that took place in
April. The truckload that was


----------
(1)  The company was in the development  stage throughout the entire fiscal year
     although just prior to the end of its fiscal year the company began to sell
     product.

                                       18

<PAGE>


ordered in May was not  shipped  until  early June and appears as revenue in the
first quarter of the 1999 fiscal year.  Although this increase in gross revenues
represents a 100% over the operating  results in 1997, the  percentage  increase
should only be viewed in light of the fact that the company recorded $0 in gross
revenue  in the  previous  fiscal  year and had very  little  capability  in the
previous year to sell its products, although it did have inventory for sale.

In 1998,  the  company  had  $122,134  in  inventory.  Of this  amount,  $76,276
consisted  of raw  materials,  $440  consisted  of work in process  and  $45,418
consisted of finished goods. A substantial  amount of the raw material inventory
consists of the 600,000 lbs. of one raw material  that is used in the  Novacrete
Admixture.  The finished  goods  inventory  consists of 55lb.  bags of Novacrete
Repair Products that are stacked on wood pallets with each pallet  containing 56
bags.

In 1997 the company had $143,313 of  inventory,  all of which was  classified as
raw  materials.  A  substantial  majority  of this  inventory  was  hauled  to a
commercial  dumping facility by the company after the new management  determined
that  the  material  was  intended  to be used as  Novacrete  Admixture  and was
improperly  blended.  This  product  was  blended  on  equipment  that  the  new
management  has discarded as obsolete in place of the new  industrial  equipment
that was installed at the company's  operating  facility in February,  1998. The
company's  decision was based on its current  operating  policy  which  requires
quality  controls on all  manufactured  product  and to avoid any  rectification
claims that could result from selling product that was improperly made and would
likely underperform the stated performance standards for the product.

Although the company had obsolete  blending  equipment  this  equipment  had the
capacity to blend over 200 lbs. of  admixture  per day,  and that the  admixture
that was discarded was packaged by an outside company.

From June 1, 1997 to January,  1998 the company's operations were funded through
sales of its common stock to affiliated and non-affiliated parties. In December,
1997,  the  company  under the  direction  of its  current  President  and Chief
Executive  Officer  announced  a 60 Day Plan to  advance  the  company  from the
development  stage.  In  February,   1998,  the  company  sold  a  10%  $550,000
Convertible  Debenture that matures on October 31, 1998, to three non-affiliated
persons who also received  warrants to purchase  1,100,000 share of common stock
at the exercise price of $.30 per share for a three year period. The proceeds of
this  debenture were used  principally  to purchase the industrial  blending and
bagging equipment that was installed in the company's operating  subsidiary,  to
renovate the  company's  offices and for working  capital to fund the  company's
operations until sales of its product could materialize.

Operating  costs  relating to general and  administrative  cost  decreased  from
$927,451 in 1997 to $824,321 in 1998 or 12% from the previous year. The decrease
in operating costs was attributable primarily to the reduction of personnel from
November, 1997 to February, 1998, when the company began to increase its payroll
with new personnel and with better  management  of the company's  resources.  In
addition  non-cash  costs  attributable  to the  issuance of stock  compensation
decreased  substantially  in 1998 to $180,405  when  compared to the  $1,360,580
incurred in 1997.  The company  fully  expects this trend to continue  since new
management  has  terminated the stock option plan that was initiated in 1996 and
which  resulted in the  excessive  issuance of common stock to insiders at below
market prices. In 1998, the company incurred $17,548 of interest expenses versus
$12,917 in the  previous  year and  $15,267 of foreign  currency  losses  versus
$3,144 in the previous year. In addition the company  amortized debt discount of
$84,535 in 1998 which

                                       19

<PAGE>


resulted from the issuance of warrants to holders of the debenture that was sold
in February, 1998.

The net result of  operations  increase  in  operating  expenses  over  revenues
resulted in a loss from operations of $1,112,594.

On account of the changes  that the  company  made this year to expand and equip
its  operating  facility  and to recruit  experienced  personnel  to oversee the
technical,  operational and marketing aspects of the company's  business and the
closing of the pending ARM PRO acquisition  (See Subsequent  Events) the company
believes  that the fiscal year  ending May 31,  1999,  could  result in material
increases in revenue.

1997 vs. 1996

From June 1, 1996 to  November,  1997 the  company was  operated  from an office
facility  with the intention of either  licensing  its  admixture  technology to
manufacturers  and marketers of admixture and  cement-based  products or to have
the admixture and finished  mortar  products  manufactured  and warehoused by an
outside  manufacturing  company (toll blended) for a negotiated charge per unit.
On November 26, 1996, as a result of  substantial  differences of opinion by the
then existing directors and shareholders of the company and certain  allegations
of  wrongdoing  that were  made  against  two of the  company's  directors,  the
company's  then Chairman and  President,  Arthur Smith,  and his spouse,  E. Lee
Monaco,  resigned as directors and officers of the company.  The only  remaining
director,  A. Roy MacMillan then became Chairman and President.  On April,  1997
the company leased its existing manufacturing  facility in Mississauga,  Ontario
and began to manufacture its Novacrete  Admixture and Novacrete MP products with
much smaller blending equipment and with limited personnel to oversee the proper
blending and packaging of the final product.  Due to the lack of working capital
in this fiscal period,  the company did limited  research and development on its
intended line of products and actually  accumulated  general and  administrative
costs of $927,451 and costs  attributable to non-cash imputed stock compensation
of  $1,360,580  for a total  loss from  operations  of  $2,288,031.  In 1996 the
company  incurred  $518,947 in general and  administrative  costs an $7 of costs
attributable  to  non-cash  imputed  stock  compensation.  In 1996  there was a
$378,213 in additional  deficit due to there being no sales. 

Liquidity and Financial Resources

The Company  ended the 1998 fiscal year with nominal  liquidity and a $1,112,594
in operating losses.  However,  since the company has begun to sell its products
in commercial  quantities to large  distributors  of  construction  products and
anticipates  closing the ARM PRO  transaction it  anticipates  that it will have
sufficient  liquidity  from its  operations  to cover  its  expenses.  Since the
company has completed  its hiring of all senior level  positions it will have an
operating overhead in 1999 of approximately $850,000. Based on the profit margin
for the company's  Novacrete  Repair  Products the company will need to generate
$1,400,000 of gross revenues to break-even.  Although the company  substantially
under performed this level of sale in 1998, the investments in new equipment and
sales personnel and marketing  materials are expected to  significantly  enhance
the company's  prospects for sale in 1999. In addition,  in September,  1998 the
company  sold a 9% $800,000  Debenture  of which the  Company  expects to retain
$200,000 for working capital after it purchases ARM PRO.  Although the company's
preference  is to reserve  these  funds it has full  discretion  to use them for
working  capital.  As part of this  financing  which  was  with an  entity  that
purchased  $500,000 of the  Debenture  that was sold by the company in February,
1998, the holder agreed

                                       20

<PAGE>


to convert the principal  amount of that Debenture  which matures on October 31,
1998 into the  company's  common  stock at a rate  equal to the  average  of the
eleven lowest closing trading prices during the month of October, 1998. With the
completion  of this  financing in  September,  1998 the company has  affectively
reduced the  principal  amount of the $550,000 in note payable by $500,000.  The
company expects to repay the remaining $50,000 of the note payable with cash.

In  addition to the  liquidity  that should  materialize  as the selling  season
continues,  the  company has sold  historically  debt and equity  securities  to
provide additional working capital on a need basis. The company however,  cannot
give any  assurances  that the revenue  prospects  that it has budgeted for 1999
will  materialize  or that it will be able to raise capital  through the sale of
its  securities.  In addition any future sales of securities may very well be on
terms that are not favorable to the company. (See Working Capital)

Inflation and Changing Prices

The company  does not  foresee  any risks  associated  with  inflation  or price
increases in the near future. In addition the raw materials that are used in the
manufacturing  of the  company's  products are  available  locally  through many
sources and are  generally  commodity  items.  The one material that the company
uses in all its products  that cannot be classified as commodity is currently in
sufficient supply although the company presently owns approximately 600,000 lbs.
of this product.  Because the company's operations are in Canada the devaluation
of the  Canadian  dollar  against  the U.S.  dollar has  allowed  the company to
manufacture its products less costly for the sales made in the United States and
that any funds raised through the sale of securities are U.S. dollar denominated
and then transferred to the Canadian  subsidiary at favorable exchange rates. As
such,  while the Company has exposure to  inflation,  in the very near future it
does not  believe  that  inflation  will  bear  significantly  on its  financial
position.

