SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                                   (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  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  10,  1995.  Additionally,  the  Company  amended  the
authorized  capital of the  Company  (i) to  increase  the number of  authorized
shares of Common  Stock from 200 to  10,000,000;  (ii) to increase the par value
from no par value to $.001 par value per share;  and (iii) to authorize  500,000
shares of Preferred Stock,  par value $.01 per share.  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 sole stockholder of the
Company, Joseph Polito, whereby Mr. Polito received 2,820,000 shares for all the
shares of the Company and 720,000  shares for all the shares of common  stock of
One Carnegie.  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  share  of the  Company  held  prior  to the
acquisition  for 20,000 post reverse split shares of common 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
Metropolitan areas. Previously, through other entities, Mr. 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  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.




<PAGE>
         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 projects.  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 Mr. Polito as officer,  director, and principal stockholder -
were engaging in similar, but different work.

         Thereafter,  the  Company  was  notified  that it was the low bidder on
several New York City  projects;  however,  its then bonding was not accepted by
the  municipality,  so the Company lost the jobs. Its 1995 public offering was a
means by which the Company could raise the funds necessary to maintain cash flow
and obtain a bonding company.

Recent Developments

         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.  The Company
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.

         In March 1995, the Company entered into a subcontracting agreement with
McKay Enterprises,  Inc. (general  contractor) for the reconstruction of the 4th
Avenue  Bridge,  located  in  Brooklyn,  New  York,  owned by the New York  City
Department of Transportation. Work on the project has been completed.

         In April 1996,  the Company  entered a  subcontracting  agreement  with
Trataros Construction, Inc. ("Trataros," general contractor) for the performance
of structural and water intrusion  repairs of the  Williamsburg  Houses owned by
the New York City Housing Authority ("NYCHA").  This contract has been placed on
hold for a  considerable  period of time due to contract  scope  changes  and/or
other issues  between  parties not involving  the Company.  The Company does not
expect to return to this project and thus deems same to be completed.

         In May 1996, the Company entered a subcontracting agreement with Lehrer
McGovern Bovis,  Inc. (general  contractor) for the terminal  restoration of the
Grand Central Terminal owned by Metro-North  Commuter Railroad.  The contract is
valued at $3,706,653 and as of September 30, 1997 is approximately 69% complete.

         In June 1996, the Company  entered a prime  contracting  agreement with
Ecklec Co., the owner of the  Palisades  Power Mall  located in West Nyack,  New
York, to perform structural steel




<PAGE>
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
was 67% complete.

         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.

     On June 19,  1997,  the Company  issued  270,000  shares of Common Stock to
Corp.  which then issued  200,000  shares of its common stock to Mr.  Polito and
150,000 shares of its common stock to J.L.B.  Equities ("JLB").  These issuances
were made pursuant to an agreement between the Company and R.S.J.J. Realty Corp.
("RSJJ") to convert  $480,000 of debt (due under the Company's  lease  agreement
with  RSJJ)  into  equity.  See  "Item 12.  Certain  Relationships  and  Related
Transactions."






<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 office and    Queens, NY
                                                                                               storage space to the               
                                                                                               Company

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

Atlas Gem Leasing,                  1986             Pres./Director    100%                    Supplies welding         Queens,
Inc. (4)                                                                                       machines and compressors         NY
                                                                                               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    Waldorf,
Fabricators, Inc.(3)(5)                                                                        Company; ceased                   MD
                                                                                               operations in 8/95

U.S. Bridge Corp.                   1994             Pres./Director    0%                      Subsidiary of  Corp.;    Queens,
(Maryland) (4)(9)                                                                              ceased operations in 11/96       NY

U.S. Bridge of N.Y.,                1990             Pres./Director    56.3%                   Provides steel erection  Queens,
  Inc. (4)(10)                                                                                 buildings, roadway, and          NY
                                                                                               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").

<PAGE>
         (footnotes continued from previous page)

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


         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.  The Company
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.

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.






<PAGE>
         Inasmuch  as the  Company  purchased  steel from  Waldorf  and now from
Maryland, 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 Board of Directors intends to exercise reasonable
judgment  and  take  such  steps  as  it  deems   necessary  under  all  of  the
circumstances in resolving 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 Mr.  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."

