SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-KSB/A-1
                                   (Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended June 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 O-26262

                            U.S. BRIDGE OF N.Y., INC.
             (Exact name of registrant as specified in its charter)

 New York                                    11-3032277
(State or other Jurisdiction of              (I.R.S. Employer
Incorporation or Organization)               Identification No.)

                    53-09 97th Place, Corona, New York 11368
              (Address of Principal Executive Offices) (Zip Code)

                                 (718) 699-0100
              (Registrant's Telephone Number, including area code)

               Securities registered pursuant to Section 12(b) of
                                    the Act:
         Title of each class Name of each exchange on which registered
                                    NONE

               Securities registered pursuant to Section 12(g) of
                                    the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

                         Common Stock Purchase Warrants
                                (Title of Class)

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

     Check if no  disclosure  of  delinquent  filers in  response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  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 on  September  30,  1997
(consisting of Common Stock,  $.001 par value per share) held by  non-affiliates
was approximately $2,590,336 based upon the average closing bid and asked prices
for such Common Stock on said date ($2.56),  as reported by a market  maker.  On
such date, there were 2,302,515 shares of Registrant's Common Stock outstanding.




<PAGE>
                                     PART I

                         ITEM 1. DESCRIPTION OF BUSINESS

History

         U.S. Bridge of N.Y., Inc. ("the Company") was incorporated in the State
of New York, on September 4, 1990, as Metro Steel  Structures,  Ltd. The Company
amended its Certificate of  Incorporation  to effect a change in its name to its
current  name on  January  31,  1995.  Additionally,  the  Company  amended  its
authorized  capital (i) to increase  the number of  authorized  shares of common
stock from 200 to  10,000,000  ("the  Common  Stock");  (ii) to increase the par
value of the Common Stock from no par value to $.001 par value per share;  (iii)
to authorize  500,000 shares of preferred  stock, par value $.01 per share ("the
Preferred  Stock");  and  (iv) to  designate  400,000  shares  of the  Company's
Preferred Stock as "Series A Preferred Stock." Also as of such date, the Company
effected a 29,687.50  for one  forward  split of its Common  Stock,  pursuant to
which there became 950,000 shares of Common Stock outstanding.

         Pursuant to an agreement  and plan of merger by and between the Company
and U.S. Bridge Corp.  ("Corp.") effective as of April 25, 1994, Corp. issued an
aggregate of 3,540,000  shares of its common  stock to the  stockholders  of the
Company and One Carnegie Court Associates,  Inc. ("One Carnegie") - 2,820,000 to
the  stockholders of the Company and 720,000 to the stockholders of One Carnegie
- in  exchange  for all of said  stockholders'  issued and  outstanding  shares.
Joseph Polito, the principal stockholder of the Company and the sole stockholder
of One Carnegie,  received,  in exchange for his shares of the Company's  Common
Stock  and  One  Carnegie's   common  stock,   2,380,000  and  720,000   shares,
respectively,  of Corp.'s common stock. The "Acquisitions" were accounted for as
a  "recapitalization"  of Corp.  Accordingly,  both the Company and One Carnegie
became wholly owned subsidiaries of Corp., of which company Joseph Polito became
an 80%  shareholder,  which  decreased  to  75.4%  upon  the  completion  of the
Company's initial public offering in August 1995.

         Immediately  prior to the  acquisition  of the  Company  by Corp.,  the
Company completed a private placement offering of its Common Stock,  whereby the
Company  sold an  aggregate  of 148,200  shares (post stock split) of its Common
Stock.  The Company  received  net proceeds of $502,594  after the  deduction of
offering expenses of $47,406.

         Pursuant  to the  terms  of the  acquisition,  each  subscriber  in the
private placement exchanged each Company share held prior to the acquisition for
20,000 post  reverse  split  shares of Corp.'s  common  stock.  Corp.  agreed to
register  the  shares  purchased  in the  private  placement  in a  Registration
Statement  under the  Securities  Act of 1933, as amended (the "Act"),  one time
only, upon demand by any of the investors in the private  placement,  after June
30, 1995.

         The  Company  commenced  operations  in or  about  June  1993 to  serve
primarily  as a  general  contractor  for  construction  projects  sponsored  by
federal,  state, and local  government  authorities in New York State and in the
New York City  metropolitan  area.  Previously,  through other entities,  Joseph
Polito furnished and provided steel erection as a subcontractor  for private and
governmental construction projects. Since its commencement of operations in June
1993, the Company has provided steel erection for building,  roadway, and bridge
repair  projects  for general  contractors  who have been engaged by private and
municipal/governmental  customers.  As of September  30,  1997,  the Company has
completed in excess of eighteen (18) projects,  with an aggregate  project value
of $22,768,614,  and is currently engaged in four (4) projects with an aggregate
value of approximately $19,998,040. The Company plans to



<PAGE>
maintain its subcontractor presence in the steel industry;  however, now that it
has  obtained  general  contractor  bonding,  it intends  to focus on  obtaining
projects as a general contractor.

         Though formed to operate as a general contractor,  the Company operated
initially only as a subcontractor.  The Company's goals were to become a general
contractor for municipal projects;  however, it needed financing to enable it to
obtain bonding, which is required for all municipal projects.

         On June 15, 1993, the Company  purchased,  from Atlas Gem Erectors Co.,
Inc.  ("Atlas  Gem"),  six then  existing  contracts to perform  steel  erection
services  for the  following  projects:  Stillwell  Avenue,  39th Street  Bridge
Rehabilitation,  Honeywell Street Bridge, New England Thruway,  Lemon Creek, and
Kosciuszko  Bridge.  Upon its sale of these  contracts  to the  Company  and its
completion of its final project in September 1994, Atlas Gem ceased  operations.
The Company  purchased Atlas Gem's contracts to add to its then backlog in order
to avoid a conflict of interest,  as the two entities - which were controlled by
Joseph Polito as officer, director, and principal stockholder - were engaging in
similar, but different work.

Recent Developments

         In June 1996, the Company  entered a prime  contracting  agreement with
EklecCo,  the owner of the Palisades Power Mall located in West Nyack, New York,
to perform structural steel erection services.  The estimated aggregate value of
the contract is $10,373,552. The mall is estimated to be approximately 3,900,000
square feet upon completion.  The project is to be performed in two phases.  The
Company  commenced  work on Phase I in June 1996. As of September 30, 1997,  the
project is 79% complete.

         In July 1996, the Company  entered into a prime  contracting  agreement
with Tishman  Construction  Corporation  of New York  (construction  manager) to
perform  steel  erection  services on the Louis  Vuitton  Office  Tower owned by
Starre  Realty  and  located  on  East  57th  Street  in  New  York,  New  York.
Commencement  of the  project was delayed  due to  conflict  not  involving  the
Company,  which  conflict  since  has been  resolved.  The  Company  expects  to
recommence  work on  this  project  by the end of  calendar  1997.  In or  about
December 1996, the Company  obtained  confirmation of United Casualty and Surety
Insurance  Company's  willingness to issue a performance bond for the Company as
general  contractor  of  this  project;   however,   the  construction   manager
subsequently waived its bond requirement.  As of September 30, 1997, the project
is 67% complete.





<PAGE>
         In October 1996, the Company  entered into a  subcontracting  agreement
with Hannibal  Construction  Co., Inc.  (general  contractor) to provide certain
structural steel work for  rehabilitation  of the Hellgate  Viaduct  Structures,
located in Philadelphia,  Pennsylvania, owned by the National Railroad Passenger
Corporation (AMTRAK). Work on the project has been completed.

         In November 1996, the Company entered into a  subcontracting  agreement
with N.Y. Iron (general  contractor)  to provide  structural  steel work for the
Indonesian  Mission owned by the United  Nations.  Work on the contract has been
completed.

         In January 1997, the Company  entered into a  subcontracting  agreement
with Humphreys & Harding, Inc. to perform certain structural steel erection work
for the  Permanent  Mission to the Republic of Korea,  located in New York,  New
York. The contract price is  $1,500,000.  As of September 30, 1997,  work on the
project is 16% complete.

     As of May 1997,  the  Company  was in arrears in the amount of  $480,000 in
payments due under its lease with R.S.J.J. Realty Corp. ("RSJJ"). This arrearage
was  converted  into equity as follows:  on June 19,  1997,  the Company  issued
270,000 shares of common stock to Corp.,  for the  cancellation of the debt owed
to RSJJ.  Corp.,  in turn,  issued  200,000 shares of its Common Stock to Joseph
Polito and 150,000 shares of its Common Stock to RSJJ. RSJJ then transferred all
of such  shares to RSJJ's  mortgagor,  which  agreed  to accept  said  shares as
payment of RSJJ's outstanding mortgage.  See "Item 12. Certain Relationships and
Related Transactions."

         In October 1997, the Company's Board of Directors  adopted a resolution
decreasing the exercise price of the Company's  outstanding public warrants from
$6.00 to $3.00.  No other terms of the warrants were amended.  In addition,  the
Board authorized the Company to prepare and file a  post-effective  amendment to
its  registration  statement  to update the  information  therein  enabling  the
warrants to become exercisable.
<PAGE>

The Company

         The following  table lists,  as of June 30, 1997,  (i) all companies in
which Joseph Polito is either an Officer,  Director,  or principal  shareholder;
and (ii) the activities  engaged in by such companies with the Company or any of
its subsidiaries:
<TABLE>
<CAPTION>

                                    Year            J. Polito's                      Activities with the        Place of
Company Name(1)                     of Inc.         Title             Ownership(%)   Company and NY             Business

<S>                                 <C>             <C>               <C>            <C>                        <C>             
U.S. Bridge Corp.(2)                1988            Pres./Director    61%            Parent Company             Queens, NY

One Carnegie Court                  1990            Pres./Director    0%             Subsidiary of Corp.        Waldorf, MD
 Associates, Inc. (3)(5)(6)

R.S.J.J. Realty Corp.(4)            1983            Pres./Director    100%           Leases the offices and     Queens, NY
                                                                                     storage space to the
                                                                                     Company

Crown Crane, Inc.(4)                1988            --                50%            Supplies cranes to the     Brooklyn, NY
                                                                                     Company for use in the
                                                                                     erection of steel

Atlas Gem Leasing,                  1986            Pres./Director    100%           Supplies welding           Queens, NY
Inc. (4)                                                                             machines and compressors
                                                                                     to the Company

Atlas Gem Erectors                  1986            Pres./Director    100%           Sold certain construction  No office
  Co., Inc. (4)(7)                                                                   contracts to the Company;
                                                                                     ceased operations 9/94

Gem Steel Erectors                  1966            Pres./Director     100%          No business relationship;  No office
 Inc.(4)(8)                                                                          ceased operations 3/91

Waldorf Steel                       1990            Pres./Director     100%          Provided steel to the      No office
Fabricators, Inc.(3)(5)                                                              Company; ceased
                                                                                     operations in 8/95

U.S. Bridge Corp.                   1994            Pres./Director     0%            Subsidiary of  Corp.;      No office
(Maryland) (2)(9)                                                                    ceased operations in 11/96

U.S. Bridge of N.Y.,                1990            Pres./Director     56.3%         Provides steel erection    Queens, NY  
Inc.(4)(10)                                                                          buildings, roadway, and
                                                                                     bridge repair projects
</TABLE>

     (1) Except as disclosed hereunder,  no company listed is beneficially owned
by another entity; nor does any company have any subsidiaries. No company listed
has  conducted any business  operations  under any name except for its corporate
name, except for Corp. See "-History."

     (2) Incorporated in the State of Delaware.

     (3) Incorporated in the State of Maryland.

     (4) Incorporated in the State of New York.

     (5) One Carnegie  owned the  property,  building,  and  equipment  which it
leased to Waldorf Steel Fabricators,  Inc.  ("Waldorf") prior to August 1, 1995,
as of which date it began leasing to U.S. Bridge Corp.  (Maryland)  ("MD") until
MD ceased operations in November 1996.

     (6) Formed in December 1990,  One Carnegie is a wholly-owned  subsidiary of
Corp.  Joseph  Polito,  through  his  ownership  of  approximately  61%  of  the
outstanding  shares of Corp. may be deemed the beneficial owner of the shares of
One Carnegie owned by Corp.

     (7) Ceased operations in September 1994.

     (8) Ceased operations in March 1991.

     (9) MD was  incorporated in the state of Delaware on September 21, 1994 and
is a  wholly-owned  subsidiary  of Corp.  It was formed to provide labor for the
fabrication of steel by Waldorf,  which it provided  until August 1, 1995,  when
Waldorf ceased operations.

     (10) Joseph  Polito,  through his  ownership  of  approximately  61% of the
outstanding  shares of the  Corp.,  may be deemed  the  beneficial  owner of the
shares of the Company owned by Corp.




<PAGE>
                         Schedule of Completed Contracts
<TABLE>
<CAPTION>

Project Name                                 Contract Amount                              Contract Date            Type of Contract
------------                                 ---------------                              -------------            ----------------
<S>                                          <C>                                          <C>                      <C>
Van Wyck                                     $ 195,500                                    April 1992               Lump-Sum
39th Street Bridge                            2,538,252                                   June 1993                Lump-Sum
39th Street (Demolition)                        679,046                                   February 1993            Lump-Sum
New England Thruway                           2,409,058                                   June 1993                Lump-Sum
Honeywell                                     1,100,000                                   June 1993                Joint Venture (1)
Kosciuszko Bridge                             3,034,281                                   June 1993                Lump-Sum
Stillwell Avenue Bridge                       8,084,655                                   June 1993                Lump-Sum
Cross Bronx Expressway                           60,176                                   March 1994               Lump-Sum
Robert Moses Causeway                           540,118                                   December 1994            Lump-Sum
4th Avenue Bridge                               387,965                                   March 1995               Lump-Sum
201 East 80th Street                          1,692,797                                   May 1995                 Lump-Sum
Centereach                                      186,500                                   June 1995                Lump-Sum
Pro-Camera                                       50,275                                   August 1995              Lump-Sum
UDC                                              82,400                                   August 1995              Lump-Sum
Williamsburg Houses (2)                         708,450                                   April 1996               Lump-Sum
South Avenue Plaza                              274,045                                   May 1996                 Lump-Sum
Hellgate Viaduct Structures                     208,750                                   Oct. 1996                Lump-Sum
Indonesian Mission                              348,000                                   Nov. 1996                Lump-Sum
Others(3)                                       188,346                                   N/A                      N/A
                  Total                       22,768,614
</TABLE>


(1)      Joint venture with John P. Picone, Inc. ("Picone"), whereby the Company
         entered into a consulting  agreement  with Picone,  who was awarded the
         project.  The  agreement  provided  that for 50% of the  profits of the
         project,  the Company would provide  Picone with its expertise in steel
         erection,  supply qualified workers,  and oversee the rehabilitation of
         the  bridge.  Picone put the  Company's  employees  on its  payroll and
         incurred all the expenses of the project.

(2)      This project, which bore an original contract price of $2,517,651,  was
         on hold  for a  considerable  period  of time  pending  a  dispute  not
         involving the Company.  The Company believes that it will not return to
         this project and thus deems the project complete.

(3) Total estimated project value of a collection of smaller projects completed.


         Inasmuch  as  the  Company  purchased  steel  from  Waldorf  or  leases
equipment from Crown Crane,  Ltd. or Atlas Gem Leasing,  Inc., the Company shall
check prices in the industry prior to engaging in any such transactions and will
transact  business  with such  companies  only on terms which may be  considered
similar.  The audit  committee  of the Board of  Directors  intends to  exercise
reasonable  judgment and take such steps as it deems  necessary under all of the
circumstances  to resolve any specific  conflict of interest which may occur and
will  determine  what,  if  any,  specific  measures,  such as  retention  of an
independent advisor, independent counsel, or special committee, may be necessary
appropriate.  The fact that Joseph Polito is an officer, director, and principal
shareholder in other companies,  including those that transact business with the
Company,  opens  the  potential  that  there may be  conflicts  of  interest  in
decisions made by Joseph Polito,  which may compromise his fiduciary duty to the
Company. Any remedy under state law, in the event such circumstances arise, most
likely  would be  prohibitively  expensive  and  time  consuming.  See  "Item 1.
Description of Business-Suppliers and Subcontractors."




