SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

         |X| Annual Report under Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                   For the fiscal year ended December 31, 1999

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934 for the transition period from ______________ to ______________

                         Commission File Number: 0-2642

                            TRIDENT ROWAN GROUP, INC.
             (Exact name of registrant as specified in its charter)

        Maryland                                             52-0466460
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

                                 299 Park Avenue
                                   16th Floor
                            New York, New York 10171
               (Address of principal executive offices) (Zip code)
                                 (212) 644- 4441

               (Registrant's telephone number including area code)

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

                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, par value $0.01 per share

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes               No  X
   ----             ----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or

<PAGE>

information statements incorporated by reference in Part III of the Form 10-K or
any amendment to the Form 10-K. _____

As of August 7, 2001 the  aggregate  market  value of the  voting  stock held by
nonaffiliates of the registrant was $2,278,176.

As of August 7, 2001,  there were 4,119,900  shares of the  registrant's  common
stock, par value $0.01 per share, outstanding.

<PAGE>

                            TRIDENT ROWAN GROUP, INC.

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I    ..................................................................  1

ITEM 1.   BUSINESS..........................................................  19

ITEM 2.   PROPERTIES........................................................  31

ITEM 3.   LEGAL PROCEEDINGS.................................................  32

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............  34

PART II   ..................................................................

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS...........................................................  36

ITEM 6.   SELECTED FINANCIAL DATA...........................................  37

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.............................................  39

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................  50

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE..............................................  85

PART III  ..................................................................

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................  85

ITEM 11.  EXECUTIVE COMPENSATION............................................  89

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....  95

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................  96

PART IV   ..................................................................

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K... 100


                                      -i-
<PAGE>

PART I


NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed herein are  "forward-looking  statements"  intended to
qualify  for  the  safe  harbors  from  liability  established  by  the  Private
Securities Litigation Reform Act of 1995. These  forward-looking  statements can
generally be  identified  as such because they include words such as the Company
"believes," "anticipates," "expects" or "estimates" or words of similar meaning.
Similarly,  statements  that  describe the Company's  future plans,  objectives,
targets  or  goals  are  also  forward-looking   statements.  By  their  nature,
forward-looking  statements  are subject to risks and  uncertainties  that could
cause actual results to differ materially from those anticipated in this report.
Certain of such risks and uncertainties are described in close proximity to such
statements or elsewhere in this report. The forward-looking  statements included
herein are made only as of the date of this report,  and the Company  undertakes
no obligation  to update  publicly  such  forward-looking  statements to reflect
subsequent events or circumstances.

ITEM 1.  BUSINESS


HISTORY OF THE COMPANY

Overview

The Company's Business as of December 31, 1999

As of December 31, 1999, the Company, through intermediate subsidiaries, was the
owner of (i) Moto Guzzi  Corporation  ("Moto Guzzi") an Italian  manufacturer of
luxury and high-performance  motorcycles,  and its four operating  subsidiaries,
Moto Guzzi S.p.A., Moto Guzzi North America Inc, Moto Guzzi France Sarl, and MGI
GmbH, (ii) L.I.T.A.,  S.p.A.  ("LITA"),  an Italian manufacturer of welded steel
tubes used  principally in the automobile  and furniture  industries,  and (iii)
Temporary Integrated Management, S.p.A. ("TIM"), an Italian temporary management
services  company,  which  provided  services  to  troubled  businesses  located
primarily in Italy.  Each of Moto Guzzi and LITA represented an industry segment
of the Company,  while the  operations  of TIM were not material to the Company.
The Company was incorporated in Maryland in 1917.

Current status of the Company

o    As of August 10, 2001, the date of this report, the Company has disposed of
     all of its  operating  subsidiaries  and real  property,  and its principal
     assets are represented by the cash proceeds of such disposals,  receivables
     and rights to escrow accounts deriving from the disposals and tax and other
     receivables.  The major part of cash and other  assets of the  Company  are
     held   by  its   majority   owned   subsidiary,   Centerpoint   Corporation
     (OTC/BB:CPTX) ("Centerpoint").

o    The Company is currently  examining  opportunities to acquire or merge with
     another operating business or businesses. Such acquisition or merger may be
     made through  Centerpoint.  In June 2001,  with the consent of the Company,
     Centerpoint  engaged the investment banking firm of Investec Ernst & Co. to
     assist Centerpoint in its evaluation of strategic alternatives.


                                      -1-
<PAGE>

o    Alternatively,  if  Centerpoint  is unable to find a suitable  business  to
     acquire or merge with acceptable to the Company, it is anticipated that the
     Company will require  Centerpoint to present a liquidation  proposal to its
     stockholders.  As a holder of a majority of the shares of Centerpoint,  the
     Company has the ability to approve or reject a liquidation proposal without
     the  vote of any  other  stockholder.  If  Centerpoint  is  liquidated  and
     liquidating  proceeds are paid to its stockholders,  then it is anticipated
     that the Company will either itself seek a suitable  business to acquire or
     merge with or  present a  liquidation  proposal  to its  stockholders.  Any
     liquidation  of  the  Company  is  complicated  by  the  complexity  of the
     Company's corporate structure, the continuing effects of past acquisitions,
     dispositions and restructurings, and related tax effects. For instance, one
     of the escrow  accounts  relating to the sale of the Moto Guzzi  operations
     must be maintained until 2007.

o    As the  Company no longer has any  operating  subsidiaries,  if the Company
     (through Centerpoint or otherwise) is unable to find a suitable business to
     acquire or merge with, and Centerpoint and the Company fail to initiate the
     liquidation  process  within twelve months of the closing of the Moto Guzzi
     sale,  then the Company and  Centerpoint may become required to register as
     investment companies under the Investment Company Act of 1940.

Disposal of the Company's motorcycle operations

o    In September 2000, the Company's  majority owned subsidiary,  Centerpoint -
     then  Moto  Guzzi  Corporation  -closed  on  the  sale  of its  Moto  Guzzi
     motorcycle operations to Aprilia S.p.A.  ("Aprilia"),  pursuant to an April
     14, 2000 share purchase agreement.  Moto Guzzi received Lit. 60,293 million
     in cash from the sale after  deduction of Lit. 11,401 million paid to Banca
     di  Intermediazione  Mobiliare  IMI SpA ("IMI"),  Moto  Guzzi's  investment
     advisor,  and the placement of Lit.  7,000 million and Lit.  2,375 million,
     respectively, in escrow to secure certain warranties given by Moto Guzzi in
     the sale agreement.

o    The motorcycle operations represented the principal industry segment of the
     Company  and have been  accounted  for as  discontinued  operations  in the
     financial statements at December 31, 1999.

o    In order to finance  Moto Guzzi  operations  through  the date of sale,  in
     December  1999  the  Company  raised  US$ 6  million  through  issuance  of
     convertible   debentures  due  in  December  2001  and  in  February  2000,
     Centerpoint  (then  Moto  Guzzi)  raised US$ 6 million  from third  parties
     through  the  issuance  of Series B  preferred  stock.  The Company and its
     majority  owned  subsidiary,   OAM  S.p.A.  ("OAM"),  and  two  Centerpoint
     directors  were  included  in the  subscribers  for the Series B  preferred
     stock, which was redeemed in full by Centerpoint in September 2000.

o    The net proceeds from the sale of the Moto Guzzi motorcycle operations have
     been invested by  Centerpoint  in short-term  interest  bearing  securities
     pending decisions by its Board of Directors,  the Company, or Centerpoint's
     stockholders as appropriate, as to Centerpoint's future plans.

o    The Company and Centerpoint are in dispute with IMI, the investment bankers
     for  the  sale  of the  Moto  Guzzi  operations,  regarding  IMI's  fees in
     connection  with the sale.  IMI caused a fee to be  deducted  from the sale
     proceeds payable to Centerpoint  that the Company and Centerpoint  consider
     to be excessive and inconsistent  with the provisions and intentions of the
     engagement  agreement.


                                      -2-
<PAGE>

     Centerpoint  is seeking to settle this dispute with IMI and is preparing to
     litigate to seek  satisfaction if no acceptable  settlement can be obtained
     otherwise.

Disposal of the Company's steel tube operations

o    In July 2000, the Company sold its 100% interest in LITA to Fintrebi S.r.l.
     and Mittel Generale  Investimenti S.p.A.,  companies  unaffiliated with the
     Company, for a total consideration of Lit. 1,800 million. Immediately prior
     to the sale, with the agreement of the purchasers,  LITA paid a dividend to
     the Company of Lit. 670 million.  The Company  received Lit. 800 million in
     cash and a further  Lit.  1,000  million is  receivable  in July  2001.  In
     connection  with the sale,  the Company  issued a Lit.  1,000  million bank
     guarantee to the purchasers to secure certain  warranties  given as part of
     the sale agreement.

o    The steel tube  operations of LITA  represented an industry  segment of the
     Company  and have been  accounted  for as  discontinued  operations  in the
     financial statements at December 31, 1999.

Disposal of other businesses and assets

o    Effective as of January 1, 2000, the Company disposed of TIM, its temporary
     management  business,  selling this business to its  management in exchange
     for  80,000  of the  Company's  shares  with a fair  value at such  date of
     approximately Lit. 320 million.

o    In July 1999,  the Company  disposed of its interest in  concession  rights
     over parking spaces in Genoa for Lit. 1,600 million.

o    In December 1999, the Company  completed its real estate  disposal  program
     with the sale of land in Sardinia for Lit. 3,000 million.

Purchase of minority interest in OAM subsidiary

o    In July 2000, the Company agreed to purchase the minority  interests in OAM
     held by Daimler  Chrysler  Corporation for US$ 2,500,000.  The purchase was
     completed in March 2001.

Centerpoint  Loan; Early payment of the Company's 5% Convertible  Debentures due
in December 2001

The Company's 5% Convertible  Debentures in an aggregate amount of US$ 6,250,000
were scheduled to come due in December  2001. On June 13, 2001 the Company,  OAM
and Centerpoint  entered into the Centerpoint Loan Agreement wherein Centerpoint
agreed to lend the Company US$ 4,200,000.  On June 13, 2001  Centerpoint  loaned
the Company US$  4,200,000  and on June 15, 2001 the Company paid the holders of
US$  6,000,000 of the  Debentures  US$  4,207,500 in cash,  which the  Debenture
holders  accepted  as payment in full on the  Debentures,  representing  a 31.5%
discount  from  their  face  value.  US$  250,000  of  the  Debentures   remains
outstanding.



                                      -3-
<PAGE>

Settlement of Wilson Litigation

In  December  2000,  the  Company  and  Gould,  the  co-defendant  in the Wilson
Litigation executed a settlement  agreement and release with the plaintiff under
which each of the Company and Gould paid US $1,025,000 to settle the claims with
the  plaintiff.  On June 15, 2001, a verdict was rendered by the Court of Common
Pleas of Philadelphia County holding that the Company was responsible for paying
all  settlement  funds and ordering the Company to pay Gould US $1,025,000  plus
interest at a rate of 7% per annum from the date Gould paid the plaintiffs.

Aprilia Claims under the Share Purchase  Agreement;  Payment by IMI; Request for
Arbitration

On June 2001 Aprilia's legal counsel sent a letter to Centerpoint  which alleged
that it had  various  claims  under the  Share  Purchase  Agreement  aggregating
approximately Lit. 9,600 million.

On July 13,  2001  Centerpoint's  Italian  counsel  sent a letter  to  Aprilia's
counsel contesting all of the Alleged Claims.

On July 13, 2001 Aprilia  requested  that IMI, the escrow agent under the Escrow
Agreement, pay them Lit. 7,611 million in respect of the Alleged Claims. On July
26,  2001,  in spite of being  aware of  Centerpoint  contesting  of each of the
Alleged Claims and its intention to seek  arbitration,  IMI advised  Centerpoint
that it had paid Lit.  7,611  million  from the  escrow  account  to  Aprilia in
respect of the Alleged Claims.

Pursuant to the Share Purchase  Agreement and Escrow  Agreement,  which provides
that  disputes  among the  parties be  arbitrated,  Centerpoint  has  prepared a
Request  for  Arbitration  in  Accordance  with  Article  4 of the ICC  Rules of
Arbitration relating to the Alleged Claims and the payment by IMI and requesting
restitution of the funds paid to Aprilia, which Centerpoint is in the process of
filing with the International  Chamber of Commerce.  Centerpoint has advised the
Company  that it expects a decision by the ICC with  respect to the request will
be  rendered  approximately  twelve to eighteen  months  after the filing of the
request.

Subsequent Events

Centerpoint's  (then Moto Guzzi) Agreement with the Company and OAM to present a
liquidation  proposal to its  stockholders  following the Closing of the sale of
its operations to Aprilia

The Share Purchase Agreement  providing for the sale of Centerpoint's  operating
subsidiaries to Aprilia  (described  below)  contained a condition that OAM (the
holder  of   approximately   58%  of  the  issued  and  outstanding   shares  of
Centerpoint's  Class A common stock,  and a subsidiary of the Company)  agree to
vote its capital  stock for the sale,  and by letter to Aprilia  dated April 14,
2000, OAM agreed to vote its shares for the sale.

In order to induce OAM to deliver its letter to Aprilia, Centerpoint agreed with
OAM and the Company by letter  dated  April 14,  2000 (the "April 14th  letter")
that,  among other things,  it would pay IMI's fees in connection with the sale.
The April  14th  letter  was  amended on June 8, 2000 to  provide,  among  other
things,  that Centerpoint would, as promptly as practicable after the closing of
the sale,  but in no event  later than 90 days  following  the  closing,  hold a
meeting of stockholders to consider and vote upon a


                                      -4-
<PAGE>

proposal to liquidate all of Centerpoint's  assets and dissolve itself. The date
for proceeding to propose a liquidation was subsequently extended by the Company
and OAM to July 15, 2001.

Under Delaware Law, any liquidation of Centerpoint  will require the approval of
the holders of a majority of Centerpoint's  Class A common stock, and compliance
by Centerpoint with applicable  Securities and Exchange  Commission  regulations
concerning  any  proposed  liquidation.   However,   because  OAM  owns  58%  of
Centerpoint's  Class A common  stock,  it can approve a  liquidation  even if no
other Centerpoint  stockholders vote in favor of it.  Conversely,  a liquidation
will not be  approved  unless  OAM  votes in favor of it.  Although  OAM and the
Company  originally  insisted  that  Centerpoint  agree to submit a  liquidation
proposal to its stockholders, OAM is not committed to vote its shares of Class A
common stock for a  liquidation  proposal.  Unless the Company and OAM amend the
April  14th  letter to  eliminate  the  requirement  that  Centerpoint  submit a
liquidation  proposal to its  stockholders,  or otherwise  terminate the letter,
Centerpoint   will  be  required  to  submit  a  liquidation   proposal  to  its
stockholders.

Centerpoint's  consideration  of a  potential  acquisition  of or merger with an
operating company

Following  the sale of the  Moto  Guzzi  operations,  Centerpoint  invested  the
proceeds of the sale in short-term fixed interest Euro  denominated  securities.
Since the closing of the sale,  with the  knowledge  and consent of the Company,
Centerpoint has sought to find a suitable  operating company to acquire or merge
with using the proceeds from the sale.  Centerpoint has advised the Company that
if it finds a suitable  acquisition  or merger  candidate  then it will probably
propose the  acquisition  of, or merger with,  such entity as an  alternative to
liquidation.  Any such  acquisition or merger would require that the Company and
OAM  terminate  or  further  amend the April  14th  letter  (which is within the
Company's  and OAM's sole  discretion),  and would need to be made in accordance
with the  requirements of Delaware law and applicable SEC  regulations.  Whether
Centerpoint  will be  required  under  Delaware  law to obtain  approval  of its
stockholders in connection  with any proposed  acquisition or merger will depend
upon the structure of the proposed transaction.

In  June  2001,  with  the  consent  of the  Company,  Centerpoint  engaged  the
investment  banking  firm  of  Investec  Ernst  &  Co.  ("Investec")  to  assist
Centerpoint in its  evaluation of strategic  alternatives,  including  potential
acquisitions  and  investments.  While  Centerpoint  has, as of the date of this
report,  identified several  acquisition/merger  candidates,  it has not entered
into a  binding  agreement  or  letter  of  intent  with  respect  to  any  such
transaction,  and has not presented any such transaction to the Company and OAM.
The Company anticipates that within six months of the date of the filing of this
report (i)  Centerpoint  will propose one or more  potential  acquisition/merger
transactions  with  one or  more  operating  companies,  one of  which  will  be
acceptable  to the  Company  and OAM,  in which  event the  Company and OAM will
amend,  or  otherwise  terminate,  the April 14th  letter in order to permit the
transaction,  or (ii) the Company and OAM will  require  Centerpoint  to proceed
with a liquidation  proposal in accordance  with Delaware law, and the rules and
regulations  of the SEC. As Delaware  law  requires  stockholder  approval for a
liquidation  of  a  company,   any  liquidation  of  Centerpoint   will  require
stockholder approval. In accordance with SEC rules and regulations,  Centerpoint
will be required to hold a special meeting of stockholders,  distribute required
proxy  materials to its  stockholders  and otherwise  comply with such rules and
regulations.