Industry Overview

         1997 has brought about a resurrection in the  construction  industry in
the  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
Metropolitan area.

         These projects  positively  affect the  availability of work in diverse
disciplines in the construction industry: landscaping,  concrete, paving, steel,
etc. New York has  qualified as a bidder (and expects to place a bid in November
1997) to handle 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.







<PAGE>
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-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 Mr. 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  anticipates  acting as a general contractor on most 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




<PAGE>
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.  In
response  to  bid  requests,  the  Company  submits  a  proposal  detailing  its
qualifications,  the services to be provided and the cost of the services to the
soliciting  entity  which  then,  based  on  its  evaluation  of  the  proposals
submitted, awards the contract to the successful bidder. 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 specification,  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, at the option of the customer requesting the bids, a unit cost bid
and a lump-sum bid. The unit cost bid is based upon a cost per unit basis, where
a lump sum bid  obligates  the Company to complete the project at a fixed price.
In a lump-sum bid the risk of  estimating  the quantity of units  required for a
particular  project is on the Company  while in 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 that a bid  submitted  has been
declared the low bid, the city's  procurement  policy requires that the New York
Finance Committee approve all funds to be allocated to such project. During this
time the  Company  which was the low  bidder  must  provide  the  Department  of
Transportation  with such  documents  as are  required,  including a payment and
performance 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 Department of Transportation 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 Mr. 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 public or private  sector  projects as a general
contractor. It has, however, commenced two projects as a prime contractor.

         The Company  anticipates  acting as a general contractor on most 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 a general contractor,  the Company will be responsible
for the performance of the entire contract, including work




<PAGE>
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.

         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 Ecklec Co. 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 it if schedules are not met. The Company has not been
materially   adversely   affected  by  these   provisions   in  the  past  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.






<PAGE>
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 Mr.
Polito.

         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 of its client.

         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 three  subcontracting  projects  which have required  same:  the Ecklec Co.,
Grand Central Terminal, and Korean Mission projects.

Work in Progress; Backlog and Seasonality

         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>                 <C>    
Ecklec Co./
 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  September30,  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 the decreased  productivity  of
the workers, thereby increasing costs as well as the inability to work in severe
weather conditions.






<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.,  neither  of which  companies  is
affiliated with the Company or Corp., provided the remainder of the steel.
 MD provided the Company with  fabricated  steel until  November  1996, at which
time it ceased operating.  The prices paid and the terms for the steel purchased
from MD were comparable to competitive prices and terms; therefore, in the event
MD is unable to continue  to provide  the Company  with the bulk of the steel it
requires,  the Company  believes it will be able to acquire same  through  other
suppliers.

         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
Mr. 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 the  Company  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 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,  there may be
difficulties  of which  the  Company  is not  aware,  in hiring  and  overseeing
subcontractors.

Competition

         All aspects of the  Company's  business  are, and will  continue to be,
highly competitive.  The Company is one of many  subcontractors  which erect and
furnish steel for




<PAGE>
     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 also  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 and 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 Company employs such number of union
employees, depending on the number and size of projects engaged in, ranging from
10-200 employees on a full-time and part-time  basis.  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  agreements  regulate all  employment  issues  between the Company and the
union  employees  including  pay,  overtime,   working  conditions,   vacations,
benefits,  etc., which agreements expire on June 30, 1999. The Company considers
relations with the unions and its employees to be good.

ITEM 2.           DESCRIPTION OF PROPERTY

         The Company's office is located at 53-09 97th Place,  Corona,  New York
11368 and consists of approximately 25,000 square feet of executive office space
of which  approximately  24,000 square feet is utilized for storage  space.  The
lease is with an  affiliate  company,  RSJJ,  which  is  owned by the  Company's
president, Joseph Polito, pursuant to a lease agreement




<PAGE>
expiring in March 1998. The Company pays rent of $20,000 per month.  The Company
also leases a yard for storage  material  pursuant  to an oral  agreement  which
requires monthly payments of $3,500. The Company believes that the terms of this
lease are comparable and competitive  with that which would 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,  which in turn issued  200,000  shares of common
stock to Mr.  Polito and 150,000  shares of common stock to RSJJ,  the latter of
which then transferred all of its shares to JLB, RSJJ's mortgagor,  which agreed
to accept same as payment toward 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
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.  The claims
are based upon alleged defective work at 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  mentioned in
regards  to  the  above  two  actions  involving  Perini   Corporation  and  its
counterclaims are based upon the same theories.