Item 8.  Financial Statements and Supplementary Data

                                                             Page

Index to Financial Statements and Supplementary              F-1
Financial Data

Report of Independent Certified Public Accountants           F-2

Financial Statements:

Balance Sheet, May 31, 1998 and 1997                         F-3

Statement of Operations, Years Ended May 31,                 F-4
1998, 1997 and 1996

Statement of Changes in Stockholders' Equity,                F-5
Years Ended December 31, 1998, 1997, 1996 and 1995


Statement of cash Flows, Years Ended May 31,                 F-6
1998, 1997 and 1996

Notes to Financial Statements                                F-7


                                       21


<PAGE>

                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        (A Development Stage Enterprise)

                        CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996


<PAGE>



                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        (A Development Stage Enterprise)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants                           F-2

Financial Statements

  Balance Sheets
      as of May 31, 1998 and 1997                                            F-3

  Statements of Operations
      for the periods  cumulative January 1, 1994 through May 31, 1998, 
      twelve months ended May 31, 1998, 1997 and 1996                        F-4

  Statements of Changes in Shareholders' Equity (Deficit)
      for the years ended May 31, 1998, 1997, and 1996                       F-5

  Statements of Cash Flows
      for the periods  cumulative January 1, 1994 through May 31, 1998, 
      twelve months ended May 31, 1998, 1997 and 1996                        F-6

  Notes to Financial Statements                                           F-7-15


                                       F-1

<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To the Shareholders and Board of Directors
Stratford Acquisition Corp.

We have  audited  the  accompanying  consolidated  balance  sheets of  Stratford
Acquisition  Corp. and subsidiary (a development stage enterprise) as of May 31,
1998 and 1997 and the related consolidated statements of operations,  changes in
shareholders'  deficit and cash flows for the periods cumulative January 1, 1994
through May 31,  1998,  and for the years ended May 31,  1998,  1997,  and 1996.
These financial  statements are the responsibility of the Company's  management.
Our  responsibility  is to express an  opinion on these  consolidated  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Stratford Acquisition Corp. and
subsidiary (a development  stage enterprise) as of May 31, 1998 and 1997 and the
results of its operations,  changes in shareholders'  deficit and cash flows for
the periods  cumulative January 1, 1994 through May 31, 1998 and the years ended
May 31, 1998,  1997 and 1996 in conformity  with generally  accepted  accounting
principles.


                                            FELDMAN SHERB EHRLICH & CO., P.C.
                                            Certified Public Accountants
                                            (Formerly Feldman Radin & Co., P.C.)


New York, New York 
August 20, 1998, except for 
Note 12 (B) for which the date 
is September 4, 1998


                                       F-2

<PAGE>


                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        (A Development Stage Enterprise)

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                May 31,         May 31,
                                                                 1998            1997
                                                              -----------    -----------
<S>                                                           <C>            <C>        
CURRENT ASSETS:
      Cash and cash equivalents                               $    49,108    $    10,098
      Accounts receivable                                           9,250           --
      Other receivables                                            17,367         40,579
      Inventory                                                   122,134        143,313
      Marketable securities                                          --           13,250
      Prepaid assets                                                2,801           --
                                                              -----------    -----------

            Total Current Assets                                  200,660        207,240

PROPERTY, PLANT, AND EQUIPMENT, net of
      accumulated depreciation and amortization                   106,598          2,158

OTHER ASSETS                                                       11,282         10,135
                                                              -----------    -----------

                                                              $   318,540    $   219,533
                                                              ===========    ===========

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
      Accounts payable and accrued expenses                   $   162,115    $   113,218
      Advances from shareholder                                    37,000           --
      Notes payable                                               520,470           --
                                                              -----------    -----------

           Total Current Liabilities                              719,585        113,218

NOTES PAYABLE                                                        --          315,000

SHAREHOLDERS' DEFICIT:
      Common stock -  $0.001 par value
           50,000,000 shares authorized
           11,965,646 and 10,113,381 shares
           issued and outstanding, respectively                    11,966         10,114
      Additional paid-in capital                                3,519,673      2,601,291
      Deficit accumulated during the
               development stage                               (3,932,684)    (2,820,090)
                                                              -----------    -----------

      Shareholders' Deficit                                      (401,045)      (208,685)
                                                              -----------    -----------

                                                              $   318,540    $   219,533
                                                              ===========    ===========
</TABLE>


                       SEE NOTES TO FINANCIAL STATEMENTS.
                                       F-3

<PAGE>
                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        (A Development Stage Enterprise)


                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                             Cumulative
                                                                                           January 1, 1994
                                                                                             (Inception)
                                             Year ended      Year ended     Year ended         through
                                               May 31,         May 31,        May 31,          May 31,
                                                1998            1997           1996             1998
                                            ------------    ------------    ------------    ------------
<S>                                           <C>              <C>             <C>             <C>      
REVENUES:
      Sale of cementitious products         $      9,073    $       --      $      --       $      9,073
      Technology license fees                       --              --           140,741         140,741
                                            ------------    ------------    ------------    ------------
                                                   9,073            --           140,741         149,814
OPERATING EXPENSES:
      General and administrative costs           824,321         927,451         518,947       2,381,287
      Non-Cash imputed Stock Compensation        180,405       1,360,580               7       1,571,557
                                            ------------    ------------    ------------    ------------
                                               1,004,726       2,288,031         518,954       3,952,844
                                            ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS                            (995,653)     (2,288,031)       (378,213)     (3,803,030)
                                            ------------    ------------    ------------    ------------

OTHER INCOME (EXPENSES)
      Interest income                                409             314             474           1,213
      Interest expense                           (17,548)        (12,917)           --           (30,465)
      Amortization of debt discount              (84,535)           --              --           (84,535)
      Foreign currency gain (loss)               (15,267)         (3,144)          2,378         (15,867)
                                            ------------    ------------    ------------    ------------

NET LOSS                                    $ (1,112,594)   $ (2,303,778)   $   (375,361)   $ (3,932,684)
                                            ============    ============    ============    ============

NET LOSS PER SHARE - BASIC                  $      (0.10)   $      (0.24)   $      (0.07)   $      (0.68)
                                            ============    ============    ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES
      OF COMMON STOCK OUTSTANDING             11,472,508       9,590,212       5,552,407       5,768,850
                                            ============    ============    ============    ============
</TABLE>


                       SEE NOTES TO FINANCIAL STATEMENTS.
                                       F-4


<PAGE>
                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        (A Development Stage Enterprise)

      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                    
                                              Common Stock            Additional                
                                       -------------------------       Paid-in      Accumulated
                                         Shares         Amount         Capital        Deficit         Total
                                       -----------    -----------    -----------    -----------    -----------
<S>                                     <C>           <C>            <C>            <C>            <C>         
BALANCE, May 31, 1995                    5,000,000    $     5,000    $   359,970    $  (140,951)   $   224,019

Sale of common stock                       494,700            495        617,324           --          617,819
Exercise of granted options
    under employee benefit plan            500,000            500           --             --              500
Issuance of common  stock
    for consulting fees                      7,250              7           --             --                7
Shares issued for no consideration       1,800,000          1,800         (1,800)          --             --
Net loss                                      --             --             --         (375,361)      (375,361)
                                       -----------    -----------    -----------    -----------    -----------
BALANCE, May 31, 1996                    7,801,950          7,802        975,494       (516,312)       466,984