                                      -5-
<PAGE>

Limitations  on OAM's and the Company's  ability to distribute  any  liquidation
proceeds or dividend received from Centerpoint;Centerpoint right of offset

If  Centerpoint  proceeds  with a  liquidation  proposal that is approved by its
stockholders,  it is expected that Centerpoint will pay off all of its remaining
obligations and pay an initial  liquidating  dividend to its stockholders within
90 days of such approval.  Escrow amounts being held in connection with the sale
of the Moto Guzzi operations would be distributed to Centerpoint's  stockholders
if and when available. The Company and OAM, as stockholders of Centerpoint,  are
each entitled to receive their pro-rata share of any liquidating  dividends paid
by  Centerpoint.  Pursuant  to the  terms  of  the  Centerpoint  Loan  Agreement
described below,  however,  Centerpoint will be able to offset any dividends due
to OAM and the  Company  against  amounts  payable  under the  Centerpoint  Loan
Agreement, and the Company anticipates that Centerpoint will exercise this right
in connection with the payment of any liquidating dividends.  Should Centerpoint
liquidate and pay  liquidating  dividends,  the Company  anticipates  that funds
remaining in the Company will not be  sufficient  to enable it to proceed with a
merger or  acquisition  of an  operating  company,  leaving  liquidation  as the
Company's most likely course of action.  However, due to its ownership structure
and tax complications  relating to prior  transactions and  restructurings,  the
Company  anticipates that OAM and Trident Rowan Servizi S.p.A.,  an intermediate
holding  company  between the Company and OAM, would not be able to proceed with
liquidations or pay liquidating dividends for a period currently envisaged as at
least two years.

Centerpoint  Loan; Early payment of the Company's 5% Convertible  Debentures due
in December 2001

The Company's 5% Convertible  Debentures in an aggregate amount of US$ 6,250,000
were scheduled to come due in December  2001. On June 13, 2001 the Company,  OAM
and Centerpoint entered into a loan agreement (the "Centerpoint Loan Agreement")
wherein  subject  to  the  terms  and  certain   conditions  set  forth  therein
Centerpoint agreed to lend the Company  $4,200,000 (the "Centerpoint  Loan"). On
June 13, 2001  Centerpoint  made the  Centerpoint  Loan and on June 15, 2001 the
Company paid the holders of  $6,000,000  of the  Debentures  $4,207,500 in cash,
which the  Debenture  holders  accepted  as  payment  in full on the  Debentures
(including  past due  interest),  representing  a 31.5% discount from their face
value.  $250,000 of the Debentures  remains  outstanding.  The Centerpoint  Loan
bears  interest at a rate of 5 % per annum,  is repayable in full on the earlier
of June  13,  2002 and the  date on  which  the  Company  causes  or  permits  a
liquidation of Centerpoint,  and is secured by the 300,000 shares of Centerpoint
common  stock  currently  owned by the  Company and  1,200,000  of the shares of
Centerpoint  common  stock  currently  owned  by OAM.  In  connection  with  the
Centerpoint  Loan, OAM also entered into a Limited Recourse  Guaranty  Agreement
(the "OAM Guaranty")  wherein it guaranteed the Company's  obligations under the
Centerpoint Loan Agreement. OAM's liability under the OAM Guaranty is limited to
the value of the Centerpoint  shares pledged by OAM, as that term is used in the
OAM pledge agreement.


                                      -6-
<PAGE>

Investment Company Act Matters

If the Company  (through  Centerpoint or otherwise) is unable to find a suitable
company to acquire or merge with, and Centerpoint fails to initiate  liquidation
proceedings by September  2001, the Company and Centerpoint are likely to become
required to register as investment companies under the Investment Company Act of
1940.  Even if Centerpoint  does find a company to acquire or merge with, if the
Company  fails to maintain  majority  ownership of  Centerpoint  following  such
acquisition  or  merger,  the  Company  may become  subject to the  registration
requirements.  There are severe  limits on what a company  registered  under the
Investment Company Act can do, including a prohibition against its borrowing and
strict   limitations   upon  dealings   between  the  company  and   significant
stockholders. If Centerpoint and the Company were required to register under the
Investment  Company Act, and following  registration  Centerpoint  determined to
acquire  or  merge  with an  operating  business,  Centerpoint  and the  Company
(provided it maintains  majority ownership of Centerpoint) could terminate their
respective  registrations  under the  Investment  Company  Act and  cease  being
subject  to  its  restrictions.   However,   Centerpoint's  registration  as  an
investment  company  could  delay  or  complicate  the  process  of  Centerpoint
acquiring or merging with an operating business.

Settlement of Wilson Litigation; Judgment

On December 19, 2000,  a  Settlement  Agreement  and Release was executed by and
between  plaintiffs,  the  Company  and I.T.E.  Imperial  Corporation  and Gould
Electronics,  Inc., the co-defendants in the Wilson Litigation.  The Company and
Gould each agreed to pay 50% of the  $2,050,000  settlement  amount,  subject to
resolution of certain issues between them.  The remaining  issue,  the Company's
claim against Gould for indemnification, was litigated on February 16, 2001.

On June 15,  2001,  a verdict  was  rendered  by the  Court of  Common  Pleas of
Philadelphia  County  holding  that the  Company is  responsible  for paying all
settlement  funds and ordering the Company to pay Gould $1,025,000 plus interest
at a rate of 7% per annum from the date Gould  paid the  plaintiffs.  The appeal
period for the judgment  expired on July 15, 2001,  and the judgment  became due
and payable to Gould on that date.

Given the status of these legal  actions,  the Company has  recorded  additional
provisions of Lit. 2,970 million and the full amount of the  $2,050,000  payable
by the Company is accrued at December  31,  1999.  Although no judgment has been
rendered with respect to the Company's claims against Travelers  relating to the
Wilson Litigation,  and it is possible that the Company may recover  significant
amounts  from  Travelers,  no  amounts  have  been  offset  or  accouted  for as
receivables in respect of these claims.

Aprilia Claims under the Share Purchase  Agreement;  Payment by IMI; Request for
Arbitration

Pursuant to the terms,  and  subject to the  conditions,  of the Share  Purchase
Agreement  and the  Escrow  Agreement  relating  to the  sale  of  Moto  Guzzi's
operating  subsidiaries,  Lit.  9,375  million of the  proceeds of the sale were
placed into escrow.


                                      -7-
<PAGE>

By letter  dated  December  21, 2000,  legal  counsel for Aprilia  filed a claim
against  Centerpoint under the Share Purchase Agreement alleging (i) that it had
failed to receive a  resignation  and release  from Mr. Roth,  an executive  and
director of MGI GmbH, and (ii) that the campaign  recall with respect to certain
Moto Guzzi  motorcycles  was more critical than that forecast in the  Management
Date Financial Statements and August 3, 2000 letter. By letter dated February 5,
2001  Centerpoint's  Italian  legal  counsel  responded to the December 21, 2000
letter  specifically  denying the alleged claims and requesting that the parties
meet to negotiate a release of the escrow  funds,  as provided for in the August
3, 2000 letter.

On June  2001  Aprilia's  legal  counsel  sent a  letter  to  Centerpoint  which
reiterated the claims in its December 21, 2000 letter and alleged the following:
(i) that  the  cost of the  recall  campaign  was  estimated  by  Aprilia  to be
approximately  Lit. 4,500 million,  which exceeded the Management Date Financial
Statement amount with respect to the recall campaign by Lit. 2,676 million, (ii)
that  technical  problems  related to various  motorcycles  were  likely to cost
Aprilia  approximately Lit. 5,308 million,  and that such technical problems had
not been  disclosed  to  Aprilia in  connection  with the sale of the Moto Guzzi
operations to Aprilia,  and that Aprilia was entitled to  reimbursement  of such
costs,  (iii) that Aprilia was entitled to  reimbursement  of Lit. 148.5 million
incurred by Aprilia in connection with the termination of Mr. Roth, an executive
of MGI GmbH, (iv) that Aprilia was entitled to reimbursement of Lit. 378 million
in respect of  unjustified  credit  notes issued by MGI GmbH in favor of dealers
and distributors,  and (v) that breaches of accounting  principles by Moto Guzzi
North America  entitled it to claims  against  Centerpoint in the amount of Lit.
1,100  million  (collectively  with  (i),  (ii),  (iii)  and(iv),  the  "Alleged
Claims").

On July 13,  2001  Centerpoint's  Italian  counsel  sent a letter  to  Aprilia's
counsel contesting all of the Alleged Claims.

By letter dated July 13, 2001 Aprilia requested that IMI, the escrow agent under
the Escrow  Agreement,  pay them Lit.  7,611  million in respect of the  Alleged
Claims.  On July 26, 2001, in spite of being aware of Centerpoint  contesting of
each of the Alleged  Claims and its intention to seek  arbitration,  IMI advised
Centerpoint  that it had paid Lit.  7,611  million  from the  escrow  account to
Aprilia in respect of the Alleged Claims.

Pursuant to the Share Purchase  Agreement and Escrow  Agreement,  which provides
that  disputes  among the  parties be  arbitrated,  Centerpoint  has  prepared a
Request  for  Arbitration  in  Accordance  with  Article  4 of the ICC  Rules of
Arbitration relating to the Alleged Claims and the payment by IMI and requesting
restitution of the funds paid to Aprilia, which Centerpoint is in the process of
filing with the International  Chamber of Commerce.  Centerpoint has advised the
Company  that it expects a decision by the ICC with  respect to the request will
be  rendered  approximately  twelve to eighteen  months  after the filing of the
request.

Closing  by  Moto  Guzzi  (now   Centerpoint)  on  the  Sale  of  its  Operating
Subsidiaries; Dispute with IMI Regarding its Fee

On  September  7,  2000,  Moto  Guzzi  closed  on the sale of all its  operating
subsidiaries, Moto Guzzi S.p.A., Moto Guzzi North America Inc, Moto Guzzi France
Sarl, and MG Motorcycle  GmbH, to Aprilia in


                                      -8-
<PAGE>

accordance  with the Share Purchase  Agreement  dated April 14, 2000 as modified
and integrated by the Letter Agreement of August 3, 2000.

Total proceeds from the sale were Lit.  79,500  million.  In accordance with the
Share  Purchase  Agreement,  Aprilia also paid Moto Guzzi Lit.  2,074 million on
behalf of the operating subsidiaries, representing the amount owed to Moto Guzzi
by the operating  subsidiaries  pursuant to loans made by Moto Guzzi to them. In
accordance  with the Share Purchase  Agreement,  Lit. 9,375 million of the total
proceeds  was  placed in escrow to cover any  claims  Aprilia  might have in the
future in respect of  representations  and warranties  made by Moto Guzzi in the
Share Purchase  Agreement.  Subject to any claims Aprilia may have in respect of
Moto Guzzi's  representations and warranties (including claims and payments made
as of the date of this report as described above), funds from the escrow account
will be released to Moto Guzzi in two tranches:  up to Lit.  7,000 million is to
be  released on  September  8, 2001;  and up to Lit.  2,375 is to be released on
September 8, 2007. Aprilia has undertaken to evaluate,  on a best efforts basis,
an earlier  resolution  of any future  claims it may have to funds in the escrow
account.

SIREF S.p.A. and San Paolo Finanziaria  S.p.A., each of which is an affiliate of
IMI, Moto Guzzi's investment adviser, acted as fiduciary agents for the closing.
At the  closing,  pursuant to an invoice  submitted  to them by IMI prior to the
closing,  but without the prior knowledge,  consent or approval of Moto Guzzi or
the Company,  the fiduciary  agents paid IMI Lit. 11,401 million,  in respect of
fees and expenses  claimed by IMI to be due it under its engagement  letter with
the Company and OAM. The fiduciary  agents then paid Carnelutti Lit. 505 million
and paid the balance of the proceeds of Lit. 60,293 million to Moto Guzzi. Since
early July 2000, the Company and Moto Guzzi have disputed  IMI's  interpretation
of the  calculation  of the fee due it under its  engagement  letter,  following
indication  by IMI of its  basis of  calculation.  The  dispute  relates  to the
respective interpretations of the Company, Moto Guzzi and IMI of the term "Total
Enterprise  Value" of the  Company,  Moto Guzzi and IMI, as that term is used in
the engagement letter. Since that time, the Company and Moto Guzzi discussed and
sought to  negotiate  with IMI  concerning  its alleged  amount of the fee.  IMI
refused to engage in negotiations and did not present any calculation of the fee
prior to the closing. After the closing and actual payment to IMI of the alleged
fee by the fiduciary agents,  IMI then presented a calculation and an invoice to
Moto  Guzzi  for  fees  and  expenses  alleged  by IMI to be  due it  under  the
engagement letter in the amount of Lit. 11,401 million. In addition to disputing
the amount of the fee paid to IMI,  the Company and Moto Guzzi  believe that IMI
had no right to cause its fee to be deducted  from the Moto Guzzi  proceeds,  as
Moto Guzzi was not a party to the engagement letter. The Company and Centerpoint
are  currently  evaluating  possible  courses  of  action  against  IMI  and the
fiduciary agents, including initiating legal proceedings in Italy and the United
States.

The Lit.  60,293  million net proceeds  received by Moto Guzzi from the sale was
applied first to payment of amounts due for  transaction  expenses in connection
with the sale and other payables and  obligations  estimated in the aggregate to
be  approximately  Lit.  2,700  million  and second to the  redemption  prior to
September 30, 2000 of all  outstanding  shares of Series B preferred stock for a
price equal to $100 per share plus  accrued  dividends  thereon,  for a total of
approximately  US$  12.6  million  (approximately  Lit.  28,300  million  at the
prevailing  exchange rate). This left Moto Guzzi with  approximately Lit. 29,300
million in cash, and rights, subject to any claims of Aprilia, to the Lit. 9,375
million  being held in escrow,  and  whatever it realizes on its claims  against
IMI.   Remaining   proceeds  were  invested  in  short-term  fixed


                                      -9-
<PAGE>

income Euro  denominated  securities  pending  Moto  Guzzi's  evaluation  of the
alternatives available to it with respect to such funds.

On September 19, 2000,  pursuant to the Share Purchase Agreement and stockholder
approval,  Moto Guzzi  Corporation  filed an  amendment  to its  Certificate  of
Incorporation  to change its name to Centerpoint  Corporation,  effective at the
time of filing.

Approval  of the Sale of the Moto  Guzzi  Operating  Subsidiaries  by Moto Guzzi
Stockholders

On July 22, 2000 Moto Guzzi's  Proxy  Statement  dated July 20, 2000 relating to
the proposed sale of Moto Guzzi's operating  subsidiaries and the change of Moto
Guzzi's name to Centerpoint  Corporation was mailed to all of Moto Guzzi's Class
A  stockholders  of record as of July 18, 2000,  the record date for the special
meeting of stockholders to consider such proposals.  The special meeting of Moto
Guzzi's  stockholders  to consider  the  proposals  was held on August 11, 2000.
4,399,784 shares of Moto Guzzi's Class A common stock were represented in person
or by proxy,  representing  73.34% of Moto Guzzi's issued and outstanding shares
of Class A common stock on the record date, thereby constituting a quorum.

At the special meeting,  the holders of 4,399,774 shares of Moto Guzzi's Class A
common  stock  (representing  73.33% of shares of record)  voted in favor of the
proposal to sell Moto Guzzi's operating subsidiaries to Aprilia, and the holders
of 4,397,314 shares of Moto Guzzi's Class A common stock (representing 73.31% of
shares of record)  voted in favor of the proposal to change Moto Guzzi's name to
"Centerpoint Corporation," thereby approving the proposals.

Execution and Delivery by Moto Guzzi of Share Purchase Agreement

On April 14, 2000, Moto Guzzi signed a sale agreement in which it agreed to sell
its four operating  subsidiaries (Moto Guzzi,  S.p.A., MGI Motorcycle GmbH, Moto
Guzzi France  S.a.r.l.  and Moto Guzzi North America,  Inc.) to Aprilia for Lit.
71.5 billion  (approximately  US$35.2 million) plus or minus the amount by which
the  subsidiaries'  net worth at April 30,  2000 is more or less than  their net
worth at December 31, 1999. In addition,  Aprilia agreed to satisfy debts of the
subsidiaries   to  Moto  Guzzi   totaling   approximately   Lit.   2.1   billion
(approximately  US$1.0  million)  and to cause OAM to be released  from a Lit. 4
billion   (approximately   US$1.9  million)  guarantee  of  obligations  of  the
subsidiaries.  Because the proposed sale of the four  subsidiaries was a sale of
substantially  all Moto  Guzzi's  assets,  the sale was  subject to  approval of
holders of a majority of Moto Guzzi's outstanding Class A common stock.