<PAGE>
         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 Court Associates,  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. In December 1995, the
Commissioners of the State Insurance fund filed a suit against the Company,  the
Company,  Joseph,  Ronald and Steven  Polito,  individually  and as Officers and
Directors,  and others.  The suit  alleges  that the  defendants  "fraudulently"
obtained worker's compensation  insurance policies and failed to pay appropriate
premiums on the policies. The claims against the Company are limited to a policy




<PAGE>
covering the period April 29, 1993 through  December 1994. The plaintiff  claims
that the amount due under the policy is  approximately  three  million  dollars.
However,  plaintiff  admits  that its claim is based upon  estimates  of what it
believes are the proper premiums. The Company vigorously disputes this claim and
asserts that the plaintiff's  legitimate  claims should not exceed three hundred
thousand  dollars.  A settlement  conference was conducted on or about September
10, 1997. At the conference, plaintiff requested documentary evidence supporting
the  Company's  position.  the Company has  provided  the  documentation  and is
currently waiting for a response to the allegations.

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.

                                                    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 $6.00 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.



<PAGE>
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 the Metropolitan areas. Previously,
Mr. Polito, through other entities, has 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  and   municipal/governmental
customers.  In  the  New  York  Metropolitan  area,  there  is an  abundance  of
subcontractors known by the Company to have significant experience and which are
competitive with respect to pricing and level of service.

     The Company's  operations are substantially  controlled by Mr. 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, the company which leases administrative office space
to the  Company,  at a cost of $20,000  per month,  pursuant  to a signed  lease
agreement  which  expires  on March 31,  1998.  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 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;  accordingly,
since then, the




<PAGE>
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, in both the public and private sectors, as
a general  contractor.  As general  contractor,  NY will be responsible  for the
performance of the entire contract,  including work assigned to  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
often 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 may also be affected by the
timing of bid  solicitation,  the stage of  completion  of major  projects,  and
revenue recognition policies.

     In order to obtain  bonding,  in addition to  performing  credit checks and
other due  diligence  disclosure  requirements,  bonding  companies  require the
Company  receiving  bonding to  maintain  certain  amounts of capital and liquid
assets. These companies base the amount of bonding they will issue on a formula,
devised individually,  which primarily takes into account such factors. 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
billing  statement and are paid by the  customer.  Any monies taken from working
capital for this  purpose will be replaced as the monthly  billing  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  11/4% to  31/2% 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
commencing work on the project.

     In December  1996, the Company  obtained a bonding  commitment for a surety
line of credit ($10,000,000 single project limit) from United American Guarantee
Company,  Ltd. 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.

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  backlog as of June 30,
1996  which  amounted  to  $17,943,400.  This  backlog  amounts  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  additional  change  orders to previous  contracts  amounting  to
approximately $3,600,347. Included in contract revenues




<PAGE>
are revenues from joint venture profit sharing  agreements on certain  projects.
Joint  venture  revenues  for the year ended  June 30,  1997  amounted  to $0 as
compared  to the year ended June 30, 1996  wherein  same  amounted to  $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 above  services and such amounts are  non-interest
bearing and 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  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  wherein 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 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%,  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,




<PAGE>
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 IRS 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
270,000  shares of Company  Common  Stock were issued to Corp.  in exchange  for
which Corp. issued 150,000 shares of its common stock to JLB (RSJJ's  mortgagor)
and 200,000  shares to Mr. Polito  (RSJJ's  president)  for the  forgiveness  of
$480,000  in  rent  debt  due by the  Company  to  RSJJ.  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.

         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
to the Management Plan to increase the amount of shares available to 1,000,000.




<PAGE>
         In February 1997,  pursuant to a Form S-8 Registration  Statement filed
with the  Securities and Exchange  Commission,  the Company  registered  125,000
shares of Common  Stock  underlying  an option  which was  issued to Mr.  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,  of which 60,000
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.

                                                   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
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




<PAGE>
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 NY.

