<PAGE>
54

UNITED STATES
Securities and Exchange Commission
Washington, DC 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 April 30, 1997

or

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

For the Transition period from ________ to ________


Commission File Number  0-3255

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

DELAWARE                                                13-1863419
(State or jurisdiction of incorporation or organization)(IRS Employer ID No.)

PO Box 741528, Houston, Texas                          77274
(Address of principal executive office)                (Zip Code)

Telephone number, including area code:            (713) 783-9184

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

Securities  registered pursuant to Section 12(g) of the Act:  Common  Stock,
par value $.30 per share

     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 [ ] NO [X ]

      Indicate by check mark if disclosure of delinquent filers pursuant  to
Item  405  of  Regulation  S-K (section 229.405  of  this  chapter)  is  not
contained  herein,  and will not be contained, to the best  of  registrant's
knowledge,  in  definitive proxy or information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment to this Form  10-K.
[  ]

     The  aggregate  market value of the voting stock held by non-affiliates
of the Registrant is $1,427,151 as of June 30, 1997.

The  number of shares outstanding of Registrant's Common Stock is  9,221,197
as of June 30, 1997.

<PAGE>

PART I

Item 1. Business

General

Jayark  Corporation  ("Jayark"  or "the Company")  conducts  its  operations
through AVES Audiovisual Systems, Inc. ("AVES"), a wholly owned subsidiary.

AVES distributes for resale, as well as rents, a broad range of audiovisual,
video and communications equipment and supplies.  Its customer base includes
schools,  industry  and  hotels. The warehousing, sales  and  administrative
operations of AVES are located in Houston, Texas.

The  Company was originally incorporated in New York in 1958.  In 1991,  the
Company changed its state of incorporation to Delaware.

     Recent Events
     
     Discontinued Operations
     
As  a  result of continued losses due to a soft retail market, low  margins,
competitive  pressures, and price reductions, the Company had  been  looking
for  methods to sell or otherwise dispose of the operations of Rosalco Inc.,
("Rosalco") a wholly owned subsidiary of Jayark .  Rosalco had been  in  the
business  of the distribution of more than 300 different products, including
occasional furniture, brass beds, custom jewelry cases and accessories, most
of  which are imported from outside the continental United States.   Rosalco
also   developed  special  designs  for  several  customers.   Rosalco   was
headquartered in Jeffersonville, Indiana.  All efforts to sell Rosalco  were
unsuccessful, and it was officially closed on October 22, 1997.  The  assets
of  Rosalco were secured as part of its borrowing agreement.  Shortly  after
the  closing,  a  receiver was assigned to liquidate the secured  assets  of
Rosalco  to satisfy the loan principal.  The financial statements have  been
restated  to  reflect Rosalco's operations for all periods  as  discontinued
operations.    In  fiscal  1997,  Jayark  incurred  a  $5,963,000  loss   on
Discontinued Operations, which includes $3,462,000 loss from operations  for
the  year ended April 30, 1997, the establishment of accruals in the  amount
of  $300,000 for expenses and guarantees related to the closing,  the  write
off  of  an  intercompany receivable and other assets of $476,000,  and  the
write off of the remaining net assets of Rosalco of $1,725,000.

     Abandonment of Investment

In  June  1995,  a wholly-owned subsidiary of the Company, LCL International
Traders, Inc. ("LCL"), acquired certain of the assets and assumed certain of
the  liabilities  of  a group of companies engaged in  the  importation  and
distribution of seasonal and promotional merchandise.

During  the  fiscal  year  ended  April 30, 1996,  the  Company  experienced
significant  problems with the acquisition, including, among  other  things,
rapid  and significant deterioration of the acquired operations, as well  as
increasing  difficulty  in  financing the  operations  associated  with  the
acquired  assets.   As  the fiscal year progressed  the  Company  found  the
continued operation of LCL to be untenable.

<PAGE>

Finally,  in the third quarter of the fiscal year ended April 30, 1996,  the
Company abandoned its investment in, and wrote off its advances to, LCL.  As
a  result, the Company incurred a pre-tax charge of approximately $4,700,000
in the fiscal year ended April 30, 1996, which has been charged as a loss on
investment.  LCL subsequently filed under Chapter 11 of the Bankruptcy Code.
On  August  1,  1996, after winding down its operations and liquidating  its
assets,  the Chapter 11 proceeding was dismissed on the ground that  all  of
the Debtor's assets have been liquidated.

During   August  1995,  the  Company,  LCL  and  Rosalco,  entered  into   a
Reimbursement Agreement with:
i)  Ben  Arnold Company, a corporation beneficially owned by several members
of the Burton I. Koffman and Richard E. Koffman families (including David L.
Koffman,  who is the president and a director of the Company, and Joseph  B.
Koffman,  a  nominee for director) and Karen Cohen, the wife  of  Arthur  C.
Cohen,  a  director of theCompany, who disclaims any beneficial interest  in
Ben Arnold Company, ii) Ruthanne Koffman (the mother of David L. Koffman and
the  wife  of  Burton  I.  Koffman), iii)Whitehorn Associates,  a  New  York
Corporation, and iv) Joel Margolin (the Vice President of LCL)  pursuant  to
which  each  of  Rosalco,  Ben Arnold Company, Ruthanne  Koffman,  Whitehorn
Associates,  and Joel Margolin agreed to provide to the CIT Group/Commercial
Services,  Inc.  ("CIT"),  the primary lender to  LCL,  irrevocable  standby
letters of credit and cash in the aggregate amount of $1,700,000 to serve as
additional  collateral  against  which CIT  would  lend  additional  working
capital  to  LCL pursuant to CIT's lending arrangements with LCL.   Each  of
Rosalco  and Joel Margolin provided $500,000 in cash and letters of  credit,
each  of  Ruthanne Koffman and the Ben Arnold Company provided  $250,000  in
irrevocable standby letters of credit, and Whitehorn Associates  provided  a
$200,000 irrevocable standby letter of credit.

In  consideration for providing the additional collateral, the parties  were
to  receive  a  total of 282,400 shares of Common Stock of  the  Company  in
proportion  to  the  amount of additional collateral initially  provided  by
them,  as follows: Joel Margolin was issued 117,600 shares; each of Ruthanne
Koffman  and the Ben Arnold Company were issued 58,800 shares; and Whitehorn
Associates  was  issued 47,200 shares. All the above shares were  issued  in
fiscal 1997.

The  arrangement  with  CIT  for the additional  financing  secured  by  the
additional collateral expired on February 28, 1996.  In connection with  the
terms  of  the  agreement, subsequent to that date, to the extent  that  CIT
applied  additional  collateral  to LCL's  obligations  to  CIT,  LCL  would
reimburse   the  parties  for  the  collateral  so  applied  by  CIT,   such
reimbursement to be made in the ordinary course of business.  Alternatively,
the  parties could at any time after February 28, 1996 receive shares of the
Company's Common Stock as reimbursement for the collateral applied by CIT to
LCL's  obligations by CIT.  Each party would receive that number  of  shares
that  had  a value equal to the amount of such party's collateral  that  was
applied  by  CIT; for purposes of the agreement, the Company's Common  Stock
were deemed to have a value of $1.25 per share.

In  July 1996, CIT notified the parties that CIT was applying the additional
collateral  to  LCL's obligations.  As a result of the  application  of  the
collateral by CIT in October 1996, the parties received the following shares
of the Company's Common Stock: Joel Margolin was issued 400,000 shares; each
of  Ruthanne Koffman and the Ben Arnold Company were issued 200,000  shares;
and Whitehorn Associates was issued 160,000 shares.

<PAGE>

Description of AVES' Business

Products

AVES  distributes and rents a broad range of audio video and  communications
equipment  and  supplies.  Among the items distributed are movie,  filmstrip
and  slide  projectors;  projection screens and  lamps;  video  cameras  and
systems; laser videodisk, video projection, TV monitors and receivers; video
systems;  public address systems, microphones and headsets; tape  recorders,
record  players, cassette recorders, and related accessories  and  supplies.
Some of the items sold (such as blank audio cassettes, headsets and cassette
recorders, duplicating equipment and supplies, laminating film and equipment
for  document  protection) are either assembled by AVES itself or  purchased
from private label and other sole source suppliers and distributed under the
"AVES" and "LAMCO" names.  AVES also distributes the products of brand  name
manufacturers  such  as  RCAT, GET, Mitsubishi,  Elmo,  Panasonic,  Ikegami,
Videotek, Hitachi, Pioneer, Dynatech, Leitch, Tektronix, Avid, Quasar, Telex
Corporation,  Kodak, Dukane, Sharp, Sony, 3M Brand, Luxor and  miscellaneous
other  brand  names.   Brand  name and "house" brand  products  account  for
approximately  97%  and 3% of AVES sales, respectively.   The  Company  also
offers  repair  services,  audio visual consulting  &  design,  engineering,
installation  and servicing of audiovisual systems to businesses,  hospitals
and hotels.

Raw Materials

The  sources  and availability of raw materials are not significant  for  an
understanding  of AVES' business since competitive products  are  obtainable
from  alternative suppliers.  AVES carries an inventory of  merchandise  for
resale and for rental operations that is adequate to meet the rapid delivery
requirements (frequently same day shipments) of its distribution business.

Patents

There  are no patents, trademarks, licenses, franchises or concessions  that
are material to AVES business.
     
Sales

AVES  currently  distributes and rents its products in  the  United  States,
primarily  by  means of catalogs, telephone orders and a field sales  force.
Sales  of AVES are not seasonal, except that sales to schools typically  are
higher from April through July than at other times during the year.

Customers

Approximately  70% of the AVES revenues in fiscal 1997 were  from  sales  to
schools and other educational institutions.  The remaining 30% came from the
rental of AVES systems primarily to hotels (approximately 3%), and sales  to
business  and industry (approximately 27%).  In fiscal 1996, 70.2%  of  AVES
revenues were from sales to schools and other educational institutions.  The
remaining  29.8%  came from the rental of AVES systems primarily  to  hotels
(approximately  3.8%),  and  sales to business and  industry  (approximately
26%).  In fiscal 1995, 69.5% of AVES revenues were from sales to schools and
other educational institutions.  The remaining 30.5% came from the rental of
AVES systems primarily to hotels (approximately 6.3%), and sales to business
and industry (approximately 24.2%).

<PAGE>

Backlog

The  amount of unfilled sales orders of AVES at April 30, 1997, was $758,320
as  compared  to  $443,000 at April 30, 1996.  The amount of unfilled  sales
orders is not a material measure of AVES' operations.

Competition

The Company believes that AVES is one of the most diversified national audio
visual purveyors in the United States, given the different types of services
and   products  offered  by  the  subsidiary.   AVES'  principal  means   of
competition are its aggressive pricing, technical expertise, quick  delivery
and  the  broad  range of product lines available through  its  distribution
channels.

Employees

At April 30, 1997, AVES had 24 employees.


Item 2. Properties

The Company's Corporate office is located in Houston, Texas in a modern, two
story, stone and glass building which includes adjoining parking for  up  to
50  cars.  The Corporate office and the business of AVES are conducted  from
approximately 13,000 square feet; 5,500 of which are used for office,  sales
and  demonstration purposes and 7,500 for warehouse purposes.   The  current
lease  term  expires on April 30, 2001.  The current rental  is  $5,200  per
month.


Item 3. Legal Proceedings

The  Company is subject to certain pending legal proceedings, most of  which
are  ordinary and routine litigation incidentals to its business.   None  of
such legal proceedings, in the opinion of the Company, is
material to its business or financial condition.


Item 4. Submission Of Matters To A Vote Of Security Holders

No  matters were submitted to a vote of the Company's stockholders,  through
the  solicitation of proxies or otherwise, during the fourth quarter of  the
Company's fiscal year ended April 30, 1997.


PART II

Item 5. Market For Registrant's Common Stock And Related Stockholder Matters

The  Company's common stock traded on The NASDAQ Small Cap Market under  the
symbol  JAYA.  Subsequent to year end, the Company was delisted and  is  now
traded over the counter.

<PAGE>

The  following table sets forth the quarterly high and low trade  prices  of
the Company's common stock for the periods indicated, in each fiscal year as
reported  by  NASDAQ.   As of April 30, 1997, there were  approximately  853
stockholders of record of common stock.

The  Company has not paid any dividends on its common stock during the  last
five years and does not plan to do so in the foreseeable future.
<TABLE>
<CAPTION>
              1997 Common Stock Trade Price  1996 Common Stock Trade Price
              -----------------------------  -----------------------------
<S>                  <C>     <C>                     <C>    <C>                                                       
                    High     Low                    High    Low
                    ----     ---                    ----    ---
First Quarter       .56      .19                     2.56    .81
Second Quarter      .41      .13                     1.06   1.00
Third Quarter       .50      .19                      .91    .56
Fourth Quarter      .50      .25                      .69    .44
</TABLE>



Item 6. Selected Financial Data
<TABLE>
<CAPTION>
<S>                      <C>         <C>        <C>        <C>        <C>
Year Ended April 30,    1997       1996       1995      1994      1993
                     ----------- ---------- ---------- --------- ---------
Results of Operations:
Net Revenues         $12,638,072 11,856,148 11,631,370 9,594,000 8,739,000
Earniings(Losses)from                                            
Cont Operations         ($96,372)  (116,390)   180,814    62,000 1,179,000
Earnings(Losses)from                                            
Disc Operations      ($5,962,839)(7,068,857)   592,479   990,000 (2,948,000)
Net Earnings(Losses) ($6,059,211)(7,185,247)   773,293  1,052,00 (1,769,000)
Primary Earnings                                            
(loss)per Share from                                            
Continuing Operations      ($.01)      (.01)       .03       .01        .18
Primary Earnings                                            
(loss) Per Share from                                            
Discontinued Operations    ($.68)      (.90)       .09       .15       (.44)
Avg Shares Outstanding 8,802,528  7,833,990  6,867,083 6,682,344  6,704,848
At April 30,                                                      
Balance Sheet Information:
Total Assets          $2,754,072  8,327,357 18,084,616 10,419,000  9,426,000
Long Term Obligations $1,407,207  1,913,967  1,542,628  1,812,000  2,117,000
Working Capital         
(Deficit)                ($7,003)  (233,256) 2,066,560  1,331,000  1,916,000  
Stockholders' Equity 
(Deficit)            ($3,001,558) 2,585,541  8,614,426 11,543,000 11,236,000    
</TABLE>

<PAGE>

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

General Comments

For  the  fiscal  year  ended  April 30,  1997,  the  Company  recognized  a
consolidated net loss after tax of $6,059,000.  AVES recognized  net  income
of  $551,000 as a result of its operations.  AVES incurred a slight increase
in  Cost of Revenues and experienced a decrease in SG&A spending for  fiscal
1997.   Jayark Corporate recognized a net loss of $6,610,000.   Losses  from
Corporate operations were $647,000.  Losses associated with the Discontinued
operations of Rosalco were $5,963,000 including the writeoff of the Deferred
Tax asset recorded in prior years of $350,000.

Comparison of Fiscal Year Ended April 30, 1997 With Fiscal Year Ended  April
30, 1996

Revenues

Consolidated Revenues of $12,638,000 increased $782,000 or 6.6% from  fiscal
1996.   The increase is the result of a $1,105,000 increase in direct  sales
and  a  slight increase in rental sales from 1996.  However, these increases
were  offset  primarily  by  decreases in contract  sales  ($323,000).   The
increased  sales are primarily a result of the increased emphasis on  direct
sales rather than contract sales.

Cost of Revenues

Consolidated Cost of Revenues of $10,592,000 increased $822,000 or 8.4% from
the  prior  fiscal year.  The increase reflects the higher costs  associated
with direct sales rather than those incurred on contract sales.  Total gross
margin  decreased  an aggregate of 1.9% from the prior fiscal  year  due  to
decreases in margin related to the transition to direct sales, which have  a
lower margin with higher volume.

Selling, General and Administrative Expense

Consolidated  Selling,  General and Administrative  Expenses  of  $2,000,000
decreased  $110,000 or 5.2% as compared to the prior reporting  year.   AVES
decreased  depreciation expense by $38,000 due to the disposal of assets  at
the  end  of fiscal 1996.  The Corporate office decreased insurance expenses
$50,000 due to savings on premiums and $22,000 in payroll expense.

Interest Expense

Consolidated Interest Expense of $222,000 increased $61,000 or  37.9%.   The
increase was due to increased borrowing levels during fiscal 1997.

Other Income

The  Company  incurred consolidated Other Income of $79,000 as a  result  of
gains on the disposal of fixed assets and other miscellaneous income.

<PAGE>

Pre tax loss from Continuing Operations

Consolidated Pre tax Loss from Continuing Operations is $96,000 as  compared
to a prior year's net loss of $116,000.  This is primarily a result of lower
spending  associated with Selling, General, and Administrative expenses  and
other miscellaneous income.


Net Loss on Discontinued Operations

Consolidated  Net  Loss from Discontinued Operations  is  $5,963,000,  which
represented  losses from the discontinued Rosalco operation  of  $3,462,000,
the  establishment of  accruals in the amount of $300,000 for  expenses  and
guarantees  related  to  the  closing, the  write  off  of  an  intercompany
receivable and other assets of $476,000, and the write off of the  remaining
net assets of Rosalco of $1,725,000.


Comparison Of Fiscal Year Ended April 30, 1996 With Fiscal Year Ended  April
30, 1995

Revenues

Consolidated Revenues of $11,856,000 increased $225,000 or 1.9% from  fiscal
1995.   AVES  increased  its revenues by continued  emphasis  on  increasing
direct sales as opposed to rental revenues, thus resulting in increased unit
sales at a lower gross profit margin as compared to rental gross profit.

Cost of Revenues

Consolidated Cost of Revenues of $9,770,000 increased $260,000 or 2.7%  from
the  prior fiscal year.  The increase in AVES' cost of revenues reflects the
increase in sales revenue.

Selling, General and Administrative Expense

Consolidated  Selling,  General and Administrative  Expenses  of  $2,109,000
decreased  $36,000 or 1.7% as compared to the prior reporting year primarily
due to a decrease in payroll and related benefit costs incurred by AVES.

Interest Expense

Consolidated  Interest  Expense  increased $161,000  primarily  due  to  the
increase  in  the amount of short term borrowings, resulting from  increased
inventory  levels  due  to  the decrease in sales,  and  increased  cost  of
borrowings.

Loss On Abandonment of Investment

The  Company incurred a consolidated Loss on Investment of $4,363,000.   The
loss  was  incurred as a result of Corporate abandoning its  investment  and
writing off its advances in certain assets and a business acquired in  June,
1995.  This expense was mainly comprised of writing off investment costs and
wind  down  costs  such as payroll expenses and other  accruals  which  were
necessary for proper liquidation.

<PAGE>
     
Loss on Discontinuing Operations

Loss  on  Discontinued  Operations  reflects  the  losses  incurred  by  the
discontinued Rosalco operation.  The increase in losses of Rosalco  in  1996
indicates the effect of a soft retail market, change in product mix,  slower
deliveries from overseas suppliers and credit restraints from suppliers.


Net Income

Consolidated  Net  Loss  of $7,185,000 as compared  to  income  of  $773,000
decreased  $7,958,000  as  a  result  of  reduced  revenues,  writeoffs   of
investment, discontinued operations, and increased operating expenses.