<PAGE>
Industry Overview

         1997 has brought about a resurrection in the  construction  industry in
the New York City metropolitan area. Major  transportation  arteries in New York
are under  extensive  construction  programs to increase their ability to handle
the ever  increasing  volumes of traffic they carry.  Work is in progress on the
major thruways,  expressways,  and parkways  across New York State.  The Company
currently is preparing  subcontracting  bids for some of the roadway projects in
the New York City metropolitan area.

         These projects  positively  affect the  availability of work in diverse
disciplines in the construction industry: landscaping,  concrete, paving, steel,
etc.  The Company has  qualified  as a bidder (and expects to place a bid by the
end of November 1997) for a project for the JFK Airport,  international arrivals
building, Korean Air and Lufthansa terminals.

         Apart from the infrastructure  construction programs, there has been an
impressive  increase in the  restoration,  alteration,  and  expansion of office
space, residential properties, and public facilities. This increase has resulted
in the  Korean  Mission  subcontracting  project.  There  also  appears to be an
infusion of foreign  investment capital into the depressed real estate market in
New York,  prompting major  renovations and  alterations.  This capital infusion
enhances the value of property and  therefore  increases  the  incentive for new
development.

Marketing

     The  Company  obtains  its  projects   primarily  through  the  process  of
competitive  bidding.  Accordingly,  the Company's marketing efforts include the
following:  (i) subscribing to bid reporting  services;  (ii)  monitoring  trade
journals  including  Engineering  Record News, Dodge Report, and Brown's Letter,
Inc.;  (iii)  monitoring  daily  newspapers and real estate  publications;  (iv)
membership and networking in affiliated  organizations including Allied Building
Trades; (v) maintaining contracts with developers and other general contractors;
and (vi)  requesting  notification  from various  government  agencies as to bid
solicitations being requested.

The Contract Process; Bidding

         In response to bid  requests,  the  Company  submits to the  soliciting
entity a proposal detailing its qualifications, the services to be provided, and
the cost of its services.  Based on its  evaluation of the proposals  submitted,
the  soliciting  entity awards the contract to the bidder it deems  appropriate.
Generally,  the contract for a project is awarded to the lowest bidder, although
other factors may be taken into consideration.

         The  Company  submits  its bids  after  management  performs a detailed
review of the  project  specifications,  an  internal  review  of the  Company's
capabilities  and  equipment  availability,  and an  assessment  of whether  the
project is likely to attain targeted  profit  margins.  In bidding on contracts,
there are two types of bid requests made by the soliciting  entity:  a unit cost
bid and a lump-sum bid. The unit cost bid is based upon a cost per unit basis; a
lump-sum  bid  obligates  the Company to complete  the project at a fixed price.
With a lump-




<PAGE>
sum bid, the risk of estimating  the quantity of units required for a particular
project is on the Company, while with a unit cost bid, the Company must estimate
the per unit cost, not the number of units needed. Any increase in the Company's
unit cost over its unit bid price or cost over its lump-sum bid,  whether due to
inefficiency,  faulty estimates,  weather,  inflation, or other factors, must be
borne by the Company and may adversely affect its results of operations.

         Upon  receipt  by a New York  City  agency of  notification  that a bid
submitted  for a project has been  declared the low bid, the city's  procurement
policy requires that the New York Finance Committee then approve all funds to be
allocated to such  project.  During this time, if the Company is the low bidder,
it must  provide the New York City agency with such  documents as are required -
including  a Payment and  Performance  Bond and a Labor and  Material  Bond - in
order to be approved to undertake  the  project.  Once the New York City Finance
Committee  has cleared the  allocation of funds for a project and the agency has
cleared all the  documentation  required to be  submitted by the  contractor,  a
starting date and time table is set up for the project.

         Most  government  contracts  provide for termination of the contract at
the election of the customer,  although in such event,  the Company is generally
entitled to receive a small  cancellation  fee. Many of the Company's  contracts
are also subject to completion  requirements  with liquidated  damages  assessed
against it if schedules are not met.

         While  Joseph  Polito has been in the  construction  business  for many
years,  the Company has only recently  started  bidding on projects as a general
contractor,  and the  Company may incur  unanticipated  expenses,  problems,  or
difficulties which may affect its bid prices and project  profitability.  Though
the Company has been the low bidder on several  public sector and private sector
bids, it has not commenced any Company  public or private  sector  projects as a
general contractor. It has, however, commenced two projects as prime contractor.

         The  Company  expects  to act as a  general  contractor  on some of the
projects  it  will   undertake  in  the  near  future  and  will  need  to  hire
subcontractors  to perform certain jobs such as electrical and mechanical  work,
though it shall continue also to bid as a subcontractor  at the request of other
general contractors.  As general contractor, the Company will be responsible for
the   performance   of  the  entire   contract,   including   work  assigned  to
subcontractors. Accordingly, the Company is subject to liability associated with
the failure of subcontractors  to perform as required under the contract;  thus,
the  Company  may  require  its  subcontractors  to furnish  Performance  Bonds.
Affirmative  action  regulations,  however,  require the Company to use its best
efforts to hire minority subcontractors for a portion of the project and some of
these minority subcontractors may not be able to obtain such surety bonds.

Insurance and Bonding

         The Company maintains general liability and excess liability insurance,
insurance  covering  its  construction  equipment,   and  workers'  compensation
insurance in amounts it believes are  consistent  with industry  practices.  The
Company  carries   liability   insurance  of  $1,000,000  per  occurrence  which
management believes is adequate for its current operations.



<PAGE>
         Although  the  Company  generally  has not  been  required  to  provide
Performance Bonds to general contractors when acting as a subcontractor,  it may
be required to furnish bonds  guaranteeing its performance as a subcontractor in
the  future.  Currently,  the  Company  is  serving  as a  subcontractor  on two
projects.  For the  EklecCo  prime  contracting  project  and the Grand  Central
Terminal  and Korean  Mission  subcontracting  projects,  the  Company  has been
required to provide, and has provided,  Performance Bonds and Labor and Material
Bonds.

         The Company  expects to bid on both private and public sector  projects
as a general contractor. Most of these projects, both public and private sector,
shall require Bid Bonds and Payment and Performance  Bonds. A Bid Bond is a bond
issued by a bonding  company  which is usually in an amount  equal to 10% of the
bid price and which  guarantees that the contractor will be able to produce such
other  additional  documents and  information  required in order to commence the
project  including the issuance of a Performance  Bond. A Performance  Bond is a
guarantee by a surety,  customarily  100% of the value of the  contract  amount,
that the  contractor  will  complete  the  project  pursuant  to the  terms  and
conditions of the contract.  Most government  contracts allow for termination of
the  contract at the  election  of the  customer,  although  in such event,  the
Company is generally  entitled to receive a small  cancellation fee. Many of the
Company's contracts are also subject to completion  requirements with liquidated
damages  assessed against the Company if schedules are not met. In the past, the
Company has not been  materially  adversely  affected by these  provisions  as a
subcontractor.

         The Company's  ability to obtain  bonding and its bonding  capacity are
primarily  determined by its net worth,  liquid working  capital  (consisting of
cash and accounts  receivable),  past  performance,  management  expertise,  the
number and size of projects under construction,  and various other factors.  The
larger the project and/or the more projects in which the Company is engaged, the
greater the bonding, net worth, and liquid working capital requirements.  Surety
companies  consider such factors in light of the amount of the Company's  surety
bonds then outstanding and the surety companies' current underwriting standards,
which standards may change periodically.  Therefore, the Company may be required
to maintain certain levels of tangible net worth in connection with establishing
and maintaining  bonding limits.  As a practical  matter,  such levels may limit
dividends,  if the Company, which might have been declared and which would limit
corporate funds available for other purposes.

         In determining whether to issue a bond, surety companies perform credit
checks and other due  diligence  disclosure  requirements  and  investigate  the
Company's  capitalization,   working  capital,  past  performance,  management's
expertise,  and such other factors as are discussed  above. The surety companies
require  companies  receiving bonding to maintain certain amounts of capital and
liquid assets and base the amount of bonding they will issue on a formula, which
is usually  based on certain  industry  standards  which take into  account such
factors.  The  surety  companies  also  require  that the  bonds  be  personally
guaranteed by Joseph Polito.



<PAGE>
Bonding  requirements  vary  depending  upon the  nature  of the  project  to be
performed.  The Company  anticipates paying premiums of between 1 1/4% to 3 1/2%
of the total amount of the contracts to be performed.  Since these  premiums are
generally  payable at the  beginning  of a project,  the Company  must  maintain
sufficient  working  capital to satisfy the premium  prior to receiving  revenue
from the project.  Bonding premiums are a line item in the submitted bid and are
included as part of the Company's billing to its clients.

         In December 1996,  the Company  obtained a commitment for a Surety Bond
Line of Credit ($10,000,000 single project limit) from United American Guarantee
Company,  Ltd. ("UAGC") for its general  contracting  projects.  This commitment
will allow the  Company to pursue  those  general  contracting  projects  in the
public and private sectors which require performance bonds. To date, it has also
allowed the Company to obtain Performance Bonds and Labor and Material Bonds for
the one prime  contracting and two  subcontracting  projects which have required
same: the EklecCo, Grand Central Terminal, and Korean Mission projects.

Work in Progress; Backlog and Seasonality

         Contracts as a subcontractor and general  contractor often involve work
periods in excess of one year.  Revenue on uncompleted  fixed price contracts is
recorded under the percentage of completion  method of accounting.  NY begins to
recognize  profit on its  contracts  when it first accrues  direct costs.  As is
standard  construction  industry practice, a portion of billings may be retained
by the customer until certain contractual obligations are fulfilled.

         The following is a list, as of September 30, 1997, of those projects in
which the Company is currently engaged.
<TABLE>
<CAPTION>

                                                               Backlog
Contract Party/                 Contract                       Amount at   Type of             % of job
Project Name                    Amount           Contract Date 9/30/97     Contract            Completed
<S>                             <C>              <C>           <C>         <C>                 <C>   
EklecCo/
  Palisades Power Mall(1) ...   $10,373,552(2)   June 1996     2,178,446   Lump-sum            79%(2)

Lehrer McGovern, Bovis, Inc./
  Grand Central Terminal ....     3,706,653      May 1996      1,169,449   Lump-sum            69%(2)

Tishman Construction Corp./
  Louis Vuitton N.A.(1) .....     4,417,835      July 1996     1,457,886   Lump-sum            67%(2)

Humphreys &  Harding, Inc./
  Korean Mission ............     1,500,000      Jan. 1997     1,260,000   Lump-sum            16%(2)

Total Signed Contracts ......   $19,998,040                  $ 6,065,781
</TABLE>


     (1) The Company is prime contractor (similar to general contractor) on this
project.

     (2)  Completion  percentage is as of September 30, 1997 and is based on the
percentage  of costs  incurred  through that date to the  estimated  cost of the
project.

         Though the  Company  does not believe its  business  is  seasonal,  its
operations  slow  during the  winter  months due to  decreased  productivity  of
laborer  caused by their  inability to work in severe weather  conditions.  As a
result of the foregoing, the Company's costs are increased.





<PAGE>
Suppliers; Subcontractors; Unions

         For the year ended June 30, 1997,  the Company  received  approximately
43% of the  fabricated  steel it required from MD, a subsidiary of Corp.  Queens
County  Ironworks and New York Iron,  Inc.  provided the remainder of the steel.
Neither Queens County  Ironworks nor New York Iron,  Inc. is affiliated with the
Company,  Corp.,  or any  other  Director  or  principle  stockholder  of either
company.  MD provided the Company with fabricated  steel until November 1996, at
which  time MD ceased  operating.  The  prices  paid and the terms for the steel
purchased from MD were  comparable to competitive  prices and terms;  therefore,
the Company believes it now will be able to acquire same through other suppliers
at similar prices and on similar terms.

         The Company  currently  depends  upon  various  vendors to supply spare
parts,  cranes,  and other  heavy  equipment,  and its  ability to hire  skilled
workers  depends upon its ability to comply with certain  union  agreements  and
contracts.  The Company rents cranes from Crown Crane,  Ltd., a company of which
Joseph Polito is a 50%  shareholder,  and rents  generators and other  equipment
from Atlas Gem Leasing, Inc., a company which is wholly owned by Mr. Polito. The
Company believes that there are a sufficient  number of vendors,  so that in the
event any  individual  or group of vendors can no longer  service the  Company's
needs, the Company will be able to find other vendors at competitive prices.

         As is standard  practice in the  construction  industry,  the Company's
employees,  other than its office employees, are not salaried individuals.  They
are union employees who are hired on an as-needed, or per project, basis and are
paid an hourly wage which is set by the unions  with which they are  associated.
The Company hires skilled steel workers  represented by the International  Union
of  Structural  Ironworkers  local 40,  361, & 417 and  International  Operating
Engineers  locals 14, 14B, 15, 15A,  15C,  15D, and 825 and Cement  Masons local
472.  The  Company  must  comply  with its  agreements  with the  unions,  which
agreements  regulate all employment  issues - including pay,  overtime,  working
conditions,  vacations,  benefits,  etc.  - between  the  Company  and the union
employees. These agreements expire on June 30, 1999.

         The Company  believes that it has a good  relationship  with the Unions
and is in compliance with all union  agreements.  No assurance can be given that
the Company will  continue to be in compliance  with the Unions or  successfully
negotiate  extensions to the Company's agreements with such Unions. In the event
problems or conflicts  with the Unions arise or there is a loss of skilled steel
and operating  engineers,  this would have a detrimental effect on the Company's
operations.

         The  Company's  success  as a  general  contractor,  in  part,  will be
dependent  upon its ability to hire workers and comply with union  contracts and
agreements  and its ability to oversee and retain  qualified  subcontractors  to
perform  certain  work.  Although the Company  believes  that it will be able to
attract  subcontractors to bid on projects it bids as general contractor,  there
can be no  assurance  that  it  will  be  able  to do so.  The  Company  will be
responsible for performance of the entire  contract,  including the work done by
subcontractors.

     Accordingly,  the  Company  may be subject to  substantial  liability  if a
subcontractor  fails  to  perform  as  required.  In  addition,  in  hiring  and
overseeing subcontractors, there may be difficulties of which the Company is not
aware.



<PAGE>
Competition

     All aspects of the Company's  business are, and will continue to be, highly
competitive.  The  Company  is one  of  many  subcontractors  which  erects  and
furnishes steel for projects.  Many of these  subcontractors  have substantially
greater  financial  resources  and  sales  than  those  of  the  Company.   When
contractors  seek  construction  contracts,  they  request  bids  from  numerous
subcontractors  based  on  the  various  requirements  of  the  project.   These
subcontractors  compete  primarily  as to  price,  name  recognition,  and prior
performance.

     As a general contractor, the Company will be competing with many larger and
more experienced (and thus more  established)  contractors  whose names are more
readily recognized and whose relationships with federal and state municipalities
and agencies,  and those private  companies who are bidding against the Company,
have been established.  The Company is a subcontractor and a general  contractor
specializing,  but not exclusively, in bridge and roadway repair and replacement
as well and in furnishing  and erecting  steel  structures  for  buildings.  The
Company's  competitors  are  numerous,   and  many  have  substantially  greater
marketing, financial, bonding, and human resources.

Government Regulation

     The  Company   must  comply  with  the   Occupational   Safety  and  Health
Administration  ("OSHA"),  a federal  agency  which  regulates  and enforces the
safety rules and  standards  for the  construction  industry.  In addition,  the
Company  must  comply  with a wide  range of other  state  and  local  rules and
regulations  applicable to its business,  including  regulations  covering labor
relations,  safety  standards,  affirmative  action  and the  protection  of the
environment  including  requirements  in connection  with water  discharge,  air
emissions and hazardous and toxic substance discharge. Continued compliance with
OSHA and the broad federal, state, and local regulatory network is essential and
costly.  The failure to comply with such  regulations  or  amendments to current
laws or  regulations  imposing more stringent  requirements  may have an adverse
effect  on  the  Company's  operations.  The  Company  believes  that  it  is in
substantial compliance with all applicable laws and regulations.

