UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  ------------

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                         Commission file number: 0-27290

                                -----------------

                                    KSW, INC.
           (Exact name of the Registrant as specified in its charter)


                 Delaware                                   11-3191686
             ----------------                           --------------
       (State or other jurisdiction                      (I.R.S. Employer
      incorporation or organization)                   Identification No.)

               37-16 23rd Street, Long Island City, New York 11101
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (718) 361-6500
                                                           --------------

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

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

                          Common Stock, $.01 par value
                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No __

<PAGE>

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

The estimated aggregate market value of the voting stock held by non-affiliates
of the registrant on March 18, 2002 was $4,102,733.25 (based on a price of
$0.75 per share).

As of March 18, 2002, there were 5,470,311 shares of Common Stock, $.01 par
value per share, outstanding.



                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE







                                       2
<PAGE>

<TABLE>

PART I
<S>           <C>                                                                                      <C>
         ITEM 1.           BUSINESS.....................................................................3

         ITEM 2.           PROPERTIES...................................................................7

         ITEM 3.           LEGAL PROCEEDINGS............................................................7

         ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........................9

PART II

         ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........9

         ITEM 6.           SELECTED FINANCIAL DATA.....................................................10

         ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                           OPERATIONS..................................................................11

         ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK...................16

         ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................................16

         ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                           DISCLOSURE..................................................................16

PART III

         ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........................17

         ITEM 11.          EXECUTIVE COMPENSATION......................................................19

         ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..............23

         ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................24


                                       i

<PAGE>

PART IV

         ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.............25

SIGNATURES.............................................................................................F-23

</TABLE>















                                       ii
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

         General. KSW, Inc., a Delaware corporation (the "Company" or "KSW"),
furnishes and installs heating, ventilating and air conditioning ("HVAC")
systems and process piping systems for institutional, industrial, commercial,
high-rise residential and public works projects. The Company does not pursue
projects under $500,000. Directly or indirectly through separate subsidiaries,
the Company also serves as a mechanical trade manager, performing project
management services relating to the mechanical trades. The Company operates its
contracting business through its wholly-owned subsidiary, KSW Mechanical
Services, Inc. ("KSW Mechanical").

         Total revenues for 2001 were $ 51,005,000. Some of the Company's
ongoing projects include the following: The Children's Hospital at New York
Presbyterian, Harborside Financial Center in Jersey City, N.J., and the New
Federal Court House and U.S. Post Office/Courthouse, both in Brooklyn, NY. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

         The Company's primary strategic objectives are to increase its revenues
and to become more competitive in its present business. The Company may use
additional funds, if available, to expand its business into new geographic areas
in the Northeastern United States or to acquire businesses which would be
complementary to its current lines of business. The Company may also pursue
acquisitions outside its current lines of business for greater diversification.
The Company's common stock is traded on the NASDAQ Electronic Bulletin Board
under the symbol "KSWW."

         The Company provides heating, ventilation and air conditioning ("HVAC")
systems and process piping systems under direct contracts with owners of
buildings or subcontracts with general contractors or construction managers.
These contracts sometimes are awarded by competitive bids, since many of the
owners are public entities. Other contracts are obtained through negotiation
with private parties.

         Traditionally, the Company's mechanical contracting and subcontracting
work made up as much as 90% of its total revenues. Because mechanical
contracting and subcontracting is a substantial portion of its business, the
Company intends to continue its concentration in this area.

         The Company's management pioneered the concept of managing the
mechanical trade portion of construction. On larger complex projects (generally
those having a mechanical portion valued over $10 million), such as the ongoing
Children's Hospital Project at New York Presbyterian, it is often beneficial for
a general contractor or construction manager to lock in the costs of the
mechanical portion of the contract prior to completion of the contract
documents. By engaging the services of a trade manager, general contractors or
construction managers can more accurately evaluate design alternatives so that
the completed construction documents balance costs and project objectives. As a


                                       3
<PAGE>

mechanical trade manager, the Company or its subsidiary performs a construction
manager function for the mechanical trade portion of a project. The Company
divides the mechanical portion of the contract into bid packages for
subcontractors and equipment, negotiates subcontracts and coordinates the work.
This coordination makes a significant difference in keeping a project on
schedule and within budget.

         As a mechanical trade manager, the Company may subcontract parts of a
large project to different subcontractors, thereby increasing competition on
projects and lowering bids by allowing smaller contractors to compete for the
subcontract work. Customers benefit by having a single source with the
responsibility for the cost, coordination and construction progress of the
mechanical portion of the projects.

         The Company provides a guaranteed maximum price ("GMP") to the owners
for its scope of responsibility. The Company controls the GMP by obtaining
accurate maximum price quotes from potential suppliers and subcontractors,
requiring payment and performance bonds from major subcontractors and adding a
contingency allowance to these before quoting the GMP. The Company also works to
control costs because it is a mechanical contractor and can perform the
guaranteed work on its own. These costs are subject to certain risk factors
discussed below.

         Although trade management is typically available only on large jobs,
the Company believes there is opportunity for expanding this line of business.
While trade management projects provide a net profit margin similar to that for
contracting projects, there is generally less risk associated with trade
management projects because there is a contingency fund which can be drawn from
if necessary. A contingency fund is a line item which the Company includes in
the GMP to account for any contingencies the Company may not have anticipated in
estimating the GMP. In the event the Company's costs exceed the relevant line
items quoted in the GMP, the Company may draw from the contingency fund to cover
such expenses. While there is no assurance that any cost overrun will not exceed
this contingency, they have not done so to date.

         Operations. The Company obtains projects primarily through negotiations
with private owners, construction managers and general contractors, and by
competitive bidding and negotiations in response to advertisements by federal,
state and local government agencies. The Company submits bids after a detailed
review of the project specifications, an internal review of the Company's
capabilities, equipment, personnel availability, and an assessment of whether
the project is likely to meet the targeted profit margins. After computing the
estimated costs of the project to be bid, the Company adds its desired profit
margin before submitting a bid.

         The Company believes it has been successful in the competitive bidding
process because it is selective in the projects on which it bids and has highly
skilled personnel familiar with the local market. The Company strives to avoid
costly bidding errors by becoming thoroughly familiar with all aspects of a
project and developing a comprehensive project budget using its proven cost
estimation system. Projects are divided into phases and line items indicating


                                       4
<PAGE>

separate labor, equipment, material, subcontractor and overhead cost estimates.
As a project progresses, the Company's project managers are responsible for
planning, scheduling and overseeing operations and reviewing project costs
against the estimates. The Company's costs have been and may in the future be
impacted by lower than expected labor productivity and higher than expected
material costs.

         The Company has received letters of approval as an authorized bidder by
various government agencies, including the New York City Transit Authority, the
New York City Health and Hospitals Corporation, the New York City School
Construction Authority, the New York City Housing Authority and the New York
State Dormitory Authority.

         Markets. The Company competes for business primarily in the New York
City metropolitan area. However, the Company has performed work outside of that
area in the past.

         Backlog. The Company has a backlog (anticipated revenue from the
uncompleted portions of awarded projects) of orders totaling approximately $
52,000,000 as of December 31, 2001, compared to $ 62,000,000 at December 31,
2000.

         A portion of the Company's anticipated revenue in any year is not
reflected in its backlog at the start of the year because some projects are
started and completed the same year. The Company believes that its backlog is
firm, notwithstanding provisions contained in some contracts which allow
customers to modify or cancel the contracts at any time, subject to certain
conditions, including reimbursement of costs incurred in connection with the
contracts and the possible payment of cancellation fees.

         Competition. The mechanical contracting market is highly competitive.
There are many larger regional and national companies with resources greater
than those of the Company. However, some of these large competitors are
unfamiliar with the New York City metropolitan area. The Company competes in New
York City with respect to such companies because of its reputation in the area
and its knowledge of the local labor force. There are many smaller contractors
and subcontractors in the New York City metropolitan area. The Company believes
there are barriers to entry for smaller competitors, including bonding
requirements, relationships with subcontractors, suppliers and union workers.

         Regulation. The construction industry is subject to various
governmental regulations from local, state and federal authorities. The Company
is impacted by state and federal requirements regarding the handling and
disposal of lead paint, but the impact cannot be predicted at this time since it
varies from project to project. The Company must also comply with regulations as
to the use and disposal of solvents and hazardous wastes, compliance with which
are a normal part of its operations. The Company does not perform asbestos
abatement but has occasionally subcontracted that part of a contract to duly
licensed asbestos companies with the Company being named as an additional
insured on the asbestos company's liability insurance policy. The Company has


                                       5
<PAGE>

not incurred any liability for violation of environmental laws. The Company must
also comply with rules and regulations promulgated by the Occupational Safety
and Health Administration.

         Employees. At December 31, 2001, the Company had 48 permanent, full
time employees. The Company also employs field employees who are union workers.
The number of union workers employed varies at any given time, depending on the
number and types of ongoing projects and the scope of construction work under
contract. The Company hires union labor for specific work assignments and can
reduce the number of union workers hired at will with no penalties.

         The Company pays for benefits payable to union employees through the
payment of funds to a trust established by the union. The Company's obligation
is to pay a percentage of the wages of union workers to the trust fund. Thus,
the Company does not accrue liabilities for pension and medical benefits to
union retirees. The Company provides its full time permanent employees with
medical insurance benefits and a discretionary matching 401(k) plan. The Company
has in the past matched 25% of the employees' 401(k) contributions.

         Dependence Upon Customers. The Company seeks large, multi-year
contracts. At any given time, a material portion of the Company's contracting
business may be for one large contract for one customer.

         For the year ended December 31, 2001, work under contracts with three
customers: Tishman Construction Co., J.A. Jones Construction Group, LLC., and
Bovis Lend Lease, Inc., amounted to 23%, 16%, and 14% of the Company's total
revenues, respectively.

         Historically, a considerable portion of the Company's revenue has been
generated from contracts with federal, state and local governmental authorities.
Consequently, a reduction in public sector contracts for any reason, including
an economic downturn or a reduction in government spending, could have a
material adverse effect on the Company's results of operations. At any one time,
the Company's contracts with federal, state and local governmental authorities
may or may not represent a material portion of its revenues.

         On most of its projects, the Company is required to provide a surety
bond. The Company's ability to obtain bonding, and the amount of bonding
required, is primarily based upon the Company's net worth, working capital and
the number and size of projects under construction. The larger the project
and/or the number of projects under contract, the greater the requirements are
for bonding, net worth and working capital. The Company generally pays a fee to
the bonding company of an amount less than 1% of the amount of the contract to
be performed. Since inception, the Company has not encountered difficulties in
obtaining Payment and Performance Bonds nor has the bonding company been
required to make a payment on any bonds issued for the Company.



                                       6
<PAGE>

         Other Matters. The Company does not own any patents, patent rights, or
similar intellectual property, and none are material to its business. The
Company's business is not subject to large seasonal variations. During 2000 the
Company spent $125,000 on investigating the feasibility of entering the
commercial fuel cell energy business. The Company expended no funds for research
and development in 2001 and anticipates none in 2002.