LIQUIDITY AND CAPITAL RESOURCES

At  April  30,  1997,  consolidated open lines of credit  available  to  the
Company for borrowing, were $750,000 as compared to $1,336,025 at April  30,
1996.   It  is  the  opinion  of  the Company's  management  that  operating
expenses,  as  well as obligations coming due during the next  fiscal  year,
will  be  met  primarily  by cash flow generated from  operations  and  from
available borrowing levels.

Working Capital

Working  capital  was  a deficit of $7,003 at April 30,  1997,  compared  to
working  capital  deficit of $233,256 at April 30, 1996.   The  decrease  in
working capital is largely due to the operating loss incurred in the current
year  and the provision for future expenses incurred in connection with  the
discontinuation of Rosalco.

Net  cash  used  by  operating activities was $1,071,762 in  1997  resulting
primarily from the losses from both continuing and discontinued operations.

Cash  flows  used  during  the  year ended  April  30,  1997  for  investing
activities was $83,556 as a result of capital expenditures by the continuing
AVES division.

Cash provided by financing activities of $871,531 arose from the proceeds of
additional financing of $2,001,083 offset by repayments of $1,129,552.

The financing arrangement in effect at April 30, 1996 was revised April 1997
to  reflect  the  renewal and extension of the maturity dates  of  lines  of
credit  to  April 1997, to approve the repayment schedule of  the  Company's
subordinated  convertible debentures, to reflect  the  payoff  of  the  term
loans,  and  to make available a total of $10,000,000 maximum  in  revolving
lines of credit for Rosalco, with interest charged at prime plus 1.75%.   In
June  1997,  the  Company entered into an agreement with State  Street  Bank
extending the maturity date of the line of credit for Rosalco to August  31,
1997.   As  collateral, Rosalco deposited $100,000 into  a  cash  collateral
account held at State Street Bank.  As of August 31, 1997, State Street Bank
did  not  renew the loan agreement with Rosalco, thereby forcing the company
to  close  its  operations in Jeffersonville.  The assets  of  Rosalco  were
secured  as  part  of  the  loan agreement, and a receiver  has  since  been
appointed  to  liquidate  the  assets of  Rosalco.   As  part  of  the  loan
agreement, Jayark guaranteed $200,000 to State Street Bank.

<PAGE>

In  March  1997, AVES established a line of credit with BSB  Bank  &  Trust,
Binghamton,  New  York, in the amount of $1,250,000.  The interest  rate  is
9.75%  annually.  There are no financial covenants associated with the  line
of credit.  As of April 30, 1997, AVES has $500,000 outstanding.

On  March  12,  1997,  in  connection with the State Street  Bank  financing
described above and the establishing of the BSB Bank & Trust line of  credit
described above, the Company issued stock warrants totaling 4,166,667 to A-V
Texas  Holding, LLC, an affiliate of the Company.  The warrants  allows  the
holder to purchase 4,166,667 shares of the Companies common stock at  a  par
value  of $.30.  The effectiveness of the warrants is subject to an increase
in  the  available  authorized shares of the Company.  The  warrants  expire
February 1, 2007.

The Company had no material commitments for capital expenditures as of April
30, 1997.

Impact of Inflation

Management  of  the  Company believes that inflation has  not  significantly
impacted  either net sales or net earnings during the year ended  April  30,
1997.   The  Company has generally been able to pass along  price  increases
from its manufacturers.


Effect of new accounting pronouncements

In  February 1997, the Financial Accounting Standards Board ("FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings  per
Share", which is effective for both interim and annual periods ending  after
December  15,  1997.   Earlier application is not  permitted.   The  Company
accordingly  plans  to  adopt SFAS No. 128 in  its  April  30,  1998  annual
financial  statements.  The Company does not anticipate that  SFAS  No.  128
will have a material effect on the earnings per share as presented.

In  June  1997,  the FASB issued two new disclosure standards.   Results  of
operations  and  financial position will be unaffected by implementation  of
these new standards.

SFAS  No.  130, "Reporting Comprehensive Income," establishes standards  for
reporting   and   display  of  comprehensive  income,  its  components   and
accumulated  balances.   Comprehensive income  is  defined  to  include  all
changes  in  equity except those resulting from investments  by  owners  and
distributions to owners.

SFAS  No.  131,  "Disclosures about Segments of an  Enterprise  and  Related
Information,"  which  supersedes  SFAS  No.  14,  "Financial  Reporting  for
Segments  of a Business Enterprise," establishes standards for the way  that
public  enterprises report information about operating segments in financial
statements.   It  also  establishes  standards  for  disclosures   regarding
products and services, geographic areas and major customers.

Both  of  these  new  standards are effective for financial  statements  for
periods   beginning  after  December  15,  1997,  and  require   comparative
information  for earlier years to be restated.  Management does  not  expect
these  two  standards  to  have a significant  impact  on  future  financial
statement disclosures.

<PAGE>

Item 8. Financial Statements And Supplementary Data

The   Reports   of  Independent  Certified  Public  Accountants,   Financial
Statements and Notes to Consolidated Financial Statements filed as a part of
this report are listed in the accompanying Index to Financial Statements and
Schedules.

Item  9.  Change  In  And Disagreement With Accountants  On  Accounting  And
Financial Disclosure

The Company released KPMG Peat Marwick, LLP as the principal accounting firm
as  of  October  23,  1995, which was approved by  the  Company's  Board  of
Directors.  The Company had no disagreement with KPMG Peat Marwick,  LLP  on
any  issues.   The  Company  appointed BDO Seidman,  LLP  as  the  principal
accounting  firm  to perform all audit functions effective with  the  fiscal
year ended April 30, 1996.

PART III

Item 10. Directors And Executive Officers Of The Registrant

Set  forth  below  is a list of the directors, executive  officers  and  key
employees of the Company and their respective ages as of June 30, 1997, and,
as to directors, the expiration date of their current term of office:

<TABLE>
<CAPTION>

                       CURRENT DIRECTORS
-----------------------------------------------------------------------------
<S>                 <C> <C>       <C>                         <C>
     Name           Age Term Exp.  Position Presently Held     Director Since
------------------- --- --------- ---------------------------- --------------
David Koffman        38   2000    Chairman, President,Chief        1983
                                  Executive Officer and 
                                  Director
Frank Rabinovitz     55   2000    Executive Vice President         1989
                                  Chief Operating Officer,
                                  Director and President
                                  of AVES
Lawrence J. Schorr   43   1999    Vice Chairman and Director       1996
Robert C. Nolt       49    N/A    Chief Financial Officer           N/A
*Michael J.Sherman   50   1997    Director                         1989
Arthur G. Cohen      68   1999    Director                         1990
*John H.M. Griffiths 44   1998    Director                         1993
Michael Silverman    53   1999    Director                         1993

     * Resigned from the Board of Directors During Fiscal 1997
</TABLE>

David  L. Koffman was elected President and Chief Executive Officer  of  the
Company  in  December 1988.  Prior to that time, he served as  Director  and
Vice President of the Company for over seven years.

<PAGE>

Frank  Rabinovitz  was  elected Executive Vice  President,  Chief  Operating
Officer  and  Director  of the Company in 1989.   In  addition,  he  is  the
President  of  the Company's audiovisual subsidiary and has served  in  this
capacity  for  more than seven years, as well as in various other  executive
and management capacities since 1980.

Lawrence  J.  Schorr  is  Vice Chairman and Director  of  the  Company.   In
addition,  Mr. Schorr is Chairman and Chief Executive Officer of  Binghamton
Industries, Inc., a company controlled by the principal shareholders of  the
Company.   Prior to joining the Company, Mr. Schorr was President and  Chief
Executive  Officer  of  RRT-Recycle America,  Inc.  for  over  seven  years.
Previously,  Mr.  Schorr was an attorney and partner  in  the  law  firm  of
Levene, Gouldin & Thompson in Binghamton, NY.

Robert C. Nolt is Chief Financial Officer of the Company.  In addition,  Mr.
Nolt  is  Chief Financial Officer of Binghamton Industries, Inc., a  company
controlled  by the principal shareholders of the Company.  Prior to  joining
the  Company, Mr. Nolt was Vice President of Finance of RRT-Recycle America,
Inc.   Mr.  Nolt  is  a Certified Public Accountant with over  25  years  of
experience  in the Accounting field and has served in a number of  executive
positions.  Before joining RRT in 1993, Mr. Nolt was Chief Financial Officer
for the Vestal, NY based Ozalid Corporation.

Michael  J. Sherman, CPA, is President and Chief Executive Officer  of  M.J.
Sherman and Associates, a financial consulting firm.  Mr. Sherman has served
in such capacities for more than seven years.

Arthur G. Cohen has been a real estate developer and investor for more  than
six  years.  Mr. Cohen is a Director of Apparel America, Inc., Baldwin,  and
Arlen,  Inc.   Burton I. Koffman and Richard E. Koffman are  parties  to  an
agreement  with Arthur G. Cohen pursuant to which they have agreed  to  vote
their shares in favor of the election of Mr. Cohen to the Board of Directors
of the Company.

John  H. M. Griffiths is Managing director and majority shareholder  of  any
international  venture capital and financing company  based  in  the  United
Kingdom;  a  board  member  and shareholder of  Lynton  Delancy  &  Partners
Limited, CL BES Limited, CL BES 2 Limited Lastbrave Livited and Capel Lynton
Limited;  a  director of Bardwell Western states, and  CL  BES  IV  Limited.
Previously,  Mr. Griffiths was associated with Samuel Montagu & Co.  Limited
as  a  main  board  member,  Nomura  Bank  International  PLC,  Lloyds  Bank
International  and  Bank of London & South America.  Mr. Griffiths  received
his BA and MA from Cambridge University.

Michael  Silverman  is  a venture capitalist and is currently  chairman  and
Chief  Executive Officer of Boatracs, Inc. and Unique Events Products, Inc.,
and  a  board member of International Savings Bank and International Bedding
Corp.  Previously, Mr. Silverman was chairman and Chief Executive Officer of
Textile Industries, USA, Sheridan Distributors, Inc., Sussex Group, Ltd. and
Huffman  Koos.  Mr. Silverman is a Chartered Accountant (S.A.) and  received
his MBA from Stanford.

<PAGE>
      
Information Concerning Operations of the Board of Directors

The  Executive Committee of the Board of Directors consists of Mr. David  L.
Koffman  (Chair)  and Mr. Frank Rabinovitz.  The function of  the  Executive
Committee is to exercise the powers of the Board of Directors to the  extent
permitted by Delaware law.  As a rule, the Executive Committee meets to take
action  with  respect to matters requiring Board of Directors  approval  and
which  cannot  await  a regular meeting of the Board or  the  calling  of  a
special  meeting.   Under Delaware law and the Company's By-laws,  both  the
Board  and Executive Committee can act by unanimous written consent  to  all
members.

The  Stock  Option  Committee  of the Board  of  Directors  was  created  to
administer  the  Company's  1981 Incentive Stock Option  Plan,  as  amended,
pursuant  to  resolution adopted November 24, 1981, giving it  authority  to
exercise  powers  of the Board with respect to the Plan.  The  Stock  Option
Committee consists of Mr. Frank Rabinovitz and Mr. Michael Silverman.

The  Audit  Committee  of  the Board of Directors was  created  in  1991  to
administer and coordinate the activities and results of the annual audit  of
the  Company  by  independent accountants and to comply with NASDAQ  listing
requirements.   The  Audit Committee is comprised  of  Mr.  Lawrence  Schorr
(Chair) and Mr. Michael Silverman.

The Compensation Committee of the Board of Directors was created in 1993  to
administer  and  review compensation structure, policy  and  levels  of  the
Company.   The  Compensation Committee is composed of Mr. Michael  Silverman
(Chair) and Mr. David Koffman.

Item 11. Executive Compensation

Set  forth  in  the following table is certain information relating  to  the
approximate  remuneration paid by the Company during the last  three  fiscal
years  to each of the most highly compensated executive officers whose total
compensation exceeded $100,000.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE (1,2)

                                              Annual Compensation
                                             ----------------------
<S>                                 <C>      <C>            <C>
                                    Year      Salary         Bonus
                                    ----     --------       -------
David L. Koffman                    1997     $162,000            $0
Chairman, President and Chief       1996      162,000             0
Executive Officer                   1995      162,000        45,500
                                            
Frank Rabinovitz                    1997     $162,000       $50,000
Director, Executive Vice            1996      162,000        50,000
Chief Operating Officer,            1995      162,000        50,000
President Of AVES
</TABLE>

<PAGE>

(1) Does  not  include  the value of non-cash compensation  to  the  named
individuals, which did not exceed the lesser of $50,000 or,  10%  of  such
individuals' total annual salary and bonus.  The Company provides a vehicle
to each of the named executives for use in connection with Company business
but  does  not  believe  the  value of said vehicles  and  other  non-cash
compensation,  if  any,  exceeds the lesser  of  $50,000  or  10%  of  the
individual's total annual salary and bonus.

(2) The  Company  has entered into Split Dollar Insurance Agreements  with
Messrs. David L. Koffman and Frank Rabinovitz, pursuant to which the Company
has obtained insurance policies on their lives in the approximate amount of
$1,054,000 and $497,700, respectively.  The premium is paid by the Company.
Upon the death of the individual, the beneficiary named by the individual is
entitled to receive the benefits under the policy.  The approximate amounts
paid  by the Company during the fiscal year ended April 30, 1997 for  this
insurance coverage were $36,507, $25,406, respectively.  Such amounts  are
not included in the above table.

The following table sets forth-certain information relating to the value  of
stock options at April 30, 1997:

<TABLE>
<S>              <C>          <C>               <C>             <C>
                    Number of Unexercised     Value of Unexercised In-The-Money
                 Options at Fiscal Year End     Options ar Fiscal Year End*
                 ---------------------------  ---------------------------------
      Name       Exercisable  Unexcercisable   Excercisable    Unexcercisable
---------------- -----------  --------------    ------------    --------------
Frank Rabinovitz   100,000          0             $28,125             0
</TABLE>

* Based on the $0.2813 per share closing bid price of the common stock on
the NASDAQ Stock Exchange on April 30, 1997


Effective November 24, 1981 and approved at the annual stockholders  meeting
in  1982,  the  1981  Incentive Stock Option Plan (ISOP)  was  adopted.   An
amendment  to  the  ISOP was adopted on December 11, 1989.   This  amendment
increased  the  number of incentive stock options that can be  granted  from
150,000 shares to 600,000 shares.  The ISOP provides for the granting to key
employees and officers of incentive stock options, as defined under  current
tax  laws.  The stock options are exercisable at a price equal to or greater
than the market value on the date of the grant.No stock options were granted
during the fiscal year ended April 30, 1997.

Effective September 15, 1994 and approved at the annual stockholders meeting
in  1994,  the  1994 NonEmployee Director Stock Option Plan  (the  "Director
Plan"  was adopted and 200,000 shares of the Company's common stock reserved
for  issuance under the Director Plan.  The Director Plan provides  for  the
automatic  grant  of  nontransferable options to purchase  common  stock  to
nonemployee directors of the Company; on the date immediately preceding  the
date  of  each  annual  meeting of stockholders  in  which  an  election  of
directors is concluded, each nonemployee then in office will receive options
exercisable  for  5,000 shares (or a pro rata share of the total  number  of
shares  still available under the Director Plan).  No option may be  granted
under  the  Director  Plan  after the date of the  1998  Annual  Meeting  of
Stockholders.

<PAGE>


Options  issued pursuant to the Director Plan are exercisable at an exercise
price  equal to not less than 100% of the fair market value (as  defined  in
the  Director  Plan)  of  shares  of common stock  on  the  day  immediately
preceding  the date of the grant.  Options are vested and fully  exercisable
as  of the date of the grant.  Unexercised options expire on the earlier  of
(i)  the  date  that is ten years from the date on which they were  granted,
(ii)  the  date  which  is  three calendar  months  from  the  date  of  the
termination of the optionee's directorship for any reason other  than  death
or  disability (as defined in the Director Plan), or (iii) one year from the
date of the optionee's disability or death while serving as a director.

The  Director  Plan became effective immediately following the  1994  Annual
Meeting  of Shareholders.  Each nonemployee director in office on  the  date
immediately  preceding the date of each year's annual meeting  will  receive
options exercisable for 5,000 shares of common stock.

During fiscal year ended April 30, 1997, no director options were granted to
nonemployee directors.

Report  of the Compensation Committee of the Board of Directors on Executive
Compensation

Except  pursuant  to  its  ISOP and the Director Plan  and  except  for  key
employees in its discontinued Rosalco subsidiary, the Company does not  have
any  formal  annual incentive program, cash or otherwise, nor does  it  make
annual  grants of stock options.  Cash bonuses and stock options,  including
bonuses  and options paid to executive officers, have generally been awarded
based  upon individual performance, business unit performance and  corporate
performance, in terms of cash flow, growth and net income as well as meeting
budgetary, strategic and business plan goals.

The  Company  is  committed to providing a compensation program  that  helps
attract  and retain the best people for the business.  The Company endeavors
to  achieve  symmetry  of  compensation paid to  a  particular  employee  or
executive  and  the compensation paid to other employees or executives  both
inside the Company and at comparable companies.

The  remuneration  package  of  the  Chief  Executive  Officer  includes   a
percentage bonus based on the Company's profitable performance.

Compensation Committee
     Michael Silverman
     David L.Koffman



Item 12. Security Ownership Of Certain Beneficial Owners And Management

The  following  table sets forth as of April 30, 1997, the holdings  of  the
Company's  Common Stock by those persons owning of record, or known  by  the
Company  to own beneficially, more than 5% of the Common Stock, the holdings
by  each director or nominee, the holdings by certain executive officers and
by all of the executive officers and directors of the Company as a group.

<PAGE>

<TABLE>
<CAPTION>
<S>                                   <C>                   <C>      <C>
PRINCIPAL STOCKHOLERS                 Amount and Nature of
Name and Address of Beneficial Owner  Beneficial Ownership  Note (1) % of Class
------------------------------------  --------------------  -------- ----------
David L. Koffman                                           
300 Plaza Drive,Vestal, NY 13850            1,446,727             2     15.7%

Burton I. Koffman
300  Plaza  Drive, Vestal, NY 13850           703,500         3,4,5      7.6%

Richard E. Koffman
300  Plaza  Drive, Vestal, NY 13850           278,500           4,6      3.0%

Milton Koffman
300  Plaza  Drive, Vestal, NY 13850           159,500                    1.8%

Jeffrey Koffman
300  Plaza  Drive, Vestal, NY 13850           296,333                    3.2%

Elizabeth Koffman
300  Plaza  Drive, Vestal, NY 13850            33,334                    0.4%

Joel Margolin
6116 Skyline Drive, Houston, TX 77057         517,600                    5.6%

Ben Arnold Company
700 Gervais Street, Columbia, SC 29201        795,189                    8.6%

Commerzbank AG
31 Charter Road, Hong Kong                  1,000,000                   10.8%

Michael Silverman                                                  
6440  Lusk  Blvd., San Diego, CA 92121          17,000                    .2%   

Frank Rabinovitz                                           
6116 Skyline Drive, Houston, TX 77057          146,000            7      1.6%
                                                           
All Directors & Executive                            
Officers as a Group                          1,609,727  2,3,4,5,6,7    17.46%
</TABLE>

1.    All  shares are owned directly by the individual named, except as  set
forth herein.  Includes actual shares beneficially owned and Employee
and Director Stock Options exercisable within 60 days. Burton I. Koffman is
the Nephew of Milton Koffman.  Burton I. Koffman and Richard E. Koffman are
brothers.  David L. Koffman is the son of Burton I. Koffman.  Elizabeth is
the daughter of Burton I. Koffman.