Sale of common stock                     1,513,500          1,514        266,015           --          267,529
Issuance of common  stock
    for services                           626,531            627      1,171,287           --        1,171,914
Issuance of options
    for services                              --             --          128,666           --          128,666
Issuance of common  stock
    for compensation                       171,400            171         59,829           --           60,000
Net loss                                      --             --             --       (2,303,778)    (2,303,778)
                                       -----------    -----------    -----------    -----------    -----------
BALANCE, May 31, 1997                   10,113,381    $    10,114    $ 2,601,291    $(2,820,090)   $  (208,685)

Sale of common stock                       720,750            721        258,522           --          259,243
Issuance of common  stock
    for services                           295,000            295         47,505           --           47,800
Issuance of common  stock
    for debt                               988,824            989        325,533           --          326,522
Issuance of common  stock
    for compensation                       331,441            331         98,119           --           98,450
Redemption of common stock                (483,750)          (484)           484           --             --
Value of warrants issued with debt            --             --          154,065           --          154,065
Value of warrants and options issued
    for services                              --             --           34,155           --           34,155
Net loss                                      --             --             --       (1,112,594)    (1,112,594)
                                       -----------    -----------    -----------    -----------    -----------
BALANCE, May 31, 1998                   11,965,646    $    11,966    $ 3,519,673    $(3,932,684)   $  (401,045)
                                       ===========    ===========    ===========    ===========    ===========
</TABLE>


                       SEE NOTES TO FINANCIAL STATEMENTS.
                                       F-5

<PAGE>
                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        ( A Development Stage Enterprise)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                       Cumulative
                                                                                                                     January 1, 1994
                                                                                                                       (Inception)
                                                                          Year ended     Year ended     Year ended      through
                                                                             May 31,       May 31,        May 31,        May 31,
                                                                              1998          1997           1996           1998
                                                                          -----------    -----------    -----------   -------------
<S>                                                                       <C>            <C>            <C>            <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                                            $(1,112,594)   $(2,303,778)   $  (375,361)   $(3,833,384)
      Adjustments to reconcile net loss to net cash
           used in operating activities:
           Depreciation and amortization                                       13,805            345           --           14,150
           Common stock issued as payment for services and compensation       146,250      1,231,914              7      1,408,736
           Common stock issued as payment for interest                         11,522           --             --           11,522
           Options issued as payment for services                              34,155        128,666           --          162,821
           Amortization of debt discount                                       84,535           --             --           84,535

      Changes in assets and liabilities:
           (Increase) decrease in trade receivables                            (9,250)          --             --           (9,250)
           (Increase) decrease in other receivables                            23,212        (28,711)       (11,868)      (183,647)
           (Increase) decrease in inventory                                    21,179       (143,313)          --         (122,134)
           (Increase) decrease in prepaid assets                               (2,801)          --             --           (2,801)
           (Increase) decrease in refundable deposits                            --          178,148       (175,898)       166,280
           (Increase) decrease in other assets                                 (1,147)       (10,135)          --          (11,282)
           Increase (decrease) in accounts payable and accrued expenses        48,897        100,587         12,131        162,115
                                                                          -----------    -----------    -----------    -----------

NET CASH USED IN OPERATING ACTIVITIES                                        (742,237)      (846,277)      (550,989)    (2,152,339)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisition of property and equipment                                   (118,246)        (2,503)          --         (120,749)
     Purchase of marketable securities                                         13,250        (13,250)          --             --
                                                                          -----------    -----------    -----------    -----------

NET CASH USED IN INVESTING ACTIVITIES                                        (104,996)       (15,753)          --         (120,749)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Decrease in due from shareholders                                         37,000        134,405         87,853         37,000
     Proceeds from bridge financing                                           480,470        265,230           --          745,700
     Proceeds from issuance of debt with warrants                              69,530         49,770           --          119,300
     Proceeds from issuance of debt without warrants                           40,000           --             --           40,000
     Proceeds from the sale of common stock                      
          and exercise of options                                             259,243        267,529        618,319      1,380,196
                                                                          -----------    -----------    -----------    -----------
                                                                 
NET CASH PROVIDED BY FINANCING ACTIVITIES                                     886,243        716,934        706,172      2,322,196


NET INCREASE (DECREASE) IN CASH AND
      CASH EQUIVALENTS                                                         39,010       (145,096)       155,183         49,108

CASH AND CASH EQUIVALENTS AT
      BEGINNING OF PERIOD                                                      10,098        155,194             11           --
                                                                          -----------    -----------    -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                $    49,108    $    10,098    $   155,194    $    49,108
                                                                          ===========    ===========    ===========    ===========


SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the period for:                              
          Interest                                                        $       691    $     1,269    $      --      $     1,960
                                                                          ===========    ===========    ===========    ===========
          Income taxes                                                    $       689    $      --      $      --      $       689
                                                                          ===========    ===========    ===========    ===========
     Non-cash financing and investing activities:             
          Conversion of debt to equity                                    $   315,000    $      --      $      --      $   315,000
                                                                          ===========    ===========    ===========    ===========
</TABLE>                                                      
                                                        

                       SEE NOTES TO FINANCIAL STATEMENTS.
                                       F-6

<PAGE>


                   STRATFORD ACQUISITION CORP. AND SUBSIDIARY
                        (A Development Stage Enterprise)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  MAY 31, 1998

1.   ORGANIZATION AND DESCRIPTION OF BUSINESS

     On May 11,  1995,  the Company  amended its  Articles of  Incorporation  to
     authorize  the  issuance  of  50,000,000  shares of common  stock  from the
     previously   approved   amount  of  1,000,000   shares  of  common   stock.
     Additionally,  the  Company  changed  the par value of its common  stock to
     $0.001 par value from $0.10 par value.  All amounts and valuations shown in
     the accompanying financial statements reflect the effects of this change.

     Substantially all of the Company's management, directors and officers were
     replaced on November 29, 1996.

     During January 1997 the Company  acquired 100% of the outstanding  stock of
     Novacrete  Technology (Canada) Inc., a newly created company established to
     manufacture and distribute the Company's Novacrete product line.

     The  Company is in the  development  stage and,  through  its wholly  owned
     subsidiary,  is engaged in the business of  manufacturing  and  marketing a
     proprietary  admixture for  enhancing  cement-based  products,  hereinafter
     referred to as  "Novacrete"  and various  finished  products  for  specific
     applications which use predetermined amounts of the Novacrete additive. The
     Company will initially  market and sell the Novacrete  additive mixture and
     the  Novacrete  finished  products  to  large   distributors   pursuant  to
     distribution  agreements  covering  predetermined  geographic  areas  on  a
     non-exclusive basis.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (A)  Basis of Presentation - The consolidated  financial statements include
          the  accounts  of  the  Company  and  its  subsidiary.   All  material
          intercompany transactions and balances have been eliminated.

     (B)  Cash and Cash  Equivalents - The Company  maintains  funds in Canadian
          financial  institutions  in both US dollar (US$) and  Canadian  dollar
          (CN$)  transaction  accounts.   All  transactions   reflected  in  the
          accompanying  financial  statements have been converted into US dollar
          equivalents,  as of the end of each respective year at the Wall Street
          Journal  published  exchange  rate on the last day of the fiscal year,
          for CN$ accounts and at historical amounts for US$ accounts.


                                       F-7

<PAGE>


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

     (C)  Income Taxes - The Company utilizes the liability method of accounting
          for income taxes as set forth in FASB  Statement  No.109,  "Accounting
          for Income  Taxes".  Under the liability  method,  deferred  taxes are
          determined based on the difference between the financial statement and
          tax bases of assets and liabilities  using enacted tax rates in effect
          in the years in which the differences are expected to reverse.

          As reflected in the accompanying statements of operations, the Company
          has incurred losses while in the development stage. Due to the limited
          operations of the Company and the uncertainty surrounding the eventual
          utilization of its losses, a valuation  allowance has been recorded to
          fully  reserve for the  deferred  tax  benefits  generated  by its net
          operating losses.

     (D)  Property,  Plant and  Equipment - Property,  plant and  equipment  are
          stated  at  cost  less  accumulated  depreciation.   Depreciation  for
          financial  statement purposes is computed by the straight-line  method
          over the estimated useful lives of the assets, which is generally five
          years for equipment.

     (E)  Inventories  -  Inventories  are valued at the lower of cost or market
          determined by the first-in, first-out method of accounting.