Background of the sale

Prior to the sale, Moto Guzzi had suffered  recurring losses from operations and
negative cash flows during the three years prior to the sale. Arrears of payment
to suppliers,  which reached  approximately  Lit.15 billion  (approximately $7.4
million) in January 2000,  affected component supply and production in the first
quarter of 2000 and thus  limited  Moto  Guzzi's  ability to generate  cash from
operations.

In December 1999,  following the termination of  negotiations  with a company in
the motorcycle  business  concerning a possible equity investment in Moto Guzzi,
and with Moto Guzzi's knowledge and consent,  the Company and OAM, the Company's
majority  owned  subsidiary,  engaged IMI, an Italian  investment


                                      -10-
<PAGE>

bank,  to seek  short  term  financing  for Moto  Guzzi and to pursue  strategic
alternatives to enhance Moto Guzzi's shareholder value.

During  January 2000,  representatives  of IMI contacted  over thirty  potential
buyers and investors  concerning a possible  transaction with Moto Guzzi. By the
third  week  of  January,   17  potential  buyers  and  investors  executed  the
confidentiality  agreements  requested by IMI. IMI  distributed  an  information
memorandum  on Moto  Guzzi to each of these  parties  and  requested  that these
parties submit written,  non-binding offers for a possible transaction with Moto
Guzzi by February 11, 2000.

The deadline of February 11th was subsequently  extended by one week to February
18th.

During January and February, Moto Guzzi's operations were at risk as a result of
a failure to timely pay its suppliers, and IMI believed that public knowledge of
this fact was interfering with IMI's ability to conduct the auction process.  On
February  16th IMI advised  Moto Guzzi that Moto Guzzi  needed  substantial  new
funds to ensure the completion of the sale process. In response, on February 25,
2000,  Moto Guzzi issued an aggregate of US$12.35  million in Series B Preferred
Stock to Fineco Sim, S.p.A. ("Fineco"),  the Company,  Wheatley Partners, LP and
Wheatley Foreign Partners, LP (each of which is an affiliate of Barry Fingerhut,
one of Moto Guzzi's directors) and William Spier (a director of Moto Guzzi and a
director  of  the  Company  through  December  1999).  Of  this,  shares  with a
liquidation  value of US$6.0  million  were  issued for cash to  Fineco,  US$3.5
million were issued for cash to the Company, and shares with a liquidation value
of US$2.85 million were issued in consideration of the conversion of outstanding
indebtedness.  See "Issuance and Redemption of Series B Preferred  Stock by Moto
Guzzi " below.

By February 18th, IMI had received  preliminary  offers from four parties,  each
relating to a proposed  acquisition  of 100% of Moto  Guzzi's  shares.  Three of
these  parties  continued  in  negotiations  with Moto Guzzi and  engaged in due
diligence.

Following  subsequent  feedback  from one  potential  buyer  that it would  only
entertain  the  purchase  of  the  four  operating  subsidiaries  and  no  other
transaction  structure,  IMI  communicated  to  potential  buyers  that it would
entertain bids for the four  subsidiaries  but would give preference to bids for
Moto Guzzi's shares if the offer price were similar.

Each of the parties that had expressed an interest was provided with access to a
data room and Moto Guzzi's material documents, oral presentations by management,
legal presentations and access to Moto Guzzi's  facilities.  A deadline of April
7th was set for the submission of final proposals, which were requested to be in
the form of draft purchase agreements containing all principal terms.

On April 7th, IMI received three firm offers.  The most competitive offer (which
was  from  Aprilia)  was for  cash  and  ready  for  signature  with  negotiated
schedules.  The second offer was in line with the first offer  economically  but
was made subject to the buyer's  ability to raise  financing and to certain open
contractual matters and with schedules and other details still to be negotiated.
The  third  offer  was  lower  economically,  was in part in cash and in part in
stock,  and was without  schedules and with some key parts of the contract to be
negotiated.


                                      -11-
<PAGE>

On April 9th, members of a special  committee of Moto Guzzi's board comprised of
Barry  Fingerhut,  David Mitchell and Frank O'Connell,  representatives  of IMI,
Clifford  Chance  Rogers & Wells LLP,  Moto  Guzzi's  U.S.  counsel,  and Studio
Carnelutti,  Moto Guzzi's Italian counsel, and the Company, met. Representatives
of IMI and Studio Carnelutti explained in detail the underlying auction process,
which had led to the  presentation  of the  offers by  Aprilia  and by two other
trade buyers.  There was a further  analysis and discussion  about the terms and
conditions of each of the offers.  Aprilia's offer was considered by the special
committee to be the most  attractive  from both an economic and a legal point of
view.  The  committee,  however,  expressed a desire to  eliminate  the proposed
escrow account following the sale.

In the  morning of April 10th,  the board of the Company met in the  presence of
representatives  of IMI, Kramer Levin Naftalis & Frankel LLP, the Company's U.S.
counsel,  and Studio  Carnelutti.  The Company's  board approved a proposed side
letter to be signed by OAM, which, among other things,  committed OAM to vote in
favor of the sale of the subsidiaries at Moto Guzzi's  stockholder meeting which
would be  required  to be held to  authorize  the sale,  subject  to Moto  Guzzi
entering into a side letter with OAM and the Company in which Moto Guzzi agreed,
among other things,  to pay IMI's fees in connection with the sale. In addition,
the  Company's  board  authorized  IMI to complete a final  auction based on the
April 7th offers.

In the afternoon of April 10th,  Moto Guzzi's board of directors,  including the
special committee of the board, and representatives  from Clifford Chance Rogers
& Wells LLP, IMI, Studio  Carnelutti and Kramer Levin Naftalis  &Frankel LLP met
to discuss and review the bids submitted by the final bidding companies.  In the
hours  before this board of directors  meeting,  two of the bidders had improved
their offers.

IMI presented Moto Guzzi's board and the special  committee with its analysis of
the bids and  delivered  its oral  opinion that each of the bids was fair from a
financial  point of view to Moto Guzzi's  stockholders.  After  discussion,  the
Aprilia  offer was selected as the best by both Moto Guzzi's  special  committee
and by Moto Guzzi's board of directors. They also approved permitting Aprilia to
assume management control of the subsidiaries  beginning May 1, 2000 if it would
assume responsibility for the subsidiaries' operating results from that date.

On the morning of April 14th, OAM signed its side letter with Aprilia,  and Moto
Guzzi signed its side letter with OAM and the  Company.  In the  afternoon,  the
sale agreement was signed by Mr. Bulgari, a Director of Moto Guzzi, on behalf of
Moto Guzzi and by Aprilia.

On May 2nd, an initial  payment by Aprilia of Lit.  71.5 billion  (approximately
US$35.2  million)  was  placed  in  escrow  with IMI  while  the  shares  of the
subsidiaries  were placed in the custody of San Paolo a Finanziaria,  S.p.A. and
Siref, S.p.A.

Moto Guzzi's  Reasons for the sale;  Recommendations  of Moto  Guzzi's  Board of
Directors

The special  committee of Moto Guzzi's  board of directors  determined  that the
sale  was in Moto  Guzzi's  best  interests  and in the best  interests  of Moto
Guzzi's stockholders and unanimously recommended that Moto Guzzi's board approve
the  sale.  Moto  Guzzi's  board  of  directors  determined  that  the  sale was


                                      -12-
<PAGE>

advisable,  fair to and in Moto Guzzi's best interests and in the best interests
of Moto Guzzi's stockholders and unanimously approved the sale.

In reaching their respective determinations,  Moto Guzzi's special committee and
Moto  Guzzi's  board of  directors  considered  a  number  of  factors,  without
assigning any relative weights to them. They included the following:

     o    historical information concerning the business,  financial performance
          and condition,  management,  competitive position and prospects of the
          subsidiaries;

     o    Moto Guzzi's historical stock prices and operating performance;

     o    that IMI was able to induce  Aprilia to increase  the  purchase  price
          above what it had initially proposed;

     o    that Moto Guzzi had announced in February 2000 that it had engaged IMI
          to seek interim financing and to pursue strategic alternatives and the
          possibility  of Moto Guzzi being sold,  and IMI had  contacted a large
          number of possible purchasers and had conducted an auction among those
          who expressed  interest in a possible  transaction in which  potential
          purchasers  were afforded  sufficient  time and  information to submit
          proposals;  with the result that three firm proposals were received of
          which Aprilia's was the most attractive;

     o    that IMI had informed Moto Guzzi's special  committee and Moto Guzzi's
          board, (subsequently confirmed in writing) that the sale consideration
          to be received from Aprilia is fair,  from a financial  point of view,
          to Moto Guzzi's stockholders; and

     o    the determination  that Moto Guzzi would not be able to achieve,  on a
          stand-alone  basis,  stockholder value equal to the sale consideration
          being paid by Aprilia.

In reaching their  respective  conclusions,  Moto Guzzi's special  committee and
Moto Guzzi's board also  considered the following  factors,  which they believed
mitigated against the sale:

     o    the fact that Moto Guzzi would have no  operating  business  after the
          sale;

     o    the fact that Moto  Guzzi  would have to pay  substantial  transaction
          costs in connection with the sale;

     o    the fact that a portion of the sale  proceeds  would be held in escrow
          for up to seven years;

     o    the  possibility  that  Aprilia  might make  changes  to Moto  Guzzi's
          subsidiaries  before the sale takes  place  which,  if the sale is not
          completed,  will make it even more  difficult than it had been to make
          the subsidiaries operate successfully;

     o    the possibility  that if the sale was not completed,  Moto Guzzi would
          not be able to repay sums Aprilia  lends to the  subsidiaries  between
          May 2, 2000 and the time the efforts to complete the sale terminate;

     o    the fact that Moto Guzzi's need to complete a transaction  quickly may
          have  limited  Moto  Guzzi's  ability  to be sure it was  getting  the
          highest possible price for the subsidiaries;

     o    the risk that the sale would not be completed; and


                                      -13-
<PAGE>

     o    the risk that the  announcement of the sale and the efforts  necessary
          to complete the transaction  could disrupt  operations by, among other
          things,  diverting  management  and other  resources  from  day-to-day
          operations.

In making its  determination  to enter  into the sale  agreement,  Moto  Guzzi's
special  committee and Moto Guzzi's board weighed the factors  described  above,
both positive and negative,  and determined  that the positive  factors  clearly
outweighed the negative factors.  In view of the wide variety of information and
factors  considered,  the  special  committee  and the  board  did  not  find it
practical to, and did not, assign any relative or specific weights to any of the
factors,  and  individual  directors  may have had  different  views as to which
factors were more significant than others.

In reaching their  conclusions,  Moto Guzzi's special committee and Moto Guzzi's
board were aware of the  potential  benefits  to be  realized  by its  officers,
directors and certain  stockholders  from the sale,  which are  described  below
under the caption "Interests of Certain Persons in the Sale."

Moto  Guzzi's  board of  directors,  acting on the  recommendation  of a special
committee of its members,  unanimously  approved the sale agreement and the sale
and unanimously recommended to the stockholders that they approve the sale.

Opinion of Financial Advisor

The Company retained IMI to act as its exclusive financial advisor in connection
with a review of Moto  Guzzi's  strategic  alternatives  and the  proposed  sale
transaction based upon IMI's substantial experience with transactions similar to
the sale transaction. On April 14, 2000, IMI delivered to Moto Guzzi's board and
Moto Guzzi's  special  committee its oral opinion that the estimated  total cash
payment (the "Estimated Total Consideration") from Aprilia contained in the sale
agreement was fair from a financial point of view to the holders of Moto Guzzi's
stock. IMI subsequently delivered to Moto Guzzi's board and Moto Guzzi's special
committee  its written  opinion,  dated  April 14,  2000,  that,  based upon and
subject to the factors and assumptions  set forth therein,  as of such date, the
Estimated  Total  Consideration  was fair from a financial  point of view to the
holders of Moto Guzzi's stock.

Interests of Certain Persons in the Sale

Certain of Moto Guzzi's  directors and officers had interests with regard to the
sale that were  different  from the  interests of the other  stockholders.  They
included:

     o    OAM and the  Company,  which had been  required  to make loans to Moto
          Guzzi or to Moto Guzzi's  subsidiaries  to provide the funds needed to
          stay in  business.  Most of these loans were  converted  into Series B
          preferred  stock in  February  2000.  Also,  OAM had been  required to
          guarantee  some of Moto Guzzi's debt.  The sale ended the need for OAM
          and the  Company  to make  loans  to Moto  Guzzi  and in  OAM's  being
          released   from  a  guarantee  of  Lit.  4  billion  of  Moto  Guzzi's
          subsidiaries' bank debt. One of Moto Guzzi's directors was a principal
          officer of the Company and an additional two of Moto Guzzi's directors
          were directors of the Company.

     o    Certain of Moto Guzzi's  officers and directors would continue to hold
          positions in the subsidiaries after the sale.


                                      -14-
<PAGE>

     o    In connection  with the sale,  Aprilia  required the  terminations  of
          certain of Moto  Guzzi's  executives  and further  required  that Moto
          Guzzi  pay all costs of such  terminations.  Accordingly,  Moto  Guzzi
          agreed to pay  severance to two of its  directors,  Mark S. Hauser and
          Howard E. Chase, and to Emanuel Arbib, one of its former directors, of
          US$169,500,  US$51,400 and  US$37,900,  respectively,  in exchange for
          termination of their  employment and consulting  agreements  with Moto
          Guzzi.

     o    The Company  (of which one of Moto  Guzzi's  directors  is a principal
          officer  and an  additional  two of Moto  Guzzi's  directors  serve as
          directors),   OAM,   Wheatley   Partners,   LP  and  Wheatley  Foreign
          Investment,  LP (each of which is an affiliate of Barry  Fingerhut,  a
          director  of Moto  Guzzi and a member of the  special  committee)  and
          William  Spier (a  director  of Moto Guzzi) all own Series B preferred
          stock.


Additional  Provisions of the Share Purchase  Agreement and  consequences of the
sale

August 2, 2000 Letter Supplementing the Share Purchase Agreement.

On August 3, 2000,  Moto Guzzi and  Aprilia  entered  into a Side  Letter  dated
August 2, 2000 which  supplemented  the Share  Purchase  Agreement  and provided
among other things as follows:

     (i)  that the net worth of Moto Guzzi's  subsidiaries  at April 30, 2000 is
          minus Lit. 6,000,000,000, that the difference between the net worth of
          Moto Guzzi's subsidiaries as shown in the Interim Financial Statements
          dated December 31, 1999 and the Management  Date Financial  Statements
          dated April 30, 2000 is plus Lit. 7,993,000,000 and that in accordance
          with article 3.6 of the Share  Purchase  Agreement  Aprilia  shall pay
          into the Escrow Account Lit. 7,993,000,000;

     (ii) that with  respect  to costs to be  incurred  in  connection  with the
          recall of certain  batches of motorcycles to replace  certain of their
          components  if,  at  completion  of the  recall  campaigns,  the  cost
          sustained less any reimbursement received from insurance companies and
          Moto  Guzzi  suppliers  is lower  than  Lit.  1,824,000,000,  then the
          difference  between the cost sustained and Lit.  1,824,000,000 will be
          paid by Aprilia to Moto Guzzi;

     (iii)that the  amount of  shareholders'  loans at the  Management  date was
          Lit.  2,074,000,000,  which amounts shall be paid to Moto Guzzi at the
          closing  date in  accordance  with  article  3.4.2  (iv) of the  Share
          Purchase Agreement;

     (iv) that with  respect to the Escrow  Agreement,  at the closing  date the
          Escrow Amount shall be reduced to Lit 9,375,000,000, and the amount of
          the first  tranche of the Escrow Fund  indicated in article 5.1 (a) of
          the Escrow Agreement is Lit. 7,000,000,000;

     (v)  that as soon as practicable after the Closing Date and before December
          31,  2000,  Moto  Guzzi and  Aprilia  will  discuss  in good faith the
          possibility  of an early release to Moto Guzzi of the first tranche of
          the Escrow  Amount,  net of the amount of any claims agreed to at that
          time;


                                      -15-
<PAGE>

     (vi) that immediately after the Closing Date, Aprilia will cause Moto Guzzi
          SpA to  fully  co-operate  in  Moto  Guzzi's  efforts  to  obtain  tax
          amnesties and tax clearance  certificates from the fiscal authorities,
          at Moto Guzzi's expense, and should such certificates be obtained Moto
          Guzzi and  Aprilia  will  immediately  discuss  in good faith an early
          release  of a  substantial  part of the  second  tranche of the Escrow
          Amount;

    (vii) that  Moto  Guzzi  and  Aprilia  would  use all  efforts  to cause the
          closing of the sale of the  Subsidiaries  to occur on or before August
          31,  2000,  and that in any case the closing  shall take place  before
          September  15,  2000,  thereby  modifying  the  original  August  31st
          deadline for the closing.