2.    Excludes $720,587.79 principal amount of the Company's 12% Convertible
Subordinated  Debentures, due December 1999, which  are  convertible  into
480,392  shares  of Common Stock at a price of $1.50 per share.   Excludes
4,166,667  shares  of Common Stock subject to a warrant further  described
under  Item  13,  Certain Relationships and Certain  Transactions.   David
Koffman may be said to have a beneficial interest in these warrants.

<PAGE>

3.   Excludes 37,000 shares owned by a charitable foundation of which Burton
I. Koffman is President and Trustee.

4.    Includes 537,000 shares owned as tenants in common by brothers Richard
E. Koffman and Burton I. Koffman.

5.   Excludes 665,962 shares owned by the spouse of Burton I. Koffman.

6.   Excludes 180,000 shares owned by the spouse of Richard E. Koffman.

7.   Excludes  $49,096.99 principal amount of the Company's 12% Convertible
Subordinated  Debentures, due December 1999, which  are  convertible  into
32,731 shares of Common Stock at a price of $1.50 per share.


Item 13. Certain Relationships And Related Transactions

During  August  1995,  the  Company,  and  Rosalco,  Inc,  entered  into   a
Reimbursement Agreement with:
i)  Ben  Arnold Company, a corporation beneficially owned by several members
of the Burton I. Koffman and Richard E. Koffman families (including David L.
Koffman,  who is the president and a director of the Company, and Joseph  B.
Koffman,  a  nominee for director) and Karen Cohen, the wife  of  Arthur  C.
Cohen,  a  director of theCompany, who disclaims any beneficial interest  in
Ben Arnold Company, ii) Ruthanne Koffman (the mother of David L. Koffman and
the  wife  of  Burton  I.  Koffman), iii)Whitehorn Associates,  a  New  York
Corporation, and iv) Joel Margolin (the Vice President of LCL)  pursuant  to
which  each  of  Rosalco,  Ben Arnold Company, Ruthanne  Koffman,  Whitehorn
Associates,  and Joel Margolin agreed to provide to the CIT Group/Commercial
Services,  Inc.  ("CIT"),  the primary lender to  LCL,  irrevocable  standby
letters of credit and cash in the aggregate amount of $1,700,000 to serve as
additional  collateral  against  which CIT  would  lend  additional  working
capital  to  LCL pursuant to CIT's lending arrangements with LCL.   Each  of
Rosalco  and Joel Margolin provided $500,000 in cash and letters of  credit,
each  of  Ruthanne Koffman and the Ben Arnold Company provided  $250,000  in
irrevocable standby letters of credit, and Whitehorn Associates  provided  a
$200,000 irrevocable standby letter of credit.

In  consideration for providing the additional collateral, the parties  were
to  receive  a  total of 282,400 shares of Common Stock of  the  Company  in
proportion  to  the  amount of additional collateral initially  provided  by
them,  as follows: Joel Margolin was issued 117,600 shares; each of Ruthanne
Koffman  and the Ben Arnold Company were issued 58,800 shares; and Whitehorn
Associates  was  issued 47,200 shares. All the above shares were  issued  in
fiscal 1997.

On  March  12, 1997, in connection with the State Street Bank financing  and
the  establishing of the BSB Bank & Trust line of credit described under the
working  capital  section above, the Company issued stock warrants  totaling
4,166,667  to A-V Texas Holding, LLC, an affiliate of the Company  of  which
David Koffman is a principal shareholder.  The warrants allows the holder to
purchase  4,166,667 shares of the Companies common stock at a par  value  of
$.30.   The effectiveness of the warrants is subject to an increase  in  the
available authorized shares of the Company.  The warrants expire on February
1, 2007.

<PAGE>

The  arrangement  with  CIT  for the additional  financing  secured  by  the
additional  collateral  expired on February  28,  1996.   In  terms  of  the
agreement,  subsequent  to  that  date,  to  the  extent  that  CIT  applied
additional  collateral to LCL's obligations to CIT, LCL would reimburse  the
parties for the collateral so applied by CIT, such reimbursement to be  made
in the ordinary course of business.  Alternatively, the parties could at any
time after February 28, 1996 receive shares of the Company's Common Stock as
reimbursement for the collateral applied by CIT to LCL's obligations to CIT.
Each party would receive that number of shares that had a value equal to the
amount  of such party's collateral that was applied by CIT; for purposes  of
the  agreement, the Company's Common Stock were deemed to have  a  value  of
$1.25 per share.

In  July 1996, CIT notified the parties that CIT was applying the additional
collateral  to  LCL's obligations.  As a result of the  application  of  the
collateral by CIT in October 1996, the parties received the following shares
of the Company's Common Stock: Joel Margolin was issued 400,000 shares; each
of  Ruthanne Koffman and the Ben Arnold Company were issued 200,000  shares;
and Whitehorn Associates was issued 160,000 shares.

In  September 1996, certain related parties advanced an additional  $500,000
to  the Company , which was applied to Rosalco's outstanding line of credit.
The related party advances now totaling $1,000,000 are payable on demand and
interest is paid monthly at prime plus 2.5%.

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 Statements.
       The Reports of Independent Certified Public Accountants, Financial
       Statements and Notes to Consolidated Financial  Statements which
       are filed as a part of this report are listed in the Index to Financial
       Statements.
       Note-no financial statement schedules were required to be filed.

     3.Exhibits, which are filed as part of this report, are  listed
       in the accompanying Exhibit Index.
(b)  Reports on Form 8-K.
     1.Other Events
       Subordated Promissory Note Dated March 12, 1997 between Rosalco,  Inc
       and
       Jayark.

<PAGE>

SIGNATURES

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

JAYARK CORPORATION

By:
     
/S/ DAVID L. KOFFMAN       Chairman of the Board and Director
DAVID L. KOFFMAN

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 date indicated.

/S/ DAVID L. KOFFMAN       Chairman of the Board, President,   December 31, 1997
DAVID L. KOFFMAN           Chief Executive Officer and Director

/S/ FRANK RABINOVITZ       Executive Vice President, Chief     December 31, 1997
FRANK RABINOVITZ           Operating Officer and Director


                           
LAWRENCE J. SCHORR         Director



MICHAEL SILVERMAN          Director


/S/ ARTHUR G. COHEN        Director                            December 31, 1997
ARTHUR G. COHEN

<PAGE>

JAYARK CORPORATION AND SUBSIDIARIES


Index                                                                      Page
_______________________________________________________________________________

Consolidated Financial Statements:

Report of Independent Certified Public Accountants                           21

Report of Independent Certified Public Accountants                           22

Balance Sheets - April 30, 1997 and 1996                                     23

Statements of Operations - For the years ended April 30, 1997, 1996 and 1995 24

Statements of Stkhldr Eq - For the years ended April 30, 1997, 1996 and 1995 25

Statements of Cash flows - For the years ended April 30, 1997, 1996 and 1995 26

Notes to Consolidated Financial Statements                                27-38

Exhibits                                                                  39-42

Financial Data Schedule

<PAGE>

Report of Independent Certified Public Accountants

To the Shareholders and Directors
Jayark Corporation

We  have  audited  the accompanying consolidated balance  sheets  of  Jayark
Corporation  and Subsidiaries as of April 30, 1997 and 1996 and the  related
consolidated statements of operations, changes in stockholders' equity,  and
cash  flows  for the years then ended.  These financial statements  are  the
responsibility  of  the  Company's management.   Our  responsibility  is  to
express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in accordance with generally  accepted  auditing
standards.   Those standards require that we plan and perform the  audit  to
obtain   reasonable  assurance  about  whether  the  consolidated  financial
statements  are free of material misstatement.  An audit includes examining,
on  a  test  basis, evidence supporting the amounts and disclosures  in  the
financial  statements.   An  audit also includes  assessing  the  accounting
principles  used and significant estimates made by management,  as  well  as
evaluating the overall presentation of the financial statements.  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 financial position of  Jayark
Corporation and Subsidiaries as of April 30, 1997 and 1996, and the  results
of  their  operations  and  their cash flows for the  years  then  ended  in
conformity with generally accepted accounting principles.

We  also  audited  the  adjustments relating to the discontinued  operations
described  in  Note  16  that were applied to restate  the  April  30,  1995
financial statements.  In our opinion, such adjustments are appropriate  and
have been properly applied.

BDO Seidman, LLP

New York, New York

July 15, 1997, except for Note 16 for which the date is November 14, 1997

<PAGE>

Independent Auditors' Report

The Board of Directors
Jayark Corporation

We  have audited the consolidated financial statements of Jayark Corporation
and  subsidiaries  as listed in the accompanying index.  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 generally  accepted  auditing
standards.   Those standards require that we plan and perform the  audit  to
obtain reasonable assurance about whether the financial statements are  free
of  material  misstatement.  An audit includes examining on  a  test  basis,
evidence supporting the amounts and disclosures in the financial statements.
An  audit  also  includes  assessing  the  accounting  principles  used  and
significant estimates made by management, as well as evaluating the  overall
financial  statement  presentation.  We believe that our  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 financial position of  Jayark
Corporation and subsidiaries as of April 30, 1995 and 1994, and the  results
of their operations and their cash flows for each of the years in the three-
year  period  ended  April 30, 1995, in conformity with  generally  accepted
accounting principles.

As  discussed in Notes 1and 7 to the consolidated financial statements,  the
Company  changed its method of accounting for income taxes in 1994 to  adopt
the  provisions of the Financial Accounting Standards Board's  Statement  of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".


KPMG Peat Marwick, LLP

Houston, Texas

August 9, 1995

<PAGE>

Jayark Corporation And Subsidiaries
Consolidated Balanc Sheets
April 30, 1997 and 1996
<TABLE>
<CAPTION>
<S>                                                    <C>          <C>
Assets                                                1997          1996
------                                             ----------    ----------
Current Assets
  Cash and Cash Equivalents                          $67,140      $350,926
  Accounts Receivable-Trade, Less Allowance        1,838,585     1,686,759
  For Doubtful Accounts of $42,000 in 1997
  and $59,000 in 1996
  Other Accounts Receivable                            2,277        53,167
  Federal and State Income Taxes Refundable                        695,501
  Inventories                                        412,846       504,555
  Deferred Federal Income Taxes                                    295,798
  Other Current Assets                                20,572         7,887
                                                   ----------    ----------
Total Current Assets                               2,341,420      3,594,59
                                                      
                                                    
Non Current Assets
  Property & Equipment, Less Accumulated             122,550       100,602
  Depreciation and Amortization
  Excess of Cost Over Net Assets of Business         290,102       311,462
  Acquired, Less Accumulated Amortization of
  $442,335  in 1997 and $420,975 in 1996
  Net Assets of Discontinued Operations of Rosalco         -     4,268,849
  Deferred Federal Income Taxes                                     51,851
                                                   ----------    ----------
Total Non-Current Assets                             412,652     4,732,764
                                                   ----------    ----------  
Total Assets                                      $2,754,072    $8,327,357
                                                  ===========   ===========
                                                
Liabilities                                                       
-----------
Current Liabilities
  Notes Payable & Line of Credit                    $500,000    $1,600,915
  Current Maturities of Long Term Debt                 7,394        28,189
  Accounts Payable                                   905,407       585,058
  Accrued Salaries and Deferred Compensation         106,531       183,905
  Accrual Related to Loss on Disc. Operation-Rosalco 305,000             -
  Accrual Related to LCL Investment                  164,579       982,624
  Other Current Liabilities                          359,512       447,158
                                                   ----------    ----------
Total Current Liabilities                          2,348,423     3,827,849
                                                         
Non Current Liabilities
  Long Term Debt, Excluding Current Maturities         7,207        13,967
  Notes Payable to Related Parties                 2,000,000             -
  Subordinated Debentures                          1,400,000     1,400,000
  Other Long Term Liabilities, Related to LCL Inv.         -       500,000
                                                   ----------    ----------
Total Non-Current Liabilities                      3,407,207     1,913,967
                                                   ----------    ----------  
Total Liabilities                                  5,755,630     5,741,816
                                                      
Commitments                                                       
                                          
Stockholders' Equity (Deficit)                                                       
------------------------------
  Common Stock of $.30 Par Value. Authorized       2,766,359     2,393,639
  10,000,000 Shares; Issued 9,221,197 Shares
  in 1997 and 7,978,799 Shares in 1996
  Additional Paid-In Capital                       8,066,122     7,966,730
  Deficit                                        (13,834,039)   (7,774,828)
                                                  ----------     ----------
Total Stockholders' Equity                        (3,001,558)    2,585,541
                                                  ----------     ----------

Total Liabilities & Stkhldrs' Equity (Deficit)    $2,754,072    $8,327,357
                                                  ===========   ===========
See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>

Jayark Corporation And Subsidiaries
Consolidated Statement of Operations
For The Years Ended April 30, 1997, and 1996
<TABLE>
<CAPTION>
<S>                                       <C>          <C>          <C>
Continuing Operations:                  1997         1996         1995
                                    ------------ ------------ ------------
Net Revenues                         $12,638,072  $11,856,148  $11,631,370
                                                
Cost & Expenses
 Cost of Revenues                     10,591,857    9,769,969    9,510,291
 Selling, General and Administrative   1,999,570    2,109,182    2,145,535
 Interest                                221,566      160,687            -                                     -
 Other Income                            (78,549)      (5,300)    (302,630)
                                      -----------   ----------   ----------
Total Costs & Expenses                12,734,444   12,034,538   11,353,196
                                                  
Pre Tax Earnings (losses) from
Continuing Operations                    (96,372)    (178,390)     278,174
                                                  
Provision for Inc. Tax. (Benefit from)         -      (62,000)      97,360
                                      -----------   -----------  ----------
Income (loss) from Cont. Operations      (96,372)    (116,390)     180,814
                                          
Income (loss) on Abandonment of
 Investment, net of tax benefit of
 benefit of $365,173 in 1996                   -   (4,363,263)           -
Income (loss) from Disc. Operations,
 net of Taxes of $350,000, ($156,503),
 $368,778 respectively                (3,462,109)  (2,705,594)     592,479
Loss on disposition of subsidiary     (2,500,730)           -            -
                                      -----------   -----------  ----------
Net Income (loss)                    ($6,059,211) ($7,185,247)    $773,293
                                     ============  ============  ==========

                                                  
Primary Earn (Loss) per Common Share                   
 Continuing Operations                    ($0.01)      ($0.01)       $0.03
 Discontinued Operations                  ($0.68)      ($0.90)       $0.09
                                      -----------   -----------  ----------
 Net Income (loss)                        ($0.69)      ($0.91)       $0.12
                                      ===========  ============  ==========        
Fully Diluted Earn (Loss) per
Common Share:
 Continuing Operations                                               $0.02
 Discontinued Operations                                             $0.07
                                                                 ----------
 Net Income (loss)                                                   $0.10
                                                                 ==========
Weighted Average Common Shares:                                                 

 Primary                               8,802,528    7,833,990    6,867,083
                                      ===========  ============  ==========
 Fully Diluted                                                   7,965,438
                                                                 ==========

See accompanying notes to consolidated financial statements

</TABLE>

<PAGE>

Jayark Corporation And Subsidiaries
Consolidated Statements of Stockholders' Equity
For The Years Ended April 30, 1997, 1996, and 1995
<TABLE>
<CAPTION>
<S>                    <C>        <C>        <C>          <C>        <C>
                       Common Stk  Pd-In Cap   Deficit    Treas Stk  Tot Equity
                       ---------- ---------- ------------ ---------- -----------
Bal at April 30, 1994  $2,049,973 $6,691,207 ($1,362,874) ($160,154) $7,218,152
 Acq.  of 319,200
 shares  of treasury
 stock                          -          -           -   (222,688)   (222,688)
 Issuance of 145,551
 shares of stock           43,666    419,273           -          -     462,939
 Retirement of treasury
 stock                          -          -           -    382,842     382,842
 Net income                     -          -     773,293          -     773,293
                       ---------- ---------- ------------ ---------- -----------
Bal at April 30, 1995   2,093,639  7,110,480    (589,581)         -   8,614,538
 Issue of 1,000,000
 shares of stock          300,000    856,250           -          -   1,156,250
 Net loss                       -          -  (7,185,247)         -  (7,185,247)
                       ---------- ---------- ------------ ---------- -----------
Bal at April 30, 1996   2,393,639  7,966,730  (7,774,828)         -   2,585,541
 Issue of 1,242,400
 shares of stock          372,720     99,392           -          -     472,112
 Net loss                       -          -  (6,059,211)         -  (6,059,211)
                       ---------- ----------- ----------- ---------- -----------
Bal at April 30, 1997  $2,766,359 $8,066,12  ($13,834,039)       $-  ($3,001,558)
                       ========== =========== ============ ========= ============                                          

See accompanying notes to consolidated financial statements
</TABLE>

<PAGE>

Jayark Corporation And Subsidiaries
Consolidated Statements of Cash Flows
For The Years Ended April 30, 1997, 1996, and 1995
<TABLE>
<CAPTION>
<S>                                       <C>          <C>          <C>
                                              1997         1996         1995
Cash Flows From Operating Activities:     ------------ ------------ ------------
  Net Income (loss)                       ($6,059,211) ($7,185,247)    $773,293
                                                      
Adjustments to Reconcile Earnings (Loss)
to Cash from Operating Activities:
  Stock  Issued  in Connection with
   Abandoned - Investment                           -    1,156,250            -
  Depreciation  and Amortization  of
   Property and Equipment                      40,089      273,378      254,894
  Amortization  of  Excess of  Cost  Over 
  Net Assets of Businesses Acquired            21,360       21,360       21,361
  Discontinued Division - PP&E                                          672,870
  Net Assets  of  Discontinued  Operations
   written off                              4,268,849            -       48,522
  (Gain) Loss on Disposition of Assets         21,516            -       56,956
Change in Assets and Liabilities Net of
 Effects From Acquisition of Subs:
  (Increase)Decrease in Deferred Federal      
    Income Tax Expense (Benefit)              350,000            -      277,284
  (Increase)Decrease in Accounts Rec Net     (105,667)    (787,431)    (790,865)
  (Increase) Decrease in Federal & State   
    Income Taxes Refundable                   695,501     (645,951)     (49,550)
  (Increase) Decrease in Inventories           91,709     (121,087)  (1,914,513)
  (Increase) Decrease in Other Current Assets (12,685)      74,440     (200,293)
  Increase (Decrease) in Accounts Payable     320,349      831,184     (422,263)
  Increase (Decrease) in Federal & State                    
   Income Taxes Payable                             -            -     (166,128)
  Increase (Decrease) in Accrued Salaries
   and Deferred Compensation                  (77,374)     (15,142)    (305,059)
  Increase (Decrease) in Commissions Payable        -       85,572       63,607
  Increase (Decrease) in Accrual for           
   Discontinued Operations - Rosalco          305,000            -            -
  Increase (Decrease) in Other Liabilities   (931,198)   1,784,881     (291,836)
                                          ------------ ------------ ------------
      Net Cash Provided By (Used In)
       Operating Activities                (1,071,762)  (4,527,793)  (1,971,720)      
                                                                  
Cash Flows from Investing Activities:
                                                                 
  Capital Expenditures for Property and   
   Equipment                                  (83,556)     (66,042)    (249,225)
  Proceeds from Sale of Property and Equipment      -            -      162,334
                                          ------------ ------------ ------------
      Net Cash Provided By (Used In)               
       Investing Activities                   (83,556)     (66,042)     (86,891)
                                                                  
Cash Flows From Financing Activities:                                                                 

  Payments of Long Term Debt                  (27,555)     (33,188)    (127,678)
  Proceeds From Issuance of Notes Payable   2,001,084    4,084,000    3,108,582
  Principal Payments on Notes Payable      (1,101,997)           -            -
  Purchase (Repayment) of Subordinated                    
   Debentures                                       -     (100,000)    (300,000)
  Purchase of Treasury Stock                        -            -     (222,668)
                                          ------------ ------------ ------------
      Net Cash Provided By (Used In)
       Financing Activities                   871,532    3,950,812    2,458,236
                                         
      Net Increase (Decrease) in Cash
       and Cash Equivalents                  (283,786)    (643,023)     399,625
Cash & Cash Equivalents at Beginning of Year  350,926     1,176,700     777,075
Cash & Cash Equivalents relative to
 Discontinued Operations                            -      (182,751)          -
                                          ------------ ------------ ------------
Cash & Cash Equivalents at End of Year        $67,140      $350,926  $1,176,700
                                          ============ ============ ============
                                                               
Supplemental Disclosure for Cash Flow
 Information:
  Cash Paid For:                                                  
     Interest                                $171,862      $965,197    $893,124
                                          ============ ============ ============
     Income Taxes                                   -       167,000     389,094
                                          ============ ============ ============
  Non-Cash Transactions:
     Common Stock Issued in Connection
      With LCL Investment                     472,112      1,156,25           - 
                                          ============ ============ ============
                                                                 
</TABLE>                                  

See accompanying notes to consolidated financial statements

<PAGE>



Notes to Consolidated Financial Statements

April 30, 1997, 1996 and 1995

(1) Summary of Significant Accounting Policies

Principles of Consolidation

The  consolidated  financial  statements  include  the  accounts  of  Jayark
Corporation and its wholly-owned subsidiaries (the "Company").  All material
intercompany profits, transactions and balances have been eliminated.