     (F)  Fair Value of Financial  Instruments - The carrying  value of cash and
          cash equivalents, other receivables,  marketable securities,  accounts
          payable and accrued  expenses  approximate  their fair values based on
          the short-term maturity of these instruments.

     (G)  Marketable  Securities  -  The  Company's  marketable  securities  are
          comprised of equity securities classified as trading securities, which
          are reported at their fair market  values based upon the quoted market
          prices of those  investments at balance sheet date.  Accordingly,  net
          realized and  unrealized  gains and losses on trading  securities  are
          included in net earnings.

     (H)  Loss Per  Share - The  Company  has  adopted  Statement  of  Financial
          Accounting  Standards No. 128,  "Earnings  Per Share".  Basic loss per
          share is computed by dividing net loss by the weighted  average number
          of shares of common stock outstanding.

     (I)  Foreign  Currency  Re-measurement  - Because the Company's  functional
          currency is the US dollar, the financial  statements for the Company's
          activities  in Canada  have been  remeasured  from  Canadian  dollars.
          Accordingly,  all gains and  losses  arising  from  Re-measurement  of
          monetary  assets and  liabilities  have been  recognized  currently in
          income.


                                       F-8

<PAGE>


     (J)  Use  of  Estimates  -  The  preparation  of  financial  statements  in
          conformity  with generally  accepted  accounting  principles  requires
          management  to make  estimates  and  assumptions  that affect  certain
          reported  amounts and disclosures.  Accordingly,  actual results could
          differ from those estimates.

3.   CAPITAL STOCK TRANSACTIONS

     (A)  Present  management is unable to determine the value  received for the
          1,800,000   shares  issued  in  fiscal  1996  and  is  contacting  the
          registered shareholders to determine if appropriate  consideration was
          received  for the shares.  In the  financial  statements  for the year
          ended May 31, 1996, the shares have been recorded as outstanding  with
          no  consideration  received for their issuance.  During fiscal 1998, a
          total  of  483,750  shares  were  returned  back and  canceled  by the
          Company.  The Company  intends to  continue  to pursue all  litigation
          against  shareholders  who  received  securities  without  paying fair
          consideration to the Company.

     (B)  During fiscal 1996, the Company sold an aggregate of 494,700 shares of
          common  stock,   pursuant  to  exemptions  from   registration   under
          Regulations  S and D of the  Securities  and Exchange Act of 1933,  as
          amended, for an aggregate sum of approximately $618,000.

     (C)  In July 1995,  the Company  filed a Form S-8 with the  Securities  and
          Exchange  Commission  to register  approximately  2,000,000  shares of
          common  stock to be issued  under the  Company's  1995  Non-qualifying
          Stock Option Plan  ("Plan").  The Plan provides that stock options may
          be issued to any  person  who is  performing  or has been  engaged  to
          perform services of special importance to management in the operation,
          development and growth of the Company. The determination of the option
          price per share for any stock  option  issued under the Plan is at the
          sole discretion of the Board of Directors or their designees. The Plan
          expires on the tenth  anniversary  of its approval  and all  ungranted
          stock options shall expire. During 1996, the Company issued a total of
          500,000  options,  all of  which  were  immediately  exercised  by the
          receiving  parties on the respective grant dates.  Current  management
          has terminated this stock option plan.

     (D)  During  fiscal  year  end  1997,   126,531  options  were  granted  as
          consideration  for  various  services  received  by the  Company.  The
          Company also issued  500,000  shares of its common stock in connection
          with  certain   management   services  and  the   acquisition  of  its
          formulation costs.

     (E)  As payment for his salary in fiscal year end 1997,  the Company's then
          president,  accepted  171,400 shares of the Company's  common stock in
          lieu of cash. The shares issued were based on $60,000 of  compensation
          which represented less than the total amount owed for fiscal 1997. The
          remaining unpaid compensation of $31,250 has been included in Accounts
          payable and accrued expenses at May 31, 1997.

                                       F-9

<PAGE>


     (F)  During the year ended May 31, 1998 the Company issued 103,000 employee
          stock  options and  warrants to purchase  common  stock at a per share
          range of $ .25 - $ .50, with exercise periods ranging from 3-5 years..
          In addition directors,  the former president and the current president
          were issued 1,819,276 options and warrants to purchase shares at $ .35
          per share,  exercisable for periods ranging from 3-5 years. A total of
          300,000 options were also issued to two individuals as an incentive to
          join the Company's  board of directors.  These options are exercisable
          at $ .40 per share and expire five years from the date of issuance.

          The Company issued 135,000 options and warrants to various consultants
          in lieu of cash  payment for services  rendered  during the year ended
          May 31,  1998.  All options and  warrants  are for five years from the
          date of issuance,  exercise price ranges from $ .25 to $ .50 per share
          of common  stock.  The  company  has  recorded  $34,155 as  consulting
          expenses related to the issuance of these options and warrants.

          The Company  issued  1,405,000  warrants  and  options  related to the
          issuance of debt during the year ended May 31, 1998.

     (G)  During fiscal year end 1998,  the Company issued 169,084 shares of its
          common stock as compensation to its former president. Such shares were
          valued at a price range of $ .32 to $ .35 per share.

          The  Company  issued  432,357  of its  common  stock  to  its  current
          president  as  compensation  for services  rendered.  Such shares were
          valued at a price range of $ .20 to $ .35 per share.

          The Company  issued 25,000  shares of its common stock for  consulting
          services  during the year ended May 31, 1998.  Such shares were valued
          at a price of $ .40 per share.

          The Company for the year ended May 31, 1998,  issued 988,914 shares of
          its common  stock for full  payment of notes  payable of $315,000  and
          accrued interest.

          During the year ended May 31, 1998, the Company sold 720,750 shares of
          its common stock to various  shareholders,  at market  prices  ranging
          from $ .24 to $ .40 per share to raise working capital.

     (H)  On  April  1,  1998,  the  Company's  board of  directors  approved  a
          resolution to adopt a  Non-Qualified  Stock Option Plan which shall be
          subject to shareholder approval to become effective. The Plan consists
          of stock  options  to  purchase  1,200,000  shares of $ .001 par value
          common  stock for a period of five years from  issuance,  each  option
          having an exercise  price  equal to the average  closing bid price for
          common  stock  prior  to date of  issuance.  The  allocation  of stock
          options under the Plan shall be senior  management  personnel based on
          total  gross   revenues   generated  by  the  Company's   wholly-owned
          subsidiary, Novacrete Technology (Canada) Inc.

                                      F-10

<PAGE>


          During the period  commencing  March 1, 1998 and ending  February  28,
          1999.  In the  event  any  stock  options  under  the  Plan  shall  be
          undistributed  in  this  period,  they  will  remain  unallocated  and
          distributed by the Company  pursuant to  performance  terms set by the
          board of  directors  for the  period  commencing  on March 1, 1998 and
          ending on February 28, 2000.  In the event any stock options under the
          plan shall be  undistributed  on February 28,  2000,  they will remain
          unallocated  and  distributed  by the Company  pursuant to performance
          terms set forth by the board of directors for the period commencing on
          March 1, 2000 and ending on February 28, 2001.

4.   COMMITMENTS

     The Company's prior  executive  office lease was terminated in August 1997.
     That lease required payments of approximately $2,100 per month. The Company
     has entered into a new lease for office space commencing June 1, 1997. This
     lease requires monthly rent payments of approximately $3,400.

     The Company leases  telecommunication,  reproduction and computer equipment
     and office  furnishings under long-term  operating lease agreements.  These
     lease  agreements  require  cumulative  monthly  payments of  approximately
     $1,656 per month for the terms of the respective  leases  expiring  between
     October 1998 and January 2001.

     Total rent  expense  was  approximately  $61,000 for the year ended May 31,
     1998. Future minimum noncancellable lease payments are as follows:

                         Year ending        US$
                           May 31,         Amount
                         -----------     --------
                            1999         $ 56,893
                            2000           57,137
                            2001           48,530
                            2002           40,115
                                         --------
                          TOTALS         $202,675
                                         ========
                                       
     In addition,  all contracts,  joint ventures and licensing  agreements have
     either expired or have been terminated by the Company's new management.