Covenant not to Compete

Moto Guzzi agreed for a period of three years after April 30, 2000 not to engage
worldwide,  directly or indirectly,  in the business of manufacturing,  selling,
distributing  or marketing  motorcycles,  or components or spare parts for them.
Moto Guzzi also agreed to cause our directors to enter into similar agreements.

Indemnification for Breaches of Representations and Warranties

Aprilia  and Moto  Guzzi  each  agreed to  indemnify  the other for any  damages
arising from the breach of any of the representations and warranties in the sale
agreement.  However,  neither  company is  required to  indemnify  the other for
damages totaling less than Lit. 1.0 billion  (approximately  US$0.5 million) and
Moto   Guzzi's   total   indemnification   is  limited  to  Lit.   10.5  billion
(approximately  US$5.2  million).  Moto Guzzi also agreed to  indemnify  Aprilia
against  costs or  liabilities  from  stockholder  litigation  instituted in the
United States with respect to the sale agreement.

Indemnification of Directors

Aprilia  agreed that it would not cause any action to be brought  against anyone
who  served on the board of  directors  of any of the  subsidiaries  in the five
years prior to April 30, 2000. Aprilia agreed to indemnify those directors if an
action is brought.

Italian Antitrust

The sale  required  that Moto  Guzzi and  Aprilia  notify  and  furnish  certain
information to the Autorita Garante della Concorrenza e del Mercato (the Italian
antitrust  authority).  Moto Guzzi  filed  notification  forms with the  Italian
antitrust  authority  in May  2000,  and on June 28,  2000 Moto  Guzzi  received
clearance of the sale from them.

Absence of Appraisal Rights

Under Delaware law, Moto Guzzi's stockholders did not have dissenters' appraisal
rights as a result of the sale.


                                      -16-
<PAGE>

Change of Corporate Name

Aprilia's  obligation  to purchase  the  subsidiaries  was subject to Moto Guzzi
removing the words "Moto Guzzi" from its corporate  name, and on August 11, 2000
Moto Guzzi's  stockholders  approved an amendment to Moto Guzzi's certificate of
incorporation to change its name to "Centerpoint  Corporation." On September 19,
2000,  Moto  Guzzi  filed a  certificate  of  amendment  to its  certificate  of
incorporation changing its name to Centerpoint Corporation.

Disposal of steel tube operations

In July  2000,  the  Company  disposed  of LITA to  Fintrebi  S.r.l.  and Mittel
Generale  Investimenti  S.p.A.,  companies  unaffiliated with the Company, for a
total  consideration of Lit. 1,800 million.  Immediately prior to the sale, with
the agreement of the purchasers, LITA paid a dividend to the Company of Lit. 670
million.  The Company  received  Lit. 800 million in cash,  leaving  Lit.  1,000
million due in July 2001, secured by a first call bank guarantee.  In connection
with the  disposal,  the Company  obtained a first call bank  guarantee for Lit.
1,000 million  through  December 31, 2003 to secure any claims the purchaser may
have for breaches of representations  and warranties given by the Company.  LITA
has been accounted for as a discontinued operation.  See Note 3 to the financial
statements.

Disposal of temporary management operations

Effective  as of January 1, 2000,  the Company  disposed of TIM,  its  temporary
management services subsidiary to two companies  controlled by TIM's management,
including  Albino Collini,  a Director of the Company through December 1999, for
80,000  shares of the Company  with a fair value of Lit. 320 million at the date
of sale.  The Company has recorded an impairment  loss of Lit. 400 million as at
December  31,  1999 in respect of the  trademarks  of TIM,  to reflect  the post
year-end disposal.

Purchase of minority interest in OAM

In  September  2000,  the Company  agreed to purchase the  outstanding  minority
interest in OAM for US$  2,500,000  held by Daimler  Chrysler  Corporation.  The
purchase  price is at a discount to the net asset value of the 15.65%  ownership
interest OAM and will permit the Company to rationalize its corporate  structure
and eliminate certain fiscal inefficiencies.  The sale of the minority interests
closed in March 2001.

Issuance and Redemption of Series B Preferred Stock by Moto Guzzi

On February 25, 2000,  Moto Guzzi,  the  Company's  majority  owned  subsidiary,
issued  123,500 shares of a new Series B Preferred  Stock to Fineco,  an Italian
institutional  investor, and affiliates of Fineco, the Company, OAM, and William
Spier,  a director of Moto Guzzi and the Company,  and Wheatley  Partners LP and
Wheatley  International  Partners  LP,  each of which is an  affiliate  of Barry
Fingerhut,  a director of Moto Guzzi,  for $100 per share (an aggregate price of
US$12,350,000).  The shares were issued as follows: (i) 60,000 to Fineco and its
affiliates for cash, (ii) 35,000 shares to the Company for cash, (iii) 16,000 to
OAM in repayment of  outstanding  loans due to OAM,  (iv) an aggregate of 10,000
shares to Wheatley Partners and Wheatley International Partners, in repayment of
loans made by them to Moto Guzzi, and (v) 2,500 shares to Mr. Spier in repayment
of loans made by him to Moto Guzzi.


                                      -17-
<PAGE>

In July 2000,  Moto Guzzi entered into an agreement  with the Series B preferred
stockholders  in which it agreed  to  redeem  the  Series B  preferred  stock by
September 30, 2000 in exchange for their agreement not to convert their Series B
preferred stock into Class A common stock prior to that date.

Moto Guzzi closed on the sale of its operating subsidiaries on September 6, 2000
and in the last  week of  September  2000 it  redeemed  in full all  outstanding
shares of Series B  Preferred  Stock  for a price  equal to $100 per share  plus
accrued  dividends  thereon,  for a total  of  approximately  US$  12.6  million
(approximately Lit. 28,300 million at the prevailing exchange rate).

The holders of the Series B Preferred  Stock were entitled to receive  dividends
at the rate of $7.00 per share per year  before any  dividends  may be paid with
regard to Moto Guzzi's Class A Common Stock, and to receive distribution of $100
per share in liquidation of Moto Guzzi before any liquidation  distributions are
made with regard to the Class A Common Stock.  Moto Guzzi was required to redeem
the  Series B  Preferred  Stock for $100 per share  plus  accrued  dividends  on
December  28,  2001.  Holders of Series B  Preferred  Stock did not have  voting
rights,  except the right to approve  issuance of securities of Moto Guzzi which
would  affect the Series B Preferred  Stock and the  incurrence  of debt by Moto
Guzzi,  other than  refinancing of existing debt or lines of credit used by Moto
Guzzi to finance its day-to-day operations.

Each share of Series B Preferred Stock was  convertible  into Moto Guzzi Class A
Common  Stock  at a  conversion  price of  $5.00,  based  upon  the  liquidation
preference of the Series B Preferred Stock ($100,  plus accrued  dividends,  per
share),  meaning  each share of Series B Preferred  Stock was  convertible  into
approximately 20 shares of Moto Guzzi Class A Common Stock.

Upon  the  occurrence  of an event  of  default  the  dividend  on the  Series B
Preferred Stock increased to $10 per share per year, the conversion price of the
Series B  Preferred  Stock  reduced to $2 per share of Moto Guzzi Class A Common
Stock,  the holders of the Series B Preferred  Stock  would  become  entitled to
elect a majority of Moto Guzzi's  directors  and Moto Guzzi would be required to
redeem the Series B Preferred  Stock for its  liquidation  preference  ($100 per
share, plus accrued dividends).

History of Moto Guzzi Corporation

Moto Guzzi Corporation was originally incorporated in Delaware on August 9, 1995
under the name of North Atlantic  Acquisition  Corporation ("North Atlantic") to
serve as a  vehicle  to  effect a  merger,  exchange  of  capital  stock,  asset
acquisition or other business combination with an operating business.  On August
27, 1997,  North Atlantic  consummated an initial public offering  consisting of
800,000  Units  and  150,000  shares  of Class B Common  Stock,  with  each Unit
consisting  of one share of Class A Common  Stock and one  warrant  to  purchase
shares of Class A Common Stock, which resulted in net proceeds to North Atlantic
of approximately $8,000,000.

Merger with Moto Guzzi Corp.

On August 18, 1998, the Company's subsidiary,  Moto Guzzi Corp., and for limited
purposes the Company,  entered into a merger agreement to merge Moto Guzzi Corp.
with North Atlantic.  The preferred stockholders of Moto Guzzi Corp. were also a
party to the merger,  which was consummated on March 5, 1999. North Atlantic was
organized in August 1995 as a specialized merger and acquisition


                                      -18-
<PAGE>

allocated risk company with the objective of acquiring an operative business and
had not engaged in any substantive commercial business. At the effective time of
the merger,  North  Atlantic  had  approximately  US$8.9  million  (Lit.  16,006
million) in cash,  from which merger  expenses of  approximately  US$0.8 million
(Lit. 1,400 million) were  subsequently  paid, to finance the operations of Moto
Guzzi.  On completion  of the merger,  North  Atlantic  changed its name to Moto
Guzzi  Corporation.  As a result of the merger,  the Company  recorded a gain of
Lit.  25,837 million in the first quarter of 1999,  including the effects of the
exchange of redeemable  preferred stock of Moto Guzzi Corp. into common stock of
North  Atlantic.  Through  December 31, 1998,  the Company had accounted for the
contingent  redemption of such preferred  stock and included Lit. 13,132 million
in the balance sheet at December 31, 1998 to reflect such contingent obligation.

The closing of the merger provided  needed  liquidity to Moto Guzzi Corp. A lack
of liquidity had led to component  supply  shortages in the last quarter of 1998
and the first two months of 1999.

Production  and sales were  stabilized  by May 1999 as proceeds  from the Merger
were applied to pay supplier  arrears.  The  financing  from the merger was not,
however,  sufficient to finance needed  investments or seasonal  working capital
shortages  in the last four  months of 1999,  and Moto Guzzi  again  experienced
component  supply  difficulties at the end of 1999 and particularly in the first
months of 2000 before further financing was obtained in February.  See "Issuance
and  Redemption  of Series B Preferred  Stock by Moto  Guzzi,"  above and Item 7
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" below.

History of Moto Guzzi Corp. and Moto Guzzi S.p.A.

Moto Guzzi  Corp.  was a Delaware  corporation  formed by the Company in 1996 to
acquire Moto Guzzi S.p.A.  and Moto Guzzi North America,  Inc., a North Carolina
corporation,  the  exclusive  U.S.  importer  and  distributor  of "Moto  Guzzi"
(Registered) brand motorcycles and spare parts.

Established in 1921, Moto Guzzi S.p.A. is one of the oldest motorcycle brands in
the world.  Between 1921 and 1972, Moto Guzzi S.p.A.  operated as an independent
privately owned entity. In 1972, Moto Guzzi S.p.A., was acquired by the Company,
then  known as De Tomaso  Industries,  Inc.  Because  management  attention  was
principally  focused on the Company's  other  operating  units,  especially  its
Maserati  automobile  subsidiary  (disposed of in 1993),  limited investment was
made  in  Moto  Guzzi's  product  design  and  development  activities  and  its
manufacturing operations.  Sales declined from a high of 46,487 units in 1971 to
3,274 units in 1993.

Prior to the merger with North  Atlantic in March 1999,  Moto Guzzi  experienced
continuous losses for twelve years,  including a loss of Lit. 20,299 million for
the  fiscal  year ended  December  31,  1998,  and had not  generated  cash from
operations for over three years.

Since 1994,  Moto Guzzi has made  investments in  reinforcing  management and in
logistical  and  production  control  systems and has increased  outsourcing  of
components  to  qualified  suppliers.  It also  introduced  two new models,  the
"Centauro" and "Quota," and updated  versions of its  "California"  and "Nevada"
models which have been well  received by  customers.  Moto Guzzi North  America,
Inc. was acquired by the Company in January of 1996 and was  transferred to Moto
Guzzi Corp. in October 1996. In February 1997,  Moto Guzzi France,  S.a.r.l.,  a
new  wholly-owned  importer-distributor  was established


                                      -19-
<PAGE>

in France to  strengthen  distribution  in important  markets.  Also, in January
1997,  distribution  in Germany was  transferred to a new 25% owned affiliate of
Moto  Guzzi,  MGI  Motorcycle  GmbH.  In March  2000,  Moto Guzzi  acquired  the
remaining 75% of MGI Motorcycle GmbH.

From 1994 to 1997 Moto Guzzi  increased unit sales from  approximately  4,300 to
approximately  5,600.  In the fiscal years ended December 31, 1998, and December
31, 1999,  unit sales  amounted to 5,647 units,  and 6,275 units,  respectively,
although Moto Guzzi continues to operate at a loss.

From 1994 through 1996,  capital for Moto Guzzi was supplied by the Company.  In
early January 1997, a private placement of Moto Guzzi Corp. redeemable preferred
stock raising gross proceeds of US$6 million was completed, and in June 1997 the
Company  committed  to Moto Guzzi  Corp.  approximately  US$4  million  from the
proceeds of a public  offering of the  Company's  common  stock and common stock
warrants.  Further, in early 1998, Moto Guzzi Corp. negotiated a Lit. 10 billion
(approximately US$5.6 million) long-term credit facility,  which it drew down in
April 1998.  From and after December 31, 1998,  Moto Guzzi was not in compliance
with certain covenants relating to this facility. Moto Guzzi Corp. obtained Lit.
7 billion of additional  debt financing in October 1998 as a result of loans and
credit enhancements by OAM.

With the  proceeds  from  these  financings,  Moto Guzzi  Corp.  started to make
investments in research and model  development,  expenditures on which more than
doubled in 1997 compared to 1996 and increased by a further 39% in 1998 compared
to 1997. To enable substantial  further growth in production and sales, the Moto
Guzzi  strategic  plan would have  required  total  investments  in research and
product development of some Lit. 50 billion (approximately US$25 million) over a
five-year period, as well as investments of Lit. 20 billion (approximately US$10
million)  in  production  plant,   machinery  and  information   systems.  As  a
consequence of Moto Guzzi's continuing lack of liquidity, no significant part of
these  investments  was ever made, and research and development was curtailed in
1999 to some 66% of 1998 expenditure levels.

The proceeds of the merger with North  Atlantic  were not  sufficient  to permit
Moto Guzzi to make all of the  investments  needed to restore its  operations to
profitability. The Company had hoped that the merger with North Atlantic and the
listing of the merged  entity on the  over-the-counter  market in New York would
have given access to the additional capital required, and would have provided an
incentive to  management  and key  personnel  through a stock option plan.  Moto
Guzzi was  unable to raise the  further  funds that it  required,  and by August
1999, was again experiencing liquidity  difficulties.  By the end of 1999, these
financial  difficulties  had become severe,  and the consequent  difficulties of
component supplies threatened operations.

In  December  1999,   following  the  breakdown  of  negotiations  with  another
motorcycle  company  regarding an equity  investment in Moto Guzzi,  the Company
engaged IMI, a leading Italian investment bank, to pursue strategic alternatives
to  enhance  shareholder  value in its  shareholding.  An  auction  process  was
conducted by IMI in the first few months of 2000,  and on April 14,  2000,  Moto
Guzzi entered into a Share  Purchase  Agreement  with Aprilia,  and in September
2000, Moto Guzzi closed the sale to Aprilia of its four operating subsidiaries.


                                      -20-
<PAGE>

For  other  material  events  occurring  after  December  31,  1999  please  see
"Subsequent Events" above.

                             BUSINESS OF THE COMPANY

Business of Moto Guzzi

Set forth below is a  description  of Moto  Guzzi's  business  and the  strategy
developed by Moto Guzzi's management as of December 31, 1999. On April 14, 2000,
Moto Guzzi entered into a Share Purchase Agreement with Aprilia, providing for a
sale of all of its Subsidiaries to Aprilia, and on September 6, 2000, Moto Guzzi
closed on the sale of the  Subsidiaries.  See  "Subsequent  Events -- Closing by
Moto Guzzi (now Centerpoint) on the Sale of its Operating Subsidiaries;  Dispute
with IMI Regarding its Fee" above. Accordingly,  the description of the Business
of Moto Guzzi set forth below is qualified  in its  entirety by the  information
set forth under such  caption.  On  September  19,  2000,  pursuant to the Share
Purchase Agreement, Moto Guzzi changed its name to Centerpoint Corporation.

 Since the closing of the sale,  with the  knowledge and consent of the Company,
Centerpoint has sought to find a suitable  operating company to acquire or merge
with using the proceeds from the sale.

The description of the business of Moto Guzzi below refers to the strategies and
operations of the Moto Guzzi  business prior to its sale to Aprilia in September
2000 and does not in any way  describe or seek to describe  the  strategies  and
operations of Moto Guzzi under its current owners.