ITEM 2.  PROPERTIES

         Pursuant to a Modification of Lease Agreement, dated as of May 1, 1998,
the Company leases an office and warehouse space in Long Island City, consisting
of 18,433 square feet. The lease has an annual rent of $173,000. The lease has
two five year options with yearly rent increases of approximately 2%. The lease
is a triple net lease and thus the Company will pay any increases on real estate
taxes over the base year taxes, maintenance, insurance and utilities. The
Company has exercised the first five year option under the Modification of Lease
Agreement, which extends the lease term through June 2004.

         The Company also leases a building and a storage yard in Bronx, New
York, consisting of a 14,000 square foot building, including 4,000 square feet
of offices, 10,000 square foot of shop space and an adjacent 5,000 square foot
storage yard. This lease is a triple net lease. The Company pays rent of
$103,000 per year, plus taxes (currently $20,000 per year), maintenance,
insurance and utilities. The lease will expire on December 31, 2002. See
"Certain Relationships and Related Transactions."

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not aware of any pending or threatened legal proceedings
which could have a material adverse effect on its financial position or results
of operations, other than item (b) below. The following are the material
lawsuits in which the Company is a party:


a.       Co-op City. In February 1999, the Company sued the general contractor
         and its bonding company in New York State Supreme Court, Queens County,
         to recover the sum of $5,770,919. Included is a claim for unanticipated
         costs incurred through 1998 in the sum of $3,662,734, and claims to
         recover for work beyond the scope of the Company's contract. Discovery
         has been completed and the action placed on the trial calendar. The
         case should be tried within the next twelve months. While the Company
         and its counsel believe the lawsuit has merit, there is no guaranty the
         claim will ultimately be successful, or that the full amount of damages
         sought will be awarded.

b.       Helionetics Creditors Committee v. Barnes, et. al. On April 26, 1999,
         the Company and six current or former officers and directors were named
         in a lawsuit in U.S. Bankruptcy Court, Central District of California,
         instituted by the Creditors Committee of Helionetics, Inc., the


                                       7
<PAGE>

         Company's former parent. The complaint alleges that the December 28,
         1995 Distribution by Helionetics of KSW, Inc. stock to Helionetics'
         shareholders was a fraudulent conveyance, and seeks compensatory
         damages of $10,890,000, plus punitive damages. The December 28, 1995
         distribution of stock was made pursuant to a Form 10 Registration
         Statement filed with and declared effective by the Securities and
         Exchange Commission. The Company believes that the lawsuit is without
         merit and is aggressively defending the case. On March 15, 2001, the
         Court denied a motion for summary judgment filed by the Company and its
         directors, except the Court dismissed the case against director Robert
         Brussel. The Court found that there were issues of fact requiring trial
         on the merits. On May 30, 2001, the Court granted partial summary
         judgment as to the Company's officers and directors, dismissing
         Plaintiff's fraudulent conveyance causes of action relating to the
         distribution. On October 11, 2001, the Court dismissed all causes of
         action against the Company's officers and directors which relate to the
         distribution itself. The Committee's remaining claims are against the
         Company and allege (i) that the Company aided and abetted and conspired
         with Helionetics, Inc. in the breach of a fiduciary duty in that the
         distribution allegedly was made in violation of California Corporations
         Code and (ii) that the redemption by the Company of 333 shares of the
         Company's stock held by Helionetics, Inc. as part of the distribution
         was a fraudulent conveyance. A hearing will be held within the next
         three months to determine valuation issues including the issue of
         Helionetics solvency on the date of distribution.


c.       Stroock & Stroock & Lavan, LLP. On February 13, 2001, the Company
         commenced an action in the Superior Court of the State of California,
         County of Los Angeles against its former counsel, Stroock & Stroock &
         Lavan, LLP ("Stroock") for malpractice in connection with Stroock's
         representation of the Company in connection with the transactions which
         form the basis for the Helionetics Creditors Committee Action described
         in item (b) above. The Complaint also alleges malpractice in connection
         with Stroock's representation of the Company and three of its Directors
         and Officers in the Helionetics Creditors Committee Action. Subsequent
         to the filing of this action in California, Stroock sued the Company
         and three of its directors in New York State Supreme Court seeking "not
         less than $300,000" for legal fees allegedly due in connection with
         Stroock's representation of the Company in the Helionetics Creditors
         Committee Action described in item (b), above. The Company moved to
         dismiss this case on the grounds that California is the proper venue
         for the parties' disputes and that any claims for legal fees relate to
         the Company's malpractice action in California. On October 24, 2001,
         the Court granted the Company's motion to the extent of staying the New
         York action pending the determination of the California Action, on
         condition that the Company does not object to Stroock's assertion of a
         counterclaim for legal fees in the California malpractice action. The


                                       8
<PAGE>

         California Superior Court denied Stroock's motion to delay discovery
         until after the Creditors' Committee action and discovery is now
         underway.




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

         No matters were submitted to a vote of stockholders during the fourth
quarter of 2001.



                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock is traded on the NASDAQ's Electronic
Bulletin Board under the symbol "KSWW."

         At March 18, 2002, the Company had 5,470,311 shares of KSW Common Stock
issued and outstanding held by approximately 5,800 shareholders of record.

         Currently, the Company intends to retain earnings, if any, for future
growth, and does not anticipate paying dividends on its Common Stock in the
foreseeable future. The Company did not pay dividends in 2000 or 2001.

         The following information on high and low trading ranges is provided
for 2001 and 2000 based on intraday trading information:
<TABLE>
<CAPTION>
                                                          2001                                   2000
                                                          ----                                   ----
                Quarter                         High                Low                High                Low
                -------                         ----                ---                ----                ---
<S>                                           <C>                <C>                 <C>                <C>
First...............................          $  1.37            $   .62             $  3.38            $  1.31
Second..............................          $  1.01            $   .56                2.75               1.69
Third...............................          $   .92            $   .47                2.50               1.69
Fourth..............................          $   .92            $   .59                2.13               1.25
</TABLE>



                                       9
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

         The following summary of certain financial information relating to the
Company for the years ended December 31, 2001, 2000, 1999, 1998, and 1997 is
derived from, and is qualified by reference to, the financial statements for
those years, audited by Marden, Harrison & Kreuter CPAs, P.C. each of which is
included herein or in prior year's annual reports on Form 10-K, and should be
read in conjunction with such financial information.
<TABLE>
<CAPTION>
                                                                For The Year Ended December 31,
                                                                -------------------------------
                                                   (Dollars in thousands, except share and per share amounts)
                                               2001            2000         1999             1998            1997
<S>                                          <C>             <C>          <C>              <C>             <C>
Income Statement:
Revenues.........................            $51,005         $52,548      $44,847          $39,631         $66,184
Direct costs.....................             49,153          48,249       38,029           36,434          62,005
Gross profit.....................              1,852           4,299        6,818            3,197           4,179
Operating expenses...............              4,547           4,728        4,308            4,397           4,030
Selling, general, administration,
   depreciation, interest and                  3,329           4,565        5,451            3,831           4,020
   income tax expenses...........
Income (loss) before income taxes
                                             (2,695)           (429)        2,510          (1,200)             149
Net (loss) income................            (1,477)           (266)        1,367            (634)             159
Net (loss) income per share - Basic
                                               (.27)           (.05)          .25            (.12)             .03

Net (loss) income per share -
   Diluted.......................              (.27)           (.05)          .25            (.11)             .03
Number of shares used in computation
Basic............................          5,470,311       5,468,991    5,468,644        5,463,505       5,528,311
Diluted..........................          5,470,311       5,641,050    5,468,644        5,655,195       5,796,893
Balance Sheet Data:
Total assets.....................             27,620          28,263       26,147           21,273          26,269
Working capital..................              5,213           6,996        7,023            5,194           5,809
Current liabilities..............             18,149          17,255       14,912           11,388          15,700
Long-term liabilities............                 19              51           40               57              70
Stockholders' equity.............              9,452          10,957       11,195            9,828          10,499

Other Data:
Current ratio....................             1.29:1          1.41:1       1.47:1           1.46:1          1.37:1
</TABLE>


                                       10
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following is a discussion of the financial condition and results of
operations of the Company for the years ended December 31, 2001, 2000 and 1999.

Overview

         The Company's contracts most often involve work periods in excess of
one year. Revenue on uncompleted fixed price contracts is recorded under the
"percentage of completion" method of accounting. The Company begins to recognize
profit on its contracts when it first incurs direct costs. Contract costs
include all direct material and labor costs and those other direct costs related
to contract performance including, but not limited to, subcontractors' costs and
supplies. General and administrative costs are charged to expense as incurred.
Pursuant to construction industry practice, a portion of billings, generally not
exceeding 10%, may be retained by the customer until the project is completed
and all obligations of the contractor are performed. The Company has not been
subject to a material loss in connection with such retentions, although at times
legal procedures have been required to collect retentions due the Company.

Results of Operations

         The following table sets forth, as a percentage of net sales, certain
items of the Company's statement of operations for the periods indicated:
<TABLE>
<CAPTION>
                                                2001                       2000                       1999
                                                ----                       ----                       ----
                                        Amount       Percent       Amount       Percent      Amount       Percent
                                        ------       -------       ------       -------      ------       -------
                                                                  (dollars in thousands)
<S>                                   <C>          <C>           <C>               <C>      <C>              <C>
Net Sales:

Contracts ........................      $ 50,973          99.9     $ 52,502          99.9     $ 44,506         99.2

Fees .............................            32            .1           46            .1          341           .8
                                        --------       -------     --------       -------     --------      -------
Total ............................        51,005         100.0       52,548         100.0       44,847        100.0
Costs of sales ...................        49,153          96.4       48,249          91.8       38,029         84.8
                                        --------       -------     --------       -------     --------      -------
Gross profit .....................         1,852           3.6        4,299           8.2        6,818         15.2
Expenses
     Selling, general,
     administrative and interest
     expenses ....................         4,547           8.9        4,728           9.0        4,308          9.6
                                        --------       -------     --------       -------     --------      -------

Income/(loss) before provision for
income taxes .....................        (2,695)          (53)        (429)          (.8)       2,510          5.6


Provision for income taxes .......        (1,218)         (2.4)        (163)          (.3)       1,143          2.6
                                        --------       -------     --------       -------     --------      -------


Net income/(loss) ................      $ (1,477)          2.9     $   (266)          (.5)    $  1,367          3.0
                                        ========       =======     ========       =======     ========      =======
</TABLE>


                                       11
<PAGE>

                                    KSW, INC.
                       COMPUTATION OF NET INCOME PER SHARE
                        (000's EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                              BASIC       DILUTED        BASIC        DILUTED       BASIC        DILUTED
                                              2001          2001          2000         2000          1999         1999
                                              ----          ----          ----         ----          ----         ----
<S>                                            <C>          <C>          <C>           <C>          <C>           <C>
Weighted average common shares........         5,470        5,470        5,469         5,469        5,469         5,469
Common stock & common stock equivalents
    using the treasury stock method...                                                   172
                                           --------     --------      --------      --------     --------      --------
Total shares outstanding for purposes of
    Calculating basic & diluted
    earnings/(loss) per share.........         5,470       5,470         5,469         5,641        5,469         5,469
                                           =========    =========     =========     ========     ========      ========
Net income (loss) as reported.........     $ (1,477)    $ (1,477)        $(266)       $(266)       $1,367       $ 1,367
                                           =========    =========     =========     ========     ========      ========
Net income (loss) per share-basic and
    diluted...........................        $(.27)      $(.27)         $(.05)       $(.05)       $  .25       $   .25
                                           =========    =========     =========     ========     ========      ========
</TABLE>

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

         Total revenue decreased by $1,543,000 or 2.9% to $51,005,000 for the
year ended December 31, 2001, compared to $52,548,000 for the year 2000. Total
revenue during the first half of 2001 was substantially less than the second
half due to the delayed start of several new projects which did not generate
substantial revenues until the third quarter of 2001. Revenue in the second half
of 2001 increased to $30,603,000, compared to $20,402,000 for the first half, a
50% increase. At December 31, 2001 the Company had backlog of $52,000,000.