5.   INVENTORY

     Inventories at May 31, 1998 and 1997 consists of the following:


                                      F-11

<PAGE>


                                                   1998                1997
                                                 --------            --------
     Raw Material                                $ 76,276            $143,313
     Work in Progress                                 440                --
     Finished Goods                                45,418                --
                                                 --------            --------
                                                 $122,134            $143,313
                                                 ========            ========

6.   PROPERTY, PLANT, AND EQUIPMENT

     Property, plant and equipment at May 31, 1998 and 1997 consists of the
following:


                                                     1998              1997
                                                  ---------         ---------
     Plant and Office equipment                   $ 103,247         $   1,869
     Leasehold Improvements                          17,330               634
                                                  ---------         ---------
                                                    120,577             2,503
     Less: accumulated depreciation
              and amortization                      (13,979)             (345)
                                                  ---------         ---------
                                                  $ 106,598         $   2,158
                                                  =========         =========
       
7.   CONTINGENCIES

     (A)  The SEC has investigated  certain  activities of the Company and those
          of the previous management.  Current management strongly believes that
          this investigation will have no adverse effect on the current position
          of the Company.

     (B)  As  consideration  for the  acquisition of its  formulation  costs the
          Company issued 500,000 shares of its $0.001 par value common stock and
          paid $100,000 to a former employee of the Company and entities related
          to him.  The Company  previously  commenced  an action to recover such
          amounts,  based on lack of  consideration.  This matter was settled in
          July 1998,  with the return and  cancellation of 130,000 shares to the
          Company.

8.   ADVANCES FROM SHAREHOLDERS

     As of  May  31,  1998  the  Company  was  advanced  $37,000  from  existing
     shareholders,  to purchase  additional  shares of its common stock to raise
     working capital. Subsequent to

                                      F-12

<PAGE>


     May 31, 1998 shares were issued for these advances.

9.   NOTES PAYABLE

     As of May 31, 1998, Notes Payable - consisted of the following:

<TABLE>
<CAPTION>
                                    Number                                    
                        Face          of          Exercise      Warrant     Unamortized
    Issuance Date      Amount      Warrants        Price         Value        Discount  
------------------   ----------   ----------   -------------   ----------   -----------
<S>       <C>        <C>           <C>         <C>             <C>           <C>       
          2/9/98     $  500,000    1,000,000   $      .30      $   94,814    $   63,208
          2/9/98         25,000       50,000          .30           4,741         3,161
          2/9/98         25,000       50,000          .30           4,741         3,161
                     ----------   -----------                  ----------    ----------
                     $  550,000    1,100,000                   $  104,296    $   69,530
                     ==========   ===========                  ==========    ==========
Less: Unamortized                                                         
          Discount       69,530
                     ----------
                     $  480,470
                     ==========
</TABLE>

     During  1998 the  Company  raised $ 550,000  by the  issuance  of debt with
     warrants  attached.  The  proceeds  were  allocated  between  the  debt and
     warrants  based on  their  estimated  fair  values.  A total  of  1,100,000
     warrants  were issued in February 1998 related to these  debentures,  these
     warrants  expire  after  three  years  from  the date of  issuance  and are
     exercisable  at $ .30 per  share  of  common  stock.  The  debentures  bear
     interest  at 10% per annum and mature on October 31,  1998.  If the Company
     should  default on these notes,  the sole recourse of the debt holder shall
     be the  conversion of all  outstanding  principal  and accrued  interest to
     shares of the  Company's  common  stock.  Conversion  would be based on the
     lower  of $ .20 per  share of  common  stock  or at a 20%  discount  to the
     average  closing bid price for the common  stock for the five days prior to
     the  maturity  date of the  debenture.  At May 31,  1997,  the  Company was
     obligated  to  certain  shareholders  for  bridge  loans in the amount of $
     315,000.  These  loans were  advanced  to the  Company as needed to satisfy
     working  capital  requirements  and bore interest at 10% per annum. In June
     1997 the Company issued 305,000  warrants to purchase common stock at $ .35
     per share.  These warrants expire five years from the date of issuance.  In
     July 1997,  these bridge loans were  converted to 988,824  shares of common
     stock in satisfaction of all outstanding  principal and accrued interest of
     $ 11,440.  The value  attributable  to the warrants was $49,770,  which was
     written off as an expense upon conversion.

     In May 1998 the Company  issued notes  payable for a total of $40,000.  The
     notes bear  interest at 10% per annum.  The  principal  of the note and all
     outstanding interest are due 90 days from the date of issuance. Interest on
     the notes are payable with the Company's

                                      F-13

<PAGE>


     common stock at the rate of $ .40 per share.  Furthermore  if the notes are
     not fully satisfied at the maturity date, the Company is obligated to issue
     1/2 of a warrant to purchase 1 share of its common stock for each dollar of
     the outstanding principal amount.

10.  STOCK OPTIONS

     The  following  table  summarizes  the activity  with regard to options and
     warrants for the year ended May 31, 1998.


                                   Option /      Options /             
                                    Warrant    Warrants Issued    Outstanding at
 Date Granted           Shares       Price       Related To         May 31,1998
 ------------           ------       -----       ----------         -----------
June 1997                3,000                  Employee Stock          3,000
                                                Options
June 1997            1,819,276        .50       Employee Stock      1,819,276
                                                Options
June 1997              305,000        .35       Debt                  305,000
July 1998               50,000        .50       Services               50,000
September 1997          10,000        .50       Employee Stock         10,000
                                                Options
September 1997          40,000        .25       Services               40,000
October 1997           200,000        .40       Employee Stock        200,000
                                                Options
January 1998           100,000        .40       Employee Stock        100,000
                                                Options
February 1998        1,100,000        .30       Debt                1,100,000
February 1998           25,000        .30       Employee Stock         25,000
                                                Options
February 1998           20,000        .25       Services               20,000
April 1998              32,500        .35       Employee Stock         32,500
                                                Options
April 1998              25,000        .31       Services               25,000
May 1998                32,500        .35       Employee Stock         32,500
                                                Options
                     ---------                                      ---------
                     3,762,276                                      3,762,276
                     =========                                      =========


                                      F-14

<PAGE>

     During fiscal year ended May 31, 1997 the company  granted  768,000 options
     to certain  individuals  and entities.  Included in this amount are 126,531
     options  issued as  consideration  for  services  received by the  Company.
     Immediately  after the issuance all 768,000 of these options were exercised
     and the shares obtained were sold in the open market.

     The  remaining   parties  receiving  options  granted  during  fiscal  1997
     exercised those options,  according to management,  for negligible amounts.
     The Company is seeking to cancel all shares  issued to parties  through the
     exercise of options obtained for little or no consideration. Because of the
     events  surrounding  the  issuance of shares by the exercise of options the
     Company has not recorded any expense  related to their  issuance  except as
     previously discussed.

11.  STOCK-BASED COMPENSATION

     In fiscal 1997, the Company  adopted the disclosure  provisions of SFAS No.
     123,  "Accounting for Stock-Based  Compensation".  For disclosure purposes,
     the fair  value of  options  is  estimated  on the date of grant  using the
     Black-Scholes  option  pricing  model with the following  weighted  average
     assumptions used for stock options granted during fiscal year ended May 31,
     1998 and 1997 respectively:  annual dividends of $0; expected volatility of
     50%;  risk free interest rate of 7%; and expected life of five years during
     fiscal 1998 and one month  during  fiscal 1997.  The weighted  average fair
     values of stock  options  granted  during the years  ended May 31, 1998 and
     1997 was $.20 and $.08 respectively.

     If the Company had recognized  compensation  costs in accordance  with SFAS
     No. 123, the Company's pro forma net loss and net loss per share would have
     been $ 1,562,387  and $.14 for the year ended May 31,  1998 and  $2,320,553
     and $.24 for the year ended May 31, 1997.

12.  SUBSEQUENT EVENTS:

     (A)  In July 1998,  the Company  entered  into an  agreement  to acquire an
          Ontario, Canada sited company in the business of producing specialized
          fibers used in the manufacture of cementitious  products. The purchase
          price is approximately $889,000 (Canadian dollars).