Employees

     As of June  30,  1997,  the  Company  had  three  executive  officers,  two
administrative  assistants,  one  comptroller,  one project  estimator,  and two
employees  in the  accounting  department.  The  number of union  employees  the
Company utilizes depends on the number and size of projects in which the Company
is  engaged  and can range  from  10-200  employees,  some of whom are  employed
full-time and others of whom are employed  part-time.  These union employees are
represented by the International Union of Structural  Ironworkers locals 40, 361
and 417;  International  Operating  Engineers locals 14, 14B, 15, 15A, 15C, 15D,
825; and Cement  Masons local 472. The  Company's  contracts  with these Unions,
which contracts regulate all employment issues between the Company and the union
employees - including pay, overtime,  working conditions,  vacations,  benefits,
etc. - expire on June 30, 1999. The Company considers its relationships with the
unions and its employees to be good.



<PAGE>
ITEM 2.           DESCRIPTION OF PROPERTY

         The Company's  office  (located at 53-09 97th Place,  Corona,  New York
11368)   consists  of   approximately   25,000   square  feet  of  office  space
(approximately  24,000 square feet of which is utilized for storage space) which
is  leased  from an  affiliate  company,  RSJJ.  RSJJ is owned by the  Company's
President,  Joseph Polito. The lease, pursuant to which the Company pays rent of
$20,000 per month to RSJJ, expires in March 1998. The Company also leases a yard
for storage  material  pursuant to an oral agreement with RSJJ,  which agreement
requires  monthly  payments of $3,500.  The Company  believes  that the terms of
these leases are comparable and competitive to those terms which might have been
negotiated with an unaffiliated landlord.

         As of May 1997, the Company was in arrears in the amount of $480,000 in
payments due under its lease with RSJJ. This arrearage was converted into equity
as follows:  the Company issued 270,000 shares of Common Stock to Corp., for the
cancellation of the debt owed to RSJJ.
 Corp., in turn,  issued 200,000 shares of its common stock to Joseph Polito and
150,000 shares of its common stock to RSJJ.  RSJJ then  transferred  all of such
shares to RSJJ's  mortgagor,  which  agreed to accept  said shares as payment of
RSJJ's outstanding mortgage.

ITEM 3.           LEGAL PROCEEDINGS

         The Company is not a party to any material  litigation and is not aware
of any threatened  litigation  that would have a material  adverse effect on its
business,  except  for the  litigation  matters  discussed  below.  The  Company
believes  that the nature  and number of these  proceedings  are  typical  for a
construction firm of its size and scope.

         Three actions to foreclose upon  mechanics  liens were commenced by the
Company in the last fiscal  year.  The first  action was  commenced  in New York
State  Supreme  Court,  Kings County on February 25, 1997.  The action names the
Company  and  Metro  Steel  Structures,   Ltd.  as  plaintiffs  and  the  Perini
Corporation, Metropolitan Transportation Authority, New York City Transportation
Authority,  and  Fidelity  and Deposit  Company of Maryland as  defendants.  The
Company's claim for relief in this action is $2,199,560. The claim is based upon
filed  mechanic's  liens  and  general  contract  law.  The  claim is for  labor
performed and  materials  supplied  including  money owed under the contract and
money due for "extra" work with regard to the  rehabilitation  of the Viaduct at
the  Stillwell  Avenue  Station of the Coney Island Line in Brooklyn,  New York.
This action is still in the discovery phase.

     The second  action was filed on February 26, 1997 in New York State Supreme
Court,  Queens County. It names the Company,  Metro Steel Structures,  Ltd., and
McKay  Enterprises,  Inc. as plaintiffs  and Perini  Corporation,  Department of
Transportation  of the City of New York,  and  Fidelity  and Deposit  Company of
Maryland  as  defendants.  The  Company's  claim for  relief  in this  action is
$844,932.  This claim is based upon filed  mechanic's liens and general contract
law. The claim is for labor  performed and materials  supplied  including  money
owed under the contract  regarding the  rehabilitation of the 39th Street Bridge
over the Long  Island Rail Road and Amtrak in Queens,  New York.  This action is
still in the discovery phase.

     On February 7,1997,  Perini  Corporation filed a related action against the
Company and Metro Steel Structures,  Ltd. in New York State Supreme Court, Kings
County.  Perini's  claims  against  the  Company  total  $1,140,560  and  allege
defective work on the Stillwell Avenue project and upon a loss/profit  agreement
for both the Stillwell  Avenue project and the 39th Street Bridge  project.  The
Company has  counterclaimed for the amounts set forth above in the discussion of
the two actions involving Perini Corporation,  and its claims are based upon the
same theories as are






<PAGE>
set forth above.

         The  Company  filed its third  action  in the New York  Supreme  Court,
Suffolk  County on or about May 13, 1997.  The action names Kiska  Construction,
the State of New York,  acting through the New York State  Comptroller,  the New
York State  Department of  Transportation,  and the Seaboard  Surety  company as
defendants.  The  Company's  claim for relief in this action is  $279,346.  This
claim is based upon filed  mechanic's  liens and general contract law. The claim
is for labor  performed and materials  supplied  including  money owed under the
contract  and money due for "extra" work  regarding  the  rehabilitation  of the
Robert Moses Causeway  Northbound Bridge over the State Boat Channel, in Suffolk
County, New York. This action is still in the discovery phase.

         In August 1997,  the Company  entered  into an  agreement  settling the
January 1997 trademark  infringement claim made by The Ohio Bridge  Corporation.
The  Company has agreed to effect a name  change to USA Bridge  Construction  of
N.Y., Inc. before the end of the 1997 calendar year.

         In  April  1995,  the  Company  (then  Metro  Steel  Structures,  Ltd.)
commenced  an Article 78  proceeding  in the  Supreme  Court of the State of New
York, County of New York,  against the Commissioners of the State Insurance Fund
and the State Insurance Fund to annul the cancellation of the Company's workers'
compensation  policy  and to annul  the  rates,  classifications,  and  premiums
assigned  to the  Company.  This  action  claims  that  defendants  audited  the
Company's  books for purposes of assigning the workers'  compensation  rates and
premiums to be assessed  against the Company and thereafter (i) "arbitrarily and
capriciously  and  without  any  foundation  in law or in fact"  assigned to the
Company's employees improper job classifications which were then used unlawfully
as the basis for improperly  assessing the highest  premium rates which could be
assessed   against  the  Company;   (ii)   improperly   applied  said   premiums
retroactively;  (iii)  billed the Company for premiums  which were  improper and
excessive; and (iv) canceled the Company's workers' compensation policy upon the
Company's  failure  to tender  payment  in the  improper  and  excessive  amount
demanded by defendants.

         The Company is prosecuting  this action to the fullest extent possible.
On  September  30, 1997,  the Company and  defendants  were  scheduled to appear
before the court for a  conference  in this matter.  This matter was  adjourned,
however, to October 28, 1997, pending settlement discussions.

         In December 1995, the Commissioners of the State Insurance Fund for and
on behalf of the State  Insurance  Fund  commenced  suit against  Joseph Polito,
Ronald Polito,  Steven Polito,  the Company,  Metro Steel Structures,  Ltd. (now
known as the Company),  One Carnegie,  and others alleging that certain workers'
compensation  insurance  policies  obtained for various insured  defendants were
obtained  fraudulently  and that the  defendant  corporations  failed to pay the
appropriate premiums. The claims against the Company, amounting to approximately
$3 million,  are limited to a policy  covering the period April 29, 1993 through
December  1994.  The  Company,  Messrs.  Polito,  and all other  defendants  are
defending  against  this  action.  The  action is in the  discovery  phase,  and
settlement negotiations are currently underway.

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

         The  Company  did not  submit  any  matters  to a vote of its  security
holders during the quarter ending June 30, 1997.







<PAGE>
                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

         The  Company's  Common Stock and Warrants are  currently  quoted on the
Nasdaq National Stock Market. The following table sets forth representative high
and low sale price quotes as reported by a market maker,  during the period from
August 9, 1995 through  September  30, 1997.  Price  quotations  reflect  prices
between  dealers,  do not include resale  mark-ups,  mark-downs or other fees or
commissions.
<TABLE>
<CAPTION>

                                                       Common Stock                   Warrants
         Calendar Period                          Low              High         Low              High

                  1995
         <S>                                      <C>              <C>          <C>              <C>
         08/09/95 - 09/30/95                      6 7/8             9 3/8       2 7/8            4
         10/01/95 - 12/31/95                      7 1/4            10 3/8       3 1/2            5 7/8

                  1996
         01/01/96 - 03/31/96                      9 3/4            10 1/2       5 1/4            6 1/2
         04/01/96 - 06/30/96                      9 1/2            10 7/8       5 1/4            6 5/8
         07/01/96 - 09/30/96                      1                10 3/4         3/16           6
         10/01/96 - 12/31/96                      1 1/8             2 1/16        3/32             13/32

                  1997
         01/01/97 - 03/31/97                      1 3/8              2 3/4        5/32             5/8
         04/01/97 - 06/30/97                      1 9/16             2 5/8        9/32             17/32
         07/01/97 - 09/30/97                      2 3/16             2 23/32      1/4              15/32
         ----------------
</TABLE>

         Each Warrant  entitles the holders thereof to purchase one share of the
Company's  Common Stock at an exercise  price of $3.00 per share,  respectively,
until August 8, 2000. The Warrants and the underlying shares of Common Stock are
in registered  form,  pursuant to the terms of a Warrant  agreement  between the
Company and North American  Transfer Co., as warrant agent,  so that the holders
of  the  Warrants  will  receive  upon  their  exercise  and  payment  therefor,
unrestricted shares of Common Stock.




<PAGE>
         As of September 30, 1997, there were approximately 20 holders of record
of the  Company's  Common  Stock,  although the Company  believes that there are
approximately  1200 additional  beneficial owners of shares of Common Stock held
in street name. As of September  30, 1997,  the number of shares of Common Stock
outstanding of the Company was 2,302,515.

         The  Company  has  paid no  dividends  and has no  present  plan to pay
dividends.  Payment of future  dividends will be determined from time to time by
its board of  directors,  based upon its  future  earnings  (if any),  financial
condition,  capital requirements and other factors. The Company is not presently
subject to any  contractual  or  similar  restriction  on its  present or future
ability to pay such dividends.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

General

         The Company  recognizes  revenue and costs for all contracts  under the
percentage of completion  method.  Cost of contract revenues includes all direct
material  and  labor  costs  and  those   indirect  costs  related  to  contract
performance.  General and  administrative  expenses are  accounted for as period
costs and are,  therefore,  not included in the  calculation of the estimates to
complete  construction  contracts  in  progress.  Material  project  losses  are
provided  for  in  their  entirety  without   reference  to  the  percentage  of
completion.  As  contracts  can  extend  over  one or more  accounting  periods,
revisions  in costs and  earnings  estimated  during  the course of the work are
reflected  during the  accounting  period in which the facts  become  known.  An
amount equal to the costs attributable to unapproved change orders and claims is
included in the total estimated revenue when realization is probable.

         The current asset,  "costs and estimated earnings in excess of billings
on uncompleted  contracts," represents costs and estimated earnings in excess of
amounts billed on respective uncompleted contracts at the end of each period.

         The  current  liability,  "billings  in excess  of costs and  estimated
earnings on uncompleted  contracts,"  represents billings which exceed costs and
estimated  earnings  on  respective  uncompleted  contracts  at the  end of each
period.

         The  Company  was  formed by Joseph  Polito,  its  President,  to serve
primarily as a general  contractor  for public and private  sector  construction
projects. The public sector projects are sponsored by federal,  state, and local
government  authorities in New York State and in the New York City  metropolitan
area.  Previously,  Mr. Polito,  through other entities,  furnished and provided
steel  erection as a  subcontractor  for private and  governmental  construction
projects.  Since its  commencement  of operations in June 1993,  the Company has
provided  steel  erection  services for  building,  roadway,  and bridge  repair
projects for general  contractors  who have been engaged by private,  municipal,
and/or governmental customers.

         The Company's operations are substantially  controlled by Joseph Polito
since he owns  approximately 61% of the outstanding  shares of Corp., the parent
company  which  owns  approximately  53.2% of the Common  Stock of the  Company;
hence,  Mr. Polito may be considered  the beneficial  owner of the Company.  Mr.
Polito is also a 100% shareholder of RSJJ.  Pursuant to a signed lease agreement
which  expires on March 31, 1998,  RSJJ leases  office space to the Company at a
cost of $20,000 per month.  Mr. Polito also has  ownership  interests in Waldorf
(which ceased  operations on August 1, 1995),  Crown Crane,  Inc., and Atlas Gem
Leasing, Inc., all of which companies provided services to the Company for the






<PAGE>
years ended June 30, 1997, and 1996. During 1997 and 1996, the Company purchased
from MD, a wholly owned  subsidiary  of Corp.,  certain  materials  and labor to
perform  steel  erection  service.  For the years  ended June 30, 1997 and 1996,
purchases  by  the  Company   from  MD  amounted  to  $371,321   and   $622,050,
respectively. MD ceased operations in November 1996; since then, the Company has
purchased its steel from unrelated parties.

         The Company plans to continue to undertake  projects as a subcontractor
but will focus on obtaining  projects as a general contractor in both the public
and  private  sectors.  In the New  York  City  metropolitan  area,  there is an
abundance of subcontractors who have significant  experience and are competitive
with  respect to pricing and level of  service.  For those  general  contracting
projects it undertakes,  the Company will be responsible  for the performance of
the entire  contract,  including  the work to be  performed  by  subcontractors.
Accordingly,   the  Company  may  be  subject  to  substantial  liability  if  a
subcontractor  fails  to  perform  as  required.   In  addition,   unanticipated
difficulties  may arise in hiring and  overseeing  subcontractors.  The  Company
requires  bonding from a New York  licensed  bonding  company in order to bid on
projects as a general contractor.

         Though the  Company  does not believe its  business  is  seasonal,  its
operations are generally slow in the winter months due to the decrease in worker
productivity  because  of  weather  conditions.  Accordingly,  the  Company  may
experience a seasonal pattern in its operating results with lower revenue in the
third quarter of each fiscal year.  Interim  results also may be affected by the
timing of bid  solicitation,  the stage of  completion  of major  projects,  and
revenue recognition policies.

     In determining  whether to issue a bond,  surety  companies  perform credit
checks and other due diligence  disclosure  requirements and require the Company
to maintain certain amounts of capital and liquid assets. Each company bases the
amount of bonding it will issue on a formula (devised  individually) which takes
into account,  inter alia, the Company's capital and liquid assets. In order for
the Company to obtain and maintain  bonding,  it must adhere to the requirements
stipulated in the bonding  agreements,  which  agreements vary with each bonding
company.  The bonding costs for each bond are incorporated in the contract price
of each job. These costs are carried as a line item in the  requisition  and are
paid by the customer. Any monies taken from the working capital for this purpose
will be replaced as monthly requisition payments are received from the customer.
Bonding  requirements  vary  depending  upon the  nature of the  projects  to be
performed.  The Company anticipates paying a fee to bonding companies of between
1 1/4% to 3 1/2% of the amount of the  contracts  to be  performed.  Since these
fees  generally  are payable at the  beginning  of a project,  the Company  must
maintain  sufficient  working  capital  to  satisfy  the fee prior to  receiving
revenue from the project.







<PAGE>
         In December  1996,  the  Company  obtained a bonding  commitment  for a
surety  line of credit  ($10,000,000  single  project  limit)  from UAGC for its
general contracting projects.  The commitment allows the Company to pursue those
general  contracting  projects in the public and private  sectors  which require
performance  bonds. To date, it has also allowed NY to obtain  Performance Bonds
and  Labor  and  Material   Bonds  for  the  one  prime   contracting   and  two
subcontracting  projects which have required  same:  the EklecCo,  Grand Central
Terminal, and Korean Mission projects.