Moto Guzzi S.p.A.,  along with its distribution  operations in Italy, the United
States,  France and Germany,  is a leading  Italian  manufacturer,  marketer and
distributor of performance and luxury motorcycles and motorcycle parts, marketed
under the "Moto Guzzi  (Registered)"  brand name.  Moto Guzzi's  primary product
offerings through the date of sale in 2000 included the following models:

     o    California EV/Special     Classic  custom/cruisers  with  1064  cc
                                    engine and traditional lines.

     o    California  Jackal        A 'stripped  down' basic  Custom/Cruiser
                                    at a lower  price  point  which  permits
                                    customer personalization.

     o    Nevada Club               A lower  riding  cruiser with a 744 cc
                                    engine and chrome accents.

     o    V-10 Centauro             A  custom   performance   bike   with  a
                                    powerful   992  cc  4-valve   air-cooled
                                    engine.

     o    1100 Sport Corsa          A sleek  sports bike with  modern  lines
                                    and a 1064 cc engine.


     o    V-11   Sport              A "retro sport" model with an innovative
                                    six-speed gearbox.


     o    Quota                     A model aimed at the street enduro segment.

     o    Police Bikes              Variations   of  Moto   Guzzi's   models
                                    targeted   at    government    agencies,
                                    national  and local  police  forces  and
                                    highway patrols.


                                      -21-
<PAGE>

The "custom" class of motorcycle is designed for short trips in an urban setting
and is distinguished  by its very stylized design and upright seating  position.
The term is  commonly  used in  Europe.  The  "cruiser"  class is similar to the
"custom" in use but is more  commonly  found in the United  States.  The cruiser
class tends to be more  aggressive  in its  styling,  have  greater  performance
characteristics   and  greater   variation  in  rider   position  than  "custom"
motorcycles.  The "street  enduro" class is the  motorcycling  equivalent to the
sport utility vehicle class of automobiles.  These  motorcycles,  while designed
for ordinary  road riding,  have some  off-road  capabilities,  such as a taller
frame with  greater  ground  clearance  than cruiser or custom  bikes,  a longer
traveling  suspension  system  to  absorb  off-road  bumps,  and a  higher  seat
position. "Sport" bikes are designed for high performance and imitate the design
of professional racing machines. "Retro Sport" bikes combine innovation and good
performance  with traditional  styling which evokes classic  motorcycles of past
generations.

Strategy

Moto Guzzi's strategy was to increase sales volumes and gross profits by:

o    focusing on the breadth, quality and design of its product offerings,

o    increasing its marketing activities,

o    enhancing its distribution network, and

o    leveraging its brand name.

The Company  believed  that Moto  Guzzi's  reputation  and rich  tradition  as a
technological  innovator and quality  manufacturer  provided a solid foundation.
Moto Guzzi had built a loyal  customer  base over the past 79 years  through the
outstanding  performance  and  reliability  of its  motorcycles,  as well as its
strong distribution  network. The current customer base ranged from professional
motorcycle  enthusiasts to government  agencies,  police departments and highway
patrols around the world.

Moto Guzzi  intended to build on its existing  product  family  platforms and to
develop  new  platforms  which  would be the  basis for its next  generation  of
motorcycles.  New power trains,  which  represent a significant  part of planned
development  activities,  typically  require at least three  years'  development
time. In the interim,  new motorcycles  based on the current  product  platforms
were to be periodically  introduced.  The focus of these intermediate  offerings
was to be on significant improvements in quality, performance and refinement.

Historically,  the motorcycle had been an "entry level" form of transport  which
has been  supplanted  by the  automobile.  Over recent  years,  the industry has
become established as a recognized  leisure industry in developed  markets,  and
Moto  Guzzi's  current  range  of  motorcycles,  being  in the  larger  and more
expensive segment of the market, are principally targeted at the leisure segment
of the  vehicular  industry.  The  management  of Moto Guzzi  believed that this
recent  recognition  was one of the  major  factors  behind  the  growth  in the
Company's market segment over the period 1995-1999.


                                      -22-
<PAGE>

The Company  believed that the U.S.  market  represented  the largest  expansion
opportunity for Moto Guzzi.  Approximately  half of all motorcycles  sold in the
U.S. are in the  large-engine  motorcycle  segment.  Between 1996 and 1999, U.S.
registrations in this segment of the market increased substantially.  Moto Guzzi
planned to implement an aggressive marketing campaign targeted at U.S. consumers
designed  to build  brand  value  and name  recognition,  and to  emphasize  the
technical and design strengths of Moto Guzzi motorcycles.

Moto Guzzi also  planned to expand and enhance its  distribution  network in the
United  States.  In  addition to  increasing  the size and quality of its dealer
network,  Moto Guzzi  planned to  introduce  new sales  incentives  programs for
dealers and a floor plan financing  program.  Other  innovations that either had
been or were intended to be introduced in the U.S.  included  customer  purchase
financing and an extended, three-year warranty program.

While public  administration  sales had  traditionally  been a stable  source of
revenue for Moto Guzzi,  management  believed that there were unexploited growth
opportunities  in this  market and  planned to refocus  its sales and  marketing
efforts in this product category.

Finally, Moto Guzzi planned to leverage the "Moto Guzzi" brand by expanding into
new products,  markets and services that also offer the  opportunity  to enhance
its  brand  awareness  and  brand  image.  Moto  Guzzi  sold a  limited  line of
non-motorcycle  merchandise.  In the future,  the Company planned to introduce a
range of branded  accessories  such as hats,  jackets,  shirts and  luggage  and
planned  to exploit  opportunities  to license  the "Moto  Guzzi"  brand name to
manufacturers and suppliers of other products and services.

If Moto Guzzi were to have proceeded on all of the projects it was evaluating to
achieve  its  goals,  it  estimated  that   approximately  Lit.  50  billion  of
development and capital  expenditures would have been required over the next few
years,  in order to,  among other  things,  refurbish  its plant to make it more
competitive  and make  investments in information  technology and systems.  Cash
flows  from  operations,  however,  would not have been  sufficient  to  finance
entirely  such  expenditures.   Moto  Guzzi's  product   development   programs,
therefore, would have been dependent upon its ability to raise further financing
from outside sources.

As described above,  when this further financing was not forthcoming in 1999 and
early in September 2000, the Company disposed of the motorcycle operations.

Manufacturing

Moto Guzzi  manufactured a high-priced line of motorcycles and distributed parts
and  accessories  under the trademark  "Moto Guzzi  (Registered)."  Moto Guzzi's
motorcycles  varied in engine  size from 750 cc to 1,100 cc.  Moto Guzzi had, in
recent  years,  concentrated  development  and  sales  efforts  on  its  largest
motorcycles.

All motorcycle  manufacturing  was conducted in a factory in Mandello del Lario,
Italy.  Moto Guzzi  manufactured  some of the required  power train  components,
acquired other components from outside suppliers,  and performed  finishing work
and assembly into motorcycle bodies.


                                      -23-
<PAGE>

Seasonal Nature of Business; Backlogs

Moto Guzzi's business was affected by seasonal factors. Retail market demand was
highest  in the  spring  and  early  summer,  while  most  sales to the  Italian
government  generally  took place in the last  quarter of the year.  Moto Guzzi,
S.p.A., like most Italian companies,  traditionally  ceased production in August
of each year and reduced  production over the Christmas  holidays and during the
period immediately following, while inventory was being taken.

Moto Guzzi's  sales were  sensitive  to  successful  coordination  of demand and
product availability.

As of December 31, 1999,  Moto Guzzi had firm orders from public  administration
bodies for 540  motorcycles  which had not yet been shipped,  at an  approximate
value of Lit. 6.7 billion.  Moto Guzzi  expected to fill all such orders  within
five months. Moto Guzzi generally received indicative  cancelable order programs
in November and December of each year from its dealers and  non-owned  importers
based on anticipation of retail demand for the forthcoming year.

While Moto Guzzi sought to plan production  schedules based on these  indicative
orders, production restrictions (exacerbated in recent years by component supply
difficulties)  were such that Moto Guzzi frequently could not produce sufficient
motorcycles  to meet peak season  demand.  Typically,  when Moto Guzzi could not
deliver on or shortly after the indicated  dates,  orders were cancelled  rather
than delayed due to the seasonal nature of retail demand.

Indicative  orders for 2000  exceeded  Moto Guzzi's  predictions  of  production
capacity  in  each of the  months  January  through  June  2000.  A  portion  of
indicative  orders  become  firm,  and other  firm  orders  are  placed,  as the
anticipated  shipment dates approach.  Moto Guzzi used ongoing research from its
sales and  marketing  departments  to forecast  expected  order volumes from the
domestic  Italian dealer network and the dealer  networks of its owned importers
in France and the United  States and did not receive  long term firm orders from
dealers.

Compliance with Governmental Regulations

Moto Guzzi,  along with other  motorcycle  manufacturers,  incurred  substantial
costs in  designing  and  testing  products to comply  with  vehicle  safety and
combustion emissions  requirements of the various countries and localities where
its products were sold. These standards added  substantially to the price of the
vehicles.  Competitive  pressures,  importation expenses and importers' margins,
however, kept export prices lower than domestic Italian sales prices.

All of Moto Guzzi's  motorcycles  were  manufactured  to comply with  applicable
safety  standards.  All Moto Guzzi models  complied with all emission  standards
applicable in all countries in which they were sold.

Raw Materials and Components

There are many reliable  sources for most  motorcycle raw  materials,  including
aluminum for power train components.  However,  some significant  components are
available from only one or two sources. From 1996 through April 2000, situations
arose where Moto  Guzzi's  suppliers  were unable to make timely  deliveries  of
needed  components  due to production  problems  incurred by those  suppliers or
because of


                                      -24-
<PAGE>

arrears  of  payment  by Moto  Guzzi to  suppliers.  Components  supply was also
delayed as a result of design  changes  made by Moto Guzzi.  All of these delays
adversely affected motorcycle production, and in recent years, may have resulted
in lost sales.

While the cost of imported raw  materials is affected by variations in the value
of the  Italian  Lira  relative to the  currencies  of Italy's  primary  trading
partners,  currency exchange rates did not have a significant  adverse effect on
costs and price competitiveness in 1997, 1998 or 1999.

Research, Development and Continuing Engineering

Moto Guzzi, while continuously  engaged in product  improvement and development,
had sought to increase its commitment to develop new products. In 1998, research
and  development  expenditures  by Moto  Guzzi  were  approximately  Lit.  4,336
million,  compared to Lit. 3,125 million in 1997 and Lit. 1,117 million in 1996.
Expenditures in 1999 were curtailed as a result of Moto Guzzi's  restricted cash
flow and were approximately Lit. 2,874. Expenditures in 1999, 1998 and 1997 were
generally  incurred in  developing  production  models as well as more  powerful
two-cylinder   air-cooled  and  other  engines  with  improved  performance  and
durability and superior braking systems, suspensions,  frames, transmissions and
other components.

Sales, Marketing and Inventory

Moto  Guzzi  marketed  its  products  primarily  through  advertising  in  trade
publications, participation in promotional events and fairs, attendance at trade
shows and from editorial coverage in trade and general circulation press.

All sales by Moto Guzzi  S.p.A.  were  invoiced in Italian  Lira except sales by
Moto Guzzi S.p.A. to Moto Guzzi North America, Inc., which were invoiced in U.S.
dollars.  Prices were customarily reviewed and, whenever possible,  increased to
cover  increases  in  production  costs at  periodic  intervals  and in light of
prevailing exchange rates. In 1997, Moto Guzzi generally  maintained its selling
prices in order to maintain market share.  In 1998, Moto Guzzi increased  prices
by  approximately  5%,  effective  in April of that  year.  In 1999,  Moto Guzzi
generally  maintained its 1998 selling  prices and  introduced a new model,  the
California  Jackal, at a lower price point than previous models in order to gain
market share. As of January 2000, prices of all models were increased by between
3% and 6%. Export sales continued to reflect lower margins than domestic Italian
sales due to importer  margins and  transportation  costs which cannot be passed
through to consumers by higher retail prices.  However,  this difference did not
affect the Company's marketing strategy.

Moto Guzzi was not  affected  by any  unusual  industry  practices  relating  to
returns of merchandise or extended payment.  It typically extended payment terms
by between 30 and 60 days in the "out of season" winter  months.  Moto Guzzi was
obliged to maintain 10 years'  inventory  of parts for all  motorcycles  sold to
Italian   government   agencies.   In  common  with  many  other  motor  vehicle
manufacturers,  Moto Guzzi also maintained  significant  spare parts inventories
for  commercial  reasons.  As  is  common  in  the  industry,  Moto  Guzzi  sold
motorcycles under open purchase orders rather than long-term contracts.


                                      -25-
<PAGE>

Distribution

Moto  Guzzi  maintained  a  distribution  network  throughout  Italy of over 120
independent dealers. No single Italian dealer accounted for more than 5% of Moto
Guzzi's  sales in  1999.  The  Italian  dealers  who  distributed  Moto  Guzzi's
motorcycles generally handled other brands as well.

In 1999, a single  importer-distributor acted as exclusive  importer-distributor
for Moto Guzzi in each of  Argentina,  Australia,  Austria,  Belgium,  the Czech
Republic, Denmark, Finland, France, Germany, Greece, Holland, Japan, Luxembourg,
Malaysia,  Malta,  New Zealand,  Norway,  Portugal,  Singapore,  Spain,  Sweden,
Switzerland, the United Kingdom and the United States.

Moto Guzzi North America was Moto Guzzi's exclusive  importer-distributor in the
United States. In 1999, Moto Guzzi North America  distributed  through a network
of over 100 dealers.

In   November    1996,    Moto   Guzzi   replaced   its    independent    French
importer-distributor  with Moto Guzzi France S.a.r.l, a wholly-owned  subsidiary
of Moto Guzzi S.p.A.,  which commenced operations in February 1997, and operated
through a network of 78 dealers at the end of 1999.

In March 2000,  Moto Guzzi  acquired  the 75% of the  outstanding  shares of MGI
Motorcycle  GmbH  that it did not  already  own.  MGI  Motorcycle  GmbH  was the
exclusive  importer-distributor  of Moto Guzzi  motorcycles  and spare  parts in
Germany and distributed through a network of over 100 German dealers.

Moto Guzzi  provided  support to its  worldwide  dealer  network by, among other
things,  operating a technical  training  and support  facility at Mandello  del
Lario.  All dealers were required to attend training courses at the inception of
their relationship and periodically afterwards.

Set forth below is a chart illustrating  percentage of motorcycle sales revenues
attributable to various geographic areas in the fiscal years 1997 to 1999.

                                                     1999      1998      1997
       Italy                                         33.2%     37.4%     33.9%
       Other:  Europe .............................  40.9%     41.0%     46.1%
       Of which: France (subsidiary) ..............  11.0%     10.2%      8.8%
                Germany (affiliate) ...............  12.9%     15.2%     17.9%
       United States (subsidiary) .................  20.3%     16.8%     16.1%
       Other    ...................................   5.6%      4.8%      4.0%

Competition

Moto Guzzi was in a highly  competitive  business,  with  competition  typically
coming from all powered  passenger  vehicles as well as other  motorcycles.  The
overall  motorcycle market in Italy (excluding  scooters) grew in 1999, with new
vehicle  registrations  increasing by  approximately  24.5% compared to the same
period in 1998. Moto Guzzi maintained an extremely small share of the world-wide
motorcycle  market,  which is dominated by many of the same  manufacturers  that
predominate  in  Italy.  Many  of  such  companies  are far  larger  and  better
capitalized,  with greater name  recognition.  Moto Guzzi  competed  principally
through such  intangible  qualities as  performance,  reputation  and quality of
manufacture -- areas in which its competitors also excel.


                                      -26-
<PAGE>

The Italian market through 1999 was dominated by large,  well-financed  Japanese
manufacturers.  A number  of  Italian  and  foreign  manufacturers,  principally
Ducati, Honda, BMW, Yamaha, Kawasaki, Aprilia and Suzuki, sell their products in
the Italian  market.  In 1999,  according  to data from the Italian  Ministry of
Transportation,  the Italian market shares of the principal  competitors of Moto
Guzzi on a unit basis, excluding scooters, were as follows:

                                                      ALL             LARGE
                                                   MOTORCYCLES     MOTORCYCLES*
                                                  ------------------------------
     Honda.......................................    23.4%            18.2%
     Yamaha......................................    20.3%            19.7%
     Suzuki......................................    11.0%            12.3%
     Ducati......................................    10.0%            10.6%
     Kawasaki....................................     8.3%             7.1%
     BMW.........................................     7.7%            14.2%
     Aprilia.....................................     5.0%             5.0%
     Cagiva/Husqvarna............................     3.1%             0.7%
     Harley Davidson.............................     2.5%             4.7%
     Moto Guzzi Corporation......................     2.0%             3.2%
     Triumph.....................................     1.6%             3.0%
     KTM.........................................     0.9%             0.0%

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


*    The Company considers  motorcycles with an engine capacity greater than 600
     cc as "Large Motorcycles."


Product Liability

Moto Guzzi's business exposed it to possible claims for personal injury from the
use  of  its  products.   Moto  Guzzi  maintained  liability  insurance  with  a
per-occurrence and aggregate one-year claim limit of Lit. 18,000 million.