Prior  to  April 30, 1997, a decision was made to discontinue the operations
of  Rosalco,  Inc. ("Rosalco"), a wholly owned subsidiary  of  the  Company.
Rosalco  was officially closed on October 22, 1997 and shortly thereafter  a
receiver  was  assigned to liquidate its secured assets.   The  accompanying
financial  statements  have  been adjusted retroactively  to  segregate  and
report separately the net assets and results of operations of Rosalco  as  a
discontinued operation.


Inventories

Inventories  comprise finished goods and are stated at  the  lower  of  cost
(first in, first out method) or market.

Property and Equipment, Depreciation and Amortization

Property  and equipment are recorded at cost.  Depreciation and amortization
are  computed using the straight-line method over the estimated useful lives
of  the  assets,  ranging from approximately 3 to  20  years.   On  sale  or
retirement,  the  cost  of  assets sold or retired and  related  accumulated
depreciation  or  amortization  is eliminated  from  the  accounts  and  any
resulting  gain or loss is included in operations.  Maintenance and  repairs
are  expensed  as incurred; expenditures for major renewals and  betterments
are capitalized and amortized by charges to operations.

Intangibles

The  accounts  of  purchased  companies are  included  in  the  consolidated
financial statements from the dates of acquisition.  The excess of cost over
the fair value of net assets of businesses acquired is being amortized using
the straight-line method over a 40-year period commencing with the dates  of
acquisition.

Revenue Recognition

Revenues  are  recorded when products are shipped.  Allowances are  recorded
for estimated returns and losses.

<PAGE>

Income Taxes

The  Company  follows the assset and liability method required by  Financial
Accounting  Standards Board Statement of Financial Accounting  Standards  No
109 in accounting for income taxes.  Deferred tax assets and liabilities are
recognized  for  the  future  tax consequences attributable  to  differences
between  the  financial statement carrying amounts of  existing  assets  and
liabilities  and  their  respective tax  bases.   Deferred  tax  assets  and
liabilities  are  measured  using enacted tax rates  expected  to  apply  to
taxable  income  in  the  years  in which those  temporary  differences  are
expected to be recovered or settled.  The effect of deferred tax assets  and
liabilities of a change in tax rates is recognized in income in  the  period
that includes the enactment date.

Earnings per Share

Earnings per common share for the year ended April 30, 1995 were computed by
dividing  net earnings by the weighted average number of common  and  common
equivalent  shares  outstanding  during  the  respective  periods.    Common
equivalent shares include shares that would be issuable upon the exercise of
outstanding  stock options reduced by the number of shares that are  assumed
to  be repurchased by the Company with the proceeds from the exercise of the
stock  options.   The  shares purchased by the Company  are  assumed  to  be
purchased  at  the  average market price during the  respective  period  for
primary earnings and at the higher of the average market price or period-end
price  for  fully  diluted earnings per share.  Fully diluted  earnings  per
share  assumes the conversion of the 12% convertible subordinated debentures
issued in December 1989 (see Note 7).

For  the  years  ended  April  30, 1997 and 1996,  net  loss  per  share  is
calculated  using  the weighted average number of common shares  outstanding
during the period.  For purposes of the calculation, the shares to be issued
in  connection  with  the LCL investment (see Note 13)  were  considered  as
issued on April 30, 1996.  The conversion of the subordinated debentures and
assumed  exercise  of options have not been considered in  the  computation,
since the effects were determined to be anti-dilutive.

Changes in Financial Presentation

Certain  reclassifications have been made in the  1995  and  1996  financial
statements to conform to the presentation used in 1997.

Statements of Cash Flows

For  purposes  of  the statements of cash flows, the Company  considers  all
highly  liquid investments with original maturities of three months or  less
to be cash equivalents.

Use of Estimates

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

<PAGE>

Long-Lived Assets
     
Long-lived  assets, such as property, equipment, and goodwill are  evaluated
for  impairment  when  events or          changes in circumstances  indicate
that  the  carrying amount of the assets may not be recoverable through  the
estimated undiscounted future cash flows from the use of these assets.  When
any such impairment exists, the related assets will be written down to their
fair  value.   This  policy  is in accordance with  Statement  of  Financial
Accounting  Standards No. 121, "Accounting for the Impairment of  Long-Lived
Assets to be Disposed Of", which was adopted on May 1, 1996.  No write-downs
have  been  necessary  through April 30, 1997,  except  for  assets  of  the
discontinued operation (Note 16).


Stock-Based Compensation

The  Company  uses  the  intrinsic value method  for  accounting  for  stock
compensation  plans,  as  permitted  by Statement  of  Financial  Accounting
Standards  No.  123,  "Accounting for Stock-Based Compensation",  which  was
adopted on May 1, 1996.  Accordingly, compensation cost for stock options is
measured  as the excess, if any, of the quoted market price of the Company's
stock  at  the date of the grant over the amount the employee  must  pay  to
acquire the stock.

Effect of new accounting pronouncements

In  February 1997, the Financial Accounting Standards Board ("FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings  per
Share", which is effective for both interim and annual periods ending  after
December  15,  1997.   Earlier application is not  permitted.   The  Company
accordingly  will adopt SFAS No. 128 in its April 30, 1998 annual  financial
statements.  The Company does not anticipate that SFAS No. 128 will  have  a
material effect on the earnings per share as presented.

In  June  1997,  the FASB issued two new disclosure standards.   Results  of
operations  and  financial position will be unaffected by implementation  of
these new standards.

SFAS  No.  130, "Reporting Comprehensive Income," establishes standards  for
reporting   and   display  of  comprehensive  income,  its  components   and
accumulated  balances.   Comprehensive income  is  defined  to  include  all
changes  in  equity except those resulting from investments  by  owners  and
distributions to owners.

SFAS  No.  131,  "Disclosures about Segments of an  Enterprise  and  Related
Information,"  which  supersedes  SFAS  No.  14,  "Financial  Reporting  for
Segments  of a Business Enterprise," establishes standards for the way  that
public  enterprises report information about operating segments in financial
statements.   It  also  establishes  standards  for  disclosures   regarding
products and services, geographic areas and major customers.

Both  of  these  new  standards are effective for financial  statements  for
periods   beginning  after  December  15,  1997,  and  require   comparative
information  for earlier years to be restated.  Management does  not  expect
these  two  standards  to  have a significant  impact  on  future  financial
statement disclosures.

<PAGE>

(3)  Business

The Company's continuing operation, AVES Audio Visual Systems, Inc. ("AVES")
is  in  the business of resale and renting of a broad range of audio visual,
video  and  communication equipment and supplies to schools,  industry,  and
hotels.

(3)  Related Party Transactions

The  Company has subordinated notes (Note 7) with related parties  amounting
to $795,712, with an annual interest rate of 12%.  Interest expense relating
to  notes  payable  to certain related parties was $167,258,  $150,868,  and
$60,736 in 1997, 1996 and 1995, respectively.

The  Company  had  long term notes payable to related parties  amounting  to
$2,000,000  at  April 30, 1997.  The interest rate is  Libor  plus  .95%  on
$1,000,000  and prime plus 2.5% on the remaining $1,000,000.   The  maturity
date of the notes have been extended to December 31, 1999.  Interest expense
relating to these notes for the year ended April 30, 1997 is $154,650.

For  the  year ended April 30, 1996, the Company had $500,000 of short  term
notes payable to these related parties.

(4)  Property and Equipment

Property and equipment are summarized as follows:
<TABLE>
<CAPTION>
<S>                                  <C>               <C>
                                     April 30, 1997    April 30, 1996
                                     --------------    --------------

Machinery and equipment                 $59,144            $59,268
Furniture and fixtures                   80,329             73,689
Leasehold improvements                   37,290             27,800
Automobiles and trucks                  200,580            218,423
Rental and demonstration
 equipment                               22,437             87,400
                                     --------------    --------------
   Total property and equipment         399,780            466,581
Less   accumulated  depreciation        
and amortization                        277,230            365,979
                                     --------------    --------------
   Net property and equipment          $122,550           $100,602
                                     ==============    ==============
</TABLE>

(5) Lines of Credit

On  April  30, 1996, the Company had $1,100,915 outstanding on its  Line  of
Credit  with  State Street Bank. The Company renegotiated the terms  of  the
agreement.   The new agreement provides for monthly interest at  prime  rate
plus  1% to 1_%.   Subsequently, the line was paid off with proceeds from  a
$1,000,000 note to related parties and the remaining amount paid.  In  March
1997,  AVES replaced the Line of Credit at State Street Bank with a line  of
credit  with  BSB Bank & Trust, Binghamton, New York.  The  Line  of  Credit
permits  AVES  to  borrow  up  to an aggregate amount  of  $1,250,000.   The
interest rate is 9.75% annually. The Line of Credit is secured by the  AVES'
accounts  receivable  and  inventories.  There are  no  financial  covenants
associated  with  the  line  of  credit. At April  30,  1997,  $500,000  was
outstanding on this Line of Credit.

<PAGE>

In  connection  with  the  guarantee for the new  line  of  credit  at  AVES
described  above  and  the  interim financing of  the  Rosalco  discontinued
operations by State Street Bank, the Company issued stock warrants  totaling
4,166,667  to  A-V  Texas Holding, LLC, an affiliate of  the  Company.   The
warrants  allows  the holder to purchase 4,166,667 shares of  the  Company's
common  stock at a par value of $.30.  The effectiveness of the warrants  is
subject  to  an increase in the available authorized shares of the  Company.
The  warrants  were deemed to have a minimal fair value and  no  amount  was
recorded for them.  The warrants expire on February 1, 2007.

At  April  30, 1997 and 1996, the Company had letters of credit  outstanding
amounting to $250,000 and $0 respectively.

(6) Long Term Debt

Long term debt is summarized as follows:
<TABLE>
<CAPTION>
<S>                                                <C>            <C>
Description                                        April 30, 1997 April 30, 1996
-------------------------------------------------- -------------- --------------
Notes  payable  to a bank with  interest  rates             
ranging  from 7.25% to 9%, maturity dates ranging             
from December 1995 to January 1999,                      
collateralized by vehicles.                             $14,601      $42,156
                                                    ------------- --------------
Total long term debt                                     14,601       42,156
Less: Current maturities of long term debt                7,394       28,189
                                                    ------------- --------------
Long term debt, excluding current maturities             $7,207      $13,967
                                                    ============= ==============
</TABLE>

Aggregate yearly maturities of long term debt for the years after April  30,
1997 are as follows:
<TABLE>
<CAPTION>
<S>                       <C>        <C>
                         1998        $7,394
                         1999         7,207
                                    -------
                         Total      $14,601
                                    =======

</TABLE>

(7)  Subordinated Debentures

On  December  19,  1989, the Company issued $2,000,000  of  12%  convertible
subordinated debentures to affiliates of the Company due December 1995.  The
maturity  date  on these debentures has been extended until  December  1999.
Interest  on  the outstanding balance is paid semiannually on April  30  and
October  31.   The debentures may be converted into shares of the  Company's
stock at a price of $1.50 per share at any time prior to maturity.  Prior to
April 30, 1996, the Company had retired $600,000 of debentures. At April 30,
1997, no additional debt was retired.  At April 30, 1997, 933,333 shares  of
the Company's common stock are reserved for this conversion.  The debentures
will  automatically  convert  into shares of  the  Company's  stock  at  the
conversion  price  in  effect at such time in the  event  that  the  average
closing sale price of the Company stock for any period of thirty consecutive
trading days was equal to or exceeded $2.25 per share.

<PAGE>

(8)  Income Taxes

Income tax expense (benefit) relating to Federal taxes consists of:

<TABLE>
<CAPTION>
<S>                             <C>           <C>            <C>
Year ended April 30,            Current       Deferred        Total
--------------------           ----------     --------      ----------
   1997                              $0       $350,000       $350,000
   1996                       ($583,676)            $0      ($583,676)
   1995                        $188,856       $277,283       $466,139

</TABLE>

The  tax benefit recorded in 1996 represents the taxes refundable due to the
carryback of that year's loss.

At  April 30, 1997, the Company had, for federal tax reporting purposes, net
operating loss carryforwards of approximately $10,000,000, expiring in years
through 2012.

The  actual  tax expense (benefit) differs from the "expected"  tax  expense
(computed by applying the U.S. Corporate rate of 34%) in each of the 3 years
ended April 30, 1997 primarily as a result of increased valuation allowances
against potential deferred tax assets.

Deferred tax assets were $4,300,000 and $2,200,000 as of April 30, 1997  and
1996  respectively, arising primarily as a result of net  operating  losses.
Valuation allowances of $4,300,000 and  $1,850,000 as of April 30, 1997  and
1996, respectively offset the deferred tax assets, resulting in net deferred
tax assets of $0 and $350,000 as of April 30, 1997 and 1996 respectively.

(9)  Leases

The  Company  has  several  operating leases that expire  at  various  dates
ranging  through  November 2000.  Future minimum lease payments  related  to
operating leases are detailed as follows:

<TABLE>
<CAPTION>
<S>               <C>                                 <C>
                  Year ending April 30,               Operating leases
                  ---------------------               ----------------
      
                        1998                              $97,015
                        1999                               86,856
                        2000                               86,856
                        2001                               86,856
                      Thereafter                                0
                                                          -------
                      Total minimum lease payments       $357,583
                                                         ========
</TABLE>

Total  rental  expense  for  operating  leases  was  approximately  $96,671,
$95,959,  and  $95,959 for the years ended April 30, 1997,  1996,  and  1995
respectively.

(10)   Stock Options

At  April  30,  1997,  the  Company had two stock options  plans  which  are
described below.  The Company applies APB Opinion 25 - "Accounting for Stock
Issued  to  Employees", and related Interpretations in  accounting  for  the
plans.  In terms of APB Opinion 25, when the exercise price of the Company's

<PAGE>

employee  stock options equals the market price of the underlying  stock  on
the date of the grant, no compensation cost is recognized.

The  Company's Incentive Stock Option Plan ("ISOP"), as amended, allows  for
the  granting  of  600,000 shares of the Company's common stock.   The  ISOP
provides  for the granting to key employees and officers of incentive  stock
options,  as  defined,  under  current tax  laws.   The  stock  options  are
exercisable at a price equal to or greater than the market value on the date
of the grant.

Option activity under the ISOP is as follows:

<TABLE>
<CAPTION>

                               Stock Option - ISOP
       ------------------------------------------------------------------------
<S>                                 <C>           <C>               <C>
                                  Options       Exercise Price     Weighted
                                                   Range            Average
       ------------------------------------------------------------------------
Outstanding April 30, 1994        467,500       $.44-$1.05           $0.47
Granted                                 -
Excercised                              -
Terminated/Expired                (75,000)        $0.44              $0.44
                                -----------------------------------------------
Outstanding April 30, 1995        392,500       $.44-$1.05           $0.48
Granted                                 -
Excercised                              -
Terminated/Expired               (150,000)                            $.44
                                -----------------------------------------------
Outstanding April 30, 1996        242,500       $.44-$1.05            $.50                                  
Granted                                 -
Excercised                              -
Terminated/Expired                      -                                            
                                -----------------------------------------------
Outstanding April 30, 1997        242,500       $.44-$1.05            $.50
</TABLE>

<TABLE>
<CAPTION>
<S>                                   <C>           <C>               <C>
                                                   Exercise       Weighted
Exercisable at Year End:             Options      Price Range     Average
-------------------------------------------------------------------------------
April 30, 1995                       392,500      $.44-$1.05       $0.48
                                                
April 30, 1996                       242,500      $.44-$1.05       $0.50
                                                 
April 30, 1997                       242,500      $.44-$1.05       $0.50
-------------------------------------------------------------------------------                                               
Available for Future grants:
                                               
April 30, 1995                       207,500                    
                                              
April 30, 1996                       357,500                     
                                      
April 30, 1997                       357,500                     
-------------------------------------------------------------------------------                                        
</TABLE>

<PAGE>

The   following  summarizes  information  regarding   stock
options outstanding at April 30, 1997.

<TABLE>
<CAPTION>
<S>                                                       <C>      <C>
                         
Range   of  Exercise                             
prices:                                                  $0.44    $1.05
                                                
Outstanding Options:                        
                                                 
Number outstanding at April 30, 1997                   217,500   25,000    
                                                 
Weighted average remaining Contractual life (YR.)          1.6      1.6
                                            
Weighted average exercise price                          $0.44    $1.05       
</TABLE>                                                 

Effective  September  17,  1994 and approved  at  the  annual  stockholders'
meeting  in  1994,  the 1994 Non-Employee Director Stock  Option  Plan  (the
"Director's  Plan") was adopted and 200,000 shares of the  Company's  Common
Stock reserved for issuance under the Director's Plan.  The Director's  Plan
provides  for  the  automatic grant of nontransferable options  to  purchase
common  stock  to  nonemployee  directors  of  the  Company,  on  the   date
immediately  preceding the date of each annual meeting  of  stockholders  in
which an election of directors is concluded.  Each nonemployee director then
in  office will receive options exercisable for 5,000 shares (or a pro  rata
share  of  the  total number of shares still available under the  Director's
Plan).  No option may be granted under the Director's Plan after the date of
the 1998 annual meeting of stockholders.

Options  issued  pursuant  to  the Director's Plan  are  exercisable  at  an
exercise  price  equal to not less than 100% of the fair  market  value  (as
defined  in  the  Director's Plan) of shares of  Common  Stock  on  the  day
immediately preceding the date of the grant.  Options are vested  and  fully
exercisable as of the date of the grant.  Unexercised options expire on  the
earlier  of (i) the date that is ten years from the date on which they  were
granted, (ii) the date which is three calendar months from the date  of  the
termination of the optionee's directorship for any reason other  than  death
or  disability (as defined in the Director's Plan), or (iii) one  year  from
the date of the optionee's disability or death while serving as a director.