     (B)  On September 4, 1998 the Company  issued  $800,000  (US$) of debt with
          warrants  attached.  The debentures were issued in order to facilitate
          the  acquisition  of the previously  mentioned  company and to provide
          additional  working  capital.  The debentures bears interest at 9% per
          annum and matures on September 4, 2000. A total of 1,500,000  warrants
          were issued with this debt, these warrants expire on September 4, 2000
          and are exercisable at $ .45 per share.


                                      F-15
<PAGE>


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

The company has engaged the certified public  accounting firm of Feldman Serb. &
Erhlich  as its  outside  auditors  to  audit  the  company's  annual  financial
statements for the fiscal year ending May 31, 1997 and has had no  disagreements
with them.

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

The  following  provides  certain  information   concerning  the  directors  and
executive officers of the Company and its subsidiaries as of May 31, 1998.

                        Stratford Acquisition Corporation

Name                               Aqe                  Position
----                               ---                  --------

William K. Lavin                   53               Chairman, Secretary

Daniel W. Dowe                     36               Director, President
                                                    and Chief Executive Officer

D. Friedenberg                     45               Director, Treasurer

Edward J. Malloy                   62               Director


Note: the company's former chairman and president, A.Roy MacMillan, retired
on November 17, 1998.

*    All  company  directors  currently  serve for one year  periods and will be
     nominated at the next annual meeting of  shareholders to serve as directors
     for in the case of Messrs.  Friedenberg and Dowe,  three years,  Mr. Lavin,
     two years and Mr. Malloy one year.

William K. Lavin.  Mr.  Lavin became a director in October,  1997 and  currently
operates his own  consulting  business that he formed in 1994.  Prior to forming
his firm, he was Chief Executive Officer of Woolworth  Corporation (NYSE:Z) from
1993-1994 and immediately  prior to that position he served as Woolworth's Chief
Administrative and Financial Officer. Mr. Lavin serves on the board of directors
of the Allegheny  corporation (NYSE:Y) and Chicago Title Corporation  (NYSE:CTZ)
and is also a trustee of St. John's University.

Daniel W. Dowe.  Mr. Dowe became a director in March,  1997 and he became Acting
President  on November 17, 1997 and  President  and Chief  Executive  Officer on
April 1, 1998.  Mr.  Dowe has agree to serve in this  capacity  for a three year
period  pursuant to a written  employment  agreement  and will have an option to
serve for additional three year period.  He is the founder of Dowe & Dowe, a New
York City-based law firm that provide some legal services to the company.  Since
November 17, 1997, Mr. Dowe has provided  legal services to the company  without
charges as part of his employment  responsibilities  with the company. From 1993
to present, Mr. Dowe has been practicing corporate and securities law. From 1990
to 1993, upon graduating from Fordham  University School of Law, Mr. Dowe was an
associate  Donohue & Donohue a New York City-  based law firm  concentrating  on
international  trade  matters.  Prior to  practicing  law he was  employed as an
accountant and internal auditor for Alliance Capital Management company, Salomon
Brothers (Salomon Smith Barney)

                                       

<PAGE>


and J.P. Morgan bank.

Douglas S.  Friedenberg.  Mr.  Friedenberg  has been a director since  November,
1996.  He has been the  President of Firebird  Capital  Management,  a financial
advisory firm, since March,  1993 and currently  manages two private  investment
funds for Firebird. He also writes a regular column for HFR Journal, a quarterly
publication  for the  investment  industry.  In 1991, he  co-founded  and became
President of Unicorn Capital  Management,  an investment  management  firm. From
1983 to 1991, he managed private investment  portfolios for Morgan Stanley, Inc.
large New York City-based  investment  banking firm. Mr.  Friedenberg  currently
serves as a Director of Datametrics Corporation.

Edward J. Malloy. Mr. Malloy became a director in January, 1998. He is currently
President  of the  Building and  Construction  Council of Greater New York.  Mr.
Malloy  represents  the  interests  of over  200,000  laborers  involved  in the
building  trades  in the  Greater  New York City  area.  He is  responsible  for
developing  building  projects in both the public and private  sectors to ensure
for an adequate  level of work for his union  members.  Mr. Malloy brings to the
company an extensive level of contacts and industry experience.

                       Novacrete Technology (Canada) Inc.

Name                                 Aqe                    Position
----                                 ---                    --------

Daniel W. Dowe                       36            Chairman, President,

Richard Dryburgh                     48            Director, Sales Manager

Gary Lacey                           50            Director, Operations Manager

John Bellocchio                      55            U.S. Regional Sales Manager

Rajinder Bhagrath                    55            Research and Development
                                                   Manager

*    All Novacrete Canada directors serve for one periods and at the election of
     the company's board of directors.

Daniel W. Dowe.  (See above profile)

Richard Dryburgh. Mr. Dryburgh joined the company in February, 1998 as sales and
marketing  manager for all of North America.  Mr.  Dryburgh is a Certified Civil
Engineering  Technologist  with more than 20 years'  experience in marketing and
product development. Prior to joining Novacrete, from 1996 to 1998, Mr. Dryburgh
was Sales and Marketing Manager for ProMesh, Inc. of Kitchener,  Ontario,  where
he  directed  technical  development,   marketing  and  media  advertising,  and
international  sales.  ProMesh is a manufacturer  and marketer of  polypropylene
fibres.  Prior to joining  ProMesh he was the Sales and  Marketing  Manager  for
National Slag (Lafarge) Ltd. From 1995 to 1996.  From  1992-1995,  Mr.  Dryburgh
managed the construction  division of several companies;  coordinated and taught
in a program for construction  trade students;  and established and grew his own
contracting  consulting firm, R.J.  Dryburgh & Associates.  Mr. Dryburgh holds a
degree in Construction  Engineering Technology from Conestoga College of Applied
Arts & Technology,  Waterloo, Ontario. He also completed professional courses at
Xerox  International's  (Salesmanship  and Sales  Management) and Humber College
(Successful Management).

Gary Lacey. Mr. Lacey joined the company in March, 1998 and oversees operations,
including quality control,  quality assurance,  and new product development.  He
will also assist with sales, drawing on his extensive experience in the building
products industry. Mr. Lacey's experience



<PAGE>


includes  marketing,  sales and technical  service of concrete repair  products,
industrial flooring systems,  protective coatings,  and expansion joint systems.
Prior to  joining  the  company,  Mr.  Lacey  was  employed  from  1995 by EPoxy
Industries, Ltd. of Concord, Ontario, where he was Sales Manager of the Canadian
division of a U.S. manufacturing company. His responsibilities included defining
and developing the Canadian market of a complete  product line, and developing a
Canadian  distribution  network.  From 1990 to 1995 he was the  Technical  Sales
Representative  with Harris  Specialty  Chemicals  and from  1986-1990  he was a
Technical Sales Representative for Fosroc Construction Chemicals.

Mr.  Lacey holds a Diploma in General  Chemistry  from the Granton  Institute of
Technology,  Toronto,  and a Certificate in Business  Administration,  Sales and
Marketing major, from Sheridan College, Oakville, Ontario. He has also completed
technical  courses  in  coatings  technology,  caulks  and  sealants,  sales and
marketing.

John Bellocchio.  Mr.  Bellocchio will manage  Novacrete's  Northeastern  United
States  sales  program.  Prior to  Novacrete,  Mr.  Bellocchio  was  Director of
Marketing  and  Sales at  Anti-Hydro  International,  a  manufacturer  of liquid
admixtures  and marketer of the ProMesh  line of  polypropylene  fibres.  Before
that,  he was Eastern  District  manager for W.R.  Grace  Construction  Projects
division,  where he helped  pioneer  the sales and  marketing  efforts  of a new
waterproofing  product  called  Bituthane.  This single product grew to over $15
million  per year in sales.  Prior to joining  W.R.Grace  he was  employed  in a
privately owned contracting business.

Mr. Bellocchio completed a two-year Certificate in Construction Management at
Fairleigh Dickinson University.