         Since 1986,  Mr. Polito has been the president and 100%  shareholder of
Gem Steel  Erectors,  Inc.  ("Gem  Steel").  Since 1985, Mr. Polito has been the
president and sole shareholder of Atlas Gem, a company which,  when it operated,
furnished  and erected  steel  structures.  Neither  Atlas Gem nor Gem Steel has
transacted any business or other operations since ceasing operations in 1994 and
1991,  respectively,  and neither  company has any present  intention  to resume
operations.  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  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 1985,  Mr. Polito has been the secretary of
Gem  Steel.  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 1988, Mr.
Polito has been the treasurer of Gem Steel.  Since 1988, Mr. Polito has been the
treasurer of One Carnegie,  Waldorf,  and RSJJ.  From 1988 until April 1994, Mr.
Polito worked as a Project  Manager of Atlas Gem, a company which  furnished and
erected steel structures. 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.




<PAGE>
     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 NY 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 NY  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 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.

Compliance with Section 16(a) of the Exchange Act

     Management  has failed to file the forms  required by Section  16(a) of the
Securities  Exchange Act of 1934, as amended,  during the period covered by this
Report; however,  management intends to file such forms immediately. In general,
Section  16(a)  requires  a  Company's  Officers,  Directors,  and  persons  who
beneficially  own more than ten percent of a registered  class of the  Company's
equity  securities to file reports of  securities  ownership and changes in such
ownership  with  the  Securities  and  Exchange  Commission  ("SEC").  Officers,
Directors,  and greater than ten percent  beneficial owners also are required by
rules  promulgated  by the SEC to furnish the Company with copies of all Section
16(a) forms they file.




<PAGE>
 ITEM 11.         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.

                                          Summary Compensation Table
<TABLE>
<CAPTION>

                                                        Annual Compensation

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            -                  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(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 the payment of an  automobile  lease of $7,920 and $7,549
     for  the  years  ended  June  30,  1997  and  1996,  respectively.  See " -
     Employment Agreements."

(3)  Includes (i) payments on the lease of an automobile of $5,416,  $5,416, and
     $8,000,  (ii) the payment of premiums  on a term life  insurance  policy of
     $8,510, $4,684, and $5,800, 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 payment on a lease automobile of $5,304,  $5,304, and $6,700 and a
     travel allowance of $3,268, $2,971, and $3,200 for the years ended June 30,
     1997, 1996 and 1995, respectively.


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.








<PAGE>
<TABLE>
<CAPTION>

                                    OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                              (Individual Grants)

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


                                                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 Corporation's 1994
Senior Management Incentive Plan (the "Management Plan").  Options granted under
this  Management  Plan are intended to qualify as incentive  stock options under
the Internal Revenue Code of 1986, as amended. Under the terms of the Management
Plan,  options  may  be  granted  to  officers,  key  employees,  directors  and
consultants of the Corporation  for a maximum term of 10 years.  Options granted
to  directors,  who are not officers or  employees,  or to  consultants,  do not
qualify as incentive  stock options.  The option price per share may not be less
than the fair market value of the Corporation's shares on the date the option is
granted.  However,  options  granted  to  persons  owning  more  than 10% of the
Corporation's  Common  Stock may not have a term in excess of five years and may
not have an option price of less than 110% of the fair market value per share of
the Company's shares on the date the option is granted.

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

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

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


     (1)  Joseph  Polito  subsequently  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

         Joseph  Polito  entered into an employment  agreement  with the Company
dated April 4, 1995,  whereby Mr.  Polito  agreed to devote 80% of his  business
time to the affairs of the Company. The agreement is for a term of approximately
three years  expiring June 30, 1998.  Pursuant to the terms of the agreement Mr.
Polito is to receive an annual  salary of $300,000 per annum until June 30, 1996
with 10% yearly escalation, 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 Company's  1994 Senior  Management
Incentive 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.

         Steven and Ronald Polito receive annual salary compensations of $94,000
and  $125,000,   respectively,  from  the  Company,  which  compensation  levels
commenced  in March 1995 and April 1994,  respectively.  Both  individuals  also
receive a car allowance equal to the monthly lease payments on their automobiles
and the  payment of  premiums  on life  insurance  policies of which they choose
their 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 the Company's  cash reserves.  The  Management  Plan is
designed to augment the Company's




<PAGE>
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 $100,00. 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 an option to purchase  125,000
shares at an exercise price of $1.10 per share pursuant to the Management  Plan.
The shares were  registered  pursuant to a February 1997 S-8. On March 25, 1997,
Mr. Polito  exercised the option.  On April 11, 1997,  Mr. Polito 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 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




<PAGE>
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"  transaction:  (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  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




<PAGE>
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.