Year ended June 30, 1997 as compared to the year ended June 30, 1996

         Contract  revenues for the years ended June 30, 1997 and 1996  amounted
to $15,455,699 and $7,091,396, respectively. This net increase of $8,364,303, or
approximately  118%, is a direct result of the Company's  $17,943,400 backlog as
of June 30, 1996.  This backlog  amount  represents  the  contracts  the Company
entered into during the latter part of its June 30, 1996 fiscal year. During the
year ended June 30, 1997,  the Company  obtained new contracts and change orders
to previous  contracts  aggregating  to  approximately  $3,600,347.  Included in
contract  revenues are revenues from joint venture profit sharing  agreements on
certain  projects.  Joint  venture  revenues  for the year ended  June 30,  1997
totaled $0 as  compared  to the year ended June 30, 1996  wherein  same  totaled
$200,000.  Accordingly,  revenues  for the year  ended  June 30,  1997  from the
Company's  core business,  construction  contracts,  increased by  approximately
$8,564,000 as compared to the year ended June 30, 1996. As of June 30, 1997, the
Company's backlog amounted to approximately  $6,100,000.  Backlog represents the
amount of revenue the Company  expects to realize  from work to be  performed on
uncompleted contracts in progress and from contractual agreements for which work
has not yet commenced.  The Company's  gross profit for the years ended June 30,
1997 and 1996 has remained constant between 27% and 28%.

         For the years ended June 30, 1997 and 1996, the Company  purchased from
Waldorf approximately $0 and $180,333,  respectively, of the materials and labor
necessary to perform  fabrication  services.  Effective August 1, 1995,  Waldorf
ceased operations. Waldorf is under the common control of the Company's majority
stockholder and President.  Lastly,  for the years ended June 30, 1997 and 1996,
the Company paid  $371,321 and $622,050,  respectively,  to MD for materials and
labor  necessary  to  perform  steel  erection  services.  MD is a wholly  owned
subsidiary of Corp.  In November  1996,  MD ceased  operations,  and the Company
began   purchasing   material  and  labor  from  unrelated   third  party  steel
fabricators.  At June 30,  1997,  the Company owed MD $62,606,  principally  for
advances in connection  with the above services:  such amounts are  non-interest
bearing and are due on demand.

         General and administrative expenses have increased by $221,302, or 10%,
to $2,342,309  for the year ended June 30, 1997,  from  $2,121,007  for the year
ended June 30,  1996.  The  increase in general  administration  costs is mainly
attributable  to an overall  increase in the Company's  administrative  salaries
associated with the material amount of increase in contract  revenue and general
corporate overhead.

         As of June 30, 1997,  the Company  increased its allowance for doubtful
accounts to $2,287,000  against its contract  receivables.  The bad debt expense
associated  with the increase in allowance  amounted to $1,287,000.  The Company
increased its allowance for doubtful  accounts  based on a review of the factors
surrounding  certain mechanic's liens filed for certain projects and an estimate
of the future income of other  projects for which no mechanic's  liens have been
filed. In management's  opinion, the allowance for doubtful accounts at June 30,
1997 will be  sufficient  to absorb any  losses  which may be  sustained  from a
settlement with this and other customers.  For the years ended June 30, 1997 and
1996, the Company had three






<PAGE>
unrelated   customers,   which   accounted  for   approximately   86%  and  62%,
respectively, of total revenues. As of June 30, 1997 and 1996, approximately 83%
and 89%, respectively,  of contracts and retainage receivables are due from four
and three customers respectively.

Liquidity and Capital Resources

Year ended June 30, 1997 as compared to the year ended June 30, 1996

         At June 30, 1997, the Company's working capital amounted to $5,673,712.
The  working  capital  increase is  principally  attributable  to the  Company's
contracts receivable. As of June 30, 1997, the Company's net contract receivable
amounted  to  $8,943,147,  approximately  $2,424,219,  or 27%, of which has been
collected through September 9, 1997.

         Net cash provided by operating  activities  amounted to $58,821 for the
year  ended  June 30,  1997.  The major  component  of such cash  provision  was
directly  attributed  to the  Company's  income  which  amounted to $387,340 and
increases in accounts  receivable  net of  increases  in its  accounts  payable,
payroll taxes payable,  and accrued expenses.  For the year ended June 30, 1996,
the net cash used for operating activities amounted to $2,122,223,  which amount
is principally  attributable  to increases in accounts  receivable and costs and
estimated earnings in excess of billings on uncompleted contracts.

         With regards to financing activities,  the Company provided $485,416 in
cash for the year ended  June 30,  1997.  Such cash was  provided  primarily  by
advances from affiliates and officers.

         As of June 30,  1997,  the Company  owes  approximately  $1,349,225  in
payroll  taxes and related  penalties  and  interest:  $1,033,226 to the IRS and
$315,999 to New York  State.  As of June 30,  1997,  the Company has been making
monthly  payments to the respective tax authorities  pursuant to oral agreements
negotiated with same.

         On August 14,  1995,  the  Company  successfully  completed  its public
offering.  As a result,  the Company sold  791,850  shares of Common Stock which
included  91,850  shares in  connection  with the exercise of the  underwriter's
over-allotment  options and 494,500  warrants  which  included  64,500  warrants
pursuant to the underwriter's  over-allotment  option. The Company yielded total
net proceeds of $2,077,903  after deducting the  underwriter's  selling expenses
and  expense  allowance,  repayment  of bridge  loans and  promissory  notes and
related accrued  interest to the bridge lenders and private  investors,  and the
pre-payment  of the first two years'  financial  consulting  agreement  with the
underwriter.  Simultaneously with the offering, the Company charged all deferred
offering costs incurred to additional  paid-in  capital which totaled  $903,820.
Accordingly,  the increase in financial  activities  amounting to $2,242,802 for
the year end June 30,  1996 was  primarily  from the  Company's  initial  public
offering.

         In June 1997, the Company and Corp. completed a transaction whereby the
Company issued 270,000 shares of its Common Stock to Corp., for the cancellation
of $480,000 in rent debt owed to RSJJ.  Corp., in turn, issued 150,000 shares of
its common stock to RSJJ and 200,000 shares of its common stock to Joseph Polito
(RSJJ's  president).  RSJJ  then  transferred  all  of  such  shares  to  RSJJ's
mortgagor,  which agreed to accept said shares as payment of RSJJ's  outstanding
mortgage. As a result of this transaction,  Corp. increased its ownership in the
Company to  approximately  53.2%. The Company recorded a gain on the forgiveness
of debt in the amount of $243,750,  the difference  between the debt forgiven of
$480,000  and the fair market  value of the stock of $1.75 per share with a 50%,
or $236,260, discount.






<PAGE>
         In  December  1994,  the Board of  Directors  adopted  the 1994  Senior
Management  Incentive Plan ("the  Management  Plan"),  which was adopted also by
shareholder  consent.  The  Management  Plan  provided for the issuance of up to
150,000 shares of the Company's  Common Stock in connection with the issuance of
stock options and other stock  purchase  rights to executive  officers and other
key employees.  In December 1996, the Board of Directors authorized an amendment
to the Management Plan to increase the amount of shares available to 1,000,000.

         In February 1997,  pursuant to a Form S-8 Registration  Statement filed
with the Securities and Exchange  Commission,  the Company registered for resale
125,000  shares of Common Stock  underlying an option which was issued to Joseph
Polito  pursuant to the Management  Plan.  The option,  exercisable at $1.10 per
share (110% of the bid price on November 27,  1996),  was exercised on March 25,
1997 and resulted in the issuance of 125,000  shares of Common Stock,  60,000 of
which shares have been resold to date.

ITEM 7.           FINANCIAL STATEMENTS

         See attached Financial Statements.

ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                  ON ACCOUNTING AND FINANCIAL DISCLOSURE

         Not Applicable.







<PAGE>
                                    PART III

ITEM 9.           DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors.

         The names, ages, and positions of the Company's  executive Officers and
Directors are as follows:
<TABLE>
<CAPTION>
                                                                                        Position with the
Name                                                          Age                       Company

<S>                                                           <C>                       <C>                      
Joseph M. Polito                                              63                        President and Director
Ronald J. Polito                                              38                        Secretary and Director
Steven J. Polito                                              35                        Treasurer and Director
Philip Neilson                                                71                        Director
Marvin Weinstein                                              66                        Director
</TABLE>


     All Directors hold office until the next annual meeting of  stockholders or
until  their  successors  are  elected and  qualify.  Vacancies  on the Board of
Directors  may be  filled  by the  remaining  Directors.  Officers  are  elected
annually by, and serve at the discretion of the Board of Directors. There are no
family  relationships  between  or  among  any  Officers  or  Directors  of  the
Corporation,  except that Joseph  Polito is the father of both Steven and Ronald
Polito.

     Joseph M. Polito has been the President and a Director of the Company since
its  inception in 1990 and prior to April 1994 was the sole  shareholder  of the
Company.  Mr. Polito has been the  president  and director of Corp.  since April
1994. Mr. Polito oversees the running of all of the Company's operations.  Since
its  inception  in 1994,  he has also been the  president  and a director of MD.
Since  December  1990,  Mr.  Polito has been the president and sole director and
shareholder of One Carnegie,  a wholly owned subsidiary of Corp. Since 1988, Mr.
Polito has been a 50%  shareholder of Crown Crane,  Ltd., a company which leases
cranes for construction projects.  Since 1986, Mr. Polito has been the president
and 100%  shareholder  of Atlas  Gem  Leasing,  Inc.,  a  company  which  leases
generators  and  other  construction  equipment.  Mr.  Polito  has also been the
president and sole  director and  shareholder  of Waldorf since 1990.  Before it
ceased operating in August 1995,  Waldorf  fabricated steel and sold same to the
Company.  Since 1983, Mr. Polito has been the president and 100%  shareholder of
RSJJ, a company which owns and leases real property.

     Since  1976,  Mr.  Polito  has been a member of the Allied  Building  Metal
Industries,  Inc.  ("ABMII"),  a trade  association  which has the  authority to
negotiate with the unions in order to better the construction  industry.  He was
the president of same from 1992 until 1993. Since approximately 1987, Mr. Polito
has been the Chairman of the Steel  Institute  of New York, a trade  association
similar to the ABMII.  From the mid-1980's to the  mid-1990's,  Mr. Polito was a
member of the Building Trades Association Joint Safety Committee. Since the mid-
1970's,  Mr.  Polito  has been a  member  of the of the  International  Union of
Structural Ironworkers, locals 40, 361, and 417. He has been co-chairman of this
organization since the early 1990's.

     Ronald J. Polito has been the Secretary and a Director of the Company since
its inception in 1990.  From its inception in 1990 until March 1995, he was also
the treasurer of the Company.  He has been the secretary and a director of Corp.
since April 1994. Mr. Polito






<PAGE>
     oversees the daily progress on all projects and analysis of the final costs
and profits of jobs completed and the  preparation  and bidding on new projects.
Since its  inception in 1994,  he has also been the  secretary and a director of
MD. Since  December  1990, Mr. Polito has been the secretary of One Carnegie and
Waldorf.  Since 1983,  Mr.  Polito has been the  secretary of RSJJ.  Mr.  Polito
received  a  Bachelor  of  Science  Degree in Civil  Engineering  from  Brooklyn
Polytechnical Institute in 1981. He is the son of Mr. Joseph Polito.

     Steven J. Polito was elected Treasurer of the Company in March 1995. He had
previously  been a Project  Manager and has been a Director of the Company since
its inception in 1990. Mr. Polito oversees the daily  operations for projects in
process and projects  completed,  including  purchasing and leasing of materials
and machinery and the  distribution  of labor.  Mr. Polito has been treasurer of
Corp.  since  March 1995 and a director of Corp.  since  April  1994.  Since its
inception in 1994,  he has been the  treasurer and a director of MD. Since 1988,
Mr. Polito has been the treasurer of One Carnegie,  Waldorf, and RSJJ. He is the
son of Mr. Joseph Polito.

     Philip  Neilson  was  elected  Director  of the  Company in June 1995.  Mr.
Neilson was the  President and a principal  shareholder  of Adler & Neilson Co.,
Inc., a steel fabricating company, from 1951 to 1997. Currently,  Mr. Neilson is
providing private  consulting  services in the field of steel  fabricating.  The
Company did not purchase any steel from Adler & Neilson Co., Inc.

     Marvin  Weinstein  was elected  Director  of the Company in June 1995.  Mr.
Weinstein was the President and sole shareholder of M. Weinstein Associates from
1988 to 1996. This company provided  consulting services to the companies in the
steel  industry.  Mr.  Weinstein  retired in 1996. The Company did not engage M.
Weinstein Associates to provide any consulting services to the Company.

Significant Employees

     John G. Bauer has been the chief  administrative  officer (a  non-executive
position) of the Company since February 1995. Since its inception in March 1992,
Mr.  Bauer  has  been the  President  and a  Director  of  Dynamic  Construction
Consulting,  Inc.  ("Dynamic"),  a company of which Mr.  Bauer was the  founder.
Dynamic provides construction  management and consulting services to the Company
and  other  companies.  From  July  1988 to March  1992,  Mr.  Bauer  was a Vice
President of Tishman Construction Corp. of N.Y., a construction company.

     Michael  Panayi has been a structural  engineer  for the Company  since its
commencement  of  operations in June 1993.  From 1987 to 1993,  Mr. Panayi was a
structural engineer for Atlas Gem.

     William  J.  Kubilus,  a  professional  estimator  in the field of  general
contracting and subcontracting since 1966, joined the Company in 1996 to provide
estimating  expertise for Corp.'s general  contracting and subcontracting  bids.
Prior to joining the Company,  from 1993 to 1996,  Mr.  Kubilus was an estimator
for Lazzinarro General  Contracting.  From 1989 to 1993, he was an estimator for
NICO Construction.

     As permitted  under the New York Business  Corporations  Law, the Company's
Certificate of Incorporation  eliminates the personal liability of the Directors
to the Company or any of its  shareholders  for  damages  for  breaches of their
fiduciary  duty as Directors.  As a result of the  inclusion of such  provision,
stockholders  may be unable to recover  damages  against  Directors  for actions
taken by them which constitute negligence or gross negligence or






<PAGE>
     which are in violation of their  fiduciary  duties.  The  inclusion of this
provision  in  the  Company's   Certificate  of  Incorporation  may  reduce  the
likelihood  of  derivative  litigation  against  Directors  and  other  types of
shareholder litigation.

Certain Reports

     No person who during the fiscal  year ended June 30,  1997 was a  Director,
Officer, or beneficial owner of more than ten percent of the Common Stock (which
is the only class of  securities of the Company  registered  under Section 12 of
the Securities Exchange Act of 1934 (the "Act") (a "Reporting Person") failed to
file on a timely  basis,  reports  required  by Section 16 of the Act during the
most recent fiscal year or prior years, except Joseph Polito did not file a Form
4 with  respect  to his  December  1996  receipt  of stock  options  which  were
exercised.  Joseph  Polito  shall file a Form 5 on or before  November 26, 1997.
Corp.  has not  filed a Form 4 for the  shares  it  received  in June  1997 with
respect to the debt cancellation regarding the Company's lease. Corp. shall file
a Form 5 with  respect to this  issuance on or before  November  26,  1997.  The
foregoing  is based  solely upon a review by the Company of (i) Forms 3 and 4 as
furnished (during the most recent fiscal year) to the Company in accordance with
Rule  16a-3(d) of the Act; (ii) Forms 5 and  amendments  thereto as furnished to
the  Company  with  respect  to its most  recent  fiscal  year;  and  (iii)  any
representations  received by the Company from any reporting persons that no Form
5 is required, except as described herein.

 ITEM 10.         EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

         The following  provides  certain  information  concerning  all Plan and
Non-Plan (as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded
to, earned by, the Company's Executive Officers, during the years ended June 30,
1997, 1996 and 1995.