         Cost of sales increased by $904,000 or 1.9% from $48,249,000 for the
year ended December 31, 2000 compared to $49,153,000 for the year ended December
31, 2001, even though revenue decreased, due to the higher labor costs in the
first half of 2001 which are described in the following paragraph.

         For the year ended December 31, 2001 the Company had a gross profit of
$1,852,000 or 3.6% compared to $4,299,000 or 8.2% for the year 2000. In the
fourth quarter of 2001 the gross profit was $1,248,000 or 8.8% compared to a
gross loss of $19,000 or 0.1% for the same period last year. Starting with the
third quarter of 2000 and continuing through the first half of 2001 the Company
experienced an erosion of its gross profit percentage due to lower than
anticipated productivity and higher labor costs on several projects. While there
continued to be some erosion during the completion of the projects in the third
and fourth quarter of 2001, they were more than offset by higher gross margins
on newer projects.

         Selling, general and administrative expenses decreased by $181,000 or
3.8% from $ 4,728,000 for the year ended December 31, 2000 compared to
$4,547,000 for the year ended December 31, 2001. During the fourth quarter ended
December 31, 2001 selling, general and administrative expenses were $958,000
compared to $1,121,000 for the same period in 2000, a reduction of $163,000 or


                                       12
<PAGE>

14.5%. Included in the above expenses were legal fees of $401,000 in 2000
($119,000 in the fourth quarter) and $653,000 in 2001 ($280,000 in the fourth
quarter, of which $250,000 represents an accrual for anticipated future costs).
The reason for the reduction of selling, general and administrative costs in the
fourth quarter, in spite of the increased legal costs, was the commencement of
new trade management projects. On these projects, certain administrative costs
are job costed instead of being carried in selling, general and administrative
costs.

         The income tax benefit for the year ended December 31, 2001 was
$1,218,000 or 45% of taxable loss compared to $163,000 or 38% of taxable loss
for the year ended December 31, 2000 The percentages were affected by certain
state and local taxes paid based on net worth.

         As a result of all of the items mentioned above the Company lost
$1,477,000 in 2001 compared to a loss of $266,000 in 2000. During the fourth
quarter of 2001 the Company had a net profit of $163,000 compared to a net loss
of $650,000 in 2000.

         During the year ended December 31, 2001 the Company earned 23%, 16% and
14% of its revenue from its three largest customers. The Company bids on large
multi-year contracts which can account for more than 10% of its contract revenue
in any given year.



Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

         Total revenue increased by $7,701,000 or 17.2% to $52,548,000 for the
year ended December 31, 2000, compared to $44,847,000 for the same period in
1999. The increase in revenue was due to an increase in the value of jobs booked
which is reflected in the increase in backlog at the beginning of 2000,
$60,000,000, as compared to the backlog at the beginning of 1999, $36,000,000,
an increase of 67%. In addition, the Company received new work of $50,000,000
and increases during the year to existing contracts in the form of change
orders. Since most of the work is multi-year contracts only a portion of the
available work was completed during the year 2000, the balance is reflected in
the Company's backlog of $62,000,000 as of December 31, 2000.

         Cost of sales increased by $10,220,000 or 26.9% to $48,249,000 for the
year ended December 31, 2000 compared to $38,029,000 for the comparable period
in 1999 primarily as a result of the increases in revenue noted above and the
additional labor costs discussed below.

         The gross margin decreased to 8.2% for the year ended December 31, 2000
compared to 15.2% for the year 1999 due to lower than expected productivity and
higher labor costs due to full employment in the industry and the competition
for the limited workforce available. This was especially true during the fourth
quarter of 2000 when the Company had a gross loss of $19,000. The Company has
factored these additional labor costs into its bidding process; however, during


                                       13
<PAGE>

the fourth quarter of 2000 the Company was still working on older projects which
were experiencing labor overruns.

         Selling, general and administrative expenses increased by $420,000 or
9.7% to $4,728,000 as compared to $4,308,000 in 1999; however, as a percentage
of revenue they decreased to 9.0% of revenue as compared to 9.6% last year. The
increases in selling, general and administrative expenses were due to $401,000
expensed for legal and consulting fees during 2000 for the Helionetics and Co-Op
City lawsuits described in Item 3. In addition, the Company spent $125,000
during 2000 investigating the feasibility of installing systems utilizing fuel
cell energy and other alternative sources. Without these costs the selling,
general and administrative costs would have decreased by $106,000 or 2.5% and
would have been 8.0% of revenue compared to 9.6% in 1999.

         The income tax benefit for 2000 was $163,000 (38% of loss before taxes)
as compared to a tax provision of $1,143,000 in 1999 (46% of income before
taxes). This was due to certain state and local taxes paid during 2000 which
were based on net worth.

         As a result of all the items previously mentioned, there was a net loss
of $266,000 in 2000 compared to a net profit of $1,364,000 in 1999. During the
fourth quarter 2000 the Company had a net loss of $650,000 due to the items
mentioned above.

         During 2000 the Company earned 20%, 19% and 15% of its revenue from its
three largest customers.

Liquidity and Capital Resources

         The Company is currently providing value engineering assistance, which
assists owners and developers in reducing costs while maintaining quality, on
several important projects now in development. As a result, the Company believes
that it is positioned to obtain new contracts and generate increased revenues
over the next year.

         The Company's current bonding limits are also sufficient given the
volume and size of the Company's contracts. The Company's surety may require
that the Company maintain certain tangible net worth levels and may require
additional guarantees if the Company should desire increased bonding limits.

         The Company believes its current cash resources are adequate to fund a
moderate increase in sales volume in the next year. However, the Company's
capital resources may not be sufficient to sustain a substantial increase in
growth. The Company's management has had experience in expanding into new
geographic areas with the Company's predecessors; however, to date the Company
has conducted its operations exclusively in the New York City metropolitan
region.

         The Company currently has a $2,000,000 line of credit with Merrill
Lynch, which expires on December 31, 2002. The line of credit calls for
borrowing at 3% over the 30 day dealer commercial paper rate. This borrowing
rate at December 31, 2001 was approximately equal to prime. As of December 31,


                                       14
<PAGE>

2001, there was $190,000 of outstanding loans against the facility.

         The Company currently has no significant capital expenditure
commitments.

Forward Looking Statements

         Certain statements contained under "Item 1. Business" and this "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations," and other statements contained herein regarding matters that are
not historical facts, continue "forward-looking statements" (as such term is
defined in the Private Securities Litigation Reform Act of 1995). These forward
looking statements generally can be identified as statements that include
phrases such as "believe", "expect", "anticipate", "intend", "plan", "forsee",
"likely", "will" or other similar words or phrases. Such forward-looking
statements concerning management's expectations, strategic objectives, business
prospects, anticipated economic performance and financial condition, and other
similar matters involve known and unknown risks, uncertainties and other
important factors that could cause the actual results, performance or
achievements of results to differ materially from any future results,
performance or achievements discussed or implied by such forward-looking
statements. This document describes factors that could cause actual results to
differ materially from expectation of the Company. All written and oral
forward-looking statements attributable of the Company or persons acting on
behalf of the Company are qualified in their entirety by such factors. Such
risks, uncertainties, and other important factors include, among others:

o        The Company has in the past experienced erosion in gross profit margins
         due to lower than anticipated labor productivity and higher labor costs
         due to shortages of skilled labor. While the Company employs a
         comprehensive labor tracking system and has striven to maintain
         productivity levels, there is no assurance that these factors will not
         affect productivity in the future.

o        Recent federal government tariff increases on foreign steel imports are
         likely to raise the costs of piping, which is the primary material
         supplied by the Company on projects, and which may impact the Company's
         profit margins.

o        A prolonged economic downturn could result in a decrease in
         construction spending in the private and public sections which could
         reduce the Company's revenues in years subsequent to 2002.

o        The Company relies on certain customers for a significant share of our
         revenues. The loss of any of these customers could adversely affect the
         Company's business and its operating results.

o        The Company faces intense competition due to the highly competitive
         nature of the mechanical contracting market that could limit its
         ability to increase its market share and its revenues.



                                       15
<PAGE>

o        The Company's continued ability to obtain bonding is critical to its
         ability to bid on most public work and on certain types of private
         projects. The inability to obtain bonding in the future could adversely
         impact the Company's revenues.

o        During the construction period, owners or general contractors may
         request that the Company perform certain work which is a change to or
         in addition to the original contract. Such work often requires months
         to obtain formal change orders (including dollar amounts). Change
         orders are often the subject of dispute and, sometimes litigation. Slow
         receipt on collections may also result from general contractor or owner
         financial difficulties. The failure of an owner or general contractor
         to issue change orders or make payments could delay receipt of revenue
         and require litigation to collect sums due the Company.

o        Although the Company's operations are not directly affected by
         inflation, both New York City and New York State have large debt
         service burdens. Inflationary pressures have tended to result in a
         reduction in capital spending by both state and local agencies; such
         capital expenditure reductions in turn could have a negative impact on
         the Company's revenues.

o        The attack of September 11, 2001 has reportedly had an adverse effect
         on public budgets and the availability of private funds for
         construction. If these effects continue, any reduction in construction
         spending could have a negative impact on the Company's revenues in
         years subsequent to 2002.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The Company does not utilize futures, options or other derivative
instruments. As of December 31, 2001, the Company has invested $644,000 in
managed stock funds selected by Merill Lynch.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Financial Statements are submitted in Item 14 herein.


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

         None.


                                       16
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The Board of Directors of the Company is divided into three classes,
with each class serving for three years or until their successors have been
elected. The officers serve at the pleasure of the Board of Directors.
Information as to the directors and executive officers of the Company and the
proposed directors is as follows:

<TABLE>
<CAPTION>
Name                          Age               Title
----                          ---               -----
<S>                           <C>               <C>
Floyd Warkol                  54                Chief Executive Officer, President, Secretary and
                                                Chairman of theBoard of Directors

Burton Reyer                  67                Vice President and Director

Robert Brussel                59                Chief Financial Officer and Director

Stanley Kreitman              68                Director

Daniel Spiegel                76                Director
</TABLE>

         Mr. Floyd Warkol has been principally employed as Chairman of the Board
since December 15, 1995 and as President, Secretary and Chief Executive Officer
of KSW and as Chairman and Chief Executive Officer of its subsidiary KSW
Mechanical Services, Inc. since January 1994. Mr. Warkol's term expires on the
date of the 2004 Annual Meeting.