<PAGE>

Option activity under the Plan is as follows:

<TABLE>
<CAPTION>
Stock Option - ISOP
<S>                              <C>        <C>              <C>      <C>
                                          Exercise       Weighted   Options
                                Options  Price Range     Average   Exercisable
-------------------------------------------------------------------------------
Outstanding April 30, 1994      35,000     $0.49          $0.49     35,000
Granted                              -                           
Terminated/Expired                   -                         
Outstanding April 30, 1995      35,000     $0.49          $0.49     35,000             -
Granted                              -
Terminated/Expired             (10,000)    
Outstanding April 30, 1996      25,000     $0.49          $0.49     25,000
Granted                              -                           
Terminated/Expired                   -                                    
Outstanding April 30, 1997      25,000     $0.49          $0.49     25,000     
-------------------------------------------------------------------------------
</TABLE>

Statement   of   Financial  Accounting  Standards  No.  123  ("SFAS   123"),
"Accounting for Stock - Based Compensation", requires the Company to provide
pro  forma disclosure of net income (loss) and earnings (loss) per as if the
optional fair value method had been applied to determine compensation  costs
for  the Company's Stock option plans.  Since no options were granted in the
years ended April 30, 1997 and 1996, no pro forma disclosures are required.

(11) Major Customers

At April 30, 1997 and 1996, no customer's sales were greater than 10% of the
Company's  total sales.  In 1994, sales to one customer represented  12%  of
total sales.

 (12) Treasury Stock

Subsequent to the Company's announcement of its stock repurchase plan during
the  third quarter of fiscal 1994, the Company purchased 319,200 and 127,430
shares  of the Company's common stock during the years ended April 30,  1995
and 1994, respectively.

During fiscal 1995, 720,581 shares of the Company's common stock, which  was
comprised of 575,030 treasury shares and 145,551 of newly issued shares were
distributed as part of the consideration given in acquiring a certain  sales
commission   agreement  between  the  Company,  the  Company's  discontinued
Sportswear  subsidiary and Stage II Apparel Corp., a New  York  corporation.
The  stock  issued  was  then distributed by the  Sportswear  subsidiary  to
certain  related  parties and affiliates in partial  settlement  of  certain
promissory notes existing between the Sportswear subsidiary and the  related
parties and affiliates.


<PAGE>

(13) Loss on Abandonment of Investment

On  June  27,  1995, LCL International Traders, Inc. ("LCL"), a wholly-owned
subsidiary  of Jayark,  completed the acquisition of substantially  all  the
assets and business of a group of affiliated companies engaged in the import
and    distribution   of   seasonal   and   promotional   merchandise   (the
"Acquisition").   The sellers, located in Hong Kong and Central  Islip,  New
York,  operated under the trade names "Liberty Bell Christmas",  "Ivy  Mar",
"Creative  Home  Products" and "Award Manufacturing".   LCL  acquired  these
trade names as part of the transaction.


The  purchase  price for the Acquisition comprised the following:  issue  of
1,000,000  common  shares of Jayark to the sellers,  cash  paid  by  LCL  of
$3,000,000,  a  note  payable by LCL to the sellers for $3,000,000  and  the
assumption  of  certain liabilities of the sellers.   The  Company  advanced
$1,000,000 to LCL in connection with the cash portion of the purchase price.
LCL  obtained a credit facility for the balance of the cash portion  of  the
purchase price.

During  August  1995, Jayark, LCL and Rosalco entered into  a  Reimbursement
Agreement  with  certain  related  third  parties  to  provide  to  The  CIT
Group/Commercial  Services,  Inc.  ("CIT"),  the  primary  lender  to   LCL,
irrevocable  standby letters of credit and cash in the aggregate  amount  of
$1,700,000  to serve as additional collateral against which CIT  would  lend
additional  working  capital to LCL pursuant to CIT's  lending  arrangements
with LCL.

In  consideration  for providing the additional collateral,  the  guarantors
were  to receive shares of common stock of the Company in proportion to  the
amount  of additional collateral initially provided by them.  Excluding  the
shares  attributable to Rosalco, the Company was obligated to issue a  total
of 282,400 shares of its common stock to the guarantors.

The  arrangement  with  CIT  for the additional  financing  secured  by  the
additional  collateral  expired  on  February  28,  1996.   The  arrangement
indicated  that on that date, in the event that CIT had applied any  of  the
additional  collateral to LCL's obligations to CIT, LCL would reimburse  the
parties  for  the collateral so applied by CIT.  Alternatively, the  parties
could  at  any time after February 28, 1996 receive shares of the  Company's
common  stock  as reimbursement for the collateral applied by CIT  to  LCL's
obligations to CIT.  Each party would receive that number of shares that had
a  value  equal to the amount of such party's collateral that is applied  by
CIT.  Excluding the shares attributable to Rosalco, the Company is obligated
to issue a total of 960,000 shares of its common stock to the guarantors.

In  July 1996, CIT notified the parties that CIT was applying the additional
collateral  to  LCL's obligations.  As a result of the  application  of  the
collateral  by  CIT,  the  parties received  the  following  shares  of  the
Company's  Common  Stock:  Joel Margolin received 400,000  shares;  each  of
Ruthanne  Koffman  and the Ben Arnold Company received 200,000  shares;  and
Whitehorn Associates received 160,000 shares.

In  fiscal 1997, the Compnay issued 1,242,400 shares of its common stock  in
connection with the above transactions, which were valued at $472,112.

<PAGE>

During  fiscal 1996, the Company abandoned the investment in LCL,  which  in
turn  filed  for  bankruptcy protection under Chapter 11 of  the  Bankruptcy
Code.  Due to the nature of the investment and the short period of operation
of  LCL,  the  operations of LCL were not consolidated  with  the  Company's
operations.   The Company provided for all realized and expected  losses  on
the abandonment, summarized as follows:

<TABLE>
<CAPTION>
          <S>                                                     <C>
          Description                                               Amount
          ----------------------------------------------------    ----------
          Value of shares issued                                  $1,156,250
          Cash paid                                                1,000,000
          Provision for issuance of shares to guarantors             500,000
            (using the most recent quoted stock price)
          Rosalco obligation under the reimbursement agreement       500,000          
          Anticipated costs of abandonment                         1,572,186
                                                                  ----------
            Total loss on abandonment                             $4,728,436
                                                                  ==========   
</TABLE>

(14) Financial Instruments

The  carrying  amounts  of financial instruments, including  cash  and  cash
equivalents,  accounts  receivable,  accounts  payable  and  notes   payable
approximated  fair value as of April 30, 1997 due to the short  maturity  of
these items.  The fair value of the convertible debentures is not reasonably
determinable.

(15) Fourth Quarter Adjustments

During  the  fourth quarter of fiscal 1996, the Company made  the  following
significant adjustments to reported earnings:


          Increase in accounts receivable reserves           $550,000
          Increase in inventory reserves                    1,195,534

During  the fourth quarter of fiscal 1997, the Company recorded the  effects
of the discontinuance of Rosalco.  See note 16.

(16)  Discontinued Operations

As  a  result of continued losses due to a soft retail market, low  margins,
competitive pressures, and price reductions, the Company had been looking to
sell or otherwise dispose of the operations of Rosalco.  Rosalco had been in
the  business  of  the  distribution of more than  300  different  products,
including  occasional  furniture,  brass  beds,  custom  jewelry  cases  and
accessories, most of which are imported from outside the continental  United
States.   Rosalco  also  developed special designs  for  several  customers.
Rosalco  was headquartered in Jeffersonville, Indiana.  All efforts to  sell
Rosalco  were  unsuccessful,  and  the  company  was  officially  closed  on
Wednesday, October 22, 1997.  The assets of the company were secured as part
of  the  borrowing  agreement.  Shortly after the closing,  a  receiver  was
assigned to liquidate the secured assets of the company to satisfy the  loan
principal.   As a result, Jayark incurred a $5,963,000 loss on  Discontinued
operations,  which  includes $3,462,000 loss from operations  for  the  year
ended  April  30,  1997,  the establishment of accruals  in  the  amount  of
$300,000  for expenses and guarantees related to the closing, the write  off
of  an  intercompany  receivable  and other  assets  of  $476,000,  and  the
remaining net asset of Rosalco of $1,725,000.

<PAGE>

The Rosalco business has been presented as a discontinued operation, and the
consolidated balance sheets and statements of operations have been  restated
to  conform  with  this presentations.   Financial results  of  the  Rosalco
operation are as follows:

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

Operating Data:                    Years Ended April 30,
                                1997         1996        1995
-----------------------------------------------------------------                                                         

Net Revenues                $37,505,589  $32,149,279  $36,761,578
                                            
Costs and Expenses           40,617,698   35,011,376   35,800,321                    
                                               
Income befor Tax             (3,112,109)  (2,862,097)     961,257                        
                                                  
Provision for (Benefit From)                                           
 Income Tax                     350,000     (156,503)     368,778
      Tax
                                                         
Net Income (Loss)           ($3,462,109) ($2,705,594)    $592,479
-----------------------------------------------------------------

</TABLE>


<PAGE>

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

Balance Sheet Data                     April 30,
                                   1997       1996
                                              
Assets                                
Current Assets
Cash                            $107,540   $182,750
Accounts Receivable            3,859,808   4,343,130  
Other Receivable                 294,713     425,277
Inventory                      4,703,319   8,149,822
Deferred Tax                           -           -
Other Current                    272,702     295,549
                               ---------   ---------
Total Current Assets           9,238,082  13,396,528
                                             
Non-Current Assets
PP&E, Net of
 Accumulated Depreciation        541,248     680,665
Intercompany                    (414,435)          -
                               ---------   ---------
Total Non-Current Assets         126,813     680,665
                               ---------   ---------
Total Assets                   9,364,895  14,077,193
                               =========  ==========

Liabilities
Notes Payable & L.O.C.         5,685,407   8,018,009
Current Portion of
 Long Term Debt                        -           -
Accounts Payable               1,576,777   1,245,156
Accrued Liabilities              117,040     278,596
Taxes Payable                          -       9,712
Other Current                    260,291     256,871
                               ---------   ---------
Total Current Liabilities      7,639,515   9,808,344

Net Assets                   $1,725,380*  $4,268,849
</TABLE>    

* Note - these net assets were written off at April 30, 1997

<PAGE>

Exhibit Index

 3(1)	Certificate of Incorporation of the Company.  Incorporated herein by
        reference to the Company's Proxy Statement for its 1991 Annual Meeting
        of Shareholders, Exhibit B thereto.

 3(2)	Bylaws of the Company.  Incorporated herein by reference to the
        Company's Proxy Statement for its 1991 Annual Meeting of Shareholders,
        Exhibit C thereto.

4(1)	Specimen Certificate of Common Stock, par value $0.30 per share,
        incorporated herein by reference from Registration Statement on Form
        S-1, File Number 2-18743, Exhibit 4 thereto.

 4(2)	12% Convertible Subordinated Debenture due 1994, incorporated herein by
        reference to the Report on Form 8-K filed January 4, 1990, Exhibit 28(a)
        thereto.

4(3)	Registration rights agreement dated as of December 20, 1989, by and
        between the Company and Rosalco, Inc., incorporated herein by reference
        to the Report on Form 8-K filed January 4, 1990, Exhibit 28(c) thereto.

10(1)*	1981 Incentive Stock Option Plan, as amended as of December 15, 1989,
        incorporated herein by reference to the Annual Report on Form 10-K for
        the year ended April 30, 1990, Exhibit 10(1) thereto.

10(2)	Notes and Loan and Security Agreements (Inventory & Accounts Receivable)
        each dated as of January 20, 1992, between Jayark Corporation, AVES
        Audio Visual Systems, Inc., Rosalco, Inc., Rosalco Woodworking, Inc.,
        Diamond Press Company, and State street Bank & Trust Company of Boston,
        Massachusetts, incorporated herein by reference from the Annual Report
        on Form 10-K for the year ended April 30, 1992, Exhibit 10(3) thereto.

10(3)	Letter Agreement dated December 6, 1989, among Arthur Cohen, Burton I.
        Koffman, and Richard E. Koffman.  Incorporated herein by reference to
        the Annual Report on Form 10-K for the year ended April 30, 1990,
        Exhibit 10(3) thereto.

10(4)	Indemnity escrow Agreement dated as of December 20, 1989, by and between
        the Company, Rosalco, Inc. and certain individuals named therein,
        incorporated herein by reference to the	Report on Form 8-K filed January
        4, 1990, Exhibit 28(c) thereto.

10(5)	Factoring Agreements dated as of February 7, 1992, by and between the
        Company, Pilgrim Too Sportswear, Inc., J.F.D. Distributors, Inc., and
        others named therein, and Barclays Commercial Corporation, incorporated
        herein by reference to the Annual Report on Form 10-K for the year
        ending April 30, 1992, Exhibit 10(10) thereto.

10(6)	Diamond Press Asset Sale and Purchase Agreement dated as of November 23,
        1992 by and between the Company and Harstan, Inc., incorporated herein
        by reference to the Company's Form 8-K, as amended, as of November 23,
        1992, Exhibit 2 thereto.

<PAGE>

10(7)	Asset Sale and Lease Termination Agreement, by and between Pilgrim Too
        Manufacturing Company, Inc., New Images, Inc., Victor Freitag, Jr. and
        wife Gilbert R. Freitag, and Robert E. Skirboll and wife Robin T.
        Skirboll, dated as of April 2, 1993; Asset Purchase Agreement by and
        between the Company, Pilgrim Too Sportswear, Inc., Pilgrim Too
        Manufacturing Company, Inc., Stage II Apparel Corp., Shambuil Ltd., and
        Pilgrim II Apparel Corp., dated as of April 2, 1993; both incorporated
        herein by reference to the Company's Form 8-K as of April 2, 1993,
        Exhibits thereto.

10(8)	Amendment to certain Notes and Loan and Security Agreements each dated
        as of January 20, 1992, incorporated herein by reference from the Annual
        Report on Form 10-K for the year ended April 30, 1993, Exhibit 10(8)
        thereto.

10(9)	Amendment to certain Notes and Loan and Security Agreements each dated
        as of December 31, 1993, incorporated herein by reference from the
        Annual Report on Form 10-K for the year ended April 30, 1994, Exhibit
        10(9) thereto.

10(10)	Asset Purchase Agreement, dated June 5, 1995, among LIB-Com Ltd.,
        Liberty Bell Christmas,	Inc., Ivy Mar Co., Inc., Creative Home Products,
        Inc., and Liberty Bell Christmas Realty, Inc. as the sellers and LCL
        International Traders, Inc. as the buyer, incorporated herein by
        reference from the Company's report on Form 8-K dated June 27, 1995,
        Exhibit 2(a) thereto.

10(11)	Asset Purchase Agreement, dated June 5, 1995, between Award
        Manufacturing Corporation as the seller, and LCL International Traders,
        Inc., as the buyer, incorporated herein by reference from the Company's
        report on Form 8-K dated June 27, 1995, Exhibit 2(b) thereto.

10(12)	Guarantee Agreement, dated June 5, 1995, by Award Manufacturing
        Corporation in favor of	LCL International Traders, Inc., incorporated
        herein by reference from the Company's report on Form 8-K dated June 27,
        1995, Exhibit 2(c) thereto.

10(13)	Guarantee Agreement, dated June 5, 1995, by LIB-Com Ltd., Liberty Bell
        Christmas, Inc., Ivy Mar Co., Inc., Creative Home Products, Inc., and
        Liberty Bell Christmas Realty, Inc. in favor of	LCL International
        Traders, Inc., incorporated herein by reference from the Company's
        report on Form 8-K dated June 27, 1995, Exhibit 2(d) thereto.

10(14)	Promissory Note of LCL International Traders, Inc., due July 29, 1998,
        payable to the order of	Commerzbank AG, Hong Kong Branch, incorporated
        herein by reference from the Company's report on Form 8-K dated June 27,
        1995, Exhibit 2(e) thereto.

10(15)	Confirmation Letter Agreement dated June 22, 1995, among Citibank, N.A.,
        Commerzbank AG,	Bayerische Vereinsbank AG, LCL International Traders,
        Inc., and Jayark Corporation, incorporated herein by reference from the
        Company's report on Form 8-K dated June 27, 1995, Exhibit 2(f) thereto.

10(16)  Factoring Agreement dated June 23, 1995, between LCL International
        Traders, Inc. and the CIT Group/Commercial Services, Inc., incorporated
        herein by reference from the Company's report on Form 8-K dated June 27,
        1995, Exhibit 99(a) thereto.

<PAGE>

10(17)	Inventory Security Agreement dated June 23, 1995, between LCL
        International Traders, Inc. and	the CIT Group/Commercial Services, Inc.,
        incorporated herein by reference from the Company's report on Form 8-K
        dated June 27, 1995, Exhibit 99(b) thereto.

10(18)	Letter Agreement dated June 23, 1995, between LCL International Traders,
        Inc. and the CIT Group/Commercial Services, Inc., incorporated herein by
        reference from the Company's report on Form 8-K dated June 27, 1995,
        Exhibit 99(c) thereto.

10(19)	Letter Agreement dated June 23, 1995, between LCL International Traders,
        Inc. and the CIT Group/Commercial Services, Inc., Liberty Bell
        Christmas, Inc., Ivy Mar Co., Inc., and Creative Home Products, Inc.,
        incorporated herein by reference from the Company's report on Form 8-K
        dated June 27, 1995, Exhibit 99(d) thereto.

10(20)	Amendment to certain Notes and Loan and Security Agreements each dated
        as of December 31, 1994, incorporated herein by reference from the
        Annual Report on Form 10-K for the year ended April 30, 1995 Exhibit
        10(20) thereto.

10(21)  Loan and Security Agreements dated April 29, 1996 Rosalco, Inc., and
        State Street Bank & Trust Company of Boston, Massachusetts.

10(22)  Loan and Security Agreements dated April 29, 1996 AVES Audio Visual
        Systems, Inc., and State Street Bank & Trust Company of Boston,
        Massachusetts.

10(23)  First amendment to Loan and Security Agreements dated as of September
        20, 1996 between Rosalco, Inc. and State Street Bank & Trust Company of
        Boston, Massachusetts.

10(24)  Agreement of Extension of Maturity of 12% Convertible Subordinated
        Debentures dated April 30, 1990.


10(25)  Forbearance and Modification Agreement dated March 12, 1997,  between
        Jayark Corporation, Rosalco, Inc., AVES Audio Visual Systems, Inc.,
        David L. Koffman, and State Street Bank and Trust Company of Boston,
        Massachusetts.
     
10(26)  Stock   Pledge  Agreement  dated  March  12,  1997,  between   Jayark
        Corporation and State Street Bank and Trust Company of Boston,
        Massachusetts.
     
10(27)  Subordination   Agreement  dated  March  12,  1997,  between   Jayark
        Corporation, Rosalco, Inc., AVES  Audio  Visual Systems, Inc.,
        David L. Koffman,  and  State Street Bank and Trust Company of Boston,
        Massachusetts.

10(28)  Revolving Note dated March 12, 1997 between Jayark Corporation and
        A-V Texas Holding, LLC.

10(29)  Stock   Pledge   Agreement  dated  March  12,  1997  between   Jayark
        Corporation and A-V Texas Holding, LLC.