<PAGE>
                           Summary Compensation Table
                               Annual Compensation
<TABLE>
<CAPTION>


(a)                        (b)     (c)                 (d)              (e)                    (f)             (g)
Name                                                                    Restricted
and Principal                                          Other Annual     Stock                  Options/
Position                   Year    Salary ($)          Bonus ($)        Compensation ($)       Awards ($) (1)   SARS (#)
------------------         ----    ---------------     ---------        ----------------       --------------   --------

<S>                        <C>      <C>                <C>               <C>                   <C>              <C>    
Joseph Polito              1997     $330,000           -                 $ 68,642 (2)          -                125,000
 President and             1996       300,000          -                  111,911 (2)          -                   -
 Director                  1995       378,000          -                   68,200 (2)          -                 25,000

Ronald Polito              1997     $118,800           -                $  17,194 (3)          -                   -
 Secretary and             1996       125,000          -                   15,144 (3)          -                   -
 Director                  1995       121,000          -                   21,200 (3)          -                   -

Steven Polito              1997       $86,580          -                $   8,572 (4)          -                   -
  Treasurer and            1996        94,000          -                    8,275 (4)          -                   -
 Director                  1995         91,575         -                    9,900 (4)          -                   -
</TABLE>


(1)      At the end of the fiscal year,  Joseph  Polito  owned 65,000  shares of
         Common Stock valued at $ 158,600.  Ronald  Polito and Steven  Polito do
         not own any Common Stock of the Company.  The valuation is based on the
         closing price of Common Stock ($2.44) on June 27, 1997 (the last day of
         the fiscal  year in which the stock  traded),  as  reported by a market
         maker.
(2)      Includes  (i) the  payment of premiums  on a life  insurance  policy of
         $10,722,  $54,362, and $46,000 for the years ended June 30, 1997, 1996,
         and 1995, respectively, (ii) the payment of travel expenses of $50,000,
         $50,000, and $22,200 for the years ended June 30, 1997, 1996, and 1995,
         respectively,  and (iii) the payment of an  automobile  lease of $7,920
         and $7,549 for the years  ended June 30,  1997 and 1996,  respectively.
         See " - Employment Agreement."
(3)      Includes (i) payments on an  automobile  lease of $5,416,  $5,416,  and
         $8,000 for the years ended June 30, 1997, 1996, and 1995, respectively;
         (ii) the payment of premiums on a term life insurance policy of $8,510,
         $4,684,  and $5,800 for the years ended June 30,  1997,  1996 and 1995,
         respectively;  and (iii) a travel  allowance  of  $3,268,  $2,971,  and
         $7,400,   for  the  years  ended  June  30,  1997,   1996,   and  1995,
         respectively.
(4)      Includes (i) payments on an  automobile  lease of $5,304,  $5,304,  and
         $6,700 for the years ended June 30, 1997, 1996, and 1995, respectively;
         and (ii) a travel allowance of $3,268, $2,971, and $3,200 for the years
         ended June 30, 1997, 1996, and 1995, respectively.








<PAGE>

Stock Options

         The following table sets forth certain information concerning the grant
of  stock   options  made  during  the  year  ended  June  30,  1997  under  the
Corporation's 1994 Senior Management Incentive Plan.

                                       OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                                (Individual Grants)
<TABLE>
<CAPTION>

====================================================================================================================================


                                                Individual Grants
------------------------------------------------------------------------------------------------------------------------------------
             (a)                           (b)                      (c)                     (d)                       (e)
                                                                 % of Total
                                     # of Securities           Options/SAR's
                                        underlying               Granted to
                                      Options/SAR's            Employees in           Exercise or Base
             Name                      Granted (1)              Fiscal Year            Price ($/SH)             Expiration Date
             ----                      ------------             ------------           -------------            ---------------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                        <C>                    <C>                          <C>    
Joseph M. Polito                         125,000                    100%                   $1.10               December 1, 2001
====================================================================================================================================
------------------------
</TABLE>

(1)      Represents  incentive stock options granted under the Management  Plan.
         Mr.  Polito  exercised  this option in full and resold 60,000 shares of
         same.

         The following table contains  information  with respect to employees of
the Company and options held as of June 30, 1997.
<TABLE>
<CAPTION>

               AGGREGATED OPTION/SAR EXERCISE IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES

================================================================================================================================
             (a)                         (b)                     (c)                     (d)                      (e)
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Value of
                                                                                                          Unexercised In-The-
                                                                                      Number of                  Money
                                                                                     Unexercised           Options/SAR's at
                                                                                 Options/SAR's at FY-          FY-End($)
                                 Shares Acquired on             Value            End (#) Exercisable/        Exercisable/
            Name                   Exercise (#) (1)        Realized($) (2)          Unexercisable          Unexercisable (3)
            ----                  -----------------        ---------------          -------------          -----------------
--------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                    <C>                   <C>                           <C>
Joseph M. Polito                       125,000                $100,000              15,000/10,000                 0/0
================================================================================================================================
----------------------------
</TABLE>

     (1) Joseph Polito sold 65,000 of the shares acquired on exercise.

     (2) Based on the closing  price of Common Stock  ($1.90) on March 25, 1997,
as reported by a market maker.

     (3) Based on the  closing  price of Common  Stock  ($2.44) on June 27, 1997
(the last day of the fiscal  year in which the stock  traded),  as reported by a
market maker.  Since the Options are exercisable at $5.50,  there is no value to
such options as of such date.







<PAGE>
Employment Agreement

         On April 4, 1995,  Joseph Polito  entered into an employment  agreement
with the  Company  whereby he agreed to devote 80% of his  business  time to the
affairs of the Company. The agreement is for a term of approximately three years
and expires June 30, 1998. Pursuant to the terms of the agreement, Mr. Polito is
to receive an annual  salary of $300,000  until June 30,  1996,  with 10% yearly
escalations, subject to adjustment by the Board of Directors. Mr. Polito is also
to receive a yearly  non-accountable  expense  allowance of $50,000.  Mr. Polito
received  stock options under the Management  Plan to purchase  25,000 shares at
$5.50 per share, vesting at the rate of 7,500 in each of April 1996 and 1997 and
10,000 in April 1998.  Mr.  Polito also has the right to receive a yearly  bonus
equal to five percent (5%) of the first  $1,000,000,  upon reaching  $1,000,000,
and five percent (5%) of the next $500,000,  upon reaching $1,500,000,  and five
percent (5%) after  $1,500,000,  of all the pre-tax profits of the Company.  The
Company  shall pay to Mr.  Polito a monthly  draw of $10,000  against the bonus.
Pursuant to the  agreement,  the Company  shall pay the premiums on a $3,500,000
life insurance  policy for the benefit of individuals as directed by Mr. Polito,
with an estimated yearly premium of $80,000.  The agreement restricts Mr. Polito
from competing  with the Company for a period of one year after the  termination
of his employment.  The agreement provides for severance compensation to be paid
to Mr.  Polito if his  employment  with the Company is  terminated or there is a
decrease  in  responsibilities  or duties  following  a change in control of the
Company. The severance  compensation shall be made in one payment equal to three
times  the  aggregate  annual  compensation  paid  to the  Employee  during  the
preceding calendar year.

         Since March 1995 and April 1994, Steven and Ronald Polito have received
annual salaries of $94,000 and $125,000,  respectively,  from the Company.  Both
individuals  also receive a car allowance equal to the monthly lease payments on
their  automobiles  and travel  expenses.  Ronald Polito receives the payment of
premiums  on a life  insurance  policy of which he  chooses  the  beneficiaries.
Neither individual has entered into an employment agreement with the Company.

1994 Senior Management Incentive Plan

         In  December,  1994,  the board of  directors  adopted  the 1994 Senior
Management  Incentive  Plan  (the  "Management  Plan"),  which  was  adopted  by
shareholder  consent.  The  Management  Plan  provided for the issuance of up to
150,000 shares of the Company's  Common Stock in connection with the issuance of
stock options and other stock  purchase  rights to executive  officers and other
key employees. In December, 1996, the board of directors authorized an amendment
the  Management  Plan to increase the amount of stock provided for to 1,000,000.
The amendment was adopted by shareholder consent.

         The  adoption of the  Management  Plan was  prompted  by the  Company's
desire (i) to attract  and retain  qualified  personnel,  whose  performance  is
expected to have a  substantial  impact on the  Company's  long-term  profit and
growth  potential,  by  encouraging  those  persons  to  acquire  equity  in the
Corporation; and (ii) to provide the Board with sufficient flexibility regarding
the forms of incentive  compensation which the Company will have at its disposal
in  rewarding  executive  Officers,  key  employees,   and  consultants  without
unnecessarily depleting






<PAGE>
the Company's  cash  reserves.  The  Management  Plan is designed to augment the
Company's existing  compensation  programs and is intended to enable the Company
to offer executives,  key employees,  and consultants a personal interest in the
Company's  growth and success  through the grant of stock  options  and/or other
rights  pursuant to the  Management  Plan.  It is  contemplated  that only those
executive   management   employees   (generally   the  Chairman  of  the  Board,
Vice-Chairman,  Chief Executive Officer, Chief Operating Officer, President, and
Vice-Presidents  of the Company) who perform  services of special  importance to
the Company will be eligible to receive  compensation under the Management Plan.
As of the date of this  Prospectus,  the  Company's  officers and  directors are
Joseph Polito, Ronald Polito, Steven Polito and Phillip Neilson, though the Plan
also includes  Messrs.  Bauer and Panayi.  A total of 1,000,000 shares of Common
Stock will be reserved for issuance under the Management Plan.

         Unless otherwise  indicated,  the Management Plan is to be administered
by the Board of Directors  or a committee  of the Board,  if such a committee is
appointed  for this  purpose (the Board or such  committee,  as the case may be,
shall be  referred  to in the  following  description  as "the  Administrator").
Subject to the specific  provisions of the Management  Plan,  the  Administrator
will have the discretion to determine (i) the recipients of the awards; (ii) the
nature of the awards to be granted; (iii) the dates such awards will be granted;
(iv) the terms and conditions of the awards;  and (v) the  interpretation of the
Management  Plan,  except that any award  granted to any employee of the Company
who is also a Director of the  Company  shall also be subject - in the event the
persons  serving as members of the  Administrator  of the Management Plan at the
time such  award is  proposed  to be  granted do not  satisfy  the  requirements
regarding the participation of  "disinterested  persons" set forth in Rule 16b-3
("Rule  16b-3")  promulgated  under the  Exchange  Act - to the  approval  of an
auxiliary  committee  consisting  of not  less  than  two  individuals  who  are
considered  "disinterested  persons" as defined under Rule 16b-3. As of the date
hereof,  the Company  has not yet  determined  who will serve on such  auxiliary
committee, if one is required.

         The Management Plan generally  provides that,  unless the Administrator
determines  otherwise,  each option or right granted shall become exercisable in
full upon certain  "change of control"  events as  described  in the  Management
Plan,  or  subject  to any right or option  granted  under the  Management  Plan
(through  merger,   consolidation,   reorganization,   recapitalization,   stock
dividend,  dividend  in  property  other than  cash,  stock  split,  liquidating
dividend,  combination  of  shares,  exchange  of  shares,  change in  corporate
structure, or otherwise), the Administrator will make appropriate adjustments to
such  plans  and the  classes,  number of  shares,  and price per share of stock
subject to outstanding rights or options.  Generally, the Management Plan may be
amended by action of the Board of Directors, except that any amendment which (i)
would increase the total number of shares subject to such plan;  (ii) extend the
duration  of such plan;  (iii)  materially  increase  the  benefits  accruing to
participants  under such plan; or (iv) change the category of persons who can be
eligible for awards under such plan, must be approved by the affirmative vote of
a majority of the  shareholders  entitled to vote. The  Management  Plan permits
awards to be made thereunder until November 2004.

         Directors  who are not  otherwise  employed by the Company  will not be
eligible for  participation in the Management Plan. The Management Plan provides
for four  types  of  awards:  stocks  options,  incentive  stock  rights,  stock
appreciation rights (including limited stock appreciation rights) and Restricted
Stock purchase agreements (as described below).



<PAGE>
         Stock Options.  Options granted under the Management Plan may be either
incentive  stock  options  ("ISOs")  or  options  which do not  qualify  as ISOs
("non-ISOs").  ISOs may be granted  at an option  price of not less than 100% of
the fair market value of the Common  Stock on the date of grant,  except that an
ISO granted to any person who owns capital stock  representing  more than 10% of
the total  combined  voting  power of all classes of Common Stock of the Company
("10%  stockholder")  must be granted at an exercise  price of at least 110% for
the fair market value of the Common Stock on the date of the grant. The exercise
price of the  non-ISOs  may not be less than 85% of the fair market value of the
Common  Stock  on  the  date  of  grant.  Unless  the  Administrator  determines
otherwise,  no ISO or non-ISO may be  exercisable  earlier than one year from he
date of grant.  ISOs may not be granted to persons who are not  employees of the
Company.  ISOs granted to persons other than 10% stockholders may be exercisable
for a period of up to ten (10) years form the date of grant; ISOs granted to 10%
stockholders  may be exercisable  for a period of up to five years from he dated
of grant.  No  individual  may be granted  ISOs that become  exercisable  in any
calendar  year for Common  Stock having a fair market value at the time of grant
in  excess  of  $100,000.  Non-ISOs  may be  exercisable  for a period  of up to
thirteen (13) years from the date of grant.

         Payment for shares of Common  Stock  purchases  pursuant to exercise of
stock options shall be paid in full in (i) cash,  (ii) by certified  check,  or,
(iii) at the discretion of the  Administrator by shares of Common Stock having a
fair market value equal to the total exercise price, or (iv) by a combination of
the above.  The  provision  that permits the delivery of already owned shares of
stocks as payment  for the  exercise  of an option may permit  "pyramiding."  In
general,  pyramiding  enables a holder  to start  with as little as one share of
common  stock and, by using the shares of common stock  acquired in  successive,
simultaneous exercises of the option, to exercise the entire option,  regardless
of the number of shares covered  thereby,  with no additional cash or investment
other than the original share of common stock used to exercise the option.

         Upon termination of employment or consulting services, an optionee will
be entitled to  exercise  the vested  portion of an option for a period of up to
three  months  after the date of  termination,  except  that if the  reason  for
termination was a discharge for cause, the option shall expire immediately,  and
if the reason  for  termination  was for death or  permanent  disability  of the
optionee, the vested portion of the option shall remain exercisable for a period
of twelve (12) months thereafter.

         On  December  2,  1996,  the  Company  granted  to Joseph  Polito,  the
Company's  president,  an option to purchase 125,000 shares at an exercise price
of $1.10 per share (110% of the market price) in accordance  with the Management
Plan. The shares were registered for resale pursuant to a Form S-8  registration
statement filed in February 1997. On March 25, 1997, Joseph Polito exercised the
option. On April 11, 1997, Mr. Polito re-sold 60,000 of these shares.

         Incentive  Stock Rights.  Incentive  stock rights  consist of incentive
stock  units  equivalent  to one  share of  Common  Stock in  consideration  for
services performed for the Company.  Each incentive stock unit shall entitle the
holder thereof to receive,  without  payment of cash or property to the Company,
one  share of Common  Stock in  consideration  for  services  performed  for the
Company or any subsidiary by the employee, subject to the lapse of



<PAGE>
the  incentive  periods,  whereby the Company  shall issue such number of shares
upon the  completion of each specified  period.  If the employment or consulting
services  of the  holder  with  the  Company  terminate  prior to the end of the
incentive  period  relating to the units awarded,  the rights shall thereupon be
null and void,  except  that if  termination  is  caused  by death or  permanent
disability,  the holder or his/her heirs,  as the case may be, shall be entitled
to receive a pro rata portion of the shares represented by the units, based upon
that  portion of the  incentive  period  which shall have  elapsed  prior to the
holder's death or disability.