         Mr. Burton Reyer has been principally employed as Vice President and
Director of KSW and as President and Chief Operating Officer of its subsidiary
KSW Mechanical Services, Inc. since January 1994. Mr. Reyer's term expires on
the date of the 2004 Annual Meeting.

         Mr. Robert Brussel has been principally employed as Chief Financial
Officer and Director of KSW and Chief Financial Officer of its subsidiary KSW
Mechanical Services, Inc. since January 1994. Mr. Brussel's term expires on the
date of the 2003 Annual Meeting.

         Mr. Daniel Spiegel has been a Director of KSW since January 1996. He
had been principally employed as Senior Vice President of Tishman Realty &
Construction Company, Inc. from 1970 until March 1995. He is presently a
consultant to various construction-related companies. Mr. Spiegel's term expires
on the date of the 2002 Annual Meeting.

         Mr. Stanley Kreitman was elected to the Board of Directors on May 18,
1999. Since 1994, Mr. Kreitman has been Chairman of Manhattan Associates, an
investment firm and is a Board member of the N.Y.C. Department of Corrections.


                                       17
<PAGE>

He is a published author and lecturer on business investment matters. He is a
member of the Board of Directors of Medallion Funding Corp. (NASDAQ), Ports
Systems Corp. (AMEX) and CCA Industries, Inc. (NASDAQ). Mr. Kreitman's term
expires on the date of the 2002 Annual Meeting.

         Committees of the Board of Directors. A Compensation Committee approves
the salary, incentives and benefit plans for directors, officers and other
employees, and the granting of options and other compensation matters. The
Compensation Committee consists of nonemployee Directors, Stanley Kreitman and
Daniel Spiegel. An Audit Committee, also composed of nonemployee Directors,
oversees actions taken by the Company's independent auditors and reviews the
Company's financial controls.

         Classified Board of Directors. The Company's Board of Directors is
divided into three classes of Directors serving staggered three-year terms.

         Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC") and the National Association of Securities
Dealers, Inc. Executive officers, directors and stockholders of more than ten
percent of the Company are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to the Company and written representations from
certain reporting persons, the Company believes that during the year ended
December 31, 2001, its executive officers, directors and stockholders of more
than ten percent of the Company complied with all applicable Section 16(a)
filings requirements.











                                       18
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

         The following table sets forth remuneration paid to executive officers
of the Company for the years ended December 31, 2001, 2000 and 1999.
<TABLE>
<CAPTION>
                                                                 Annual
                                                                 ------
                                                                 Compensation
                                                                 ------------
         Name and Principal Position                  Year       Salary                 Bonus
         ---------------------------                  -----      ------                 -----
<S>                                                   <C>        <C>                    <C>
         Floyd Warkol                                 2001       $420,000               $0
         Chairman of the Board, President,            2000       $420,000               $0
         Secretary and Chief Executive Officer        1999       $420,000               $252,605

         Burton Reyer                                 2001       $240,000               $0
         Vice President                               2000       $240,000               $0
                                                      1999       $240,000               $146,245


         Robert Brussel                               2001       $145,000               $30,000
         Chief Financial Officer                      2000       $145,000               $30,000
                                                      1999       $135,000               $37,500


         James Oliviero                               2001       $160,000               $30,000
         General Counsel and Director of Investor     2000       $160,000               $30,000
         Relations                                    1999       $150,000               $37,500
</TABLE>


         The Company and KSW Mechanical entered into a two-year employment
contract and a noncompetition agreement with Mr. Warkol for the term of January
1, 1999 through December 31, 2000. The employment contract provided for base
annual compensation of $420,000. In addition, Mr. Warkol was entitled to
receive, each year, an amount equal to 9.5% of the Company's annual profits,
before taxes, which are in excess of $250,000. For the purposes of computing the
amount due Mr. Warkol, annual pretax profits excluded the effect of any income
or expense on the Co-op City project, and excluded any bonuses due to Mr. Warkol
or Mr. Reyer. Mr. Warkol was entitled to medical insurance, disability insurance
with payments equal to 60% of base compensation, a $1 million policy of life
insurance payable as directed by the employee (at a cost of $3,595 per year) and
a car with a chauffeur. Mr. Warkol was entitled to terminate his employment for
"good reason," i.e., a substantial change in the nature or status of his
responsibilities or the person to whom he reported in which event he was
entitled to receive full pay and benefits for the remainder of the term of the
contract. The Company was not entitled to discharge Mr. Warkol for disability
until he had been disabled for 180 consecutive days. Mr. Warkol's estate was


                                       19
<PAGE>

entitled to two months pay in the event of his death. Mr. Warkol agreed that he
will not compete in the mechanical contracting business in the New York City
metropolitan area for the term of his employment agreement and for two years
thereafter.

         The Company and KSW Mechanical entered into a two-year employment
contract and a noncompetition agreement with Mr. Reyer for the term January 1,
1999 through December 31, 2000. The employment contract provided for base annual
compensation of $240,000. In addition, Mr. Reyer was entitled to receive an
amount each year, equal to 5.5% of the Company's annual profits, before taxes,
which are in excess of $250,000. For the purposes of computing the amount due
Mr. Reyer, annual pretax profits excluded the effect of any income or expense on
the Co-op City project and shall exclude any bonuses due Mr. Reyer and Mr.
Warkol. Mr. Reyer was entitled to medical insurance, disability insurance with
payments equal to 60% of base compensation and a $500,000 policy of life
insurance payable as directed by the employee. Mr. Reyer was entitled to
terminate his employment for good reason, i.e., a substantial change in the
nature or status of his responsibilities or the person to whom he reports, in
which event he is entitled to receive full pay and benefits for the remainder of
the term of the contract. The Company was not entitled to discharge Mr. Reyer
for disability until he has been disabled for 180 consecutive days. Mr. Reyer's
estate was entitled to two months pay in the event of his death. Mr. Reyer
agreed that he will not compete in the mechanical contracting business in the
New York City metropolitan area for the term of his employment agreement and for
two years thereafter.

         The Company has not entered into new employment agreements with Mr.
Warkol or Mr. Reyer. During 2001 and 2002, Mr. Warkol and Mr. Reyer continued in
the same capacities and continue to receive the same financial renumeration as
under the prior employment agreements.

         Options Granted. The Company adopted the 1995 Stock Option Plan of KSW,
Inc. (the "Stock Option Plan") on December 15, 1995, and the Stock Option Plan
was approved by the KSW stockholders by unanimous written consent on December
15, 1995. The Stock Option Plan is administered by a Committee appointed by the
Board of Directors (each herein called the "Compensation Committee"). All key
employees of, consultants to, and certain non-employee Directors of the Company,
as may be determined by the Compensation Committee from time to time, are
eligible to receive options under the Stock Option Plan.

         A total of 750,000 shares were originally authorized for issuance under
the Stock Option Plan. At the Company's Annual Meeting held on June 27, 1996 the
shareholders approved an amendment to the Stock Option Plan to increase by
350,000 shares the aggregate number of shares of Common Stock available for
future options to 490,000 shares. Prior to 1997, the Company had granted options
with respect to 610,000 shares at an exercise price of $1.50 per share to
certain eligible participants under the Stock Option Plan (of which 535,000 were
issued to officers and directors of the Company and its subsidiaries). In 1999,


                                       20
<PAGE>

the Company issued a total of 55,000 stock options to three key employees and to
a Director, Stanley Kreitman, exercisable at $1.50 per share.

         The exercise price of an incentive stock option and a nonqualified
stock option is fixed by the Compensation Committee on the date of grant;
however, the exercise price under an incentive stock option must be at least
equal to the fair market value of the KSW Common Stock on the date of grant.

         Stock options are exercisable for a duration determined by the
Compensation Committee, but in no event more than ten years after the date of
grant. Options shall be exercisable at such rate and times as may be fixed by
the Compensation Committee on the date of grant. The aggregate fair market value
(determined at the time the option is granted) of the KSW Common Stock with
respect to which incentive stock options are exercisable for the first time by a
participant during any calendar year (under all stock option plans of the
Company and its subsidiaries) shall not exceed $100,000. To the extent that this
limitation is exceeded, such excess options shall be treated as nonqualified
stock options for purposes of the Stock Option Plan and the Internal Revenue
Code of 1986, as amended (the "Code").

         At the time a stock option is granted, the Compensation Committee may,
in its sole discretion, designate whether the stock option is to be considered
an incentive stock option or nonqualified stock option plan. Stock options with
no such designation shall be deemed an incentive stock option to the extent that
the $100,000 limit described above is met.

         Payment of the purchase price for shares acquired upon the exercise of
options may be made by any one or more of the following methods: in cash, by
check, by delivery to the Company of shares of KSW Common Stock already owned by
the option holder, or by such other method as the Compensation Committee may
permit from time to time. However, a holder may not use previously owned shares
of KSW Common Stock that were acquired pursuant to the Stock Option Plan, or any
other stock plan that may be maintained by the Company or its subsidiaries, to
pay the purchase price under an option, unless the holder has beneficially owned
such shares for at least six months.

         Stock options become immediately exercisable in full upon the
retirement of the holder after reaching the age of 65, upon the disability or
death of the holder while in the employ of or service with the Company, upon a
Change of Control (as defined in the Stock Option Plan), or upon the occurrence
of such special circumstances as in the opinion of the Compensation Committee
merit special consideration. However, no options may be exercised earlier than
six months following the date of grant.

         Stock options terminate at the end of the tenth business day following
the holder's termination of employment or service. This period is extended to
one year in the case of the disability or death of the holder, and in the case
of death, the stock option is exercisable by the holder's estate.



                                       21
<PAGE>

         The options granted under the Stock Option Plan contain anti-dilution
provisions which will automatically adjust the number of shares subject to the
option in the event of a stock dividend, split-up, conversion, exchange,
re-classification or substitution. In the event of any other change in the
corporate structure or outstanding shares of KSW Common Stock, the Compensation
Committee may make such equitable adjustments to the number of shares and the
class of shares available under the Stock Option Plan or to any outstanding
option as it shall deem appropriate to prevent dilution or enlargement of
rights.

         The Company shall obtain such consideration for granting options under
the Stock Option Plan as the Compensation Committee in its discretion may
request. Each option may be subject to provisions to assure that any exercise or
disposition of KSW Common Stock will not violate the securities laws. No option
may be granted under the Stock Option Plan after December 15, 2005.

         The Board of Directors or the Compensation Committee may at any time
withdraw or amend the Stock Option Plan and may, with the consent of the
affected holder of an outstanding options at any time withdraw or amend the
terms and conditions of outstanding options. Any amendment which would increase
the number of shares issuable pursuant to the Stock Option Plan or change the
class of individuals to whom options may be granted shall be subject to the
approval of the stockholders of the Company within one year of such amendment.

         No options were granted during 2001.