Dianne  Hartwick.   As  General  Manager,   Ms.  Hartwick   oversees  the  daily
administrative  functions  of  the  Company's  Canadian  subsidiary,   Novacrete
Technology,  Inc.,  where she also  serves as a  director.  In  addition  to her
primary duties, Ms. Hartwick will serve as the Company's  administrative liaison
with vendors and distributors of the Company's products.  In this capacity,  Ms.
Hartwick will assist the efforts of the Company's marketing and operations staff
to ensure  the timely  delivery  of raw  materials  and  supplies,  and that all
deliveries of finished products are met with total customer satisfaction.

Ms. Hartwick has been trained by the Industrial Accident Prevention  Association
in loss control leadership and has been trained in Workplace Hazardous Materials
Information System (WHMIS) classification and legislation.

Employed on August 24, 1998

Rajinder  S.  Bhagrath.   Mr.  Bhagrath  oversees  the  company's  research  and
development. For a six month period before joining the company, Mr. Bhagrath was
employed as a research  chemist by one of the  construction  product  industry's
leaders, Mapei, Inc. From 1971 to 1998, he was employed by Sternson Construction
Products in various  capacities  that lead to his becoming  group leader for all
product development and research and development.

Item 11.    Executive Compensation


<PAGE>

                           SUMMARY COMPENSATION TABLE

                                               Long-Term Compensation
                                               ----------------------
               Annual compensation          Awards               Payouts
               -------------------          ------               -------
                                                     Securi-
                                                      ties
Name                            Other                Underly-              All
and                             Annual   Restrict-     ing               Other
Princi-                         Compen-  ed Stock    Options/   LTIP   Compen-
pal          Salary    Bonus    sation   Awards       SARs     Payouts  sation
Position/Year ($)      ($)        ($)      (#)         ($)       ($)       ($)
--------------------------------------------------------------------------------
Daniel W.
Dowe
President
(1)(2)(5)    $180,000                   367,500

Douglas
Friedenberg,
Treasurer
(1)(2)(6)                               $38,500

William K.
Lavin,
Chairman,
Secretary
(1)(6)

Edward J.
Malloy,
Director
(1)(6)

Richard
Dryburgh,
(4)

Gary
Lacey,
(4)

John
Bellocchio,
(4)

(1)  Except for Mr.  Dowe,  the three  remaining  directors  receive  $2,500 per
     quarter for services rendered as directors of the company, which is paid in
     restricted  common stock based on the average bid and closing prices of the
     company's common stock on the last trading day for the months ending March,
     June, September and December.  In addition each non-employee director shall
     receive  an  additional  $10,000  per annum,  payable in equally  quarterly
     installments  if such  director is a member of a committee  of the board of
     directors that actually meets during the quarterly period.

     For assisting the company with corporate finance advice and capital raising
     services Mr.  Friedenberg  has received a total of $38,500 of which $13,500
     was paid in  common  stock at then the  existing  market  price of $.35 per
     share.  In addition,  upon the request of the company's  President and with
     full  disclosure  to the entire board of directors,  certain  directors may
     receive  additional  compensation for services  rendered to the company for
     specifically  defined and approved projects that are beyond their duties as
     directors  of the company.  As of May 31, 1998,  Mr. Lavin has provided the
     company with approximately 20 hours of service relating to the strategy and
     due diligence  associated with potential  corporate  acquisitions.  In this
     capacity he charges the company a rate of $200 per hour.

(2)  On June 25,  1997,  the Company  issued an  aggregate  of  1,727,772  stock
     options



<PAGE>


     to its  then  directors,  Messrs.  MacMillan,  Friedenberg  and  Dowe as an
     incentive for future  performance.  Of these  options,  Messrs.  MacMillan,
     Friedenberg and Dowe each received 575,924  options.  The stock options are
     exercisable  when issued at then current market price of $.35 per share and
     will expire on June 25, 2002.

(3)  In lieu of cash,  Mr.  MacMillan  has  agreed to accept  189,160  shares of
     common stock for the period June 1, 1997 to November  17, 1997,  as payment
     for his salary  compensation  which was based on  $150,000  per  annum.  In
     addition,  Mr.  MacMillan is claiming to be owed another  $60,000 in unpaid
     salary which the company disputes.

(4)  Total  compensation  paid to  each  of  these  individuals  did not  exceed
     $100,000.

(5)  On April 1, 1998, Mr. Dowe agreed to serve as President and Chief Executive
     Officer  for a three year terms and for an  additional  three  years at his
     option.  His base  compensation  for the period April 1, 1998 through March
     31,  1999 is  $180,000  and  shall  be  subject  to  annual  review  by the
     Compensation Committee of the Board of Directors but not less than $180,000
     per annum.  In addition for  agreeing to wind down his equity  interest and
     involvement  in his law firm,  Dowe & Dowe,  Mr. Dowe was  granted  270,000
     shares of common stock which when granted had a public market value of $.30
     per share, although the share issued were restricted from transfer pursuant
     to Rule 144. In  addition  Mr. Dowe shall be entitled to a cash bonus equal
     to seven and one-half percent  consolidated  revenue not to exceed his base
     salary and shall be allowed to  participate  in the company's  stock option
     plan if such plan is approved by the company's shareholders.  From November
     17,  1997 to March 31, 1998 Mr. Dowe was paid the sum of $15,000 and 30,000
     shares of restricted  common stock per month to serve as Acting  President.
     All common stock issued to Mr. Dowe can be registered pursuant to Form S-8,
     although  at the  time of this  filing  he has not  asked  the  company  to
     register any of his shares for resale.

(6)  Pursuant  to a  resolution  of the  board  of  directors  all  non-employee
     directors  and  employees  that are not part of a defined  cash  bonus plan
     shall be paid a cash  bonus  equal to $.50  per gas of a  Novacrete  Repair
     Product  sold at a price  equal or  greater to $11.00  per 55 lb.  bag.  In
     addition  cash  bonuses  will be paid at ten  percent of the gross  selling
     price for Novacrete Admixture sold in excess of $2.00 per pound.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The  following  table shows the amount of common stock owned as of May 31, 1998,
by each director and officer and affiliates and by all directors and officers as
a group.  Each  individual  has  beneficial  ownership  of the shares  which are
subject to an unexercised stock options and stock warrants held by him, and each
individual has sole voting power and sole  investment  power with respect to the
number of shares beneficially owned:



<PAGE>


                             Amount and Nature
Name and Address               of Beneficial                   Percent of
of Beneficial owner              ownership                     Class (1)
-------------------              ---------                     ---------

Douglas Friedenberg,              3,353,376                     21.4%
Director, Treasurer
1775 Broadway, Suite 1410
New York, New York 10019

Daniel W. Dowe
Director, President
Chief Executive Officer

67 Wall Street, Suite 2411
New York, New York 10005          1,008,281                     6.4%

QuilCap Corporation
375 Park Avenue
New York, New York 10022          1,200,000                     7.6%

William K. Lavin
Chairman
67 Wall Street
Suite 2411
New York, New York 10005                                          *

Edward J. Malloy
Director
71 West 23rd Street
New York, New York March                                          *

Richard Dryburgh
2525 Tedlo Street
Unit B
Mississauga, Ontario L5A 4A8                                      *

Gary Lacey
2525 Tedlo Street
Unit B
Mississauga, Ontario L5A 4A8                                      *

John Bellocchio
67 Wall Street
Suite 2411
New York, New York 10005                                          *

All Directors and
officers as a group               4,759,157                    30.32%

*    Percentage  of shared  beneficially  owned by each of these  directors  and
     management  employees does not exceed one percent of the class so owned, on
     a fully diluted basis. As of May 31, 1998,the company had 11,965,646 shares
     outstanding on a primary basis and 15,695,422 on a fully-diluted basis.