         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




<PAGE>
Common  Stock) for cash,  securities or any other  consideration  pursuant to at
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 17,
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) Mr. 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 Mr.  Polito which are
vested. Does not include (i) 10,000 shares issuable upon the exercise of options
not  presently  vested or (ii) 60,000 shares which were resold upon the exercise
of an option.




<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company leases its administrative  office space and certain storage
space from RSJJ,  an  affiliate  owned by the  Company's  majority  stockholder,
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.  Mr.
Polito is the majority  shareholder of the Company, he owns approximately 61% of
the  outstanding  shares of Corp.  and  therefore,  may be deemed to control the
shares  of  the  Company  owned  by  Corp.  which  1,225,665  or  52.89%  of the
outstanding shares.

         On October 11, 1995, the Company paid One Carnegie $50,000 on behalf of
MD for fabrication  services  performed by MD. Such payment was treated as an on
account payment 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.

         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.

     During the year ended June 30,  1996,  the Company  purchased  from Waldorf
approximately  $180,333  of  fabricated  steel.  Such  amount  paid  to  Waldorf
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. MD is a wholly owned subsidiary of
Corp.

     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.  Mr.  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 Mr. Polito.

         On March 25, 1997, the Company issued 125,000 shares of Common Stock to
Mr. Polito upon exercise by Mr. Polito of an option to purchase  125,000  shares
at an exercise  price of $1.10 per share,  which  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. This arrearage was converted into equity
as follows: the Company



<PAGE>
issued 270,000 shares of Common Stock to Corp., for the cancellation of the debt
owed,  which in turn issued 200,000  shares of Corp.  common stock to Mr. Polito
and  150,000  shares of Corp.  common  stock to RSJJ,  the  latter of which then
transferred all of its shares to JLB, RSJJ's  mortgagor,  which agreed to accept
said shares as payment toward RSJJ's outstanding mortgage.

         See  "Item  10.   Executive   Compensation-Employment   and  Consulting
Agreements" 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:

                                    Page
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

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

All exhibits,  except those  designated  with an asterisk  (*),  which are to be
filed by amendment to this form,  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,
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.
10.7              -        Agreement between Local Union 14, 14B, 15, 15A, 15C, 15D,
                           International Union of Operating Engineers, AFL-CIO and the
<PAGE>
                           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. (the Louis Vuitton project), dated May 15,
                           1996.
10.23*            -        Prime contractor  agreement between the Company and
                           Tishman  Construction  Corporation of New York, dated
                           July 24, 1996.
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 10th day of October, 1997.


                                           U.S. BRIDGE OF N.Y., INC.
                                           \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                                       10\10\97
Joseph M. Polito                                     (Chief Executive                                             Date
                                                     Officer)


\s\ Ronald J. Polito                                 Secretary and Director                                       10\10\97
Ronald J. Polito                                                                                                  Date



\s\ Steven J. Polito___                              Treasurer                                                    10\10\97
Steven J. Polito                                                                                                  Date



\s\ Phillip Neilson___                               Director                                                     10\10\97
Phillip Neilson                                                                                                   Date


\s\ Marvin Weinstein                                 Director                                                     10\10\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
                                      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>            <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




                           c)       Revenue recognition

                  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.

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

                  c)       Revenue recognition (cont'd)

                  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





             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

                           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)

                                      F-8
<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

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.
<TABLE>
<CAPTION>

<S>                                                                  <C>         
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
                                                                    ============
</TABLE>
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.

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



                                      F-9
<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

                  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:

NOTE 8       -    INCOME TAXES

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.

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



                                      F-10
<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996




                  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%.

NOTE 9            -   STOCKHOLDERS EQUITY

                  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.




                                      F-11
<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

            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.

                  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



                                      F-12
<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996

                  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)    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



                                      F-13
<PAGE>
                            U.S. BRIDGE OF N.Y., INC.
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 1997 AND 1996



                  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.

             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-14