<PAGE>

10(30)  Stock  Warrant  to  purchase 3,666,667 shares of common  stock  dated
        March 12, 1997 between Jayark Corporation and A-V Texas Holding, LLC.

10(31)  Commercial  Security Agreement dated February 18, 1997, between  AVES
        Audio Visual Systems, Inc. and BSB Bank and Trust Company.

10(32)  Promissory  Note  dated February 18,1997, between AVES  Audio  Visual
        Systems, Inc. and BSB Bank and Trust Company.

10(33)  Commercial  Guaranty  dated February 18,  1997,  between  AVES  Audio
        Visual Systems, Inc., David L. Koffman and BSB Bank and Trust Company.

10(34)  Subordinated  Promissory Note date March 12,  1997  between  Rosalco,
        Inc. and Jayark Corporation.

10(35)  Second  Forbearance and Modification Agreement dated  June  1,  1997,
        between State Street Bank and Trust Company of Boston, Massachusetts,
        Rosalco, Inc.,  and Jayark Coporation.

10(36)  Stock  Warrant to purchase 500,000 shares of common stock dated March
        12, 1997 between Jayark Corporation and A-V Texas Holding, LLC.


<PAGE>

[ARTICLE]                               5
[LEGEND]		
[RESTATED]		
[CIK]                          0000053260 
[NAME]		
<MULTI PLIER>                      1000.0 
[CURRENCY]                            USD 
[FISCAL-YEAR-END]                04/30/97 
[PERIOD-START]                   05/01/96 
[PERIOD-END]                     04/30/97 
[PERIOD-TYPE]                      12-mos 
[EXCHANGE-RATE]		
   		
[CASH]                                 67 
[SECURITIES]                            0
[RECEIVABLES]                       1,841  
[ALLOWANCES]                            0
[INVENTORY]                           412  
[CURRENT-ASSETS]                    2,341  
[PP&E]                              1,132  
[DEPRECIATION]                        719
[TOTAL-ASSETS]                      2,754  
[CURRENT-LIABILITIES]               2,348  
[BONDS]                                 0
[COMMON]                            2,766  
[PREFERRED-MANDATORY]                   0
[PREFERRED]                             0
[OTHER-SE]                          5,768
[TOTAL-LIABILITY-AND-EQUITY]        2,754  
[SALES]                            12,638  
[TOTAL-REVENUES]                   12,638  
[CGS]                              10,592  
[TOTAL-COSTS]                      10,592  
[OTHER-EXPENSES]                    1,921    
[LOSS-PROVISION]                        0    
[INTEREST-EXPENSE]                    222  
[INCOME-PRETAX]                       (96) 
[INCOME-TAX]                            0
[INCOME-CONTINUING]                   (96) 
[DISCONTINUED]                     (5,963)
[EXTRAORDINARY]                         0
[CHANGES]                               0
[NET-INCOME]                       (6,059) 
[EPS-PRIMARY]                       -0.69 
[EPS-DILUTED]                         .00

<PAGE>     

EXHIBIT 10(35)

SECOND FORBEARANCE AND MODIFICATION AGREEMENT

      This  SECOND FORBEARANCE AND MODIFICATION AGREEMENT (this "Agreement")

is  made as of this 1st day of June, 1997, among State Street Bank and Trust

Company  (the "Bank"), Rosalco, Inc. (the "Borrower") and Jayark Corporation

("Jayark").

      WHEREAS,  the  Bank  has  made extensions of credit  to  the  Borrower

pursuant to (i) a certain Loan and Security Agreement (All Assets), dated as

of April 29, 1996, between the Borrower and the Bank (the "Loan Agreement"),

and  (ii)  a Forbearance and Modification Agreement, dated March  12,  1997,

among  the  Borrower,  Jayark, AVES Audio Visual  Systems,  Inc.,  David  L.

Koffman and the Bank (the "Initial Forbearance Agreement");

     WHEREAS, the Obligations of the Borrower to the Bank (as defined in the

Loan  Agreement)  are evidenced by, among other things, a $10,000,000  Note-

Grid-Fluctuating Interest, dated as of April 29, 1996, made by the  Borrower

in favor of the Bank (the "Note");

      WHEREAS,  all  obligations of the Borrower  to  the  Bank,  including,

without limitation, the Obligations, are guaranteed by Jayark pursuant to  a

certain Multi-Entity Guaranty (Unlimited), dated as of April 26, 1996,  made

by,  among other parties, Jayark and the Borrower in favor of the Bank  (the

"Multi-Entity  Guaranty"), which Multi-Entity Guaranty was  amended  by  the

Initial Forbearance Agreement;

     WHEREAS,  certain  defaults  and events of default,  more  particularly

described  on   Schedule A attached hereto (the "Specified Defaults"),  have

occurred and are continuing;

     WHEREAS,  notwithstanding the foregoing, the Borrower and  Jayark  have

requested  that the Bank further forbear from demanding payment in  full  of

the Obligations;

     WHEREAS,  in response to such request, the Bank has agreed  to  further

refrain   from  exercising  its  rights  and  remedies  under  the   Initial

Forbearance Agreement, Loan Agreement, the Note, the Multi-Entity  Guaranty,

<PAGE>

all  security agreements securing the Obligations (as defined  in  the  Loan

Agreement), a certain Pledge Agreement, dated March 12, 1997, between Jayark

and  the Bank (the "Stock Pledge"), a certain Subordination Agreement, dated

March  12,  1997,  between Jayark, the Bank and others  (the  "Subordination

Agreement'),  and  all  other  agreements  and  documents  relating  to  the

Obligations  (collectively,  the  "Loan Documents")  until  the  Forbearance

Termination  Date  (as hereinafter defined), upon the  following  terms  and

conditions.

     NOW,  THEREFORE, for good and valuable consideration, the  receipt  and

sufficiency  of  which  are hereby acknowledged, the parties  hereto  hereby

agree as follows:

     Section 1.     Ratification of Existing Agreements.

      (a)  All of the Obligations as evidenced by or otherwise arising under

the Loan Documents, except as otherwise expressly modified in this Agreement

upon  the  terms  set forth herein, are, by each party's execution  of  this

Agreement,  ratified and confirmed in all respects.  The  Borrower  confirms

that the Bank has a first priority perfected security interest in all of the

collateral described in the Loan Documents, which collateral secures all  of

the  Obligations.  Jayark hereby specifically acknowledges and  consents  to

this  Agreement  and ratifies and confirms in all respects  its  obligations

under  the  Multi-Entity  Guaranty (as amended by the  Original  Forbearance

Agreement), the Stock Pledge Agreement and the Subordination Agreement.   In

addition,  by  the  execution of this Agreement,  the  Borrower  and  Jayark

represent  and warrant that no counterclaim, right of set-off or defense  of

any kind exists or is outstanding with respect to any of such Obligations.

     Section  2.      Amount  of Obligations.  As of the  date  hereof,  the

Borrower  and  Jayark  acknowledge and agree that the outstanding  principal

amount   of  the  Obligations  under  the  Loan  Documents   is   equal   to

$5,592,389.20, the accrued but unpaid interest, which continues  to  accrue,

totals $40,504.18, the undrawn amount of all letters of credit issued by the

<PAGE>

Bank pursuant to the Loan Documents is $250,000.00, and all fees, costs  and

expenses (including legal fees) total $43,250.00.

     Section  3.     Existing Defaults.  The Borrower and Jayark  agree  and

acknowledge that (i) the Obligations and the Loan Documents are currently in

default as a result of the Specified Defaults, and (ii) the Bank is entitled

to  exercise all of its rights and remedies thereunder and under  applicable

law.

     Section  4.      Forbearance.  Subject to the terms and conditions  set

forth  herein,  and in consideration of the representations, warranties  and

agreements  made  by  the Borrower and Jayark herein,  the  Bank  agrees  to

further  forbear  from  exercising its rights and remedies  under  the  Loan

Documents until that certain date (the "Forbearance Termination Date") which

is the earliest to occur of:

          (a)  Subject  to a one business day cure period after notice  from

the  Bank,  the failure of the Borrower or Jayark to comply with  any  terms

applicable to such party set forth in this Agreement;

          (b)   The  failure of any representation or warranty made  by  the

Borrower  or  Jayark herein to have been true and complete as  of  the  date

made.

          (c)   The  occurrence  of  any  material  adverse  change  in  the

financial  condition of the Borrower after the date of  this  Agreement,  as

determined by the Bank in its reasonable discretion;

          (d)   The  commencement by the Borrower, Jayark or  any  affiliate

thereof  of any litigation against the Bank or any affiliate of the Bank  in

connection with or related to this Agreement or any of the Loan Documents;

          (e)   After  any  applicable  notice  and  cure  period,  (i)  the

occurrence  after the date of this Agreement of any Event of  Default  under

the  Loan Documents (as amended hereby), including, without limitation,  any

of  the  Specified Defaults, or (ii) the continuance after the date of  this

Agreement  of  any  Event of Default under the Loan  Documents  (as  amended

hereby), including, without limitation, any of the

          Specified Defaults, which first occurred prior to the date of this

Agreement;

<PAGE>
          (f)   The  termination of the employment of the Recovery Group  as

financial   advisor  to  the  Borrower  (unless  a  replacement   reasonably

satisfactory to the Bank has been immediately retained by the Borrower);

          (g)  August 31, 1997.

     On  and after the Forbearance Termination Date, (i) the Bank shall  not

be  required  to  make any further advances to the Borrower under  the  Loan

Documents,  (ii)  all  of the Obligations shall become immediately  due  and

payable in full, without any further notice to the Borrower or Jayark, (iii)

the  Bank  shall be free in its sole and absolute discretion to  proceed  to

enforce any or all of its rights under or in respect of this Agreement,  the

Loan  Documents and applicable law in order to collect and realize upon  the

Obligations, and (iv) interest shall accrue on the Obligations until paid in

full, without further notice to the Borrower or Jayark, at the default  rate

of  interest provided in the Loan Documents.  Nothing contained herein shall

constitute a waiver or release of any of the Specified Defaults.

     Section  5.      Conditions Precedent.  The forbearance obligations  of

the  Bank shall be subject to the prior satisfaction, on or before the  date

hereof, of the following conditions precedent:

          (a)  The Borrower shall have paid all of the fees and expenses  of

counsel for the Bank, and all of the fees and expenses of its own counsel.

          (b)   The Borrower shall have delivered financial projections  for

the  120-day period following the date of this Agreement, including  balance

sheet, profit and loss statement and statement of cash flows (each of  which

shall  be  presented  on  a  week-by-week  basis),  in  form  and  substance

satisfactory to the Bank.

     Section   6.       Covenants.   Without  any  prejudice  or  impairment

whatsoever  to  any other rights and remedies of the Bank contained  in  the

Loan Agreement, the Note or in any of the other Loan Documents, the Borrower

covenants and agrees with the Bank as follows:

<PAGE>

          (a)  The Borrower will deliver to the Bank an inventory assessment

plan,  developed  with assistance by and in conjunction with  its  financial

advisor,  on  or before June 30, 1997 or such other date as may be  mutually

agreeable to the Borrower and the Bank.

          (b)   The  Borrower shall continue to employ at least one day  per

week  the  Recovery  Group as financial advisor, or a replacement  financial

advisor  reasonably  acceptable to the Bank,  whose  responsibilities  shall

include  periodically assessing the business operations and  assets  of  the

Borrower  and assisting the Borrower in its efforts to enhance  revenue  and

cash  flow  throughout  the term of this Agreement.  The  financial  advisor

shall  also  be  responsible for assisting the Borrower  in  developing  and

implementing a plan to provide for the payment in full of all Obligations no

later  than  August 31, 1997.  Such plan shall be delivered to the  Bank  no

later  than  July  15,  1997.   After  the  occurrence  of  the  Forbearance

Termination Date, the Bank shall have the right, at its sole discretion, but

at  the sole cost of the Borrower, to require the Borrower to employ, at any

frequency reasonably determined by the Bank, the Recovery Group as financial

advisor,  or  a replacement financial advisor reasonably acceptable  to  the

Bank,  whose  responsibilities  shall  include,  but  not  be  limited   to,

continually assessing the business operations, business prospects and assets

of the Borrower and assisting the Borrower in its efforts to enhance revenue

and cash flow.

          (c)  The Borrower shall at all times be in compliance with all  of

the terms, covenants and provisions contained in this Agreement and the Loan

Documents as they may be amended hereby, and all of the representations  and

warranties contained in this Agreement shall be correct and complete  as  of

the date made.

          (d)   The  Borrower and Jayark shall at any time or from  time  to

time  execute  and deliver such further instruments, and take  such  further

action  as  the Bank may reasonably request, in each case to further  affect

the  purposes  of  this  Agreement or any of the Loan Documents,  including,

<PAGE>

without  limitation, the execution and delivery of  additional subordination

agreements with respect to any indebtedness incurred by the Borrower to  any

of  its affiliates (as defined in the Loan Agreement), in form and substance

satisfactory to the Bank.

          

          (e)  On a weekly basis, the Borrower shall deliver a report to the

Bank with respect to any inventory of the Borrower which is in transit to or

from  a warehouse maintained by the Borrower, including, without limitation,

any  inventory purchased by the Borrower which is being transported by ocean

going  vessel  to a port in the United States, setting forth the  following:

(i)  a  description and the amount of such inventory, (ii) the name  of  the

shipper,  (iii) the carrier which is transporting such inventory,  and  (iv)

the  shipping charges owed to such carrier for such shipment and  the  total

amount unpaid to such carrier for all shipments to date.  To the extent that

such  inventory  is  represented by a bill of  lading,  the  Borrower  shall

immediately deliver such bill of lading to the Bank on demand.

          (f)    The   Borrower   shall  deliver  the  following   financial

information to the Bank, in form and substance satisfactory to the Bank: (i)

on  a  daily basis, a listing of the Borrower's sales for the previous  day,

(ii)  on  a weekly basis, a cash flow report, showing the cash flow for  the

Borrower for the period from the date of this Agreement through the date  of

such  cash  flow report, with comparisons to the amounts budgeted  for  such

period,  a  listing  of  the  inventory of the  Borrower,  and  a  completed

Borrowing  Base Certificate in the form of  Exhibit A attached to  the  Loan

Agreement, (iii) on a monthly basis, within twenty (20) days of the  end  of

each calendar month, an aging of the accounts receivable of the Borrower, an

aging  of  the  accounts  payable of the Borrower,  and  a  listing  of  the

inventory of the Borrower, (iv) on a monthly basis, within thirty (30)  days

of the end of each calendar month, a consolidating balance sheet, profit and

loss statement and statement of cash flows of the Borrower, together with  a

Certificate of No Defaults, signed by the President or the Chief   Financial

Officer  of the Borrower in the form of Exhibit A attached hereto,  and  (v)

<PAGE>

any  other  financial information requested by the Bank from time  to  time.

During  normal  business hours, the Borrower shall permit the  Bank  or  its

designated  agents to inspect the books and records of the Borrower  and  to

make copes therefrom, all at the cost and expense of the Borrower.

          (g)   The  Borrower shall not request, and the Bank shall  not  be

required  to  issue, letters of credit to be issued by the Bank  which  have

expiration dates later than August 31, 1997.

          (h)   The  Borrower  shall, on demand, pay all  of  the  fees  and

expenses of counsel for the Bank.

          (i)   If, at any time and for any reason, the aggregate amount  of

the  outstanding loans made to the Borrower pursuant to the  Loan  Documents

exceeds the lesser of the Credit Limit or the Borrowing Base (as defined  in

the  Loan Agreement as amended hereby), then the Borrower shall, within  one

business day after demand by the Bank, pay to the Bank, in cash, the  amount

of such loans in excess of the Credit Limit.

     Section 7.     Application of Cash Collateral.    Pursuant to the terms

of the Initial Forbearance Agreement, the Borrower deposited $100,000 into a

cash  collateral  account  maintained at the  Bank,  which  cash  collateral

secures all of the obligations of the Borrower under the Initial Forbearance

Agreement  and the Loan Documents.  The Borrower and the Bank  hereby  agree

that  the  Bank shall immediately apply such cash collateral to  reduce  the

Obligations, and that, as a result of such reduction, the Borrowing Base and

the Credit Limit (as such terms are defined in the Loan Agreement) shall  be

permanently  reduced  by the amount of $100,000.  Such  reduction  shall  be

reflected  in  an amendment to the Loan Agreement as provided in  Section  8

below.

     Section 8.     Amendment and Modifications to Loan Agreement.  The Loan

Agreement is hereby amended and modified in the following respects:

     
           (a)   Sections 5(a)(1), 5(a)(2), 5(a)(3), 5(a)(4) and 5(a)(5)  of

<PAGE>

the  Loan Agreement are hereby amended in their entirety, and a new  Section

5(a)(6) is hereby inserted as follows:

                (1)   ninety percent (90%) of the unpaid face amount of  all
          Qualified Accounts (as defined below); which are rated one or  two
          by Dunn and Bradstreet; PLUS
          
                (2)   eighty percent (80%) of the unpaid face amount of  all
          Accounts  which  are not rated one or two by Dunn and  Bradstreet;
          PLUS
          
               
               
               (3)  ninety percent (90%) of the unpaid face amount
          of  all  Accounts  which have not  yet  been  earned  by
          performance  but  which  are  supported  by  letters  of
          credit; PLUS
               
               ``(4)       the   lesser  of  (i)  $1,750,000;   or
          (ii)  forty-five  (45%)  of all Eligible  Inventory  (as
          defined  below) consisting of finished goods located  in
          warehouses,  in  transit  or  which  have  been  ordered
          pursuant  to  a  purchase order backed by  a  letter  of
          credit  issued by the Bank, but which have not yet  been
          negotiated (exclusive of Inventory in Transit covered by
          subsection (3) above); MINUS
          
               (5)   one hundred percent (100%) of the aggregate amount then
          undrawn   on  all  outstanding  letters  of  credit  and  Banker's
          Acceptances  issued by the Bank for the account of  the  Borrower,
          which shall in no event exceed $750,000; MINUS
               
               (6)  $100,000;
          
          (d)   Section 5(b) of the Loan Agreement is hereby amended in  its

entirety to read as follows:

               (b)   The term "Credit Limit" as used herein  shall
          mean  an amount equal to (i) during the period prior  to
          and including June 30, 1997, $5,900,000, (ii) during the
          period from July 1, 1997 through and including July  31,
          1997,   $5,150,000,  and  (iii)  after  July  31,  1997,
          $4,400,000.
          
          (e)   Section  12(h)  of the Loan Agreement is hereby  amended  by

deleting the phrase "forty-five (45) days" and inserting, in its place,  the

phrase "thirty (30) days".