         The following table shows the number of options which have been
exercised during the past fiscal year.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
                                                            Number of Securities Underlying
                    Shares Acquired                            Unexercised Options/SARs          Value of Unexercised in-the-Money
Name                 on Exercise (#)   Value Realized ($)       at Fiscal Year-End (#)          Options/SARs at Fiscal Year-End ($)
----                 ---------------   ------------------       ----------------------          -----------------------------------
                                                             Exercisable      Unexercisable      Exercisable      Unexercisable
                                                             -----------      -------------      -----------      -------------
<S>                        <C>                  <C>            <C>                  <C>              <C>               <C>
Floyd Warkol......         0                    0              300,000              0                N/A               N/A
Burton Reyer......         0                    0              150,000              0                N/A               N/A
Robert Brussel....         0                    0               25,000              0                N/A               N/A
James Oliviero....         0                    0               20,000              0                N/A               N/A
Daniel Spiegel             0                    0               20,000              0                N/A               N/A
Stanley Kreitman           0                    0               13,333            6,667              N/A               N/A
</TABLE>

                                PERFORMANCE GRAPH


         The following graph compares the cumulative total returns for our
common stock for the five year period ending December 31, 2001 with the NASDAQ
Market Index and an index of all Publicly traded companies in the Plumbing,
Heating and Air-Conditioning industry (SIC Code 1711) (the "Peer Index"). Total
return equals change in stock price plus dividends paid and assumes the
investment of $100 in the Company's common stock and in each index on January 1,
1997 and that all dividends are reinvested. The information has been obtained
from sources believed to be reliable, but neither its accuracy nor its
completeness is guaranteed. The performance graph is not necessary indicative of
future investment performance.
<TABLE>
<CAPTION>
                             5/09/97    12/31/97   12/31/98   12/31/99   12/31/00   12/31/01
<S>                            <C>        <C>        <C>        <C>        <C>         <C>
         KSW, INC.             100.00     120.71     35.71      47.86      51.43       26.79
        PEER INDEX             100.00     118.78     83.15      53.47      19.45       16.13
    NASDAQ MARKET INDEX        100.00     125.21     176.60     311.48     195.78     156.06
</TABLE>

Source: Media General Financial Services, Inc.

                                       22
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information relating to the beneficial
ownership of KSW Common Stock by (i) those persons known to the Company to
beneficially own 5% or more of the Company's Common Stock, (ii) each of the
Company's directors, proposed directors and executive officers and (iii) all of
the Company's directors, proposed directors and executive officers as a group.
As used in this table, "beneficial ownership" means the sole or shared power to
vote, or to direct the voting of a security, or the sole or shared investment
power with respect to a security (i.e., the power to dispose, or direct the
disposition of a security). Accordingly, the number of shares may include shares
owned by or for, among others, the wife, minor children or certain other
relatives of such individual, as well as other shares as to which the individual
has the right to acquire within 60 days after such date.

                                             Number of               Percentage
                                              Shares                 Ownership
                                              ------                 ---------
Name of Beneficial Owner
------------------------
Floyd Warkol                                   844,000     (1)          15.4%
Meadow Lane
Purchase, NY 10577

Burton Reyer                                   380,080     (2)           6.9%
17 Foxwood Road
Kings Point, NY 11024

Allen & Company                                312,500                   5.7%
711 Fifth Avenue
New York, NY

Robert Brussel                                  33,500                   *
365 Woodmere Blvd.
Woodmere, NY  11598

Stanley Kreitman                                     0                   *
375 Park Avenue (Suite 1606)
New York, NY  10022

Daniel Spiegel                                   5,000                   *
351 Twin Lakes Road
Teconic, CT 06079

All executive officers                       1,262,580                  23.1%
and directors as a group (5 persons)

-------------------------
*        Less than one percent.


                                       23
<PAGE>

(1) Includes 50,000 shares owned by the Floyd and Barbara Warkol Charitable
Foundation, of which Mr. Warkol is a Trustee.

(2) Includes 1,540 shares owned by Mr. Reyer's wife.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Floyd Warkol, President of the Company, and a charitable foundation he
controls, jointly are the shareholders of a corporation which owns the property
that the Company leases in Bronx, New York. The lease payments on such property
were $103,000 for 2001. See "Properties."















                                       24
<PAGE>

                                     PART IV

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

(a)      Documents filed as part of this report:

         1. and 2. Financial statement and financial statement schedules.

         See Index to consolidated financial statements and financial statement
         schedules on page F-1 of this form 10-K.

         3.       Exhibits

                                  EXHIBIT INDEX

    No.                                 Description
    ---                                 -----------

3.1^^             Amended and Restated Articles of Incorporation of the
                  Registrant

3.2^              Amended and Restated By-Laws of the Registrant

10.1^             Employment Agreement, dated as of January 1, 1994, by and
                  among KSW Mechanical Services, Inc., Floyd Warkol and the
                  Registrant

10.2^^            Employment Agreement, dated as of January 1, 1994, by and
                  among KSW Mechanical Services, Inc., Burton Reyer and the
                  Registrant

10.3+             Amendatory Employment Agreement, dated as of December 15,
                  1995, by and among KSW Mechanical Services, Inc., the
                  Registrant and Floyd Warkol

10.4+             Amendatory Employment Agreement, dated as of December 15,
                  1995, by and among KSW Mechanical Services, Inc., the
                  Registrant and Burton Reyer

10.5++            Form of Second Amendatory Employment Agreement dated as of
                  December 31, 1998 by and among KSW Mechanical Services, Inc.
                  the Registrant and Floyd Warkol

10.6++            Form of Second Amendatory Employment Agreement dated as of
                  December 31, 1998 by and among KSW Mechanical Services, Inc.
                  the Registrant and Burton Reyer

10.7++            Form of Modification of Lease Agreement dated as of May 1,
                  1998

21.1^             List of Subsidiaries


^ Previously filed as an exhibit to the Company's Registration Statement on Form
10, filed on November 24, 1995.
^^ Previously filed as an exhibit to Amendment No. 1 to the Company Registration
Statement on Form 10, filed on December 28, 1995.
+ Previously filed as an exhibit to the Company's Annual Report on Form 10-K,
filed on March 27, 1996.
++ Previously filed as an exhibit to the Company's Annual Report on Form 10-K,
filed on March 30, 1999.

(b)      Reports on Form 8-K.

         The Company did not file Current Reports on Form 8-K during the fourth
         quarter of 2001.


                                       25
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS


                                                                   PAGE
                                                                   ----

Independent auditors' report                                        F-2

Consolidated financial statements:

   Consolidated balance sheets                                    F-3-4

   Consolidated statements of operations                            F-5

   Consolidated statements of comprehensive income                  F-6

   Consolidated statements of stockholders' equity                  F-7

   Consolidated statements of cash flows                          F-8-9

   Notes to consolidated financial statements                    F-10-22





                                      F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT
----------------------------

To the Board of Directors and Stockholders
KSW, Inc. and Subsidiary
37-16 23rd Street
Long Island City, New York 11101

We have audited the accompanying consolidated balance sheets of KSW, Inc. and
subsidiary as of December 31, 2001 and 2000, and the related consolidated
statements of operations, comprehensive income, stockholders' equity and cash
flows for the years ended December 31, 2001, 2000 and 1999. These consolidated
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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of KSW,
Inc. and subsidiary as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for the years ended December 31, 2001, 2000 and
1999 in conformity with accounting principles generally accepted in the United
States of America.

Marden, Harrison & Kreuter
Certified Public Accountants, P.C.



White Plains, New York
February 1, 2002


                                      F-2
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2001 AND 2000
                                 (in thousands)
                          ----------------------------

                                                   2001                2000
                                               -------------      -------------
      A S S E T S
      -----------

Current assets:
   Cash and cash equivalents                     $    715           $   3,499
   Marketable securities                              641               2,541
   Accounts receivable, net                        17,639              13,704
   Retainage receivable                             2,549               3,263
   Costs and estimated earnings in excess
     of billings on uncompleted contracts              26                 138
   Deferred income taxes                            1,067                 227
   Prepaid expenses and other receivables             725                 879
                                                 --------           ---------

                Total current assets               23,362              24,251





Property and equipment, net                           333                 337





Other assets:
   Goodwill, net                                    3,514               3,667
   Deferred income taxes and other                    411                   8
                                                 --------           ---------

     Total assets                                $ 27,620           $  28,263
                                                 ========           =========

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                                                                    2001                2000
                                                                                -------------      -------------
      LIABILITIES AND STOCKHOLDERS' EQUITY
      ------------------------------------
<S>                                                                              <C>                 <C>
Current liabilities:
   Loans payable                                                                 $     190           $       -
   Accounts payable                                                                 11,375               8,823
   Retainage payable                                                                 1,774               1,781
   Accrued payroll and benefits                                                        747               1,148
   Accrued expenses                                                                    374                 680
   Billings in excess of costs and estimated
     earnings on uncompleted contracts                                               3,689               4,823
                                                                                  --------           ---------

                Total current liabilities                                           18,149              17,255

Long-term liabilities                                                                   19                  51
                                                                                  --------           ---------

                Total liabilities                                                   18,168              17,306
                                                                                  --------           ---------

Commitments and contingencies

Stockholders' equity:
   Common stock                                                                         54                  54
   Additional paid-in capital                                                        9,729               9,729
   Retained earnings (deficit)                                                        (328)              1,149
   Accumulated other comprehensive income:
     Net unrealized holding gain (loss) on available for sale securities                (3)                 25
                                                                                  --------           ---------

                Total stockholders' equity                                           9,452              10,957
                                                                                  --------           ---------

                Total liabilities and stockholders' equity                        $ 27,620           $  28,263
                                                                                  ========           =========
</TABLE>

                 See notes to consolidated financial statements.


                                      F-4
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                                 (in thousands)
                ------------------------------------------------
<TABLE>
<CAPTION>
                                                                2001               2000                1999
                                                            -----------         ----------         -----------
<S>                                                         <C>                 <C>                <C>
Revenues:
   Contracts                                                $    50,980         $   52,201         $    44,379
   Fees                                                              32                 46                 341
   Interest and other                                                (7)               301                 127
                                                            -----------         ----------         -----------

                  Total revenues                                 51,005             52,548              44,847

Direct costs                                                     49,153             48,249              38,029
                                                            -----------         ----------         -----------

Gross profit                                                      1,852              4,299               6,818
                                                            -----------         ----------         -----------

Selling, general and administrative expenses                      4,499              4,706               4,279
Interest expense                                                     48                 22                  29
                                                            -----------         ----------         -----------

                                                                  4,547              4,728               4,308
                                                            -----------         ----------         -----------

Income (loss) before income taxes                                (2,695)              (429)              2,510

Income tax expense (benefit)                                     (1,218)              (163)              1,143
                                                            -----------         ----------         -----------

Net income (loss)                                           $    (1,477)        $     (266)        $     1,367
                                                            ============        ===========        ===========

Net income (loss) per common share - basic                  $     (.27)         $     (.05)        $       .25
                                                            ===========         ===========        ===========

Net income (loss) per common share - diluted                $     (.27)         $     (.05)        $       .25
                                                            ===========         ===========        ===========

Weighted average common shares outstanding -
   basic                                                      5,470,311          5,468,991         5,468,644

Weighted average common shares outstanding -
   diluted                                                    5,470,311          5,641,050         5,468,644
</TABLE>

                 See notes to consolidated financial statements.