Patents and Trademarks

Except as described  below,  the business of Moto Guzzi was not and has not been
in any  material  respect  protected  by or dependent  upon  patents,  licenses,
franchises or concessions.  The component parts of motorcycles are  manufactured
pursuant to well known techniques and include components which are not unique to
its  products,  although  some of these  components  are  specially  styled  and
designed.  Moto Guzzi  believed  that the  registered  trade  name  "Moto  Guzzi
(Registered)"  and the  related  trademarks  are well known and highly  regarded
throughout  the world,  and  appropriate  steps have been taken to protect  Moto
Guzzi's  rights in these trade names and  trademarks in 67 countries,  including
those countries representing significant markets.

Employees and Employee Relations

Relations with Moto Guzzi's  employees  were  considered by its management to be
good,  though  they had been  affected by the  temporary  lay-off  program  that
commenced in September 1999. At December 31, 1999, Moto Guzzi had 306 employees,
all of them unionized,  of which 23 out of 53 employees  included in the lay-off
program had been laid-off.  This compares to 332 employees at December 31, 1998.
The


                                      -27-
<PAGE>

lay-off program  affected Moto Guzzi's ability to benefit from overtime work (as
well as the  willingness  of employees  themselves  to do overtime) and while it
persisted,  it limited  Moto  Guzzi's  ability to assume  temporary or permanent
employees  for certain  functions,  if and when they might have been required to
meet seasonal needs or otherwise.  Moto Guzzi could call on those  employees who
are laid-off to return to work.  Approximately 48% of the employees were engaged
in factory production and the balance in various supervisory, sales, purchasing,
administrative,  design, engineering and clerical activities.  Resolution of the
national metal workers union contract in 1997 resulted in a one-time  payment to
workers of Lit.  900,000  in  respect  of  periods  prior to the date of the new
agreement.


Business of LITA

o    Set forth  below is a  description  of  LITA's  business  and the  strategy
     developed by LITA's  management  as of December 31, 1999.  In July 2000 the
     Company  sold 100% of the  shares of LITA to  Fintrebi  S.r.l.  and  Mittel
     Generale Investimenti S.p.A.,  companies unaffiliated with the Company. See
     "Subsequent  Events -- Sale of LITA."  Accordingly,  the description of the
     Business  of LITA set  forth  below is  qualified  in its  entirety  by the
     information set forth under such caption.

o    The  description of the business of LITA below refers to the strategies and
     operations of the LITA business prior to its sale in July 2000 and does not
     in any way describe or seek to describe the  strategies  and  operations of
     LITA under its current owners.


Background

On July 25, 1995, the Company, through one of its Italian subsidiaries, acquired
LITA.  The  Company's  temporary  management  business unit had been retained to
manage  LITA after a material  decline in LITA's  operations  and to oversee its
sale to a third  party  to be  identified  by the  unit.  The  stock of LITA was
acquired at a cost of Lit. 615 million, representing a discount of approximately
Lit. 1,600 million from the book value of LITA's assets of Lit. 2,264 million.

Manufacturing

LITA  manufactured  plain and  perforated  welded  specialty  steel  tubes used
principally in the automotive and furniture industries.  The subsidiary's 10,000
square  meter  factory  in  Torino  has  a  two-shift   production  capacity  of
approximately  15,000 tons.  Beginning in 1996,  after the Company's  management
intervention,  LITA's production equaled approximately 80% of capacity; in prior
years, however, production rarely reached 60% of capacity.

Impact of Changing Prices and Currency Movements

Steel  prices had a material  effect on the business of LITA.  Finished  product
prices are affected by the cost of steel;  market and competitive  pressures are
such that selling  prices react quickly to changes in the price of steel.  Steel
prices increased  modestly early in 1998,  stabilized at mid-year,  and declined
slightly  towards the year-end.  To the extent  permitted by  competition,  LITA
sought to pass  increased  costs from


                                      -28-
<PAGE>

changing prices on to its customers by increasing  selling prices.  The increase
in steel  prices in early 1998,  however,  was not passed on to  customers.  The
effects of steel prices were not significant to LITA's business in 1999.

Exchange rates historically did not have a significant effect on the business of
LITA, as export sales were not  significant  to overall  sales.  Export sales in
1999  amounted to 32.4% of sales and LITA was seeking to increase  such sales in
year 2000. As export sales continued to increase,  LITA became more sensitive to
exchange rates between Italy and the countries of export.

Plant and Machinery

Much of LITA's plant and  machinery  were  acquired many years ago. LITA did not
have the financial  ability to  significantly  renovate its plant and machinery.
While such machinery  continued to function,  maintenance  costs were higher and
productivity was lower than with newer machinery.

Sales and Marketing

LITA  distributed  its products  directly in all  countries  except in the U.K.,
where it distributed  through exclusive agents,  and in certain regions of Italy
(which represented approximately 20% of net sales).

Customers

LITA had begun  developing a market in the low-cost  furniture  industry,  which
provides a steadier flow of production and demand than the automotive  industry.
In 1997 through 1999, LITA had a number of customers each  representing  between
5% and 9% of net sales. As a consequence of the recent and planned  expansion of
the business, including expansion of export sales and expansion in markets other
than  the  automobile  market,  it was  expected  that in the  medium  term  the
importance of any single customer would have decreased.

Backlogs

LITA had no long-term  contracts with customers,  and orders typically reflected
the requirements of customers for the following one to two months.

Export Sales

LITA did not have significant  export sales prior to 1996. In 1999, 67.6% of net
sales were made in Italy and most of the remaining  32.4% were made elsewhere in
Europe.  In  1998,  71.5%  of net  sales  were  made in  Italy,  and most of the
remaining 28.5% were made elsewhere in Europe.

Suppliers

There are multiple suppliers of the special clad and coated steels used by LITA.
LITA did not have written  long-term  contracts  with such  suppliers  except in
respect of a particular  steel quality which was not  significant  to net sales.
LITA was seeking to formalize its  arrangements  with major  suppliers to reduce
the business risks associated with its planned expansion and to reflect the fact
that  close  collaboration  with the  steel  suppliers  is  required  to  ensure
consistent  quality and to shorten lead times for significant  changes in supply
levels, which could run from 12 to 18 months.


                                      -29-
<PAGE>

Competition

LITA's competitors were principally larger companies,  many of them subsidiaries
of Italian steel  manufacturers,  including Profilmec,  S.p.A.,  Ispadue S.p.A.,
Lombarda Tubi (a division of the Marcegaglia Group) and ITAS, S.p.A. The size of
these  competitors  and the support of their  parent  companies  enabled them to
compete  aggressively  in the  market.  LITA  competed  principally  on quality,
flexibility of service and timeliness of delivery, factors which its competitors
also sought to offer to the market.  LITA was in 1997  through  1999 the leading
supplier in Italy of  aluminized  steel tubes for  automotive  exhaust  systems.
While automotive original equipment manufacturers were increasing their usage of
higher grade stainless  steel,  which LITA did not currently  supply in material
quantities,  the  automotive  aftermarket  in Italy and  elsewhere in Europe was
increasing  its  purchases  of  aluminized  steel  tubing  as  a  cost-effective
compromise between lower-grade cold steel tubing and the higher priced stainless
steel.

Seasonal Nature of Business

LITA's operations  historically have been  characterized by seasonal factors due
to the company's  dependence on the automobile  industry.  Demand is lowest over
the period from  November to February and is also  significantly  reduced in the
traditional  holiday  month of August.  Since  1995,  LITA sought to reduce this
seasonality  by expanding its markets in the furniture  industry,  which is less
seasonal, but which is more price sensitive and less profitable.

Number of Employees

Labor  relations  with LITA's  employees  were  considered  by  management to be
excellent.  LITA was not  subjected to any strikes or work  stoppages in 1998 or
1999. As of December 31, 1999,  LITA had 38 employees,  of which 30 were engaged
in production and 8 in management,  sales and administrative  roles. At December
31, 1999,  the amount of LITA's  severance pay  obligation to employees was Lit.
981 million

Compliance With Governmental Regulations

LITA was subject to a number of  governmental  regulations  relating to the use,
storage, discharge and disposal of minerals and alloys used in its manufacturing
processes and to the safety standards of its facilities and processes.  LITA had
not been the subject of material  environmental or safety claims in the past and
its  management  believed  that LITA's  activities  conformed in all respects to
presently applicable regulations.  The costs of compliance with regulations were
not significant to LITA's operations.

Commercial Real Estate Development Business

The Company acquired a real estate portfolio in 1995 which it had disposed of by
the end of 1999.

In June 1996, the Company sold its 66.7% equity interest in Immobiliare  Broseta
S.r.l. which owns industrial and commercial holdings and additional  surrounding
land  aggregating  approximately  66,000 square meters in Bergamo,  Italy to its
then  25%-owned  affiliate  Domer S.r.l.  ("Domer") The  remaining  33.3% equity
interest in Immobiliare Broseta S.r.l. was owned by Interim S.p.A., a subsidiary
of Domer, and was transferred to Domer. The Company had sought offers from third
parties through an independent  broker, and the sale price of Lit. 5,200 million
offered  by  Domer  was the  highest  of the  offers  received.


                                      -30-
<PAGE>

Domer issued a promissory  note for Lit.  1,800  million of the sale price,  due
December  31,  1996,  which note was  subsequently  extended  for another  year,
bearing an interest  rate equal to the official  Lira discount rate plus 3%. The
balance  due of  Lit.  3,400  million  was to be  received  from  the  sales  of
apartments to be developed from the  Immobiliare  Broseta  S.r.l.  property when
such sales occurred or on June 30, 1999, whichever occurred earlier. This amount
of Lit. 3,400 million carried an interest rate of 6%, payable  bi-annually,  and
was accounted for at its  estimated  net present  value of Lit.  2,908  million,
applying a discount rate of 12%, considered to be a fair market rate for similar
notes  receivable.  The book value of the 66.7% interest in Immobiliare  Broseta
S.r.l.  was  Lit.  4,708  million  and no  gain  or  loss  was  recorded  on the
transaction.

In December  1997,  the Company  entered into an agreement to dispose of its 25%
interest  in Domer and the  promissory  notes due from Domer  deriving  from the
Company's  1996  disposal of  Immobiliare  Broseta  S.r.l.described  above.  The
consideration  for such sale  consisted of Lit.  2,900 million in cash, of which
Lit. 1,400 million was paid on December 31, 1997 and Lit. 1,500 million on March
31, 1998,  plus the proceeds of sale of 45,977  shares of the  Company's  Common
Stock, plus the proceeds from the sale of certain apartments located in Bergamo.
The Company  received Lit. 1.1 billion in installment  payments from the sale of
apartments in 1998 and Lit. 1.4 billion in 1999.

The Company  owned an 80%  interest in  unimproved  land  aggregating  2,539,020
square meters near Cagliari (Sardinia), Italy which had a book value at December
31, 1998 of Lit.  3,500  million,  net of reserves for risks  connected with the
permitted use of the land and its  development.  In November  1999,  the Company
sold this land for Lit. 3,000 billion to Finprogetti S.p.A.

The Company owns 100% of Pastorino Strade S.r.l.,  which owned concession rights
for 196  spaces in a  municipal  parking  garage in Genoa,  Italy.  The  Company
disposed of the concession rights in July 1999. The book value of the concession
rights was lowered to Lit.  1,600 million at December 31, 1998,  reflecting  the
sale price agreed to.

Structure of the Company

The following is a textual summary of the organizational chart of the Company as
of the date of this report.

The  Company  owns a 99.9%  equity  interest  in Trident  Rowan  Servizi  S.p.A.
("TRS"), an Italian corporation.

TRS owns a 99.9% equity interest in O.A.M.  S.p.A., an Italian  corporation.  In
March 2001, the Company  purchased a 16.35% equity  interest in OAM from Daimler
Chrysler Corporation.

OAM owns a 57.7%  equity  interest  in  Centerpoint  Corporation  (in  which the
Company also owns a 5%  interest)  and a 100% equity  interest in Trident  Rowan
International S.A., a Luxembourg corporation.

Item 2. Properties

The  following  facilities  were in 1999  leased or owned by the  Company in the
active conduct of its business:


                                      -31-
<PAGE>

(a)  1,700  square  feet of office  space at Two  Worlds  Fair  Drive,  Franklin
     Township,  Somerset,  NJ 08873,  in which are  located  the  United  States
     administrative  office of the Company, and which was occupied under a lease
     expiring in 2001, at a monthly rental of approximately  $2,200.  This lease
     was terminated in June 2000.

(b)  Factory and office  facilities  owned in fee and  located in  Mandello  del
     Lario,  Italy in a group of one, two and three story buildings  aggregating
     54,550 square meters,  and which was used by Moto Guzzi.  This facility was
     disposed  of in  September  2000 as part of the  disposal of the Moto Guzzi
     operations.

(c)  Moto Guzzi's parts distribution facility is located at a 3,683 square meter
     facility in Modena,  Italy,  under a lease expiring in 2002.  This facility
     was disposed of in September 2000 as part of the disposal of the Moto Guzzi
     operations.

(d)  Offices  aggregating 480 square meters in Milan,  Italy, are leased from an
     entity  affiliated with Francesco Pugno Vanoni,  the former Chairman of the
     Board of the  Company,  and his  brother,  at a cost of Lit. 161 million in
     1998 under a lease  expiring on August 31, 2000.  The rental is believed to
     be comparable to rents paid for similar facilities elsewhere in Milan. From
     August 2000, the Company renewed this lease for a part of the offices for a
     total of 100 square meters for a rental of Lit. 38 million annually through
     July 2002.

(e)  Factory and related commercial facility  aggregating  approximately  10,000
     square meters in Torino,  Italy leased by LITA, at an annual rental of Lit.
     540 million in 1999 and used at approximately  80% of production  capacity,
     based on equipment in place.  This facility was disposed of in July 2000 as
     part of the disposal of the LITA operations.

Item 3. Legal Proceedings

The Company and its subsidiaries are involved in litigation in the normal course
of  business.  Except as follows,  management  does not believe  that an adverse
result in any such action would have a material adverse effect on the Company.

In August 1998, an action entitled "Rawlings Sporting Goods Co., Inc. v. Trident
Rowan Group, Inc. et al.," was commenced in the United States District Court for
the Northern District of New York by the owner of property located in Salisbury,
New York,  seeking to hold the Company liable for costs that the owner (Rawlings
Sporting  Goods  Co.) has  allegedly  incurred  in  response  to the  release or
threatened release of allegedly hazardous  substances on land allegedly owned by
the Company  between  1948 and 1970,  and used by a third  party.  In an amended
complaint  served in December  2000,  the  plaintiff  for the first time further
alleged  that the  Company  still owns a portion of the  allegedly  contaminated
land.

The action seeks restitution of costs incurred by the plaintiff in responding to
the release or threatened  release of such  substances  at the  property,  in an
amount in excess of US$ 1.7 million.  The action is in the discovery  phase, and
the Company intends to contest the action vigorously.

While it is too early to assess the likelihood  that the Company will suffer any
liability,  the Company  believes it has meritorious  defenses to the action and
will  contest  all  claims  vigorously.  An answer has been  filed  denying  all
liability.


                                      -32-
<PAGE>

In June 1997, the Company was notified that an action had been commenced against
it in the  Court of  Common  Pleas,  a  Pennsylvania  state  court  situated  in
Philadelphia,  entitled "John Wilson et al. v. Trident Rowan Group, Inc. et al,"
(the "Wilson  Litigation"),  an action  eventually  consolidated with a related,
companion action against other parties.  As a result of detailed  communications
over the ensuing months between plaintiff,  the Company,  the Company's insurer,
and defense counsel appointed by the insurer,  it was learned that the plaintiff
was seeking damages for serious burn injuries  alleged to have been sustained by
the  plaintiff  in 1996 from  working  with a starter  unit claimed to have been
manufactured  in the  1950's by a company  once  owned by a  predecessor  of the
Company.

In mid-1998, approximately one year after onset of the litigation, the Company's
insurer notified the Company that it was disclaiming coverage and defense of the
suit. The Company then retained new counsel to defend it in the action.

On December 19, 2000,  a  Settlement  Agreement  and Release was executed by and
between  plaintiffs,  the  Company  and I.T.E.  Imperial  Corporation  and Gould
Electronics,  Inc., the co-defendants in the Wilson Litigation.  The Company and
Gould each agreed to pay 50% of the  $2,050,000  settlement  amount,  subject to
resolution of certain issues between them.  The remaining  issue,  the Company's
claim against Gould for indemnification, was litigated on February 16, 2001.

In March 1999, the Company separately  brought suit against Travelers  Casualty,
the Company's  insurer,  to compel it to resume coverage of the underlying claim
and to assume the costs of defense of the personal  injury action.  In May 2001,
the United  States  District  Court  granted  summary  judgment  in favor of the
Company,  holding  that  Travelers  must  indemnify  the Company  for  liability
incurred and attorney's fees paid in connection with the Wilson litigation, plus
interest. Travelers may appeal this decision.