          (f)   Section 14(g) of the Loan Agreement is hereby amended in its

entirety to read as follows:

               (g) (Liens) create, permit to be created or suffer  to
          exist  any lien, encumbrance, charge, security interest  or
          any  other  type of preferential arrangement,  or  grant  a

<PAGE>

          negative   pledge  to  any  party  other  than   the   Bank
          (collectively,  "Lien") upon any of the Collateral  or  any
          other   property  of  Borrower,  now  owned  or   hereafter
          acquired,     except:     (i)    landlords',     carriers',
          warehousemen's, mechanics' and other similar Liens  arising
          by  operation  of law in the ordinary course of  Borrower's
          business;  which  secure  indebtedness  not  yet  due   and
          payable,  (ii)  arising out of pledges  or  deposits  under
          worker's  compensation,  unemployment  insurance,  old  age
          pension,  social  security, retirement  benefits  or  other
          similar legislation; (iii) purchase money Liens arising  in
          the   ordinary  course  of  business  (so   long   as   the
          indebtedness secured thereby does not exceed the lesser  of
          the  cost  or  fair  market value of the  property  subject
          thereto, and such Lien extends to no other property);  (iv)
          those  Liens  and  encumbrances set forth on  Schedule  "B"
          annexed hereto; and (v) in favor of Bank;

          (g)  Section 14(l) of the Loan Agreement is hereby amended in  its

entirety to read as follows:

               (l)  (Transactions  with Affiliates)  enter  into  any
          lease  or  other transaction with any shareholder, officer,
          subsidiary,  parent,  any subsidiary  of  any  parent,  any
          affiliate or any affiliate of any parent, on terms any less
          favorable  than those which might be obtained from  persons
          who  (or  entities  which)  are  not  such  a  shareholder,
          officer,   subsidiary,   parent  or  affiliate;   provided,
          however, Borrower shall not make any payments to its parent
          corporation  in  any  one month in  excess  of  $20,000  in
          consideration for services to be provided to  the  Borrower
          by  Jayark Corporation, which payments shall be subject  to
          that certain Subordination Agreement, dated as of even date
          herewith;
               
     Section  9.      Accumulated Operating Cash Flow.  The  Borrower

shall  have attained a minimum of the following Accumulated Operating

Cash Flow as of each of the following dates:

                                   Minimum Accumulated
          Attainment Date               Operating Cash Flow
          
          June 30, 1997                        $    900,000
          July 31, 1997                        $  1,900,000

Accumulated Operating Cash Flow shall be calculated on a consistent basis in

accordance with the calculations contained in Exhibit B attached hereto.

     Section  10.    Release.  The Borrower and Jayark on their  own  behalf

<PAGE>

and  on  behalf of their prospective shareholders, directors, employees  and

agents and their successors and assigns, hereby waive, release and discharge

the Bank and all directors, officers, employees, attorneys and agents of the

Bank,  from any and all claims, demands, actions or causes of action arising

out  of  or  in  any way relating to the Loan Documents and  any  documents,

agreements,  dealings or other matters connected with  the  Loan  Documents,

including,  without  limitation,  all known  and  unknown  matters,  claims,

transactions  or  things  occurring prior to  the  date  of  this  Agreement

relating to the Loan Documents.

     Section 11.    Representations and Warranties.

          (a)   All  of  the  representations and  warranties  made  by  the

Borrower in the Loan Agreement are true and correct as of the date hereof as

if  made on and as of the date hereof, except to the extent that any of such

representations  and warranties relate by their terms to  a  prior  date  or

except as otherwise disclosed in writing to the Bank on or before such date;

and  the Borrower has no actual knowledge that any other representations and

warranties  made  by the Borrower in the Loan Documents  are  not  true  and

correct on and as of the date hereof.

          (b)  Neither the execution and delivery of this Agreement, nor the

consummation  of  the transactions herein contemplated, nor  the  compliance

with  the  provisions hereof will violate any provisions of the Articles  of

Organization  or  Bylaws of the Borrower or Jayark, or any law,  statute  or

regulation,   or   any  order  or  decree  of  any  court  or   governmental

instrumentality,  or  will  conflict with, or result  in  a  breach  of,  or

constitute  a  default  under,  any  indenture,  mortgage,  deed  of  trust,

agreement or other instrument to which the Borrower or  Jayark is a party or

by  which  any of them or any of their property may be bound, or, except  as

contemplated  under this Agreement, result in the creation or imposition  of

any   mortgage,  pledge,  security  interest,  encumbrance,  lien,   charge,

attachment,  judgment, levy, or other condition having the practical  effect

of any of the foregoing upon any property of the Borrower or Jayark.


<PAGE>

          (c)  The Borrower and Jayark have the corporate power and authority to

execute, deliver and  carry  out the terms and provisions of this Agreement and

the  other documents executed  in  connection  herewith  or contemplated hereby

(collectively,  the  "Forbearance Documents"), and the Borrower  and  Jayark

have taken or caused to be taken all necessary corporate action to authorize

the   execution,  delivery  and  performance  of  this  Agreement  and   the

Forbearance  Documents.   This Agreement and  each  of  the  Loan  Documents

constitute  the  legal, valid and binding obligations of  the  Borrower  and

Jayark and are enforceable in accordance with their respective terms.

     (d)  To the best knowledge of the Borrower, there are no material Events of

 Default under the  Loan Documents existing as of the date hereof other than

the Events of Default listed as items 1-13 on Schedule A attached hereto

     Section  12.     Forbearance Fee.  Commencing on the date  hereof,  and

until the Obligations are paid in full, the Borrower shall pay to the Bank a

fee  equal to $25,000 per month (the "Forbearance Fee"), payable in  advance

on the first day of each month beginning with the month of June, 1997 (which

initial  Forbearance  Fee  shall be due and payable  on  the  date  hereof),

provided, that $15,000 of each required payment of the Forbearance Fee shall

be  deferred and paid on the Forbearance Termination Date, provided further,

that if the Borrower repays the Obligations in full prior to the Forbearance

Termination  Date,  the  deferred portion of the  Forbearance  Fee  will  be

waived.

     

     Section 13.    Consent to Appointment of Receiver.  In addition to  all

of  the other rights and remedies available to the Bank under this Agreement

and  the Loan Documents, on or after the Forbearance Termination Date,  each

of  the  Borrower  and  Jayark expressly consents to the  appointment  of  a

receiver  as requested by the Bank in its sole discretion for its properties

and  business  in  any state or federal court proceeding  or  administrative


<PAGE>

proceeding.   The  Borrower will take no action to  contest,  object  to  or

otherwise  interfere with the request for or appointment of a  receiver  and

the  Borrower shall cooperate fully in making all of its books  and  records

available  to  a receiver and in giving such receiver dominion  and  control

over all properties, business records and business of the Borrower.  If  the

Bank  requests  the  appointment of a receiver, the Borrower  will  promptly

execute  all  documents  required by the Bank  to  evidence  the  Borrower's

consent to such appointment.  The Bank shall provide the Borrower with seven

(7)  business days prior written notice of any request by the Bank  for  the

appointment  of  a  receiver.  The Bank's right to require  a  receiver  for

Borrower's properties and business shall be in addition to, and not in  lieu

or  limitation  of,  the  Bank's other rights and remedies  under  the  Loan

Documents, this Agreement or otherwise and may be executed by the Bank prior

to,  concurrently  with,  or  successive to any other  rights  and  remedies

available.

     Section  14.    No Waiver.  Except as otherwise expressly provided  for

in  this  Agreement, nothing in this Agreement shall extend to or affect  in

any  way  any  of the obligations of the Borrower or Jayark or  any  of  the

Bank's rights and remedies arising under the Loan Documents.  The acceptance

by the Bank of any partial payment of any amount due shall not constitute  a

waiver of the rights of the Bank to collect the remaining portion thereof.

     Section 15.    Expenses.  The Borrower agrees to pay to the Bank on the

date  hereof and upon demand from time to time hereafter (a) an amount equal

to  any  and  all  reasonable  out-of-pocket costs  or  expenses  (including

reasonable legal fees and disbursements) incurred or sustained by  the  Bank

in  connection with the administration of credit extended by the Bank to the

Borrower or the preservation of or enforcement of its rights under the  Loan

Documents  or in respect of any of the Borrower's other obligations  to  the

Bank.   The Borrower hereby authorizes and directs the Bank, upon  five  (5)

day's notice from the Bank, to charge the Borrower's deposit accounts at the

Bank for all such costs and expenses.


<PAGE>

      Section  16.    Notices.  All notices, demands or other communications

required  or permitted hereunder shall be in writing and shall be telecopied

(followed by overnight mail), personally delivered or sent by registered  or

certified  mail, postage-prepaid, return receipt requested, or by  receipted

overnight delivery service to the addressee, at its address set forth below:

If to the Borrower:                     With a copy to:


     Rosalco, Inc.                           Robert Nolt
     257 America Place                       300 Plaza Drive
     Jeffersonville, IN 47130                Vestal, NY 13850
     Fax:  (812) 284-6658                    Fax:  (607) 797-7103


If to Jayark:                           With a copy to:

     c/o David L. Koffman                    Robert Nolt
     300 Plaza Drive                         300 Plaza Drive
     Vestal, NY 13850                        Vestal, NY 13850
     Fax:  (607) 797-7103                    Fax:  (607) 797-7103

If to the Bank:                              With a Copy to;

     State  Street  Bank  and  Trust         Mintz,  Levin,  Cohn, Ferris,
     Company                                 Glovsky and Popeo, P.C.
     225 Franklin Street                     One Financial Center
     Boston, MA 02110                        Boston, MA 02111
     Attention: John D. Gaziano, Jr., V.P.   Attention:   Paul  J. Ricotta
                James M. Benninger, V.P.     Fax:  (617) 542-2241
                Fax: (617) 664-4176

or  at  such  other address as shall be designated by any of  the  foregoing

parties  in  a written notice to the other parties complying as to  delivery

with  the  terms of this Section.  All such communications shall  be  deemed

received (i) in the case of hand delivery, on the day of delivery,  (ii)  in

the  case  of  overnight  mail or overnight courier  service,  on  the  next

business day after such communication is mailed, postage prepaid, or  placed

in  the  hands of such courier service for delivery, (iii) in  the  case  of

telecopy,  on  the  day the sender receives electronic confirmation  that  a

facsimile  has been successfully transmitted to the recipient  thereof,  and

<PAGE>


(iv) in the case of registered or certified mail, on the fifth business  day

after  such communication is mailed, postage prepaid, with the United States

Postal Service.

     Section 17.    Miscellaneous.

          (a)  This Agreement shall be binding and shall be deemed effective

only when executed by all of the parties hereto.

          (b)   This  Agreement shall bind and inure to the benefit  of  the

respective  successors and assigns of each of the parties hereto;  provided,

however,  neither the Borrower nor Jayark may assign this Agreement  or  any

rights  or  obligations hereunder, and any prohibited  assignment  shall  be

absolutely  void.  Without notice to or consent of the Borrower  or  Jayark,

the Bank may assign this Agreement and its rights and duties hereunder.  The

parties  hereto  do  not intend that any of the benefits of  this  Agreement

shall  inure  to any third party, and no third party shall be a third  party

beneficiary hereof.

          (c)   Headings  and section numbering contained in this  Agreement

have been set forth herein for convenience only.

          (d)   Each  provision of this Agreement shall  be  severable  from

every other provision of this

Agreement for the purposes of determining the legal enforceability  of  such

provision, and the unenforceability of any provision of this Agreement shall

not invalidate the enforceability of any other provision of this Agreement.

          (e)    This   Agreement  and  the  Initial  Forbearance  Agreement

constitute the entire agreement among the parties hereto with respect to the

Bank's forbearance of its rights and remedies under the Loan Documents.

          (f)   This  Agreement cannot be changed or terminated orally,  but

only by a writing signed by all of the parties hereto.


<PAGE>

          (g)     This    Agreement   supersedes   all   prior   agreements,

understandings  and  negotiations relating  to  the  Bank's  forbearance  as

provided  herein,  all  of  which are merged into this  Agreement;  provided

however,  this  Agreement  shall not supersede or  merge  into  the  Initial

Forbearance Agreement, and the terms of this Agreement shall be in  addition

to, not in substitution for, the terms of the Initial Forbearance Agreement.

          (h)   This Agreement may be executed in any number of counterparts

each  of  which,  when executed and delivered, shall  be  deemed  to  be  an

original and all of which, when taken together, shall constitute but one and

the same Agreement.

      Section  18.   Continuing  Effect.  Except  as  specifically  modified

hereby,  the Loan Documents shall remain in full force and effect,  and  the

Borrower  and  Jayark  acknowledge and agree  to  comply  with  all  of  the

provisions of the Loan Documents, as modified hereby.

       Section  19.   No  Future  Commitments.   The  Borrower  and   Jayark

acknowledge  that  while the Bank may agree to review a plan  or  plans  for

restructuring  of  the  existing obligations, the Bank  has  not  agreed  or

committed  to  enter  into such restructuring.  Nothing  contained  in  this

Agreement shall be deemed to constitute the Bank's agreement that  the  Bank

will  agree  to any restructuring.  The Borrower and Jayark acknowledge  and

agree  that  they are not relying upon any expectation that  the  Bank  will

agree  to any restructuring in the future.  The Borrower and Jayark  further

acknowledge and agree that, absent a written modification  of  the  terms  of

this  Agreement  in  accordance  with  the provisions hereof, the Obligations

shall become due and payable in  full  in cash on the Forbearance Termination

Date.

<PAGE>     


     Section  20.    WAIVER OF JURY TRIAL.  THE BORROWER HEREBY  WAIVES  ITS

RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY

DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OF  THE

BORROWER'S  OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE  OF  SUCH

OBLIGATIONS.



      Section  21.     Governing Law.  This Agreement shall be governed  and

construed in accordance with the laws of The Commonwealth of Massachusetts.

      IN  WITNESS  WHEREOF,  each  of the parties  hereto  has  caused  this

Agreement to be duly executed by its duly authorized officer as of  the  day

and year first above written.

WITNESS:                      ROSALCO, INC.
                         
                         
                         
/s/ Robert C. Nolt                 By:  /s/ David L. Koffman
Name: Robert C. Nolt               Name:    David L. Koffman
                                   Its: Chairman
                              

<PAGE>


WITNESS:                           STATE STREET BANK AND TRUST
                                   COMPANY



_______________________________    By:  /s/ John D. Gaziano
Name:                              Name:     John D. Gaziano
                                   Its: Vice President
                              
                              
WITNESS:                           JAYARK CORPORATION
                         
                         
                         
/s/ Robert C. Nolt                 By:  /s/ David L. Koffman
Name: Robert C. Nolt               Name: David L. Koffman
                                   Its: President
                              
                         
                         
<PAGE>                         
                         

SCHEDULE A

SPECIFIED DEFAULTS

          1.   Section 14(b) of the Loan and Security Agreement (All Assets)
               (the  "Loan  Agreement") with respect to the Debt to  Capital
               Base;
          
          2.   Section  14(c)  of  the Loan Agreement with  respect  to  the
               Current Ratio;
          
          3.   Section  14(d) of the Loan Agreement with respect to  Minimum
               Net Earnings; and
          
          4.   Section  14(i)  of the Loan Agreement with respect  to  loans
               made by the Borrower.
          
          5.   Section  14(j)  of  the Loan Agreement with  respect  to  the
               guaranty of indebtedness.
          
          6.   Section  14(l) of the Loan Agreement with respect  to  leases
               with shareholders or affiliates of the Borrower.
          
          7.   Section   15(c)  of  the  Loan  Agreement  with  respect   to
               violations of the Loan Documents
          
          8.   Section 15(f) of the Loan Agreement with respect to liens  of
               creditors.
          
          9.   Section  15(l) of the Loan Agreement with respect to material
               adverse changes in the financial condition of the Borrower.
          
          10.  Section  15(o) of the Loan Agreement with respect to  changes
               in the identify of the management of the Borrower.
          
          11.  Section  15(u)  of  the Loan Agreement with  respect  to  the
               occurrence of an event of default by a guarantor
          
          12.  Section  15(x)  of  the Loan Agreement with  respect  to  the
               occurrence of an event of default under the Loan and Security
               Agreement  (All Assets) between AVES and the Bank on  account
               of  the  occurrence  of an event of default  under  the  Loan
               Documents.
          
          13.  Section  5(a)  of  the  Loan Agreement with  respect  to  the
               aggregate principal amount of the loan.
          
     The  Borrower has informed the Bank that the Borrower may be in default
of  other  covenants  and obligations under the Loan  Documents.   The  Bank
acknowledges that these additional defaults, although not enumerated,  shall
constitute Specified Defaults.

<PAGE>


EXHIBIT A

FORM OF CERTIFICATE OF NO DEFAULTS

     I do hereby certify to State Street Bank and Trust Company (the "Bank")
that  I  have  reviewed  the Second Forbearance and Modification  Agreement,
dated  as  of  June  1,  1997,  among the Bank,  Rosalco,  Inc.  and  Jayark
Corporation (the "Second Forbearance Agreement") and the Loan Documents  (as
defined  therein);  I further certify that I have caused the  investigations
necessary to make this certification; I further certify that to the best  of
my  knowledge, except as already disclosed to the bank, no default under the
Second  Forbearance Agreement or Event of Default (as defined  in  the  Loan
Documents) exists as of the date hereof [or describing such default or Event
of Default if one exists].

     Dated: This 27 day of June, 1997

                                   /s/ David L. Koffman
                                   Name
     
     
                              
                                   Chairman
                                   
                                   Title
     
     

|TRADOCS: 1003952.10 (l$nk10!.doc)



<PAGE>

<TABLE>
<CAPTION>
   
EXHIBIT B

Rosalco Inc.

<S>                         <C>           <C>           <C>
                          6/6/97
                           June           July           August
Net  Sales               2,500,000      1,300,000      1,500,000

Cash Receipts            2,500,000      2,200,000      2,600,000

Operating Disbursements
Payroll/Payroll Taxes      188,600        128,166        109,165
A/P                        440,000        300,000        280,955
Factory Payments           900,000        660,000      1,386,221
                         ---------      ---------      ---------
  Total Oper.Exp.        1,340,000        960,000      1,667,176

OCF                      1,160,000      1,240,000        932,824
       Accum.            1,160,000      2,400,000      3,332,824

         Interest           40,112         29,571         23,447
         Proceeds       
                         ---------      ---------      ---------
 NCF                     1,119,888      1,210,429        909,377
         Accum.          1.119,888      2,330,317      3,239,694

OCF-cumm. Covenant

Collateral
         A/R             4,009,677      2,856,273      1,951,269
         Cust L/C          200,000        200,000        200,000
         Inventory L/C     725,000        725,000        725,000
         Inventory       3,118,422      2,945,480      3,174,357
                         ---------      ---------      ---------
            Total        8,053,099      6,726,753      6,050,626

Rates
         A/R (blended)        87.0%          87.0%          87.0%
         Cust. L/C            90.0%          90.0%          90.0%
         Inventory L/C        45.0%          45.0%          45.0%
         Inventory            45.0%          45.0%          45.0%

Availability
         A/R 1/2         3,488,419      2,484,958      1,697,604
         Cust L/C          180,000        180,000        180,000
         Inv. L/C          326,250        326,250        326,250
         Inventory       1,403,290      1,325,466      1,428,461
                         ---------      ---------      ---------
            Total        5,397,959      4,316,674      3,632,315

Borrowings
         Line            4,696,069      3,461,931      2,745,045
         L/Cs              725,000        725,000        725,000
                         ---------      ---------      ---------
            Total        5,421,069      4,186,931      3,470,045

Excess Available           (23,110)       129,743        162,270

</TABLE>

<PAGE>


EXHIBIT 10(36)

      THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE  SOLD
      OR  OFFERED FOR  SALE  IN  THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
      STATEMENT AS  TO  THE  SECURITIES UNDER SAID  ACT  AND  ANY APPLICABLE
      STATE  SECURITIES  LAWS  OR  THE  AVAILABILITY  OF  AN  EXEMPTION FROM
      REGISTRATION UNDER SAID  ACT  AND  ANY APPLICABLE STATE  SECURITIES
LAWS.