                                      F-5
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                                 (in thousands)
                ------------------------------------------------
<TABLE>
<CAPTION>
                                                              2001                  2000               1999
                                                           ----------            ---------          ---------
<S>                                                        <C>                    <C>                <C>
Net income (loss)                                          $ (1,477)              $  (266)           $ 1,367

Other comprehensive income:
   Net unrealized holding gain (loss) arising
    during the year                                             (28)                   25                 -
                                                           --------               -------            -------

Total comprehensive income (loss)                          $ (1,505)              $  (241)           $ 1,367
                                                           =========              ========           =======
</TABLE>











                 See notes to consolidated financial statements.


                                      F-6
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                   YEARS ENDED DECEMBER 31, 2001, 2000AND 1999
                        (in thousands, except share data)
                        ---------------------------------
<TABLE>
<CAPTION>
                                        Common Stock, $.01 par,     Additional     Retained      Net unrealized holding
                                     25,000,000 shares authorized     Paid-In      Earnings     gain (loss) on available
                                     ----------------------------
                                       Shares             Amount      Capital       (Deficit)      for sale securities     Total
                                       ------             ------      -------       ---------      -------------------     -----
<S>                                    <C>            <C>            <C>            <C>                      <C>        <C>
Balances, December 31, 1998            5,468,644      $      54      $   9,726      $      48                $  -       $   9,828

Net income                                     -              -              -          1,367                   -           1,367
                                       ---------      ---------      ---------      ---------           ---------       ---------

Balances, December 31, 1999            5,468,644             54          9,726          1,415                   -          11,195

Exercise of stock options                  1,667              -              3              -                   -               3

Net loss                                       -              -              -           (266)                  -            (266)

Unrealized gain on available for sale
  securities                                   -              -              -              -                  25              25
                                       ---------      ---------      ---------      ---------           ---------       ---------

Balances, December 31, 2000            5,470,311             54          9,729          1,149                  25          10,957
                                                                                                                             (266)

Net loss                                       -              -              -         (1,477)                  -          (1,477)

Unrealized loss on available for sale
   securities                                  -              -              -              -                 (28)            (28)
                                       ---------      ---------      ---------      ---------           ---------       ---------

Balances, December 31, 2001            5,470,311      $      54      $   9,729      $    (328)          $      (3)      $   9,452
                                       =========      =========      =========      =========           =========       =========
</TABLE>

                 See notes to consolidated financial statements.


                                      F-7
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------
<TABLE>
<CAPTION>
                                                              2001                 2000              1999
                                                           ------------         ------------      ------------
<S>                                                         <C>                  <C>               <C>
Reconciliation of net income (loss) to net cash
   provided by (used in) operating activities:

     Net income (loss)                                      $  (1,477)           $  (266)          $  1,367

   Adjustments to reconcile net income (loss)
     to net cash provided by (used in)
     operating activities:

       Depreciation and amortization                              304                323                326
       Deferred income taxes                                   (1,243)              (197)               900
       Increase in allowance for
         doubtful accounts                                       -                    -                  40

       Changes in assets (increase) decrease:
         Accounts receivable                                   (3,935)            (3,098)            (1,434)
         Retainage receivable                                     714                859               (375)
         Costs and estimated earnings in excess
           of billings on uncompleted contracts                   112                200                 54
         Prepaid expenses and other receivables                   154               (661)                 9

       Changes in liabilities increase (decrease):
         Accounts payable                                       2,552              2,553                806
         Retainage payable                                         (7)                 7               (468)
         Accrued payroll and benefits                            (401)               (17)               739
         Accrued expenses                                        (306)               311                180
         Billings in excess of costs and estimated
           earnings on uncompleted contracts                   (1,134)              (511)             2,267
         Long-term liabilities                                    (32)               (19)               (17)
                                                            ---------            -------           --------

                Net cash provided by (used in)
                  operating activities                         (4,699)              (516)             4,394
                                                            ---------            -------           --------

   Cash flows from investing activities:
     Sale (purchase) of marketable securities                   1,872             (2,516)               -
     Purchase of property and equipment                          (147)              (123)              (147)
                                                            ---------            -------           --------

                Net cash provided by (used in)
                  investing activities                          1,725             (2,639)              (147)
                                                            ---------            -------           --------
</TABLE>

                 See notes to consolidated financial statements.


                                      F-8
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (CONCLUDED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------
<TABLE>
<CAPTION>
                                                                2001               2000              1999
                                                              ----------         --------           --------
<S>                                                            <C>                <C>                <C>
   Cash flows from financing activities:
     Exercise of stock options                                      -                  3                  -
     Increase in loans payable                                      190                -                  -
                                                               --------           -------            -------

                Net cash provided by financing activities           190                 3                 -
                                                               --------           -------            -------

Net increase (decrease) in cash and cash equivalents             (2,784)           (3,152)             4,247

Cash and cash equivalents, beginning of year                      3,499             6,651              2,404
                                                               --------           -------            -------

Cash and cash equivalents, end of year                         $    715           $ 3,499            $ 6,651
                                                               ========           =======            =======

Supplemental disclosure of cash flow information:

   Cash paid during the year for:

     Interest                                                  $     48           $    22            $    29

     Income taxes                                              $     12           $   690            $    35

</TABLE>


                 See notes to consolidated financial statements.



                                      F-9
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(1)    Principles of consolidation and nature of operations:

       The consolidated financial statements for the years ended December 31,
       2001, 2000 and 1999 include the accounts of KSW, Inc. and its
       wholly-owned subsidiary, KSW Mechanical Services, Inc., collectively "the
       Company." All material intercompany accounts and transactions have been
       eliminated in consolidation.

       The Company furnishes and installs heating, ventilating and air
       conditioning systems and processes piping systems for institutional,
       industrial, commercial, high-rise residential and public works projects,
       primarily in the State of New York. The Company also serves as a
       mechanical trade manager, performing project management services relating
       to the mechanical trades and as a constructability consultant.

(2)    Summary of significant accounting policies:

       (A)    Cash and cash equivalents:

              The Company considers all highly liquid instruments with original
              maturities of three months or less to be cash equivalents. At
              December 31, 2001 and 2000, there were no cash equivalents.

       (B)    Revenue and cost recognition:

              Revenue is primarily recognized on the "percentage of completion"
              method for reporting revenue on long-term construction contracts
              not yet completed, measured by the percentage of total costs
              incurred-to-date to estimated total costs at completion for each
              contract. This method is utilized because management considers the
              cost-to-cost method the best method available to measure progress
              on these contracts. Revenues and estimated total costs at
              completion are adjusted monthly as additional information becomes
              available and based upon the Company's internal tracking systems.
              Because of the inherent uncertainties in estimating revenue and
              costs, it is reasonably possible that the estimates used will
              change within the near term.

              Contract costs include all direct material and labor costs and
              those other indirect costs related to contract performance
              including, but not limited to, indirect labor, subcontract costs
              and supplies. General and administrative costs are charged to
              expense as incurred.

              The Company has contracts that may extend over more than one year,
              therefore, revisions in cost and profit estimates during the
              course of the work are reflected in the accounting period in which
              the facts, which require the revisions, become known.

              Provisions for estimated losses on uncompleted contracts are made
              in the period in which such losses are determined.


                                      F-10
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------

(2)    Summary of significant accounting policies - cont'd:

       (B)    Revenue and cost recognition - cont'd:

              Revenues recognized in excess of amounts billed are recorded as a
              current asset under the caption "Costs and estimated earnings in
              excess of billings on uncompleted contracts." Billings in excess
              of revenues recognized are recorded as a current liability under
              the caption "Billings in excess of costs and estimated earnings on
              uncompleted contracts."

              In accordance with construction industry practice, the Company
              reports in current assets and liabilities those amounts relating
              to construction contracts realizable and payable over a period in
              excess of one year.

              Fees for the management of certain contracts are recognized when
              services are provided.

       (C)    Marketable securities:

              Marketable securities, consisting of managed security accounts,
              are classified as "available-for-sale" securities and are stated
              at fair value. Realized gains and losses, determined using the
              specific identification method, are included in earnings.
              Unrealized holding gains and losses are reported as a separate
              component of stockholders' equity.

       (D)    Allowance for doubtful accounts:

              The Company establishes an allowance for uncollectible trade
              accounts receivable based on historical collection experience and
              management's evaluation of collectibility of outstanding accounts
              receivable. The allowance for doubtful accounts is $200 as of
              December 31, 2001 and 2000.

       (E)    Property and equipment:

              Property and equipment is stated at cost. Depreciation is computed
              over the estimated useful lives, generally five years, of the
              assets using the straight-line method. Leasehold improvements are
              amortized over the lesser of the estimated useful lives of the
              assets to which they apply or the related lease term. Repairs and
              maintenance are charged to operations in the period incurred.

       (F)    Goodwill:

              Goodwill, which represents the excess of cost over the fair value
              of net assets acquired, is amortized using the straight-line
              method over 30 years.

              The Company assesses the recoverability of goodwill periodically
              by determining whether the amortization of the goodwill balance
              over its remaining life can be recovered through projected
              undiscounted cash flows. The amount of goodwill impairment, if
              any, is charged to operations in the period in which goodwill
              impairment is determined by management. At December 31, 2001, 2000
              and 1999, no impairment of goodwill was determined by management.


                                      F-11
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(2)    Summary of significant accounting policies - cont'd:

       (F)    Goodwill - cont'd:

              Goodwill at December 31, 2001 and 2000 is as follows:
<TABLE>
<CAPTION>
                                                                                    2001                2000
                                                                                  ----------         ----------
<S>                                                                                <C>                 <C>
                   Goodwill                                                        $ 4,990             $ 4,990

                   Less: accumulated amortization                                    1,476               1,323
                                                                                   -------             -------

                     Goodwill, net                                                 $ 3,514             $ 3,667
                                                                                   =======             =======
</TABLE>

              Amortization expense for the years ended December 31, 2001, 2000
              and 1999 amounted to approximately $153 per year.

       (G)    Income taxes:

              The Company accounts for income taxes under Statement of Financial
              Accounting Standards No. 109, "Accounting for Income Taxes." Under
              Statement No. 109, the asset and liability method is used in
              accounting for income taxes. Deferred taxes are recognized for
              temporary differences between the bases of assets and liabilities
              for financial statement and income tax purposes. The temporary
              differences relate primarily to different accounting methods used
              for depreciation and amortization of property and equipment,
              goodwill, allowance for doubtful accounts and net operating loss
              carryforwards. A valuation allowance is recorded for deferred tax
              assets when it is more likely than not that some or all of the
              deferred tax assets will not be realized through future
              operations.