Pursuant  to the May 2001  judgment,  on June 11,  2001  legal  counsel  for the
Company submitted to the Court a proposed form of judgment  requiring  Travelers
to (i) pay the Company,  $2,050,000,  plus interest attributable to the sums the
Company has and will have to spend in settlement of the Wilson Litigation,  (ii)
$764,045  plus  interest  representing  costs and  attorneys  fees  incurred  in
defending the Wilson Litigation, and (iii) $78, 975, plus interest, representing
costs and  attorneys  fees  incurred  by the Company in  prosecuting  its claims
against Travelers.

On June 11, 2001 Travelers filed with the Court a Motion for  Reconsideration of
Order or in the Alternative For Resolution of Certain Undecided Issues,  seeking
reconsideration  of the  judgment,  or in the  alternative  asking  the Court to
confirm that Travelers  liability is limited to $1,000,000 and that Travelers is
entitled to charge the Company a reasonable premium for the liability  coverage.
In July  2001,  legal  counsel  for the  Company  filed a motion  with the Court
responding to Travelers' motion.

On June 15,  2001,  a verdict  was  rendered  by the  Court of  Common  Pleas of
Philadelphia  County  holding  that the  Company is  responsible  for paying all
settlement  funds and ordering the Company to pay Gould $1,025,000 plus interest
at a rate of 7% per annum from the date Gould paid the  plaintiffs.  On June 27,
2001, the Company's  legal counsel  advised counsel to Travelers of the judgment
and formally  tendered to  Travelers  responsibility  for  deciding  whether any
post-trial  motions  and/or notice of appeal  should be filed.  On June 29, 2001
legal  counsel  for  Travelers  responded  that  Travelers  refused  to take any
position


                                      -33-
<PAGE>

on the issues.  The appeal period for the judgment expired on July 15, 2001, and
the judgment became due and payable to Gould on that date.

Item 4. Submission of Matters to Vote of Security Holders

At the 1999 Annual Meeting of Shareholders held at the offices of Kramer, Levin,
Naftalis & Frankel,  919 Third Avenue,  41st Floor,  New York, NY 10022 at 10:00
a.m. on December 6, 1999 the Company's  stockholders  were  presented  with five
proposals, as set forth below:

                         PROPOSALS NO. 1 THROUGH NO. 4:

               PROPOSAL NO. 1: TO ESTABLISH THE SIZE OF THE BOARD

The  Board  proposed  to  amend  the  Articles  of  Incorporation  to  eliminate
provisions fixing the minimum number of directors under certain circumstances.

                                 PROPOSAL NO. 2

      TO ELIMINATE THE REQUIREMENT FOR AT LEAST THREE INDEPENDENT DIRECTORS

The Board  proposed to amend the  Articles of  Incorporation  to  eliminate  the
requirement that at least three members of the Board of Directors be independent
directors.

                                 PROPOSAL NO. 3

                 TO ELIMINATE A STAGGERED BOARD OF THREE CLASSES

The Board  proposed to amend the  Articles of  Incorporation  to  eliminate  the
staggered Board of Directors and to provide for the Board to consist of a single
class being elected each year.

                                 PROPOSAL NO. 4

                    TO ELIMINATE PROVISIONS ENTITLING TAMARIX
                        TO NOMINATE UP TO THREE DIRECTORS

The  Board  proposed  to  amend  the  Articles  of  Incorporation  to  eliminate
provisions  giving  Tamarix the right under  certain  circumstances  to nominate
members of the various classes of directors.

The Company's  stockholders  were permitted to vote  separately  with respect to
each proposal, but the adoption of each of proposals 1 through 4 was conditioned
upon the adoption of the other proposals.

                                 PROPOSAL NO. 5

To elect the  following  persons as  Directors of the Company to serve until the
Company's  2000  Annual  Meeting  and until  their  successors  are  elected and
qualified:

                                 Emanuel Arbib
                                 Gianni Bulgari


                                      -34-
<PAGE>

                                 Duncan Chapman
                                 Howard E. Chase
                                 Andrea Della Valle
                                 Mark S. Hauser
                                 Mark B. Segall

The adoption of Proposal No. 5 was conditioned  upon the adoption of proposals 1
through 4.

At the special meeting:

     (i)  the  holders  of  3,041,442  shares  of  the  Company's  Common  Stock
          (representing 69% of shares of record) voted in favor of Proposal 1;

     (ii) the  holders  of  3,035,108  shares  of  the  Company's  Common  Stock
          (representing 69% of shares of record) voted in favor of Proposal 2;

    (iii) the  holders  of  3,041,442  shares  of  the  Company's  Common  Stock
          (representing 69% of shares of record) voted in favor of Proposal 3;

     (iv) the  holders  of  3,037,871  shares  of  the  Company's  Common  Stock
          (representing 69% of shares of record) voted in favor of Proposal 4;

     (v)  the  holders  of  3,667,066  shares  of  the  Company's  Common  Stock
          (representing  83% of shares  of  record)  voted in favor of  electing
          Emanuel Arbib,  Gianni Bulgari,  Duncan  Chapman,  Andrea Della Valle,
          Mark Hauser and Mark Segall as directors of the Company; and

     (vi) the  holders  of  3,667,016  shares  of  the  Company's  Common  Stock
          (representing  83% of shares  of  record)  voted in favor of  electing
          Howard Chase as a director of the Company;

thereby approving each of the Proposals.

PURPOSES AND EFFECTS OF THE AMENDMENTS TO THE ARTICLES OF INCORPORATION

On May 2, 1997, pursuant to an agreement between Tamarix and Finprogetti, S.p.A.
("Finprogetti")  dated  March  7,  1997  (the  "Tamarix/Finprogetti  Acquisition
Agreement"),  Finprogetti  sold to  Tamarix  1,000,000  shares of the  Company's
Common  Stock  owned  by  Finprogetti.   Tamarix  and  Finprogetti  agreed  that
Finprogetti  would  have a put right and  Tamarix  would  have a call right with
respect to an additional 635,000 shares of Common Stock owned by Finprogetti.

Tamarix  assigned  to Gianni  Bulgari its rights and  obligations  as to 317,500
shares in February 1999, who subsequently acquired such shares from Finprogetti.

In connection with the Tamarix/Finprogetti Acquisition Agreement, pursuant to an
agreement  dated April 8, 1997,  by and between the Company and Tamarix  Capital
Corporation (the "Inducement  Agreement"),  the Company amended its By-Laws, and
following shareholder approval at the Annual Meeting of Shareholders on December
9, 1997,  the Articles of  Incorporation  of the Company were amended to provide
(i) for a  staggered  Board of  Directors  which  includes  one or more  persons
nominated


                                      -35-
<PAGE>

by Tamarix in each of the three classes, (ii) for a representative of Tamarix to
be Chairman of the Board of the Company and (iii) that the Board of Directors be
expanded and limited to not more than 11 members,  under certain  circumstances,
and  otherwise to be limited to 10 members,  such Board to include three Tamarix
nominees and an additional  three  independent  directors who are experienced in
business  matters  and  otherwise  reasonably   acceptable  to  Tamarix.   These
amendments  were all  included  in  individual  paragraphs  of  Article 5 of the
Company's Articles of Incorporation and together constitute substantially all of
Article 5.

On March 9, 1999,  Tamarix  distributed  to  entities  controlled  by two of its
principals,  Gianni Bulgari and Emanuel Arbib, 634,921 shares of Common Stock of
the Company  theretofore  owned by Tamarix pursuant to a December 1998 amendment
to  an  agreement  among  the  Tamarix  shareholders.  In  connection  with  the
resolution  of certain  disputes  between Mr.  Bulgari and the Company,  Messrs.
Hauser,  Bulgari,  Arbib, Spier and Chase entered into an agreement on September
21, 1999 (the  "Settlement  Agreement")  with the Company  providing  that among
other  things,  the Company  would  propose for election  the director  nominees
described  above under  Proposal 5 and would vote their shares of the Company in
support of the  election of such  persons  and the  proposed  amendments  to the
Articles  of  Incorporation  set forth  above.  The  parties  to the  Settlement
Agreement  beneficially  owned,  in the  aggregate,  approximately  58.4% of the
outstanding  shares of Common  Stock of the  Company.  See  "Principal  Security
Holders." The Settlement  Agreement was approved by the Board of Directors after
determining  that it was in the Company's best interests.  The amendments to the
Articles of Incorporation  were intended to eliminate the governance  changes in
the  Articles  of  Incorporation,  which  had  been  adopted  in 1997 to  assure
Tamarix's continued participation in the governance of the Company and which are
inconsistent  with the  terms of the  Settlement  Agreement.  As a result of the
amendments,  it is  anticipated  that it may be  easier  to effect a change in a
majority of the members of the Board of Directors.

The  Company's  By-Laws  were also  amended,  subject to  approval  of the above
proposals, to eliminate all amendments adopted in accordance with the Inducement
Agreement granting special rights to Tamarix.

THE  BOARD  OF  DIRECTORS  RECOMMENDED  A VOTE  FOR THE  APPROVAL  OF THE  ABOVE
DESCRIBED PROPOSALS.

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

From August 22, 1996 until June 5, 1997,  the  Company's  Common Stock traded on
the Nasdaq SmallCap Market under the symbol TRGI. The reported prices  represent
inter-dealer  prices, which do not include retail mark-ups,  mark-downs,  or any
commission  to the  broker-dealer,  and may  not  necessarily  represent  actual
transactions.  From June 5, 1997 until March 17, 1999,  the Common Stock and the
newly issued  Warrants  traded on the Nasdaq  National  Market.  Since March 18,
1999,  the Common  Stock and Warrants  have been quoted in the  Over-The-Counter
market Bulletin Board.


                                      -36-
<PAGE>

                                  Common Stock

                                                     Bid Prices
                                             ---------------------------
                                             High Bid           Low Bid
                                             --------           -------
          1997       1st Quarter               9-1/2             7-3/8
                     2nd Quarter               8-1/2             4-7/8
                     3rd Quarter               7-1/4             4-1/8
                     4th Quarter               7-1/8             4-15/16
          1998       1st Quarter               6-3/4             3-9/16
                     2nd Quarter               7-1/2             5
                     3rd Quarter               6-9/16            4
                     4th Quarter               5-7/16            3
          1999       1st Quarter               7                 4 1/8
                     2nd Quarter               6-7/16            4-5/8
                     3rd Quarter               5                 1-15/16
                     4th Quarter               4-1/4             1-1/8
          2000       1st Quarter               3-3/4             2-7/8



                                     Warrants

                                                     Bid Prices
                                             ---------------------------
                                             High Bid           Low Bid
                                             --------           -------
          1997       2nd Quarter from          1-1/8              3/8
                     June 5
                     3rd Quarter               1-7/16             11/32
                     4th Quarter               1-3/8              3/4
          1998       1st Quarter               1                  7/16
                     2nd Quarter               1-7/16             3/4
                     3rd Quarter               15/16              3/8
                     4th Quarter               27/32              3/16
          1999       1st Quarter               1-1/16             9/16
                     2nd Quarter               13/16              7/16
                     3rd Quarter               15/32              7/32
                     4th Quarter               1-1/4              1/16
          2000       1st Quarter               6/16               3/32


As of August 8, 2001  there  were  approximately  1000  holders of record of the
Company's Common Stock.

                                 DIVIDEND POLICY

The  Company  has not  paid  any  dividends  since  its  inception  and does not
anticipate paying any dividends on its Common Stock for the foreseeable  future.
Management  intends to retain  earnings,  if any, for use in its business and to
support development and expansion of the Company's business.  Under an agreement
with Tamarix, the approval of the Tamarix-designated  directors is required as a
condition of paying dividends.

Item 6.           Selected Financial Data

The selected  consolidated  financial  data set forth below for the fiscal years
ended December 31, 1999,  1998,  1997,  1996 and 1995 have been derived from the
Company's  audited  financial  statements.  The  information  should  be read in
conjunction with  "Management's  Discussion and Analysis of Financial


                                      -37-
<PAGE>

Condition and Results of Operations"  and such financial  statements,  including
the notes thereto, included elsewhere in this Form 10-K.

<TABLE>
<CAPTION>
                                                            Year ended December 31,
                                    ----------------------------------------------------------------------
                                       1999        1999        1998         1997         1996         1995
      Income Statement Data         US$000(a)      Lit.m       Lit.m        Lit.m        Lit.m       Lit.m
                                    ---------      -----       -----        -----        -----       -----
<S>                                 <C>          <C>           <C>        <C>        <C>         <C>
Net Sales(b) ....................   $  1,033     Lit.1,987     Lit.3,775  Lit.2,535  Lit.2,757   Lit.2,085
Loss from continuing operations .     (3,400)       (6,541)       (6,485)    (9,803)   (11,202)     (5,458)
Net profit/loss .................      1,292(c)      2,485(c)    (25,019)   (22,477)   (15,001)     (6,980)
Cash dividends per common share .       --            --            --         --         --          --
Balance Sheet Data
Total assets ....................     12,322        23,706        23,938     55,089     79,877     122,180
Long-term debt net of current
portion .........................   6,5678,609      12,634         1,271      2,316     10,839      13,900
Loss per share(b)
Continuing operations ...........      (0.79)       (1,528)       (1,415)    (2,131)    (2,440)     (1,615)
Discontinued operations .........       1.10(c)      2,109(c)     (4,043)    (2,755)      (828)       (450)
</TABLE>


Figures for 1995 through 1999 have been  restated to reflect the  discontinuance
of the Moto Guzzi and LITA businesses.

     (a)  Converted solely for the convenience of the reader at Lit. 1,924 : US$
          1.00, the approximate rate as at December 31, 1999.

     (b)  As the company had losses from  continuing  operations  in each of the
          years 1995  through  1999,  all options,  warrants and other  dilutive
          instruments were antidilutive for each of the years above.

     (c)  Includes  US$  13,429/Lit.  25,837 gain  relating to the merger of the
          discontinued Moto Guzzi business with North Atlantic Acquisition Corp.
          equal to US$ 3.14/Lit. 6,036 per share.

Exchange Rates

Since all of the production,  and much of the sales, of the Company  occurred in
Italy, the Company's primary financial  statements are reported in Italian Lira,
the  functional  currency  of the  Company  as  defined  by  generally  accepted
accounting  principles.  U.S.  Dollar  translations  are provided solely for the
reader's convenience and have been made at the approximate rate of 1,924 Lira to
the dollar as of December 31, 1999.

Prior to  September  1992,  the Bank of Italy  maintained  the value of the Lira
within the narrow band  contemplated  by the Exchange Rate Mechanism (the "ERM")
of the European  Monetary System (the "EMS"). On September 17, 1992, in response
to strong  downward  pressure on the exchange rate of the Lira against other EMS
currencies  that  continued  despite  intervention  by the Bank of Italy and the
central banks of other nations participating in the EMS, the Italian government,
in  consultation  with  the Bank of  Italy,  suspended  the  Lira  from the ERM.
Following  this  suspension,  the  value of the  Lira  immediately  declined  by
approximately  20%  against  the main EMS  currencies  with  similar  consequent
depreciation  against the U.S.  Dollar.  The Lira was readmitted into the ERM on
November  25,  1996.  On January 1, 1999,  Italy  participated  as one of the 11
European countries in a European common currency, the Euro.


                                      -38-
<PAGE>

The following table sets forth, for the period indicated, the high, low, average
and end of period  exchange rates  expressed in Lira per dollar  (rounded to the
nearest Lira):

            Calendar Year    High      Low       Average       End of Period
            -------------    ----      ---       -------       -------------
                2000        2,340     1,874       2,103            2,061
                1999        1,933     1,631       1,819            1,924
                1998        1,823     1,590       1,733            1,656
                1997        1,837     1,520       1,703            1,768
                1996        1,606     1,499       1,542            1,522
                1995        1,767     1,565       1,626            1,588

Fluctuations  in the exchange  rates between the Lira and the Dollar will affect
the Dollar  equivalents  of the Company's  reported  revenues and earnings.  The
Company does not currently  engage in hedging  activities to reduce its exposure
to exchange rate fluctuations.

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

Portions of the discussion and analysis below contain certain "forward  looking"
statements which involve risks and  uncertainties.  The Company's actual results
may differ  significantly  from the results  discussed  in the  forward  looking
statements.  Factors  that might cause such a  difference  include,  but are not
limited to, lack of adequate capital to continue operations, changes in currency
exchange  rates,  other  factors  discussed  in the  report  as well as  factors
discussed in other  filings made with the  Securities  and Exchange  Commission.
Although  the  Company  believes  that the  assumptions  underlying  the forward
looking statements contained herein are reasonable, any of the assumptions could
prove  inaccurate,  and  therefore,  there can be no assurance  that the forward
looking statements included herein will prove to be accurate.