         Stock Appreciation  Rights (SARs). SARs may be granted to recipients of
options under the Management Plan. SARs may be granted  simultaneously  with, or
subsequent  to, the grant of a related option and may be exercised to the extent
that  the  related  option  is  exercisable,  except  that  no  general  SAR (as
hereinafter  defined) may be exercised within a period of six months of the date
of grant of such SAR, and no SAR granted with respect to an ISO may be exercised
unless the fair market value of the Common Stock on the date of exercise exceeds
the exercise  price of the ISO. A holder may be granted  general SARs  ("General
SARs") or limited SARs ("Limited SARs"), or both. General SARs permit the holder
thereof to receive an amount (in cash,  shares of Common Stock, or a combination
of both) equal to the number of SARs  exercised  multiplied by the excess of the
fair market  value of the Common  Stock on the  exercise  date over the exercise
price of the related  option.  Limited SARs are similar to General SARs,  except
that, unless the Administrator determines otherwise,  they may be exercised only
during  a  prescribed  period  following  the  occurrence  of one or more of the
following  "Change of Control"  transactions:  (i) the  approval of the Board of
Directors of  consolidation  or merger in which the Company is not the surviving
corporation,  the sale of all of substantially all the assets of the Company, or
the liquidation or dissolution of the Company; (ii) the commencement of a tender
or exchange offer for the Company's Common Stock (or securities convertible into
Common Stock) without the prior consent of the Board;  (iii) the  acquisition of
beneficial  ownership by any person or other  entity  (other than the Company or
any employee benefit plan sponsored by the Company) of securities of the Company
representing  25% or more  of the  voting  power  of the  Company's  outstanding
securities;  or (iv) if during any period of two years or less,  individuals who
at the beginning of such period  constitute the entire Board cease to constitute
a majority of the Board, unless the election, or the nomination for election, of
each new director is approved by at least a majority of the directors then still
in office.

         The exercise of any portion of either the related  option or the tandem
SARs will cause a  corresponding  reduction  in the  number of shares  remaining
subject to the option or the tandem SARs,  thus  maintaining  a balance  between
outstanding options and SARs.

         Restricted  Stock  Purchase   Agreements.   Restricted  Stock  purchase
agreements  provide  for the sale by the  Company  of shares of Common  Stock at
prices  to be  determined  by the  Board,  which  shares  shall  be  subject  to
restrictions  on disposition for a stated period during which the purchaser must
continue employment with the Company in order to retain the shares. Payment must
be made in cash. If termination  of employment  occurs for any reason within six
months  after the date of  purchase,  or for any  reason  other than death or by
retirement  with the consent of the Company of the Company  after the  six-month
period but prior to the time that the




<PAGE>
restrictions  on  disposition  lapse,  the  Company  shall  have the  option  to
reacquire the shares at the original purchase price.

         Restricted  shares awarded under the Management Plan will be subject to
a period of time  designated  by the  Administrator  (the  "restricted  period")
during  which the  recipient  must  continue  to render  services to the Company
before the restricted  shares will become  vested.  The  Administrator  may also
impose other  restrictions,  terms, and conditions that must be fulfilled before
the restricted shares may vest.

         Upon the grant of restricted shares,  stock certificates  registered in
the name of the recipient will be issued and such shares will constitute  issued
and outstanding  shares of Common Stock for all corporate  purposes.  The holder
will have the right to vote the  restricted  shares and to receive  all  regular
cash  dividends  (and  such  other   distributions  as  the   Administrator  may
designate),  if any, which are paid or distributed on the restricted shares, and
generally to exercise all other rights as a holder of Common Stock, except that,
until the end of the restricted  period,  (i) the holder will not be entitled to
take possession of the stock  certificates  representing the restricted  shares;
and (ii) the holder will not be entitled to sell, transfer, or otherwise dispose
of the  restricted  shares.  A breach of any  restrictions,  terms or conditions
established  by the  Administrator  with respect to any  restricted  shares will
cause a forfeiture of such restricted shares.

         Upon   expiration  of  the  applicable   restriction   period  and  the
satisfaction of any other applicable  conditions,  all or part of the restricted
shares and any dividends or other  distributions  not  distributed to the holder
(the "retained distributions") thereon will become vested. Any restricted shares
and any retained distributions thereon which do not so vest will be forfeited to
the Company.  If prior to the  expiration of the  restricted  period a holder is
terminated  without  cause or  because  of a total  disability  (in each case as
defined in the Management Plan), or dies, then,  unless otherwise  determined by
the Administrator at the time of the grant, the restricted
period applicable to each award of restricted shares will thereupon be deemed to
have  expired.  Unless the  Administrator  determines  otherwise,  if a holder's
employment  terminates  prior to the  expiration  of the  applicable  restricted
period for any reason other than as set forth above,  all restricted  shares and
any retained distributions thereon will be forfeited.

         Accelerating of the vesting of the restricted shares shall occur, under
the provisions of the Management Plan, on the first day following the occurrence
of any of the following:  (a) the approval by the stockholders of the Company of
an "Approved Transaction"; (b) a "Control Purchase"; or (c) a "Board Change."

         An "Approved Transaction" is defined as (A) any consolidation or merger
of the  Company  in  which  the  Company  is not  the  continuing  or  surviving
corporation  or pursuant to which shares of Common Stock would be converted into
cash,  securities or other  property other than a merger of the Company in which
the holders of the Common  Stock  immediately  prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation immediately
after the merger,  or (B) any sale, lease,  exchange,  or other transfer (in one
transaction or a series of related  transactions) of all, or substantially  all,
of the assets of the  Company,  or (C) the  adoption of any plan or proposal for
the liquidation or dissolution of the Company.



<PAGE>
         A "Control  Purchase" is defined as  circumstances  in which any person
(as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
corporation or other entity (other than the Company or any employee benefit plan
sponsored by the Company) (A) shall purchase any Common Stock of the Company (or
securities convertible into the Company's Common Stock) for cash, securities, or
any other  consideration  pursuant to a tender offer or exchange offer,  without
the prior consent of the Board of Directors, or (B) shall become the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Exchange Act),  directly
or indirectly,  of securities of the Company  representing  twenty-five  percent
(25%) or more of the combined voting power of the then outstanding securities of
the  Company   ordinarily   (and  apart  from  rights   accruing  under  special
circumstances) having the right to vote in the election of directors (calculated
as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire
the Company's securities).

         A "Board  Change"  is  defined as  circumstances  in which,  during any
period of two  consecutive  years or less,  individuals  who at the beginning of
such period constitute the entire Board shall Cease for any reason to constitute
a majority  thereof  unless the election,  or the nomination for election by the
Company's stockholders,  of each new director was approved by a vote of at least
a majority of the directors then still in office.




<PAGE>
ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

         The  following  table sets forth certain  information  at September 30,
1997, based upon information  obtained by the persons named below,  with respect
to the  beneficial  ownership of shares of Common Stock by (i) each person known
by the Company to be the owner of 5% or more of the outstanding shares of Common
Stock;  (ii) by  each  Officer  and  Director;  (iii)  and by all  Officers  and
Directors as a group.
<TABLE>
<CAPTION>

                                                                                Percent of
                                            Number of                             Common
Name                                        Shares                              Stock Owned
----                                        ---------                           -----------
<S>                                         <C>                                 <C>  
U.S. Bridge Corp.(1)                        1,240,665                           53.5%
53-09  97th Place
Corona, New York  11368

Joseph Polito (2)                           1,305,665                           56.3%
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

Steven Polito                               -                                   -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

Ronald Polito                               -                                   -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

Philip Neilson                              -                                   -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

Marvin Weinstein                            -                                   -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

All Officers and Directors
as a group (5 persons) (2)                  1,305,665                           56.3%

</TABLE>

(1)      Does not include the shares  issuable  upon the exercise of the Special
         Warrant  or the  voting  rights  included  in the  shares  of  Series A
         Preferred Stock issuable upon the happening of certain events.

(2)      Joseph Polito owns approximately 61% of the outstanding shares of Corp.
         and may be considered the beneficial owner of the shares of the Company
         owned by Corp.  Includes  15,000  shares  issuable upon the exercise of
         stock options granted to Joseph Polito,  all of which are vested.  Does
         not include (i) 10,000 shares issuable upon the exercise of options not
         presently  vested; or (ii) 60,000 shares issued upon the exercise of an
         option; these shares have been resold.



<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On  September  1, 1995,  in  conjunction  with the  underwriter  of the
Company's  public  offering  exercising  its  over-allotment  option to purchase
91,850  additional  shares of the Company's Common Stock, the Company  exercised
its Special Warrant and purchased 5,665 shares of the Company's  Common Stock at
$2.50 per share.

         On October 11, 1995, the Company paid One Carnegie $50,000 on behalf of
MD, a wholly owned  subsidiary of Corp., for fabrication  services  performed by
MD. Such  payment was treated as a payment on account by the Company to MD. From
July 1995 to October  1995 the Company  paid MD  approximately  $183,000 for the
labor associated with the fabrication of steel.

         During  the  year  ended  June  30,   1996,   the   Company   purchased
approximately $180,333 of fabricated steel from Waldorf. Such amount represented
approximately  18% of the steel purchased by the Company for the year ended June
30, 1996. Waldorf is wholly owned by Joseph Polito.

         During  the years  ended  June 30,  1997 and  1996,  the  Company  paid
$371,321  and  $802,383,  respectively,  to MD for certain  materials  and labor
necessary to perform steel erection services.

         During  the years  ended  June 30,  1997 and  1996,  the  Company  paid
$214,000 and $163,000, respectively, to Crowne Crane, Inc. for leasing of cranes
necessary to perform steel erection  services.  Joseph Polito owns 50% of Crowne
Crane, Inc.

     During the year ended June 30, 1997,  the Company paid $35,000 to Atlas Gem
Leasing,  Inc.  for  certain  machinery  necessary  to  perform  steel  erection
services. Atlas Gem Leasing, Inc. is wholly owned by Joseph Polito.

         On March 25, 1997, the Company issued 125,000 shares of Common Stock to
Joseph  Polito  upon  exercise by Mr.  Polito of an option to  purchase  125,000
shares at an exercise price of $1.10 per share. The option was granted under the
Company's  Management  Plan in  December  1996.  In  February  1997,  a Form S-8
Registration  Statement was filed with the Securities  and Exchange  Commission,
registering the sale of these shares underlying the option.
On April 11, 1997, Mr. Polito sold 60,000 of these shares.

         On June 19, 1997,  the Company was in arrears in the amount of $480,000
in payments due under its lease with RSJJ. The Company leases its administrative
office space and certain storage space from RSJJ, a corporation  owned by Joseph
Polito.  In accordance  with a signed lease agreement which expires on March 31,
1998 the Company  pays rent in the amount of $20,000 per month.  This  arrearage
was  converted  into equity as follows:  the Company  issued  270,000  shares of
Common Stock to Corp.,  for the  cancellation of the debt owed.  Corp., in turn,
issued  200,000  shares of its common stock to Mr. Polito and 150,000  shares of
its common stock to RSJJ. RSJJ then  transferred all of its Corp.  shares to its
mortgagor,  who agreed to accept  said  shares as payment of RSJJ's  outstanding
mortgage.

         See  "Item  10.   Executive   Compensation-Employment   Agreement"  for
information regarding management's compensation.




<PAGE>
                                     PART IV

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

(a) The following  financial  statements of the Company are included as Part II,
Item 8:
<TABLE>
<CAPTION>

                                                                                      Page
<S>                                                                                     <C>
Independent Auditors Report .......................................................   F-1

Balance Sheet .....................................................................   F-2

Statements of Operations ..........................................................   F-3

Statement of Stockholders' Equity .................................................   F-4

Statements of cash flows ..........................................................   F-5

Notes of financial statements .....................................................   F-6 - F-15
</TABLE>

(b) During the last quarter, the Company filed no reports on Form 8-K.

(c) All exhibits,  except those  designated with an asterisk (*) which are filed
herewith,  previously have been filed with the Commission in connection with the
Company's  Registration  Statement on Form SB-2, dated August 9, 1995 under file
No.  33-89230-NY  and pursuant to 17 C.F.R.  ss.230.411.  The  previously  filed
exhibits bear the same exhibit number as indicated below and are incorporated by
reference herein.
<TABLE>
<CAPTION>


<S>                        <C>     
 3.1              -        Certificate of Incorporation of the Company filed September 4, 1990.
 3.2              -        Certificate of Amendment to the Certificate of Incorporation of the
                           Company filed January 31, 1995.
 3.3              -        By-Laws of the Company.
 3.3              -        Specimen Common Stock Certificate.
 4.1              -        Specimen Redeemable Common Stock Warrant Certificate.
 4.3              -        Form of Redeemable Common Stock Warrant Agreement between the
                           Company and Continental Stock Transfer & Trust Company.
 4.4              -        Form of Special Warrant.
 4.6              -        U.S. Bridge Corp. note issued in January 1995.
 4.7              -        Form of Promissory Note sold in Private Placement in March 1995.
 4.8              -        Stock option and Agreement issued to Joseph Polito.
10.2              -        Stock Purchase Agreement between Corp. and the Company.
10.3              -        Employment Agreement of Joseph Polito.
10.4              -        Lease Agreement between the Company and R.S.J.J. Realty Corp.
10.5              -        The Company Incentive Stock Option Plan.
10.6              -        Agreement between Iron Workers Local Union 40 and the Company.




<PAGE>
10.7              -        Agreement between Local Union 14, 14B, 15,
                           15A,  15C,  15D,  International  Union  of  Operating
                           Engineers, AFL-CIO and the Company.
10.8              -        Agreement between Local 780 and the Company.
10.9              -        Subcontractor agreement between the Company and McKay Enterprises,
                           Inc., with respect to the reconstruction of 4th Avenue Bridge.
10.10             -        Subcontractor agreement between the Company and Perini Corporation,
                           with respect to the rehabilitation of Stillwell Avenue Station on Coney
                           Island.
10.11             -        Subcontractor  agreement  between  the Company and
                           Perini    Corporation,    with    respect    to   the
                           rehabilitation of 39th Street Bridge over L.I.R.R.
10.12             -        Subcontractor agreement between the Company and KISKA Construction
                           Corporation-USA, with respect to the rehabilitation of Robert Mosses
                           Causeway.
10.13             -        Agreement between Atlas and the Company pursuant to the sale of
                           contracts.
10.14             -        Promissory Note issued to First Bank of the Americas.
10.15             -        Subcontractor agreement between the Company and McKay Enterprises,
                           Inc.,  with  respect  to  the  rehabilitation  of the
                           Kosciuszko Bridge.
10.17             -        Agreement to capitalize the $400,000 debt into 320,000 shares of U.S.
                           Bridge Corp.
10.18*            -        Subcontractor agreement between the Company and Trataros
                           Construction Inc. (the Williamsburg Houses project), dated April 11,
                           1996.
10.19*            -        Subcontractor agreement between the Company and Hannibal
                           Construction Co., Inc. ("the Hellgate Viaduct Structures project), dated
                           October 30, 1996.
10.20*            -        Subcontractor  agreement  between  the Company and
                           N.Y. Iron (the  Indonesian  Mission  project),  dated
                           November 6, 1996.
10.21*            -        Prime contractor  agreement between the Company and
                           Eklec Co. (the Palisades  Power Mall project),  dated
                           June 17, 1996.
10.22*            -        Subcontractor agreement between the Company and Lehrer McGovern,
                           Bovis, Inc., dated May 15, 1996.
10.23*            -        Prime contractor  agreement between the Company and
                           Tishman  Construction  Corporation of New York, dated
                           July 24, 1996. (the Louis Vuitton project)
10.24*            -        Subcontractor agreement between the Company and Humphreys &
                           Harding, Inc. (the Korean Mission project), dated January 15 1997.
27.1              -        Financial Data Schedule.

</TABLE>


<PAGE>
                                   SIGNATURES


         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized, this 7th day of November, 1997.


                                             U.S. BRIDGE OF N.Y., INC.