                         STOCK WARRANT

        To Purchase 500,000 Shares of Common Stock of

           Jayark Corporation, a Delaware Corporation
                        (the "Company")

               Subject to Adjustment as Set Forth
           in Section 5 and Particularly Section 5(g)

           DATE OF INITIAL ISSUANCE: March 12, 1997


      THIS  CERTIFIES  THAT,  for  value received, A-V  Texas  Holding,  LLC
or  registered   assigns (hereinafter called the "Holder") is  entitled   to
purchase  from  the  Company  during the Term of this Warrant at the   times
provided   for herein, the number of shares of Common Stock, par value  $.30
per share,  of  the Company  (the  "Common  Stock") as specified herein,  at
the   Warrant   Price   (as  hereinafter defined),  payable  in  the  manner
specified  herein.  The conversion of this Warrant shall be subject  to  the
provisions, limitations and restrictions herein contained.

     SECTION 1.  Definitions.

       Common   Stock   -  shall mean and include the Company's   authorized
Common Stock, as constituted on the date the Certificate of Incorporation is
amended  as  provided  in  the  definition of "Term of this Warrant"  below,
and   shall   also  include any capital stock of any class  of  the  Company
hereafter authorized which has  the right to participate in the distribution
of earnings and assets of  the
Company without limit to amount or percentage.

      Securities Act - the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

       Term  of  this Warrant - shall mean the period beginning on the  date
the  Company   amends  its Certificate of Incorporation to provide  for   no
less   than 20,000,000  authorized shares of Common Stock (at any par value)
and  ending  on February 1, 2007.



     Warrant Price - is defined in Section 2.1 hereof.

       Warrant   Rights  - the rights of the Holder to purchase  shares   of
Common Stock  upon conversion of this Warrant, which rights shall not relate
to  shares of Common Stock already purchased pursuant to this Warrant.

      Warrant  Shares  -  shares  of Common  Stock  purchased  or
purchasable  by  the Holder of this Warrant upon  the  conversion
hereof.

<PAGE>

     SECTION 2.  Conversion of Warrant.

      2.1.  Right to Exercise Warrant.  At any time and from time
to  time during the term of this Warrant, the Holder hereof shall
have  the  right to convert this Warrant, in whole or part(s)  to
purchase up to the number of shares of Common Stock set forth  on
the  cover  page  hereof, subject to adjustment  as  provided  in
Section 5.

      The  Warrant  Price  shall be $.30  per  share  subject  to
adjustment as provided in Section 5 and shall be paid in cash.

      2.2.    Procedure for Cashless Conversion of Warrant.   The
registered  holder  hereof  shall convert  this  Warrant  by  the
surrender  of  this  Warrant and the Notice  of  Conversion  form
attached hereto duly executed at the office of the Company at 300
Plaza  Drive,  Vestal, New York  13850 (or such other  office  or
agency of the Company as it may designate by notice in writing to
the  registered  holder  hereof at the  address  of  such  holder
appearing  on the books of the Company), into shares  of  Warrant
Shares as provided in this Section 2.

      Upon  conversion  of this Warrant in accordance  with  this
Section  2,  the  registered holder hereof shall be  entitled  to
receive a certificate for the number of shares of Warrant  Shares
determined in accordance with the foregoing.

      2.3.   Transfer and Restriction Legend.  This  Warrant  is
freely transferable by the Holder, except as transferability  may
be   limited   by  federal  and  state  securities  laws.    Each
certificate  for  Warrant Shares shall bear the following  legend
(and  any additional legend required by (i) any applicable  state
securities laws and (ii) any securities exchange upon which  such
Warrant  Shares may, at the time of such exercise, be listed)  on
the  face  thereof  unless at the time of exercise  such  Warrant
Shares shall be registered under the Securities Act:

                 "THESE   SECURITIES  HAVE   NOT   BEEN
          REGISTERED UNDER THE SECURITIES ACT OF  1933,
          AS  AMENDED,  OR  ANY STATE SECURITIES  LAWS.
          THEY  MAY NOT BE SOLD OR OFFERED FOR SALE  IN
          THE  ABSENCE  OF  AN  EFFECTIVE  REGISTRATION
          STATEMENT AS TO THE SECURITIES UNDER SAID ACT



          AND  ANY APPLICABLE STATE SECURITIES LAWS  OR
          THE   AVAILABILITY  OF  AN   EXEMPTION   FROM
          REGISTRATION   UNDER   SAID   ACT   AND   ANY
          APPLICABLE STATE SECURITIES LAWS."

Any  certificate  issued at any time in exchange or  substitution
for any certificate bearing such legend (except a new certificate
issued   upon  completion  of  a  public  distribution  under   a
registration  statement  of the securities  represented  thereby)
shall also bear such legend unless, in the opinion of counsel for

<PAGE>

the   holder   thereof   (which  counsel  shall   be   reasonably
satisfactory   to  counsel  for  the  Company)   the   securities
represented  thereby are not, at such time, required  by  law  to
bear such legend.

      SECTION  3.   Covenants as to Common  Stock.   The  Company
covenants and agrees that all shares of Common Stock that may  be
issued  upon  the  exercise  of the rights  represented  by  this
Warrant  will,  upon issuance and receipt by the Company  of  the
Warrant  Price,  be validly issued, fully paid and nonassessable,
and  free from all taxes, liens and charges with respect  to  the
issue thereof.  The Company further covenants and agrees that  it
will pay when due and payable any and all federal and state taxes
which may be payable in respect of the issue of this Warrant,  or
any  Common  Stock  or certificates therefor  issuable  upon  the
exercise  of  this  Warrant.  The Company further  covenants  and
agrees  that  the Company will at all times have  authorized  and
reserved,  free  from preemptive rights, a sufficient  number  of
shares  of Common Stock to provide for the exercise of the rights
represented  by this Warrant.  The Company further covenants  and
agrees that if any shares of capital stock to be reserved for the
purpose  of  the issuance of shares upon the conversion  of  this
Warrant require registration with or approval of any governmental
authority  under any federal or state law before such shares  may
be  validly issued or delivered upon conversion, then the Company
will  in good faith and as expeditiously as possible endeavor  to
secure such registration or approval, as the case may be.  If and
so  long as the Common Stock issuable upon the conversion of this
Warrant  is  listed  on  any  national securities  exchange,  the
Company  will,  if permitted by the rules of such exchange,  list
and  keep  listed  on  such  exchange, upon  official  notice  of
issuance,   all  shares  of  such  Common  Stock  issuable   upon
conversion of this Warrant.

     SECTION 4.  Ownership.

      4.1   Register;  Transfer  or Exchange  of  Warrants.   The
Company shall keep at its office maintained in Vestal, New York a
register  in which the Company shall provide for the registration
of  Warrants  and for the registration of transfer  of  Warrants.
The Holder of any Warrant may, at its option and either in person
or   by   duly  authorized  attorney,  surrender  the  same   for
registration of transfer or exchange at such office and,  without
expense  to  such  Holder (other than transfer  taxes,  if  any),
receive in exchange therefor a new Warrant or Warrants, dated  as
of  the  date  to  which transfer is effectuated,  for  the  same
aggregate  amount  of  shares  as  the  Warrant  or  Warrants  so
surrendered for transfer or exchange and each registered in  such
name or names as may be designated by such Holder.  Every Warrant
so  made and delivered in exchange for any Warrant shall  in  all
other respects be in the same form and have the same terms as the
Warrant so surrendered for transfer or exchange.

      4.2.  Ownership of This Warrant.  The Company may deem  and
treat the person in whose name this Warrant is registered as  the

<PAGE>

holder  and  owner  hereof  (notwithstanding  any  notations   of
ownership  or  writing  hereon made  by  anyone  other  than  the
Company) for all purposes and shall not be affected by any notice
to   the   contrary  until  presentation  of  this  Warrant   for
registration of transfer as provided in this Section 4.

     4.3.  Transfer and Replacement.  This Warrant and all rights
hereunder  are subject to applicable federal and state securities
laws,  transferable in whole or in part upon  the  books  of  the
Company  by  the  Holder hereof in person or by  duly  authorized
attorney,  and  a new Warrant or Warrants, of the same  tenor  as
this  Warrant  but  registered in the name of the  transferee  or
transferees  shall  be made and delivered  by  the  Company  upon
surrender  of  this Warrant duly endorsed.  Upon receipt  by  the
Company  of evidence reasonably satisfactory to it of  the  loss,
theft or destruction, and, in such case, of indemnity or security
reasonably satisfactory to it, and upon surrender of this Warrant
if  mutilated, the Company will make and deliver a new Warrant of
like  tenor, in lieu of this Warrant; provided that if the Holder
hereof is an instrumentality of a state or local government or an
institutional holder or a nominee for such an instrumentality  or
institutional  holder, an irrevocable agreement of  indemnity  by
such  Holder shall be sufficient for all purposes of this Section
4,  and  no  evidence  of loss or theft or destruction  shall  be
necessary.   This  Warrant  shall be  promptly  canceled  by  the
Company upon the surrender hereof in connection with any transfer
or  replacement.  Except as otherwise provided above, in the case
of the loss, theft or destruction of a Warrant, the Company shall
pay  all  expenses, taxes and other charges payable in connection
with  any  transfer  or replacement of this Warrant,  other  than
stock  transfer  taxes  (if any) payable  in  connection  with  a
transfer of this Warrant, which shall be payable by the Holder.

     SECTION 5.  Adjustment of Warrant Price and Number of Shares
of Common Stock or Warrants.

           (a)   In case the Company shall (i) pay a dividend  or
make  a  distribution  in  shares of its capital  stock  (whether
shares of Common Stock or of capital stock of any other class) or
distribute  evidences of indebtedness or assets, (ii)  sub-divide
its  outstanding  shares  of  Common  Stock   (iii)  combine  its
outstanding  shares  of Common Stock into  a  smaller  number  of
shares, or (iv) issue by reclassification of its shares of Common
Stock  any shares of capital stock of the Company, the conversion
privilege and Warrant Price in effect immediately prior  to  such
action  shall  be  adjusted so that the holders of  any  Warrants
thereafter surrendered for exercise shall be entitled to  receive
the number of shares of capital stock of the Company which he  or
she  would have owned immediately following such action had  such
Warrant  been exercised immediately prior thereto.  An adjustment
made  pursuant  to  this  subsection (a) shall  become  effective
retroactively immediately after the record date in the case of  a
dividend  or  distribution and shall become effective immediately
after   the   effective  date  in  the  case  of  a  subdivision,
combination  or  reclassification.   If,  as  a  result   of   an
adjustment  made pursuant to this subsection (a), the  holder  of
any  shares of this Warrant thereafter surrendered for conversion

<PAGE>

shall become entitled to receive shares of two or more classes of
capital  stock  of  the Company, the Board  of  Directors  (whose
reasonable  determination  shall be made  in  good  faith)  shall
determine the allocation of the adjusted conversion price between
or among shares of such classes of capital stock.

           (b)  The Company may elect, upon any adjustment of the
Warrant  Price  hereunder,  to  adjust  the  number  of  Warrants
outstanding, in lieu of the adjustment in the number of shares of
Common  Stock purchasable upon the conversion of each Warrant  as
hereinabove provided, so that each Warrant outstanding after such
adjustment  shall represent the right to purchase  one  share  of
Common  Stock.   Each  Warrant  held  of  record  prior  to  such
adjustment of the number of Warrants shall become that number  of
Warrants   (calculated  to  the  nearest  tenth)  determined   by
multiplying the number one by a fraction, the numerator of  which
shall  be the Warrant Price in effect immediately prior  to  such
adjustment  and  the denominator of which shall  be  the  Warrant
Price in effect immediately after such adjustment.

            (c)    In   case  of  any  reclassification,  capital
reorganization  or other change of outstanding shares  of  Common
Stock,  or in case of any consolidation or merger of the  Company
with  or into another corporation (other than a consolidation  or
merger  in  which  the Company is the continuing corporation  and
which   does   not   result  in  any  reclassification,   capital
reorganization  or other change of outstanding shares  of  Common
Stock),  or  in  case  of  any  sale  or  conveyance  to  another
corporation  of the property of the Company as, or  substantially
as,  an entirety (other than a sale/leaseback, mortgage or  other
financing   transaction),  the  Company  shall  cause   effective
provision  to  be  made so that each holder  of  a  Warrant  then
outstanding  shall have the right thereafter, by converting  such
Warrant,  to purchase the kind and number of shares of  stock  or
other  securities  or property (including cash)  receivable  upon
such  reclassification, capital reorganization or  other  change,
consolidation,  merger, sale or conveyance by  a  holder  of  the
number  of  shares of Common Stock that might have been purchased
upon  conversion  of  such  Warrant  immediately  prior  to  such
reclassification,  capital  reorganization   or   other   change,
consolidation,  merger, sale or conveyance.  Any  such  provision
shall  include provision for adjustments that shall be as  nearly
equivalent as may be practicable to the adjustments provided  for
in  this  Section  5.   The Company shall  not  effect  any  such
consolidation,  merger or sale unless prior to or  simultaneously
with  the  consummation thereof the successor (if other than  the
Company)  resulting  from such consolidation  or  merger  of  the
corporation purchasing assets or other appropriate corporation or
entity shall assume, by written instrument executed and delivered
to  the Company, the obligation to deliver to the holder of  each
Warrant  such  shares  of  stock, securities  or  assets  as,  in
accordance  with the foregoing provisions, such  holders  may  be
entitled  to  purchase  and  the  other  obligations  under  this
Warrant.   The  foregoing  provisions shall  similarly  apply  to
successive  reclassification, capital reorganizations  and  other
changes  of  outstanding shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.

<PAGE>

           (d)   After  each  adjustment  of  the  Warrant  Price
pursuant  to this Section 5, the Company will promptly prepare  a
certificate signed by the President, and by the Treasurer  or  an
Assistant  Treasurer or the Secretary or any Assistant Secretary,
of  the  Company  setting forth:  (i) the  Warrant  Price  as  so
adjusted,  (ii) the number of shares of Common Stock  purchasable
upon  conversion of each Warrant after such adjustment,  and,  if
the  Company shall have elected to adjust the number of Warrants,
the  number  of Warrants to which the registered holder  of  each
Warrant shall then be entitled.

           (e)  For purposes of Section 5(a) and 5(b) hereof, the
following shall also be applicable:

                 (A)   The  number  of  shares  of  Common  Stock
     outstanding at any given time shall include shares of Common
     Stock owned or held by or for the account of the Company and
     the  sale  or  issuance  of  such  treasury  shares  or  the
     distribution  of  any  such treasury  shares  shall  not  be
     considered a Change of Shares for purposes of said sections.

                (B)  No adjustment of the Warrant Price shall  be
     made  unless such adjustment would require a decrease  of  a
     least  $.0001  in such price; provided that any  adjustments
     which  by reason of this clause (B) are not required  to  be
     made  at  the time of and together with the next  subsequent
     adjustment which, together with any adjustment(s) so carried
     forward,  shall require an increase or decrease of at  least
     $.0001 in the Warrant Price then in effect hereunder.

           (f)   If and whenever the Company shall grant  to  all
holders of Common Stock, as such, rights or warrants to subscribe
for  or  to purchase, or any options for the purchase of,  Common
Stock or securities convertible into or exchangeable for carrying
a  right, warrant or option to purchase Common Stock, the Company
shall  concurrently therewith grant to each Registered Holder  as
of  the  record  date for such transaction of the  Warrants  then
outstanding,  the  rights,  warrants or  options  to  which  each
Registered Holder would have been entitled if, on the record date
used  to  determine  the  stockholders entitled  to  the  rights,
warrants  or options being granted by the Company, the Registered
Holder were the holder of record of the number or whole shares of
Common  Stock  then  issuable  upon  conversion  (assuming,   for
purposes  of  this section 5 (f), that exercise  of  Warrants  is
permissible during periods prior to the Warrant Exercise Date) of
his  Warrants.  Such grant by the Company to the holders  of  the
Warrants shall be in lieu of any adjustment which otherwise might
be called for pursuant to this Section 5.

     g)     Anything   in  this  Warrant  to  the  contrary notwithstanding,
the  number of shares of Common  Stock  to  which this  Warrant shall relate
shall  increase  .5%  for each $1,000 paid by the original  Holder  of  this
Warrant, or any person or entity affiliated with the original Holder of this
Warrant  pursuant to any guarantee issued by such Holder, person  or  entity
guaranteeing obligations of the Company or any of its subsidiaries.


<PAGE>

SECTION 6.  Notice of Extraordinary Dividends. If the Board of Directors  of
the Company shall declare any dividend or  other
distribution on its Common Stock except out of earned surplus  or
by way of a stock dividend payable in shares of its Common Stock,
the  Company shall mail notice thereof to the Holder  hereof  not
less  than  fifteen (15) days prior to the record date fixed  for
determining shareholders entitled to participate in such dividend
or   other   distribution,  and  the  Holder  hereof  shall   not
participate  in such dividend or other distribution  unless  this
Warrant  may  be  converted, in whole or  in  part,  pursuant  to
Section  2.1  of  this Warrant, and is converted  prior  to  such
record date.  The provisions of this Section 6 shall not apply to
distributions  made  in connection with transactions  covered  by
Section 5.


SECTION 7.  Fractional Shares.  Fractional shares shall not
be  issued  upon the conversion of this Warrant but in  any  case
where the Holder would, except for the provisions of this Section
7,  be  entitled under the terms hereof to receive  a  fractional
share  upon  the  conversion of this Warrant, the Company  shall,
upon  the conversion of this Warrant, pay a sum in cash equal  to
the  excess of the value of such fractional share (determined  in
such  reasonable manner as may be prescribed in good faith by the  Board  of
Directors of the Company.

SECTION  8.   Notices.  Any notice or other document required or   permitted
to   be  given  or  delivered to  the  Holder  or   the  Company   shall  be
effected  on  the seventh day following  delivery to the United States  Post
Office, proper postage prepaid, sent by certified or registered mail  return
receipt requested, or on  the day  delivered  by hand and receipted,  or  on
the second  business day  after  delivery to a recognized overnight  courier
service, addressed to the Holder at the address thereof specified   in   the
records   of   the  Company or to such other address as   shall   have  been
furnished to the Company in writing by the  Holder  or  the
Company  at 124 West Main Street, High Bridge, New Jersey 08829 or to   such
other address as shall have been furnished in writing to  the Holder by  the
Company.


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     SECTION  9.   No  Rights  as  Stockholder;  Limitation  of
     Liability.  This Warrant shall not entitle the Holder to  any  of
     the rights of a shareholder of the Company.  No provision hereof,
     in  the  absence of affirmative action by the Holder to  purchase
     shares  of  Common Stock, and no mere enumeration herein  of  the
     rights  or  privileges  of the Holder, shall  give  rise  to  any
     liability of the Holder for the Warrant Price hereunder or  as  a
     shareholder of the Company, whether such liability is asserted by
     the Company or by creditors of the Company.

      SECTION 10.  Law Governing.  This Warrant shall be governed
     by,  and  construed and enforced in accordance with, the laws  of
     the State of New York.

     SECTION 11.  Miscellaneous.   This Warrant and any provision
     hereof  may be changed, waived, discharged or terminated only  by
     an  instrument in writing signed by the party (or any predecessor
     in  interest  thereof) against which enforcement of the  same  is
     sought.   The  headings  in  this Warrant  are  for  purposes  of
     reference  only and shall not affect the meaning or  construction
     of any of the provisions hereof.

      IN WITNESS WHEREOF, the Company has caused this Warrant  to
     be   signed by its duly authorized officer this 12th day of  March
     1997.

                                   JAYARK CORPORATION

                                   Name: /s/ David L. Koffman
                                   Title: President


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