       (H)    Net income (loss) per share:

              Net income (loss) per share-basic is computed based on the
              weighted average number of shares of common stock outstanding. Net
              income (loss) per share-dilutive reflects the potential dilution
              that could occur if securities or other contracts to issue common
              stock were exercised or converted into common stock or otherwise
              resulted in the issuance of common stock and is computed similarly
              to "fully diluted" net income (loss) per share that was reported
              under previous accounting standards. Dilutive potential common
              shares do not have a significant dilutive effect.

       (I)    Use of estimates:

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


                                      F-12
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(2)    Summary of significant accounting policies - cont'd:

       (J)    Stock-based compensation:

              In October 1995, the Financial Accounting Standards Board issued
              Statement of Financial Accounting Standards No. 123, "Accounting
              for Stock-Based Compensation" (SFAS 123). Under SFAS 123,
              companies are encouraged, but not required, to adopt a fair value
              based method of accounting for stock compensation awards. As
              permitted by SFAS 123, the Company has elected to continue to
              measure compensation cost using the intrinsic value based method
              as prescribed in Accounting Principles Board opinion No. 25,"
              Accounting for Stock Issued to Employees" and to provide the
              disclosures required by SFAS 123 (see Note 13(A)).

(3)    Marketable securities:

       The cost and fair value of the marketable securities, classified as
       available-for-sale securities at December 31, 2001, was as follows:

<TABLE>
<CAPTION>
                                                              Gross             Gross
                                                            Unrealized       Unrealized        Fair
                                             Cost         Holding Gains    Holding Losses      Value
                                             ----         -------------    --------------      -----
<S>                                        <C>                 <C>                <C>         <C>
       Managed stock funds                 $    644            $ -                $(3)        $  641
                                           ========            ====               ====        ======
</TABLE>

       The cost and fair value of the marketable securities, classified as
       available-for-sale securities at December 31, 2000, was as follows:
<TABLE>
<CAPTION>
                                                              Gross             Gross
                                                            Unrealized       Unrealized        Fair
                                             Cost         Holding Gains    Holding Losses      Value
                                             ----         -------------    --------------      -----
<S>                                         <C>               <C>             <C>             <C>
       Stock based mutual funds             $    500          $ 15            $               $     515
       Bond based mutual funds                 1,017            10                   -            1,027
       Certificates of deposits                  999            -                    -              999
                                            --------          ----            ---------       ---------

                                            $  2,516          $ 25            $      -        $   2,541
                                            ========          ====            =========       =========
</TABLE>
       For the years ended December 31, 2001 and 2000, gross unrealized gains on
       the sale of available-for-sale securities were $-0- and $25,
       respectively. For the years ended December 31, 2001 and 2000, gross
       unrealized losses on the sale of available-for-sale securities were $3
       and $-0-, respectively. The change in net unrealized holding gains
       (losses) is $(28) and $25 for the years ended December 31, 2001 and 2000,
       respectively.


                                      F-13
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(4)    Retainage receivable:

       At December 31, 2001 and 2000, approximately $336 and $183, respectively,
       of the retainage receivable is not collectible within one year.

(5)    Construction contracts:

       Information with respect to contracts in progress at December 31, 2001
       and 2000 is as follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                                ------------       ------------
<S>                                                                               <C>                <C>
       Expenditures on uncompleted contracts                                      $ 28,408           $  37,625

       Estimated earnings thereon                                                    4,144               1,402
                                                                                  --------           ---------

                                                                                    32,552              39,027

       Less billings applicable thereto                                             36,215              43,712
                                                                                  --------           ---------

                                                                                  $ (3,663)          $  (4,685)
                                                                                  =========          ==========
       Included in the accompanying consolidated balance sheets under the
         following captions:

         Costs and estimated earnings in excess of
           billings on uncompleted contracts                                      $     26           $     138

         Billings in excess of costs and estimated
           earnings on uncompleted contracts                                        (3,689)             (4,823)
                                                                                  --------           ---------

                                                                                  $ (3,663)          $  (4,685)
                                                                                  =========          ==========
</TABLE>


                                      F-14
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------

(6)    Property and equipment:

       Property and equipment at December 31, 2001 and 2000 consists of the
       following:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                                ------------       ------------
<S>                                                                               <C>                <C>
              Machinery and equipment                                             $   676            $    559
              Furniture and fixtures                                                  624                 597
              Leasehold improvements                                                  828                 825
                                                                                  -------            --------

                                                                                    2,128               1,981

              Less accumulated depreciation and amortization                        1,795               1,644
                                                                                  -------            --------

              Net property and equipment                                          $   333            $    337
                                                                                  =======            ========
</TABLE>

       Depreciation and amortization expense relating to property and equipment
       was approximately $151, $170 and $173 for the years ended December 31,
       2001, 2000 and 1999, respectively.

(7)    Income taxes:

       The components of income tax expense (benefit) are as follows:
<TABLE>
<CAPTION>
                                                                2001               2000              1999
                                                              ----------         ---------         ----------
<S>                                                            <C>                <C>                <C>
       Current
          Federal                                              $      -           $   (16)           $   119
          State and local                                            54                50                124
                                                               --------           -------            -------

                                                                     54                34                243
                                                               --------           -------            -------

       Deferred
          Federal                                                  (760)             (122)               565
          State and local                                          (512)              (75)               335
                                                               --------           -------            -------

                                                                 (1,272)             (197)               900
                                                               --------           -------            -------

                           Total                               $ (1,218)          $  (163)           $ 1,143
                                                               =========          ========           =======

       A reconciliation of the statutory Federal income tax rate to the
       provision for income taxes is as follows:

                                                                2001               2000              1999
                                                              ----------         ---------         ----------

       Statutory Federal income tax rate (benefit)                (34)%             (34)%               34%
       State and local taxes, net of Federal tax benefit          (11)               (7)                12
       Adjustment of prior year over accrual                      -                   3                 -
                                                                -------            ------            --------

                                                                  (45)%             (38)%               46%
                                                                =======            =======           ======
</TABLE>


                                      F-15
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(7)    Income taxes - cont'd:

       The 2001 and 2000 tax benefits on state and local taxes is offset by
       current provisions based on net worth.

       The details of deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
                                                                                    2001                2000
                                                                                 -----------        -----------
<S>                                                                                <C>                 <C>
       Deferred income tax assets:
             Property and equipment                                                $  278              $   283
             Allowance for doubtful accounts                                           92                   92
             Net operating loss carryforward                                        1,585                  227
                                                                                   ------              -------
             Total deferred income tax assets                                       1,955                  602

       Deferred income tax liabilities:
             Amortization of goodwill                                                (486)                (405)
                                                                                   ------              -------

                   Deferred income tax asset, net                                  $1,469              $   197
                                                                                   ======              =======
</TABLE>

       For the years ended December 31, 2001 and 2000, the Company incurred net
       operating loss carryfowards of approximately $2,900 and $600,
       respectively, which expire through the year ending December 31, 2016. At
       December 31, 2001, $1,067 of the net current portion of deferred income
       tax assets is recorded as a current asset, and $402 net long-term
       deferred income tax asset is included in long-term assets in the
       accompanying balance sheet. At December 31, 2000, $227 of the net current
       portion of deferred income tax assets is recorded as a current asset and
       $30 net deferred income tax liability is included in long-term
       liabilities in the accompanying balance sheet.

(8)    Accumulated other comprehensive income:

       At December 31, 2001 and 2000, accumulated other comprehensive income,
       which consists of unrealized holding gains on available for sale
       securities, is as follows:
<TABLE>
<CAPTION>
                                                                                   2001                 2000
                                                                                 ---------           ---------
<S>                                                                              <C>                 <C>
       Beginning balance                                                         $     25            $      -
       Current period change                                                          (28)                 25
                                                                                 --------            --------

       Ending balance                                                            $     (3)           $     25
                                                                                 =========           ========
</TABLE>

(9)    Commitments and contingencies:

       (A)    Performance bonds:

              The Company is contingently liable to a surety under a general
              indemnity agreement. The Company agrees to indemnify the surety
              for any payments made on contracts of suretyship, guaranty or
              indemnity. Management believes that all contingent liabilities
              will be satisfied by performance on the specific bonded contracts
              involved.


                                      F-16
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(9)    Commitments and contingencies - cont'd:

       (B)    Operating leases:

              The Company is obligated under non-cancelable operating leases,
              including a lease with its chief executive officer, for office
              space with future rental payments at December 31, 2001 as follows:
<TABLE>
<CAPTION>
                   Year ending
                   December 31                          Non-affiliated         Related Party            Total
                   -----------                          --------------         -------------            -----
<S>                    <C>                                    <C>                  <C>                   <C>
                       2002                                   $ 176                $ 103                 $ 279
                       2003                                     180                    -                   180
                       2004                                      91                    -                    91
                                                              -----                -----                 -----

                                                              $ 447                $ 103                 $ 550
                                                              =====                =====                 =====
</TABLE>

              In accordance with the lease agreement, the Company has the option
              to extend its non- affiliated lease an additional five years from
              June 2004 through June 2009.

              Rent expense for the years ended December 31, 2001, 2000 and 1999
              amounted to approximately $276, $272 and $282, respectively,
              including $103 to a related party in each year.

       (C)    Employment agreements:

              KSW Mechanical Services, Inc. has entered into employment
              agreements with two of its officers for the period January 1999
              through December 2000. These agreements provide for aggregate base
              annual compensation of $660 each year plus 15% of income before
              taxes in excess of $250. The officers are also entitled to medical
              insurance, disability insurance and life insurance. The Company
              has not entered into new employment agreements with these
              individuals. During 2001, they continued in the same capacities
              and continued to receive the same financial remuneration as under
              the prior employment agreements. During 2001, officers' combined
              compensation was a base salary of $660. No bonuses were paid in
              2000 and 2001.

       (D)    Environmental regulation:

              The Company must comply with certain Federal, state and local
              regulations involving contract compliance as well as the disposal
              of certain toxins. In management's opinion, there have been no
              violations of laws, which could have a material adverse impact on
              the financial condition of the Company.


                                      F-17
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------

(9)    Commitments and contingencies - cont'd:

       (E)    Legal:

              The Company is not aware of any pending or threatened legal
              proceedings, which could have a material adverse effect on its
              financial position or results of operations, other than item (b)
              below. The following are the material lawsuits in which the
              Company is a party:

              (a)   Co-op City. In February 1999, the Company sued the general
                    contractor and its bonding company in New York State Supreme
                    Court, Queens County, to recover the sum of $5,771. Included
                    is a claim for unanticipated costs incurred through 1998 in
                    the sum of $3,663, and claims to recover for work beyond the
                    scope of the Company's contract. Discovery has been
                    completed and the action placed on the trial calendar. The
                    case should be tried within the next twelve months. While
                    the Company and its counsel believe the lawsuit has merit,
                    there is no guaranty the claim will ultimately be
                    successful, or that the full amount of damages sought will
                    be awarded. At December 31, 2001 and 2000, approximately
                    $1,937 of billings applicable to the base contract is
                    included in accounts and retainage receivable relating to
                    this contract.