By:                                                 /s/ Joseph M. Polito
                                                     Joseph M. Polito, President


         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  Registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>



<S>                                         <C>                                                          <C>
/s/ Joseph M. Polito                        President and Director                                       11/07/97
Joseph M. Polito                            (Chief Executive                                             Date
                                            Officer)


/s/ Ronald J. Polito                        Secretary and Director                                       11/07/97
Ronald J. Polito                                                                                         Date



/s/ Steven J. Polito                        Treasurer                                                    11/07/97
Steven J. Polito                                                                                         Date



/s/ Phillip Neilson                         Director                                                     11/07/97
Phillip Neilson                                                                                          Date


/s/ Marvin Weinstein                        Director                                                     11/07/97
Marvin Weinstein                                                                                         Date

</TABLE>



<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          INDEX TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

<TABLE>
<CAPTION>


                                                                                                              Page
                                                                                                              Number

<S>                                                                                                             <C>
Independent auditors' report ..............................................................................   F-1

Balance sheet as of June 30, 1997 .........................................................................   F-2

Statements of operations for the years ended
 June 30, 1997 and 1996 ...................................................................................   F-3

Statement of stockholders' equity for the years ended
 June 30, 1997 and 1996 ...................................................................................   F-4

Statements of cash flows for the years ended
 June 30, 1997 and 1996 ...................................................................................   F-5

Notes to financial statements .............................................................................   F-6 - F-14

</TABLE>




<PAGE>
                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders of U.S. Bridge of N.Y., Inc.

We have audited the  accompanying  balance  sheet of U.S.  Bridge of N.Y.,  Inc.
("the  Company") as of June 30, 1997 and the related  statements of  operations,
stockholders'  equity and cash flows for the years ended June 30, 1997 and 1996.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to

                                       F-1


<PAGE>
                           U.S. BRIDGE OF N.Y., INC.
                                  BALANCE SHEET
                                  JUNE 30, 1997
<TABLE>
<CAPTION>

                               ASSETS
Current assets:
<S>                                                               <C>        
    Cash ......................................................   $   554,025
    Cash, restricted ..........................................       214,001
    Contracts and retainage receivable, net ...................     8,943,147
    Costs and estimated earnings in excess of billings
     on uncompleted contracts .................................     2,225,723
    Deferred tax asset ........................................       239,750
    Other current assets ......................................        80,727
                                                                  -----------
         Total current assets .................................    12,257,373

Other assets ..................................................        21,445
                                                                  -----------
Total assets ..................................................   $12,278,818
                                                                  ===========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable, including cash overdraft
     of $119,658 ..............................................   $ 3,392,317
    Accrued expenses ..........................................       915,016
    Payroll taxes payable .....................................     1,349,225
    Due to related parties ....................................       321,894
    Income taxes payable ......................................       507,379
    Billings in excess of costs and estimated earnings
     on uncompleted contracts .................................       126,455
         Total current liabilities ............................     6,612,286

Commitments and contingencies (Note 9) ........................          --

Stockholders' equity:
    Preferred stock $.01 par value, authorized 500,000 shares,
     issued and outstanding -0- ...............................          --
    Common stock $.001 par value, authorized 10,000,000 shares,
     issued and outstanding 2,302,515 .........................       504,047
    Additional paid in capital ................................     4,459,906
    Retained earnings .........................................       702,579
                                                                  -----------
         Total stockholders' equity ...........................     5,666,532
                                                                  -----------
Total liabilities and stockholders' equity ....................   $12,278,818
                                                                  ===========

</TABLE>
               See accompanying notes to the financial statements.


                                       F-2


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                            STATEMENTS OF OPERATIONS
                          FOR THE YEARS ENDED JUNE 30,
<TABLE>
<CAPTION>


                                                        1997          1996
                                                        ------------  ----------
<S>                                                     <C>           <C>         
Contract revenue ..................................     15,455,699    $  7,091,396

Cost of contract revenue ..........................     11,167,130       5,197,215
                                                                    

Gross profit ......................................      4,288,569       1,894,181

Expenses:
   General and administrative .....................      2,342,309       2,121,007
   Bad debt expense ...............................      1,287,000       1,019,127
                                                                    
       Total expenses .............................      3,629,309       3,140,134
                                                                    
Income (loss) from operations before other income
 (expense) and provision (benefit) for income taxes        659,260      (1,245,953)

Other income (expenses):
   Interest expense ...............................        (43,341)        (19,285)
   Unusual item (Note 6) ..........................           --          (441,863)
   Gain on forgiveness of accounts payable ........        243,750            --
   Interest income ................................         10,425          27,478
                                                                    
       Total other (expenses) .....................        210,834        (433,670)

Income (loss) before provision (benefit)
 for income taxes .................................        870,094      (1,679,623)

Provision (benefit) for income taxes ..............        267,629        (855,250)

Net income (loss) .................................   $    602,465    $   (824,373)
                                                       ============    ============

 Income (loss) per common equivalent share:
   Income (loss) before provision (benefit)
    for income taxes ..............................   $        .44    $      (.93)
                                                      ============    ============

   Provision (benefit) for income taxes ...........   $        .14    $      (.47)
                                                      ============    ============

   Net income (loss) ..............................   $        .30    $      (.46)
                                                      ============    ============

Weighted average number of shares outstanding .....      1,961,265       1,807,354
                                                      ============    ============
</TABLE>
                 See accompanying notes to financial statements.


                                       F-3


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                        STATEMENT OF STOCKHOLDERS EQUITY
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

<TABLE>
<CAPTION>



                                               Common
                                               stock
                                                                 Additional                    Total
                                                                 paid in        Retained       stockholders
                                       Shares      Amount        capital        earnings       equity

<S>                                    <C>         <C>           <C>            <C>            <C>        
Balances at July 1, 1995 .........     1,110,000   $   502,854   $   968,306    $   924,487    $ 2,395,647

Issuance of common stock and
 warrants from initial public
 offering ........................       791,850           792     4,007,908           --        4,008,700

Cost associated with initial
 public offering .................          --            --        (903,820)          --         (903,820)

Issuance of shares in connection
 with exercise of special warrants         5,665             6        14,157           --           14,163

Net loss for the year
 ended June 30, 1996 .............          --            --            --         (824,373)      (824,373)
                                     -----------   -----------   -----------    -----------    -----------

Balances at June 30, 1996 ........     1,907,515       503,652     4,086,551        100,114      4,690,317

Issuance of common shares
 in connection with the exercise
 of options ......................       125,000           125       137,375           --          137,500

Issuance of common stock
 in connection with settlement
 of related party debt ...........       270,000           270       235,980           --          236,250

Net income for the year
 ended June 30, 1997 .............          --            --            --          602,465        602,465
                                     -----------   -----------   -----------    -----------    -----------

Balances at June 30, 1997 ........     2,302,515   $   504,047   $ 4,459,906    $   702,579    $ 5,666,532
                                     ===========   ===========   ===========    ===========    ===========

</TABLE>

                 See accompanying notes to financial statements.


                                       F-4


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                            STATEMENTS OF CASH FLOWS
                          FOR THE YEARS ENDED JUNE 30,
<TABLE>
<CAPTION>

                                                           1997           1996
Cash flows from operating activities:
<S>                                                        <C>            <C>         
   Net income (loss) ...................................   $   602,465    $  (824,373)
   Adjustments to reconcile net income (loss) to net
    cash used for operating activities:
       Amortization of financing costs .................          --          441,863
       Bad debt expense ................................     1,287,000      1,019,127
       Deferred income tax benefit .....................      (239,750)          --
       Gain on issuance of stock .......................      (243,750)          --
       Decrease (increase) in:
          Contracts and retainage receivable ...........    (6,789,756)    (1,539,045)
          Costs and estimated earnings in excess of
            billings on uncompleted contracts ..........       207,801       (607,395)
          Other current assets .........................       (20,415)       (11,256)
       Increase (decrease) in:
          Accounts payable .............................     2,946,778        381,199
          Accrued expenses .............................       629,622       (220,934)
          Payroll taxes payable ........................     1,061,559         77,274
          Income taxes payable .........................       507,379       (855,250)
          Billings in excess of costs and estimated
           earnings on uncompleted contracts ...........       109,888         16,567
                                                           -----------    -----------

Net cash provided by (used for) operating activities ...        58,821     (2,122,223)
                                                           -----------    -----------

Cash flows from financing activities:
   Financing costs incurred ............................       (35,000)          --
   Proceeds from (repayments to) officers ..............       273,181         (5,963)
   Proceeds from (repayments to) affiliates ............       128,410        (19,784)
   Proceeds from related parties .......................       118,825         16,752
   Proceeds from initial public offering and
    exercise of special warrants net of costs ..........          --        3,222,597
   Repayment of notes payable ..........................          --         (972,000)
                                                           -----------    -----------

Net cash provided by financing activities ..............       485,416      2,241,602
                                                           -----------    -----------

Net increase in cash ...................................       544,237        119,379
Cash, beginning ........................................       223,789        104,410
                                                           -----------    -----------

Cash, ending ...........................................   $   768,026    $   223,789
                                                           ===========    ===========

Supplemental disclosure of cash flow information:
   Interest paid .......................................   $    21,612    $    11,342
                                                           ===========    ===========
   Taxes paid ..........................................   $       678    $       704
                                                           ===========    ===========

Issuance of 270,000 shares of common stock in connection
 with settlement of related party debt .................   $   236,250    $      --
                                                           ===========    ===========

Issuance of 125,000 shares of common stock in connection
 with exercise of options ..............................   $   137,500    $      --
                                                           ===========    ===========
</TABLE>

                 See accompanying notes to financial statements.


                                       F-5


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 1            -        ORGANIZATION

     U.S. Bridge of N.Y., Inc. ("the Company") is a New York  corporation  which
provides  steel  erection for building,  roadway and bridge repair  projects for
contractors who have been engaged by private and municipal/governmental clients.
During June 1996,  the Company began  providing  prime  contracting  (similar to
general contracting services). The Company was incorporated on September 4, 1990
and is a 53.23% owned  subsidiary of U.S.  Bridge Corp.  ("Bridge  Corp.").  The
Company's President is also the majority stockholder 61% of Bridge Corp. and may
be considered the beneficial owner of the Company.

NOTE 2       -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  a)       Use of estimates

                  The preparation of the financial statements in conformity with
                  generally accepted  accounting  principles requires management
                  to make  estimates  and  assumptions  that  affect the amounts
                  reported  as  assets  and   liabilities   and   disclosure  of
                  contingent assets and liabilities at the date of the financial
                  statements  and the  reported  amounts of revenue and expenses
                  during the reporting  period.  The most significant  estimates
                  with  regard  to  these  financial  statements  relate  to the
                  estimating   of  final   construction   contract   profits  in
                  accordance  with   accounting  for  long-term   contracts  and
                  estimating  potential  liabilities in conjunction with certain
                  contingencies  and  commitments.  Actual  results could differ
                  from these estimates.

             b)   Contracts and retainage receivable

                  Contracts   receivable  include  receivables  which  represent
                  amounts  billed  but  uncollected  on  completed  construction
                  contracts and construction  contracts in progress and unbilled
                  retainage on completed and in progress construction contacts.

                  The Company  utilizes the allowance method for recognizing the
                  collectibility  of its  contracts  receivable.  The  allowance
                  method  recognizes  bad debt expense  based on a review of the
                  individual accounts outstanding based on the surrounding facts
                  and estimates made by management.

             c)   Revenue recognition

                  The Company  recognizes  revenue  and costs for all  contracts
                  under the  percentage of completion  method.  Cost of contract
                  revenues  includes  all direct  material  and labor  costs and
                  those indirect costs related to contract performance.  General
                  and administrative  expenses are accounted for as period costs
                  and are,  therefore,  not included in the  calculation  of the
                  estimates  to complete  construction  contracts  in  progress.
                  Material  project  losses are provided  for in their  entirety
                  without   reference  to  the  percentage  of  completion.   As
                  contracts  can  extend  over one or more  accounting  periods,
                  revision in costs and earnings  estimated during the course of
                  the work are reflected  during the accounting  period in which
                  the  facts  become  known.   An  amount  equal  to  the  costs
                  attributable  to  unapproved   change  orders  and  claims  is
                  included in the total  estimated  revenue when  realization is
                  probable.



                                       F-6


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996


NOTE 2       -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)


                  c)       Revenue recognition (cont'd)

                  The current asset,  "costs and estimated earnings in excess of
                  billings  on  uncompleted  contracts",  represents  costs  and
                  estimated  earnings in excess of amounts  billed on respective
                  uncompleted contracts at the end of each period.

                  The  current  liability,  "billings  in  excess  of costs  and
                  estimated  earnings  on  uncompleted   contracts,"  represents
                  billings   which  exceed  costs  and  estimated   earnings  on
                  respective uncompleted contracts at the end of each period.

                  d)       Cash and cash equivalents

                  For  purposes of the  statements  of cash  flows,  the Company
                  considers  all highly  liquid  investments  purchased  with an
                  original   maturity   of  six   months  or  less  to  be  cash
                  equivalents.  The Company at June 30, 1997  maintains its cash
                  deposits  in accounts  which are in excess of federal  deposit
                  insurance corporation limits by $244,625.

                           As of June 30, 1997, the Company  maintains  $214,001
                  of  restricted  cash  securing a credit  line from a financial
                  institution on behalf of US Bridge.

             e)   Earnings (loss) per common share

                  Earnings  (loss) per common  share for the year ended June 30,
                  1997 and 1996 are based upon the  weighted  average  number of
                  common stock outstanding during the respective periods.

             f)   Income taxes

                  The  Company  accounts  for income  taxes in  accordance  with
                  Statement  of   Financial   Accounting   Standards   No.  109,
                  "Accounting  for Income  Taxes" which  requires the use of the
                  "liability   method"   of   accounting   for   income   taxes.
                  Accordingly,   deferred   tax  assets  and   liabilities   are
                  determined  based  on the  difference  between  the  financial
                  statement  and tax  bases of  assets  and  liabilities,  using
                  enacted  tax  rates  in  effect  for  the  year in  which  the
                  differences are expected to reverse.  In addition,  future tax
                  benefits,  such  as  net  operating  loss  carryforwards,  are
                  recognized  currently  to the extent  such  benefits  are more
                  likely than not to be  realized as an economic  benefit in the
                  form of a reduction of income taxes in future  years.  Current
                  income  taxes are  based on the  respective  periods'  taxable
                  income  for  Federal,  State  and City  income  tax  reporting
                  purposes.

                    g)     Fair value disclosure as of June 30, 1997

                  The carrying value of cash, contract and retainage receivable,
                  accounts  payable,  and accrued  expenses,  and payroll  taxes
                  payable are a reasonable estimate of their fair value.




                                       F-7


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996





NOTE 2       -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)


             h)   Reclassifications

                  Certain  reclassifications have been made to the June 30, 1996
                  financial  statements in order to conform to the June 30, 1997
                  presentation.

            i)    Balance sheet classifications

                      The  Company  includes in current  assets and  liabilities
                  amounts  receivable and payable under  construction  contracts
                  which may extend  beyond one year.  A one-year  time period is
                  used as the basis for classifying all other current assets and
                  liabilities.

            j)    Impact of recently issued accounting standards

     During 1995, SFAS No. 123,  "Accounting for Stock-based  Compensation"  was
issued.  The  statement  requires  the fair  value of stock  options  and  other
stock-based   compensation   issued  to  employees  to  be  either  included  as
compensation  expense in the income  statement,  or the pro-forma  effect on net
income and earnings per share to be disclosed in the  footnotes to the financial
statements  commencing  in 1996.  The  Company has elected to adopt SFAS No. 123
effective July 1, 1995.

NOTE 3       -    CONTRACTS AND RETAINAGE RECEIVABLE

                  At June 30, 1997, contract and retainage receivable consist of
the following:

Contracts in progress ................   $  5,087,169
Completed contracts ..................      4,920,134
Unbilled retainage on completed and in
 progress contracts ..................      1,222,844
                                           11,230,147
Less:  allowance for doubtful accounts     (2,287,000)
                                         $  8,943,147
NOTE 4       -    CONTRACTS IN PROGRESS

                  At June 30, 1997,  costs and  estimated  earnings in excess of
                  billings  and  billings  in  excess  of  costs  and  estimated
                  earnings on uncompleted contracts consist of the following:

Costs incurred on uncompleted contracts   $ 14,025,808
Profits earned to date ................      4,190,473
                                          ------------
                                            18,216,281
Less: billings to date ................    (16,117,013)
                                          $  2,099,268




                                       F-8


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 4       -    CONTRACTS IN PROGRESS (Cont'd)


                  Included in the accompanying  balance sheet under the
                  following captions at June 30, 1997:

Costs and estimated earnings in excess of
billings on uncompleted contracts ..................        $ 2,225,723
Billings in excess of costs and estimated
earnings on uncompleted contracts ..................        (126,455)
                                                            $ 2,099,268
NOTE 5       -      BACKLOG

                  The  following  schedule  summarizes  changes  in  backlog  on
                  contracts  during  the  year  ended  June  30,  1997.  Backlog
                  represents  the  amount of  revenue  the  Company  expects  to
                  realize from work to be performed on uncompleted  contracts in
                  progress at year end and from contractual  agreements on which
                  work has not yet begun.