(1)  The class includes stock options and stock warrants  granted to the holders
     prior to May 31, 1998 and which are deemed by the company to be  acquirable
     by the  beneficial  owner  within 60 days of this filing by exercise of the
     option or  warrant.  The  company  has elected not to include in this Table
     subsequent  common stock or common  stock  equivalent  acquisitions  by the
     directors  after May 31, 1998, to enable the financial  statements  and the
     disclosures contained in this report to be comparable.

a.     Section 16(a) Beneficial Ownership Reporting Compliance

                                             Form Not         Form
Beneficial Owner    Status                    Filed        Filed late
--------------------------------------------------------------------------------
A. Roy MacMillan    Former Director/Officer  Form 5           (1)

Edward Malloy       Director/Officer         Form 3           (2)


(1)  A.Roy MacMillan  retired on November 17, 1997 and the company has no record
     of a Form 5 being filed for the year end.




<PAGE>


(2)  Mr.  Malloy became a director on January 15, 1998 and did not file his Form
     3 until  March  12,  1998  which was  attributable  to a delay in his being
     granted a stock option certificate and agreement representing his ownership
     of 100,000 stock options.

A. Roy MacMillan became a director and officer in October, 1996. On September 5,
1997, Mr.  MacMillan  filed Form 3, Form 4 and Form 5 (for the period ending May
31,  1997).  Form 3 covered  one  transaction  involving  an exercise of a stock
option  for  50,000  shares of common  stock.  Form 5  recorded  one  additional
transaction not previously  disclosed,  whereby Mr.  MacMillan  received 171,400
shares of common stock in exchange for services rendered.  Form 4, which was due
on July 15, 1997,  disclosed  two  acquisitions  of 71,248 and 98,450  shares of
common  stock  that were  issued  to Mr.  MacMillan  in  exchange  for  services
rendered,  an  acquisition  of a stock option for 575,924 shares of common stock
for services  rendered and a warrant to purchase  91,504  shares of common stock
that was received for deferring compensation.

Mr. Friedenberg became a director and officer in November, 1996. On September 5,
1997, Mr. Friedenberg filed Form 3, Form 4 and Form 5 (for the period ending May
31, 1997) as beneficial  owner of common stock,  common stock options and common
stock warrants. Form 3 covered 585,000 common shares acquired by the Friedenberg
Entities  prior to Mr.  Friedenberg  becoming a director of the Company.  Form 5
recorded  one  additional  transaction  not  previously  disclosed  whereby  Mr.
Friedenberg and the Friedenberg  Entities acquired an additional  450,000 shares
of  common  stock.  Form 4,  which  was  due on July  15,  1997,  disclosed  the
acquisition  by the  Friedenberg  Entities of 907,150 shares of common stock and
304,000 warrants to purchase common stock and Mr. Friedenberg's acquisition of a
stock option to purchase 575,924 shares of common stock.

Daniel W. Dowe became a director in March,  1997. On September 5, 1997, Mr. Dowe
filed Form 3, Form 4 and Form 5 (for the period ending May 31, 1997). Form 3 was
filed to  disclose  his  official  status and no  ownership  of  equity.  Form 5
recorded one additional  transaction not previously  disclosed  whereby Mr. Dowe
received a stock option for 575,924  shares of common  stock.  Form 4, which was
due on July 15, 1997,  disclosed  the  acquisitions  of 64,857  shares of common
stock that were received in exchange for services rendered.

The above  transactions that occurred prior to May 31, 1997, were disclosed in a
Form 10-K/A that was filed for the period ending May 31, 1996 in June, 1997.

Item 13.  Certain Relationships and Related Transactions

Mr. Friedenberg is a principal shareholder of the Company in addition to being a
director and officer.  From June 1, 1997 until November 17, 1998, his investment
company  sub-leased office space to the company at the rate of $1,000 per month.
In  addition,  three  private  investment  funds  that  are  controlled  by  Mr.
Friedenberg have loaned funds to the company and have purchase equity securities
to provide working capital to the company.  The company has established a policy
whereby when common stock is sold to any funds controlled by Mr. Friedenberg, or
any other  affiliate,  the price of the common stock is the average  between the
closing  bid and  asking  prices  for the  common  stock on the day prior to the
purchase,  even though the common stock issued is subject to restricted legends.
The  company  believes  that this  policy is fair being  that the  common  stock
issuable to Mr.  Friedenberg's  funds is not registered  and thereby  restricted
from  transfer,  and actually has a value that is discounted to the market price
of common stock that can be freely-traded.

For providing  corporate  finance  advisory  services and assisting with raising
capital from  entities  other than the funds he controls,  Mr.  Friedenberg  has
received fees for his services totaling $38,500.

In addition to serving as a director of the company, Mr. Dowe's law firm, Dowe



<PAGE>


& Dowe, provided legal services to the company from June 1, 1997 to November 17,
1998.  From  November 17, 1997 Mr. Dowe has been  performing  legal work for the
company as part of his  responsibilities as President.  Prior to becoming Acting
President in November 17, 1997, Mr. Dowe's law firm charged the company $200 per
hour for legal services for corporate and securities matters.  From November 17,
1997 to May 31, 1998, no legal fees have been paid to Dowe & Dowe.  From June 1,
1997 to November 16, 1997 the company paid Dowe & Dowe approximately $15,000 for
services rendered and an additional  $22,700 was paid in 64,857 shares of common
stock.

Mr.  Lavin has  provided  the company  with  professional  services  relating to
potential corporate acquisitions. In this capacity he is paid on an hourly basis
for services  rendered at the hourly rate of $200.  In the period ending May 31,
1998 the company did not pay any funds to Mr. Lavin but  anticipates  paying him
$4,000 in the first quarter of 1999.


                                     PART IV

Item 14.      Exhibits, Financial Statement Schedules, and
              Reports on Form 8-K
                                                                    Page
(A)           The  following financial statements and
              supplementary data are included in
              Part II Item 8

Index to Financial statements and Supplementary                     F-1
Financial Data

Report of Independent Certified Public Accountants                  F-2

Financial Statements:

Balance Sheet, May 31, 1998 and 1997                                F-3

Statement of Operations, Years Ended May 31,                        F-4
1998, 1997 and 1996

Statement of Changes in stockholders' Equity,                       F-5
Years Ended December 31, 1998, 1997, 1996
and 1995

Statement of Cash Flows, Years Ended May 31,                        F-6
1998, 1997 and 1996

Notes to Financial Statements                                       F-7

All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.



<PAGE>


(B) Exhibits to be incorporated herein by reference:

Exhibit                                              Incorporated Document

3(i)     -     Articles of Incorporation             Form 10-K/A for the
                                                     period ending May 31,
                                                     1996

3(ii)    -     By-Laws                               Form 10-K/A for the
                                                     period ending May 31, 1996

99       -     Battista Agreement                    Form 10-K/A for the
                                                     period ending May 31,
                                                     1997.

99       -     Supercrete N/A Limited                Form 10-K for the period
               Agreement dated December              ending May 31, 1997
               20, 1996

(B) Exhibits filed herein:

Exhibit

4        -     10% $550,000 Convertible
               Debenture and Stock Warrant
               Agreement

21       -     Subsidiaries of the Company

99       -     Employment Agreement for
               Daniel W. Dowe dated
               April 1, 1998

(C) Reports on Form 8-K

Part IV, Item 14                                      Form 8-K filed on
                                                      August 27, 1997

Part IV, Item 14                                      Form 8-K filed on
                                                      November 3, 1997

Part IV, Item 14                                      Form 8-K filed on
                                                      November 17, 1997



<PAGE>


                                   SIGNATURES

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

STRATFORD ACQUISITION CORPORATION


By:    /s/ Daniel W. Dowe
       ----------------------------
         Daniel W. Dowe, President


By:    /s/ Douglas Friedenberg
       --------------------------------
         Douglas Friedenberg, Treasurer


Dated: September 15, 1998


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 capacities and on the dates indicated:


                                                              Dated    
                                                              -----    

/s/ Daniel W. Dowe         Director                     September 15, 1998
------------------
Daniel W. Dowe


/s/ William K. Lavin       Director                     September 15, 1998
--------------------
William K. Lavin               
                               
                               
/s/ Douglas Friedenberg    Director                     September 15, 1998
-----------------------
Douglas Friedenberg            
                               
                               
/s/ Edward J. Malloy       Director                     September 15, 1998
--------------------
Edward J. Malloy