              (b)   Helionetics Creditors Committee v. Barnes, et al. On April
                    26, 1999, the Company and six current or former officers and
                    directors were named in a lawsuit in U.S. Bankruptcy Court,
                    Central District of California, instituted by the Creditors
                    Committee of Helionetics, Inc., the Company's former parent.
                    The complaint alleges that the December 28, 1995
                    distribution by Helionetics of KSW, Inc. stock to
                    Helionetics' shareholders was a fraudulent conveyance, and
                    seeks compensatory damages of $10,890, plus punitive
                    damages. The December 28, 1995 distribution of stock was
                    made pursuant to a Form 10 Registration Statement filed with
                    and declared effective by the Securities and Exchange
                    Commission. The Company believes that the lawsuit is without
                    merit and is aggressively defending the case. On March 15,
                    2001, the Court denied a motion for summary judgment filed
                    by the Company and its directors, except the Court dismissed
                    the case against director Robert Brussel. The Court found
                    that there were issues of fact requiring trial on the
                    merits. On May 30, 2001, the Court granted partial summary
                    judgment as to the Company's officers and directors,
                    dismissing Plaintiff's fraudulent conveyance causes of
                    action relating to the distribution. On October 11, 2001,
                    the Court dismissed all causes of action against the
                    Company's officers and directors, which relate to the
                    distribution itself. The Committees' remaining claims are
                    against the Company and allege (i) that the Company aided
                    and abetted and conspired with Helionetics, Inc. in the
                    breach of fiduciary duty in that the distribution allegedly
                    was made in violation of California Corporations Code and
                    (ii) that the redemption by the Company of 333 shares of the
                    Company's stock held by Helionetics, Inc. as part of the
                    distribution was a fraudulent conveyance. A hearing will be
                    held within the next three months to determine valuation
                    issues, including the issue of Helionetics solvency on the
                    date of distribution.


                                      F-18
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(9)    Commitments and contingencies - cont'd:

       (E)    Legal - cont'd:

              (c)   Stroock & Stroock & Lavan, LLP. On February 13, 2001, the
                    Company commenced an action in the Superior Court of the
                    State of California, County of Los Angeles against its
                    former counsel, Strook & Stroock & Lavan, LLP ("Stroock")
                    for malpractice in connection with Stroock's representation
                    of the Company in connection with the transactions which
                    form the basis for the Helionetics Creditors Committee
                    Action described in Note 9(E)(b). The Complaint also alleges
                    malpractice in connection with Stroock's representation of
                    the Company and three of its Directors and Officers in the
                    Helionetics Creditors Committee Action. Subsequent to the
                    filing of this action in California, Stroock sued the
                    Company and three of its directors in New York State Supreme
                    Court seeking "not less than $300" for legal fees allegedly
                    due in connection with Stroock's representation of the
                    Company in the Helionetics Creditors Committee Action
                    described in Note 9(E)(b), above. The Company moved to
                    dismiss this case on the grounds that California is the
                    proper venue for the parties' disputes and that any claims
                    for legal fees relate to the Company's malpractice action in
                    California. On October 24, 2001, the Court granted the
                    Company's motion to the extent of staying the New York
                    action pending the determination of the California Action,
                    on condition that the Company does not object to Stroock's
                    assertion of a counterclaim for legal fees in the California
                    malpractice action. The California Superior Court denied
                    Stoock's motion to delay discovery until after the Creditors
                    Committee action and discovery is now underway.

 (10)  Concentration risks:

       (A)    Credit risk:

              Financial instruments, which potentially expose the Company to
              concentrations of credit risk, consist primarily of cash and cash
              equivalents and trade accounts and retainage receivables.

              The Company maintains its cash and cash equivalents accounts at
              balances, which exceed Federally insured limits for such accounts.
              The Company limits its credit risk by selecting financial
              institutions considered to be highly creditworthy. At December 31,
              2001 and 2000, amounts in excess of federally insured limits
              totaled approximately $495 and $3,394, respectively.

              Trade accounts and retainage receivables are due from government
              agencies, municipalities and private owners located in the New
              York metropolitan area. The Company does not require collateral in
              most cases, but may file claims or statutory liens against the
              construction projects if a default in payment occurs. Trade
              accounts and retainage receivables from the Company's three
              largest customers totaled approximately $9,728 and $8,027 at
              December 31, 2001 and 2000, respectively.


                                      F-19
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(10)   Concentration risks - continued:

       (B)    Labor concentrations:

              The Company's direct labor is supplied primarily by unions through
              collective bargaining agreements expiring through June 2002.
              Although the Company's past experience was favorable with respect
              to resolving conflicting demands with these unions, it is always
              possible that a protracted conflict may occur which will impact
              the renewal of the collective bargaining agreements.

       (C)    Contract revenue/significant customers:

              The Company earned approximately 23%, 16% and 14% of its contract
              revenue in 2001, 20%, 19% and 15% of its contract revenue in 2000,
              and 23%, 20% and 18% of its contract revenue in 1999, from its
              three largest customers.

(11)   Retirement plans:

       (A)    Profit-sharing/401(k) plan:

              The Company sponsors a profit-sharing/401(k) plan covering
              employees not covered under collective bargaining agreements who
              meet the age and length of service requirements of the plan. The
              Company may make discretionary contributions to the plan. The
              total of employee contributions may not exceed Federal government
              limits. The Company expensed approximately $63, $62 and $51 as a
              25% matching contribution for the years ended December 31, 2001,
              2000 and 1999, respectively.

       (B)    Multiemployer pension plans:

              The Company has made contributions to multiemployer pension plans
              that cover its various union employees. These plans provide
              benefits based on union members' earnings and periods of coverage
              under the respective plans. It is not cost effective to accumulate
              information regarding the pension expense under these plans.

(12)   Line of credit - bank

       On December 31, 2001, the Company renewed its line of credit in the
       amount of $2,000 with Merrill Lynch for an additional year. The line of
       credit calls for borrowings at 3% over the 30 day dealer commercial paper
       rate. At December 31, 2001 and 2000 the borrowing base rate was
       approximately equal to prime, and there was $190 and $-0-, respectively,
       borrowed against this line.


                                      F-20
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------


(13)   Stockholders' equity:

       (A)    Stock option plan:

              The Board of Directors of the Company adopted the 1995 Stock
              Option Plan (the Plan). The Plan enabled the Company to offer an
              incentive-based compensation system to its employees, officers,
              directors and consultants.

              A total of 750,000 shares were authorized for issuance under the
              Plan. Options to purchase 610,000 shares of common stock at $1.50
              per share were issued (of which, 535,000 shares were issued to
              officers and directors of the Company and its subsidiary). The
              Plan requires that the exercise price of options be set at not
              less than the fair market value of the common stock on the date of
              grants. In the case of the initial options, the price of $1.50 was
              determined to be in excess of the fair market value in light of
              the contingencies facing the Company prior to completion of this
              Distribution. Options awarded vest one-third on each anniversary
              of the date of grant and are fully vested three years after grant
              and expire ten years from the date of the grant. Additional credit
              towards vesting is given in the event of death (six months) or
              disability (three months). Any shares which are subject to an
              award but are not used because the terms and conditions of the
              award are not met, or any shares which are used by participants to
              pay all or part of the purchase price of any option may again be
              used for awards under the Plan. The Plan provides that no shares
              may be issued to officers or directors in excess of the 750,000
              shares originally planned to be authorized unless the Company's
              stockholders approve an increase in the number of shares which may
              be used for that purpose. At the Company's annual meeting held on
              June 27, 1996, the stockholders approved an amendment to the plan
              to increase by 350,000 shares the aggregate number of shares of
              common stock available for future options to 490,000 shares of
              common stock.

              Holders of shares issued pursuant to the Plan are entitled to
              registration of such shares annually, subject to restrictions in
              any underwriting agreement. During 2001, 2000 and 1999, -0-,
              1,667, and -0- options, respectively, under the Plan were
              exercised. During 2001 and 2000, no new options were granted.
              During 1999, 55,000 options were issued to employees and a
              director. At December 31, 2001, there were 650,000 exercisable
              options outstanding, all of which have an exercise price of $1.50
              per share.

              The Company has adopted the disclosure-only provisions of
              Statement of Financial Accounting Standards No. 123, "Accounting
              for Stock-Based Compensation." Accordingly, no compensation cost
              has been recognized for the stock option plan. Had compensation
              cost for the Company's stock option plan been determined based on
              the fair value at the grant date consistent with the provisions of
              SFAS No. 123, the Company's pro forma net income for 1999 would
              have been $1,338 and the pro forma net income per share - basic
              and diluted would remain at .25, unchanged.


                                      F-21
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONCLUDED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                        (in thousands, except share data)
                          ----------------------------

(13)   Stockholders' equity - cont'd:

       (A)    Stock option plan - cont'd:

              The fair value of each option grant is estimated on the date of
              grant using the Black-Scholes option-pricing model with the
              following weighted-average assumptions used for grants in 1999:
              dividend yield of 0%; expected volatility of 54.67%; risk-free
              interest rate of 7.00%; and expected lives of six years.

       (B)    Preferred stock:

              The Company is authorized to issue 1,000,000 shares of preferred
              stock. Through December 31, 2000, no shares of preferred stock
              have been issued by the Company.

(14)   Backlog:

       At December 31, 2001, the Company had a backlog of $51,906. Backlog
       represents the amount of revenue the Company expects to realize from work
       to be performed on uncompleted contracts in progress at year end and from
       contractual agreements on work which has not commenced.

(15)   Impact of recently issued accounting standards:

       In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS
       No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
       Intangible Assets." These standards require that all business
       combinations be accounted for using the purchase method and that all
       goodwill not be amortized, but tested periodically for impairment and
       provide guidelines for new disclosure requirements. The standards outline
       the criteria for initial recognition and measurement of intangibles,
       assignment of assets and liabilities including goodwill to reporting
       units, and goodwill impairment testing. The provisions of SFAS No. 141
       and SFAS No. 142 apply to all business combinations after June 30, 2001.
       The provisions of SFAS No. 142 for existing goodwill and other intangible
       assets are required to be implemented effective January 1, 2002.
       Management believes that the implementation of SFAS No. 142 will result
       in a significant write-down of goodwill upon adoption.


                                      F-22
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
March 19, 2001 its behalf by the undersigned, thereunto duly authorized.

                                  KSW, INC.

                                  By:    /s/ Floyd Warkol
                                       ------------------------
                                       Floyd Warkol
                                       President, Chief Executive Officer,
                                       Secretary and Chairman of the Board of
                                       Directors
                                       March 19, 2002

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


                                        /s/ Floyd Warkol
                                        ----------------------
                                        Floyd Warkol
                                        President, Chief Executive Officer,
                                        Secretary and Chairman of the Board of
                                        Directors
                                        March 19, 2002

                                        /s/ Burton Reyer
                                        -----------------------
                                        Burton Reyer
                                        Vice President and Director
                                        March 19, 2002

                                        /s/ Robert Brussel
                                        -----------------------
                                        Robert Brussel
                                        Chief Financial Officer and Director
                                        March 19, 2002

                                        /s/ Stanley Kreitman
                                        Stanley Kreitman
                                        Director
                                        March 19, 2002


                                        /s/ Daniel Spiegel
                                        Daniel Spiegel
                                        Director
                                        March 19, 2002




                                      F-23