Backlog balance at July 1, 1996                             $ 17,943,400
Change orders to contracts in progress at July 1, 1996         2,486,885
New contracts during the year ended June 30, 1997              1,113,462
                                                            ------------------
                                                              21,543,747
Less: contract revenue earned during 
 the year ended June 30, 1997                                (15,455,699)
                                                            --------------------
Backlog balance at June 30, 1997                             $ 6,088,048
                                                            ============

NOTE 6       -    PROMISSORY NOTES

                           On January 16, 1995,  an  Underwriter  commenced  and
                  privately offered on a best-efforts basis,  sixteen (16) units
                  of the  Company's  securities  at a price of $55,000 per unit.
                  Each unit  consisted  of a  promissory  note in the  principal
                  amount of  $45,000  bearing  interest  at 12% per  annum,  and
                  10,000 shares of common stock at $1.00 per share.  The 160,000
                  shares sold in this  offering were assigned a value of 100% of
                  the  initial  public  offering  price of $5.00 per  share.  In
                  relation to the common stock sold in the offering, the Company
                  recorded deferred  financing costs of $640,000 (160,000 shares
                  at $5.00 per share  less  original  cost of $1.00 per  share).
                  Deferred  financing  costs were  amortized on a monthly  basis
                  until  the  earlier  of  March  1996,  the due of the  related
                  promissory  notes,  or  the  initial  public  offering  of the
                  Company.  As a  result,  as at June  30,  1997 and  1996,  the
                  Company  recorded  amortization  expense  of $0 and  $441,863,
                  respectively. The holders of such shares included their shares
                  in the Company's  initial  public  offering.  The offering was
                  completed on March 9, 1995 resulting in all sixteen (16) units
                  being sold  netting  proceeds to the Company of  approximately
                  $696,851.



                                       F-9


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 7       -    ACCRUED EXPENSES

                  Accrued expenses consisted of the following at June 30, 1997:

Wages and related union benefits ................... $307,934
Professional fees .................................. 20,000
Accrued insurance expense .......................... 421,885
Accrued interest and penalties ..................... 165,197

                                                    $ 915,016

NOTE 8 -     INCOME TAXES

                  The Company  has adopted  Statement  of  Financial  Accounting
                  Standards  (SFAS) No.  109,  "Accounting  for  Income  Taxes".
                  Income taxes are provided for the tax effects of  transactions
                  reported  in the  financial  statements  and  consist of taxes
                  currently  due  plus  deferred  taxes  related   primarily  to
                  differences  between the financial and tax basis of assets and
                  liabilities. The deferred tax assets and liabilities represent
                  the  future  tax  return   consequences   of  these  temporary
                  differences,  which will either be taxable or deductible  when
                  the assets and  liabilities  are  recovered  or  settled.  The
                  Company's only such significant  items relate to its allowance
                  for  doubtful  accounts  and  Section  144  stock  issued  for
                  services.

For income tax purposes, the Company reports using a
year end of December 31.

The reconciliation of income tax computed at the federal
statutory tax rate to income tax expense is as follows:

Federal statutory income tax rate 34% Increases (reductions)
resulting from:
State and local income taxes net of federal benefit         13%
Deferred income tax benefit and other miscellaneous
permanent differences                                       (16%)

Effective income tax rate                                   31%

The tax effects of significant items comprising the Company's
net deferred tax assets as of June 30, 1997 is as follows:

Allowance for doubtful accounts                             $ 1,073,500
Section 144 restricted stock                                (114,500)
Less: Valuation allowance                                   (719,250
                                                            -------------

Current portion of deferred tax asset                       $ 239,750
                                                            =============

The Company has recorded a deferred tax asset with an
estimated valuation allowance of 75% as of June 30, 1997 based
on the estimated deductibility of the above items in the
future.



                                      F-10


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 9            -   STOCKHOLDERS EQUITY

             a)   Recapitalization

                  On April 24, 1994, the Company's parent,  Bridge Corp., issued
                  2,820,000  shares  of its own  common  stock  to the  previous
                  stockholders  of  the  Company  in  exchange  for  all  of the
                  Company's outstanding shares.

                      The acquisition of the Company by Bridge Corp, was treated
                  as a recapitalization  for accounting  purposes.  Accordingly,
                  after  such  transaction,   the  Company  was  a  wholly-owned
                  subsidiary of Bridge Corp. As discussed in Note 9, the Company
                  became a majority-owned  subsidiary of Bridge Corp as a result
                  of the Company's  initial public  offering,  the exercise of a
                  special  warrant  by Bridge  Corp and the  exchange  of Bridge
                  Corp, stock for Company stock held by related parties.

                  b)  Initial Public Offering

                  On August 14,  1995 the  Company  successfully  completed  its
                  public offering.  As a result, the Company sold 791,850 shares
                  which included  91,850 shares in connection  with the exercise
                  of  the  underwriter's   over-allotment  options  and  494,500
                  warrants  which  included  64,500  warrants  pursuant  to  the
                  underwriter's  over-allotment  option.  The Company  yielded a
                  total net proceeds of $2,077,903  after deducting  underwriter
                  selling  expenses and expense  allowance,  repayment of bridge
                  loans and promissory notes and related accrued interest to the
                  bridge lenders and private  investors,  and the pre-payment of
                  the first two year's financial  consulting  agreement with the
                  underwriter.
                   Simultaneously  with the  offering,  the Company  charged all
                  deferred offering costs incurred to additional paid-in capital
                  which totalled $903,820.

                  Upon  the  closing  of the  sale of the  Shares  and  Warrants
                  offered, the Company sold to the underwriter  individually and
                  not as a  representative  of  the  Underwriters,  warrants  to
                  purchase 70,000 common shares and 43,000 Warrants  exercisable
                  for a period of four years  commencing  one year after the IPO
                  effective  date  (August  9,  1995)  at  120%  of the  initial
                  offering price.

                  c)  Special Warrant

                  On September 9, 1995,  the  Company's  majority  stockholder.,
                  Bridge Corp.  purchased at $2.50 per share 5,665 common shares
                  of the Company by exercising  its right  pursuant to the terms
                  of a special warrant issued only to such  stockholder in order
                  to maintain an ownership interest above 50%.



                                      F-11


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 9            -   STOCKHOLDERS EQUITY (Cont'd)

                  d)  Issuance of common stock

                          i) In December  1994,  the board of directors  adopted
                      the 1994 Senior Management Incentive Plan (the "Management
                      Plan"),  which was  adopted by  shareholder  consent.  The
                      Management Plan provided for the issuance of up to 150,000
                      shares of the Company's  Common Stock in  connection  with
                      the  issuance of stock  options  and other stock  purchase
                      rights to  executive  officers  and  other key  employees.
                      During December 1996, the board of directors authorized an
                      amendment to the Management Plan to increase the amount of
                      stock options available to 1,000,000.

                          ii)  In  December  1996,   the  Company   granted  its
                      President an option under its Management  Plan to purchase
                      125,000 shares of Common Stock. In February 1997, pursuant
                      to a  Form  S-8  Registration  Statement  filed  with  the
                      Securities and Exchange Commission, the Company registered
                      the sale of the 125,000 shares of Common Stock  underlying
                      the option.  The option was exercisable at $1.10 per share
                      (110%  of the bid  price on  November  27,  1996)  and was
                      exercised  March 25,  1997,  resulting  in the issuance of
                      125,000 shares of common stock.

                          iii) During June 1997,  pursuant to an agreement  with
                      RSJJ Realty Corp, ("RSJJ"), (a Company wholly-owned by the
                      Company's  President) the Company issued 270,000 shares of
                      its common  stock to RSJJ for  settlement  of  $480,000 of
                      accrued rent. These shares were then transferred to Bridge
                      Corp by RSJJ in exchange for shares in Bridge Corp.  These
                      shares have been recorded at the estimated market value at
                      the date of issuance of $1.75 per share with a 50% haircut
                      due to the restricted nature of the stock, or $236,750. As
                      a  result,   the  Company  has  recorded  a  gain  on  the
                      forgiveness of accounts payable of $243,250.

NOTE 10           -   COMMITMENT AND CONTINGENCIES

            a)    Disclosure of significant estimates - revenue recognition

                      As  outlined  in the  Summary  of  Significant  Accounting
                  Policies,  the Company's construction revenue is recognized on
                  the percentage of completion basis. Consequently, construction
                  revenue  and  gross  margin  for  each  reporting   period  is
                  determined  on a contract by contract  basis by  reference  to
                  estimates  by  the  Company's   management  and  engineers  of
                  expected costs to be incurred to complete each project.  These
                  estimates  include  provisions for known and anticipated  cost
                  overruns,  if  any  exist  or are  expected  to  occur.  These
                  estimated  may be subject to revision in the normal  course of
                  business.




                                      F-12


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 10           -   COMMITMENT AND CONTINGENCIES (Cont'd)

                  b)  Lease agreement

                  The  Company  leases its  administrative  offices  and storage
                  space  pursuant to a signed lease  agreement  with RSJJ.  Such
                  lease  requires  monthly  payments  of $20,000  and expires on
                  March 31,  1998.  Under such lease  agreement,  the Company is
                  required to make future minimum lease payments as follows:

                 Year Ending
                 June 30,
                 1998                           $       180,000
                                                ===============


                  Included  in  general  and  administrative  expenses  is  rent
                  expense  which  amounted to $240,000  for the years ended June
                  30, 1997 and 1996. In addition,  pursuant to an oral agreement
                  the  Company  leases  a yard  for  storage  material  with  an
                  unrelated   party   which   requires   monthly   payments   of
                  approximately $3,500. Accordingly,  total rent expense for the
                  years ended June 30, 1997 and 1996 amounted to $282,000. As of
                  June 30, 1997,  $66,500 of rent remains unpaid and is included
                  in  accounts  payable.  During June 1997,  the Company  issued
                  270,000  shares  of its  common  stock to settle  $480,000  of
                  accrued rent. (See Note 9(d)(iii) above).

             c)   Significant customers and vendors

                  For the years  ended June 30,  1997 and 1996,  the Company had
                  three unrelated  customers  respectively,  which accounted for
                  approximately 86% and 62%, respectively, of total revenues. As
                  of  June  30,  1997  and  1996  approximately  83%  and 89% of
                  contracts  and  retainage  receivables  are due from  four and
                  three customers, respectively.

             d)   Seasonality

                  The Company  operates in an  industry  which may be  seasonal,
                  generally due to inclement weather occurring during the winter
                  months.  Accordingly,  the Company may  experience  a seasonal
                  pattern in its  operating  results  with lower  revenue in the
                  third quarter of each fiscal year.  Quarterly results may also
                  be affected by the timing of bid solicitations by governmental
                  authorities,  the stage of  completion  of major  projects and
                  revenue recognition policies.

                  e)    Bonding requirements

                  The  Company is  required  to provide  bid and/or  performance
                  bonds in connection with governmental  construction  projects.
                  To date,  the  Company  has been able to  sufficiently  obtain
                  bonding for its private projects.  The Company is continuously
                  pursuing  obtaining bonding for its governmental  construction
                  projects. In addition,  new or proposed legislation in various
                  jurisdictions   may  require   the   posting  of   substantial
                  additional  bonds or require other  financial  assurances  for
                  particular projects.




                                      F-13


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




NOTE 10           -     COMMITMENT AND CONTINGENCIES (Cont'd)

            f)    Mechanics liens

                        As of June 30, 1997,  three  actions to  foreclose  upon
                  mechanics  liens filed during the fiscal year were  commenced.
                  Such actions amounted to $3,278,775.

            g)    Legal Proceedings

                                     i)  During  January  1997,  an  action  was
                        commenced  by  the  Ohio  Bridge  Corporation   ("Ohio")
                        against  the  Company.  Ohio claims that the Company has
                        infringed its  trademark  "U.S.  Bridge".  During August
                        1997, the Company agreed to effect a name change to "USA
                        Bridge  Construction  of NY"  before the end of the 1997
                        calendar year.

                                     ii)  The  Company  is a  party  to  various
                        claims and legal proceedings incidental to its business.
                        In management's opinion, the outcome of these claims and
                        proceedings  will not have a material  adverse effect on
                        the  financial  statements  of the  Company  taken  as a
                        whole.

            h)    Payroll taxes

                        As of June 30,  1997,  the  Company  owes  approximately
                  $1,349,225  of  payroll   taxes  and  related   penalties  and
                  interest. Although as of June 30, 1997, the Company has not
                  entered  into  any  formal   repayment   agreements  with  the
respective tax  authorities,  it has been making monthly  payments based on oral
agreements.

NOTE 11           -     RELATED PARTY TRANSACTIONS

                  a)    Purchase of material and labor

                  For the  years  ended  June 30,  1997  and  1996  the  Company
                  purchased   from  Waldorf   approximately   $0  and  $180,333,
                  respectively,  of the materials and labor necessary to perform
                  fabrication services.  Effective August 1, 1995 Waldorf ceased
                  operations.  Said  vendor is under the  common  control of the
                  Company's majority stockholder and President.  Lastly, for the
                  years ended June 30, 1997 and 1996,  the Company paid $371,321
                  and $622,050,  respectively, to US Bridge MD for materials and
                  labor necessary to perform steel erection services.  US Bridge
                  MD  is  a  wholly-owned  subsidiary  of  Bridge  Corp.  During
                  September 1996, US Bridge MD ceased operations and the Company
                  began purchasing material and labor from unrelated third party
                  steel fabricators. At June 30, 1997 the Company owed US Bridge
                  MD $62,606,  principally for advances in connection with above
                  services and such amounts are non-interest  bearing and due on
                  demand.

             b)   Rent expense

                  Included  in  general  and  administrative  expenses  is  rent
                  expense  paid  pursuant  to a signed  lease  agreement  with a
                  company  wholly-owned  by the Company's  President.  Such rent
                  amounted  to  $240,000  for the years  ended June 30, 1997 and
                  1996.



                                      F-14


<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996



NOTE 11           -     RELATED PARTY TRANSACTIONS (Cont'd)

             c)   Employment agreement

                  On April 4,  1995,  the  Company  entered  into an  employment
                  agreement  with  its  President  and  Director  for a term  of
                  approximately  three (3) years  expiring on June 30, 1998. The
                  employment agreement provides for an annual salary of $300,000
                  with a 10% annual escalation.  In addition,  the President and
                  Director has been granted options to purchase 25,000 shares of
                  the Company's  common  stock,  all of which options shall vest
                  through April 1998. The exercise price of the options shall be
                  equal to the 110% of the  stock  price in the  initial  public
                  offering.  The  foregoing  options are  intended to qualify as
                  incentive stock options.

            d)    Due from related parties

                        During  the  years  ended  June  30,  1997  and 1996 the
                  Company paid certain  expenses on behalf of Bridge Corp. These
                  advances are non-interest bearing and are due on demand. As of
                  June 30,  1997 such  advances  to  Bridge  Corp.  amounted  to
                  $18,566 and are included in other current assets.

            e)    Due to related parties

                                           (i) Since June 1995 the  President of
                       the Company has advanced the Company  certain funds.  The
                       advances are non-interest  bearing and are due on demand.
                       At June 30, 1997 amounts due to the President amounted to
                       $225,368.

                                          (ii) As of June 30, 1997,  the Company
                       owes   approximately   $96,526  for   advances   made  by
                       affiliates  and  related  parties  on  its  behalf.  Such
                       advances are non-interest bearing and are due on demand.

                                      F-15


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