General

In calendar year 2000, the Company disposed of two of its industry segments with
the sale of its  motorcycle and steel tube  operations,  as discussed in Item 1.
These have been  accounted  for as  discontinued  operations  and the results of
operations  for  1999  and  prior  years  have  been  restated  to  reflect  the
discontinuance.


                                      -39-
<PAGE>

Year ended December 31, 1999 compared to Year ended December 31, 1998

<TABLE>
<CAPTION>
                                                      Dec. 31,
                                                        1999                  Dec. 31, 1998
                                                       Lira m.                   Lira m.
                                                      --------                --------------
<S>                                                     <C>          <C>            <C>           <C>
Net sales .......................................       1,987        100.0%         3,775         100.0%
Cost of sales ...................................      (1,055)       (53.1%)       (2,447)        (64.8%)
                                                          932         46.9%         1,328          35.2%
Selling, general and administrative expenses ....      (5,829)      (293.4%)       (6,303)       (167.0%)
Impairment expense ..............................        (900)       (45.3%)       (2,688)        (71.2%)
Operating loss ..................................      (5,797)      (291.8%)       (7,663)       (203.0%)
Interest expense ................................        (589)       (29.6%)         (761)        (20.2%)
Interest income .................................       1,178         59.3%         1,554          41.2%
Other income, net ...............................      (1,245)       (62.7%)          546          14.5%
Loss from continuing operations before Income taxes    (6,453)      (324.8%)       (6,324)       (167.5%)
    and minority interests ......................
Income taxes ....................................         (88)        (4.4%)         (161)         (4.3%)
Profit/(loss) from continuing operations ........      (6,541)      (329.2%)       (6,485)       (171.8%)
Discontinued operations: ........................       3,324                     (21,374)
Losses of motorcycle segment after income taxes of    (22,976)                    (21,802)
    Lit. 88 and Lit. 519 ........................
Gain on merger of motorcycle subsidiary .........      25,837                          --
Profit of steel tube segment after income taxes of        708                         428
    Lit. 164 and Lit. 0 .........................
Provision for loss on disposal of steel tube             (245)                         --
    segment .....................................
Minority interests ..............................       5,702                       2,840
Net profit/(loss) ...............................       2,485                     (25,019)
</TABLE>

Net sales  principally  represent  sales of the Company's  temporary  management
services  subsidiary,  TIM.  Net sales in 1999  include  sales to the steel tube
operations  of Lit. 389 million in respect of  performance  based fees for TIM's
management intervention and Lit. 287 million in 1998 in respect of a TIM manager
who supervised the steel tube operations. The decrease in sales in 1999 compared
to  1998  principally  results  from  fact  that  1998  includes  a  significant
intervention  by  TIM on  behalf  of a  Swiss  client  in  connection  with  its
acquisition of a business in Italy.

Gross  margins  increase as ant  incidence of net sales in 1999 compared to 1998
due to the  significant  effect of the Lit.  389 million  performance-based  fee
charged by TIM to the steel tube operations.

The reduction of Lit. 474 million or 7.5% in selling general and  administrative
expenses in 1999 compared to 1998 reflects cost  reductions  implemented  by the
Company.  The cost saving program is hindered by the need to maintain accounting
and tax compliance systems for both Italian and U.S. purposes and the complexity
of the  disposal  programs  in 1999  and  1998  and of  corporate  restructuring
programs.  Further,  in 1999,  corporate salaries included an amount of Lit. 481
million  (US$250,000)  in respect of the  issuance of a $250,000 5% Debenture to
Emanual Arbib, a director of the Company in respect of his efforts in raising $6
million from the issuance of the 5%  Debentures to third  parties.  Cost savings
achieved  were also  partially  offset by the average US$ : Lira  exchange  rate
which was 5% higher in 1999  compared to 1998.  Higher legal costs were incurred
in 1999  compared to 1998  principally  in


                                      -40-
<PAGE>

connection with the U.S. litigation described in Item 3. Significant elements of
selling, general and administrative costs are as follows:

                                               Dec. 31 1999   Dec. 31 1998
                                                   Lit. m         Lit. m
                                               ---------------------------
Corporate salaries ............................    1,421          1,157
Legal costs ...................................      938            547
Other costs....................................    2,570          3,208
Temporary management services subsidiary ......      900          1,391
                                               ---------------------------
                                                   5,829          6,303
                                               ===========================

Other costs include rent and office  expenses for the  Company's  offices in New
Jersey  (closed in 2000) and in Milan,  Italy,  tax,  accounting  and compliance
costs in the U.S. and Italy,  professional  fees in connection with the disposal
of operations in Italy,  public company costs in the U.S. and certain  statutory
costs in Italy.

Impairment  expense in 1999 reflects Lit. 500 million in respect of the December
1999 disposal of land in Sardinia and Lit. 400 million  impairment of trademarks
and  other  intangibles  of TIM,  to  reflect  the  2000  terms  of sale of this
subsidiary.  In  1998,  impairment  expense  reflected  reserves  made  for  the
Company's  concession  rights  over  parking  spaces  in Genoa  in the  light of
negotiations for their disposal, completed in 1999.

Interest expense in 1999 principally reflects interest on residual Italian loans
dating  from  when OAM was  operative  (prior to 1993)  and  interest  on bridge
financing provided in October 1998 by Tamarix and Mr. Giovanni Bulgari repaid in
November and May 1999 respectively.  Final installments on the OAM loans are due
to be paid in 2001. In 1998, interest  principally reflects the same items as in
1999 and  additionally  interest on the Company  loan note issued to the company
pursuant to its 1996 stock redemption program and repaid in October 1998.

The  principal  elements  of  interest  income  in 1999  are  Lit.  916  million
receivable by OAM in respect of the value of warrants of Moto Guzzi  Corporation
issued to OAM as  remuneration  for the  ongoing  provision  of  finance  to the
disposed motorcycle  operations,  Lit. 176 million other interest paid to OAM by
the disposed motorcycle operations and, for the balance,  interest receivable on
cash  balances  and tax  receivables.  In 1998,  Lit.  533  million of  interest
receivable is in respect of OAM financing of the disposed motorcycle  operations
and the  balance  was  principally  of  interest  on cash and  short-term  fixed
interest investments.


                                      -41-
<PAGE>

Significant elements of other income, net were as follows:

                                                   Dec. 31 1999   Dec. 31 1998
                                                      Lit. m         Lit. m
                                                  -----------------------------
Foreign exchange .................................       (2)            (2)
Release of reserves for claims ...................    1,009            714
Additional reserve for U.S. litigation............   (2,970)            --
Rental income ....................................       80            150
Other ............................................      638           (316)
                                                  -----------------------------
                                                     (1,245)           546
                                                  =============================

The U.S.  litigation is described in Item 3 of this report.  Additional  reserve
was made in 1999 in light of  preliminary  judgments -see Item 3 which is hereby
incorporated by reference. Release of reserves for claims principally relates to
reserves  made in respect of  companies  disposed in the early  1990's  based on
final settlements of claims deriving from such disposals.

As a  result  of  the  above  items,  losses  from  continuing  operations  were
substantially  unchanged  at Lit. 6.5 billion in 1999  compared to 1998.  Losses
from the discontinued  motorcycle  operations  increased to Lit. 23.0 billion in
1999  compared to Lit.  21.8 billion in 1998 as benefits from an 11% increase in
unit sales volumes were offset by the effects of product mix and higher selling,
general and  administrative  expenses  from  increased  U.S.  selling  expenses,
marketing  costs for a new product launch and the higher costs of being a quoted
company from March 1999 following the merger of the motorcycle  operations  with
and into North Atlantic  Acquisition Corp., which merger generated a gain of Lit
25.8  billion.  This merger and the gain is described in Note 3 to the financial
statements  and in Item 1, above.  The Company had hoped that the merger and the
status of Moto Guzzi as a public  company  would have  enabled  the  business to
raise the further  capital  needed to  refurbish  its  operations  and  increase
production and sales,  but when such further  financing was not  forthcoming and
with operations affected adversely by a liquidity crisis from the second half of
1999, a merger with or disposal to another better financed party became the only
viable strategic alternatives.  The motorcycle operations were sold in September
2000 following a public auction process,  again described above in Item 1 and in
the Notes to the Financial Statements.

The Company also sold its steel tube operations in 2000. While this business was
profitable  in 1999 and 1998,  mainly due to  favorable  market  conditions  and
prices,  it did not present  opportunities  for growth and future  profits which
justified further investment. Consequently it was disposed to a trade purchaser.

The Company has  classified  minority  interests  after  losses from  continuing
operations,  as  substantially  all of the minority  interests  reflect minority
shareholders' interests in the discontinued motorcycle operations.


                                      -42-
<PAGE>

Year ended December 31, 1998 compared to Year ended December 31, 1997

<TABLE>
<CAPTION>
                                                           Dec. 31                    Dec. 31
                                                          1998                         1997
                                                          Lira m.                     Lira m.
                                                          -------                     -------
<S>                                                         <C>         <C>             <C>        <C>
Net sales ........................................          3,775       100.0%          2,535      100.0%
Cost of sales ....................................         (2,447)      (64.8%)        (1,570)     (61.9%)
                                                            1,328        35.2%            965       38.1%
Selling, general and administrative
     expenses ....................................         (6,303)     (167.0%)        (8,151)    (321.5%)
Impairment expense ...............................         (2,688)      (71.2%)        (4,001)    (157.8%)
Operating loss ...................................         (7,663)     (203.0%)       (11,187)    (441.3%)
Interest expense .................................           (761)      (20.2%)          (832)     (32.8%)
Interest income ..................................          1,554        41.2%          2,516       99.3%
Other income, net ................................            546        14.5%          2,046       80.7%
Loss from continuing operations before income taxes
     and minority interests ......................         (6,324)     (167.5%)        (7,457)    (294.2%)
Income taxes .....................................           (161)       (4.3%)          (222)      (8.8%)
Charge for issuance of warrants ..................             --        (4.3%)        (2,124)     (83.8%)
Loss from continuing operations ..................         (6,485)     (171.8%)        (9,803)    (386.7%)
Discontinued operations: .........................        (21,374)                    (13,715)
Losses of motorcycle segment after income taxes of
     Lit. 519 and Lit. 235 .......................        (21,802)                    (14,164)
Profit of steel tube segment after income taxes of
     Lit. 0 and Lit. 0 ...........................            428                         449
Minority interests ...............................          2,840                       1,041
Net loss .........................................        (25,019)                    (22,477)
</TABLE>

Net sales  principally  represent  sales of the Company's  temporary  management
services subsidiary,  TIM. Net sales in 1998 and 1997 include sales to the steel
tube  operations  of Lit.  287 million and Lit.  204 million in respect of a TIM
manager who supervised the steel tube operations.  The increase in sales in 1998
compared to 1997 principally  results from a significant  intervention by TIM on
behalf of a Swiss client in  connection  with its  acquisition  of a business in
Italy in the first quarter of 1998.

The  reduction  of  Lit.  1,848  million  or  22.7%  in  selling,   general  and
administrative  expenses  in 1998  compared  to 1997  reflects  cost  reductions
implemented by the Company following its decision to focus resources on its Moto
Guzzi motorcycle business and not invest in its other businesses.

The cost saving  program is hindered by the need to maintain  accounting and tax
compliance  systems for both Italian and U.S. purposes and the complexity of the
disposal programs and corporate restructuring programs.  Significant elements of
selling, general and administrative costs are as follows:


                                      -43-
<PAGE>

                                                       Dec. 31   Dec. 31
                                                        1998      1997
                                                       Lit. m    Lit. m
                                                      -----------------
            Corporate salaries .....................   1,157     1,442
            Legal costs ............................     547       280
            Other costs ............................   3,208     5,328
            Temporary management services subsidiary   1,391     1,101
                                                      -----------------
                                                       6,303     8,151
                                                      =================

Other corporate costs include rent and office expenses for the Company's offices
in New Jersey and in Milan,  Italy, tax,  accounting and compliance costs in the
U.S. and Italy,  professional fees in connection with the disposal of operations
in Italy, public company costs in the U.S. and certain statutory costs in Italy.
The  principal  areas of reduction in 1998  compared to 1997  resulted  from the
trimming  of  administrative  staff in the Milan,  Italy,  office and New Jersey
offices and reductions in travel and related expenses.

Impairment expense in 1998 reflected reserves made for the Company's  concession
rights  over  parking  spaces  in Genoa in the light of  negotiations  for their
disposal, completed in 1999. In 1997, consequent to decisions to focus resources
only on the Moto Guzzi business, impairment expense reflected Lit. 3,000 million
in respect of trademarks and other  intangibles of TIM and Lit. 1,001 million in
respect of goodwill.

Interest expense in 1998 principally reflects interest on residual Italian loans
dating from when OAM was  operative,  interest on bridge  financing  provided in
October 1998 by Tamarix and Mr. Giovanni Bulgari repaid in November and May 1999
respectively  and  interest  on the  Company  loan note  issued  to the  Company
pursuant to its 1996 stock  redemption  program and repaid in October  1998.  In
1997,  interest  principally  related to the OAM loans, the Company loan note to
the  Company and on real  estate  loans for the first  quarter of 1997 when such
loans were disposed along with the real estate.

The  principal  elements  of  interest  income  in 1998 and  1997  are  interest
receivable on cash balances and tax  receivables.  Interest income also includes
Lit. 533 million and Lit. 371 million in 1998 and 1997  respectively of interest
receivable  in respect of OAM financing of the disposed  motorcycle  operations.
Interest  income was greater in 1997 than 1998 due to higher  interest rates and
also  increased  cash and  short-term  investments  in 1997. In part,  increased
interest  income  results  from the effects of interest for the whole of 1997 as
compared to 6 months of 1998 on certain funds  pledged as  collateral  for share
repurchases effected in 1997 - See Note 4 to the Financial Statements.


                                      -44-
<PAGE>

Significant elements of other income, net were as follows.

                                                   Dec. 31    Dec. 31
                                                    1998       1997
                                                   Lit. m     Lit. m
                                                 ---------------------
               Foreign exchange .............       (2)       1,851
               Release of reserves for claims      714           --
               Rental income ................      150          477
               Other ........................     (316)        (282)
                                                 ---------------------
                                                   546        2,046
                                                 =====================

Exchange gains were principally in respect of bridge financing, until completion
of the  Company's  June 1997 public  Common  Stock  offering,  by the  Company's
Italian  subsidiaries  to the U.S.  parent..  Release  of  reserves  for  claims
principally  relates to reserves  made in respect of  companies  disposed in the
early 1990's based on final settlements of claims deriving from such disposals.

The  Company  booked  a charge  in 1997 of Lit.  2,124  million  in  respect  of
1,250,000  warrants issued to the manager of Tamarix in connection with a change
of control of the Company - see Note 1 to the Financial Statements.

As a result of the above items, losses from continuing  operations  decreased to
Lit. 6.5 billion in 1998 from Lit. 9.8 billion in 1997.

Losses  from the  discontinued  motorcycle  operations  increased  to Lit.  21.8
billion in 1998 compared to Lit. 14.2 billion in 1997. In summary, the increased
loss  resulted  firstly  from a decision  to grow the  business,  along with the
decision not to pass on material and cost increases in selling prices, increased
research and development expenditure and increased marketing,  sales and general
management in connection with expansion of operations in the U.S. and France and
plans to improve  all areas of its  business.  Moto Guzzi then  incurred  losses
related to inefficiencies deriving from inadequate funds to pursue such a growth
strategy (a higher  incidence of fixed  production  costs on reduced  production
volumes consequent to new model introductions and component shortages related to
liquidity  shortages,  reorganization  costs  connected with refocusing of short
term strategies and product offerings in line with limited availability of funds
reduced finance).  As discussed above, the financial restraints and consequences
evidenced  in  1998  persisted  and  led  to  the  decision  to  dispose  of the
operations.

The Company has  classified  minority  interests  after  losses from  continuing
operations,  as  substantially  all of the minority  interests  reflect minority
shareholders' interests in the discontinued motorcycle operations.

Liquidity and Capital Resources

Overview

The Consolidated Statements of Cash Flows in the Financial Statements evidence a
consistent  trend  in 1997 to 1999 of the  Company  raising  funds  through  the
realization of investments,  assets and receivables and from capital markets (in
1997 from a public  offering  of its  shares,  in 1998 from loans  from  related
parties following  unsuccessful  attempts to raise funds from public markets and
in 1999 from the  issuance


                                      -45-
<PAGE>

of a convertible debenture) which funds were then principally applied to finance
the  discontinued  motorcycle  operations and to finance losses from  continuing
operations.  In 1998,  the Company also applied the proceeds  realized  from the
sale of investments to meet share purchase  commitments -- secured for the major
part by those investments sold -- see Note 4 to the Financial Statements.

Significant cash activities in 1999

In  1999,  the  principal  asset  realizations  were  Lit.  6.0  billion  of tax
receivables and proceeds from the sales of the Company's  concession rights over
parking  spaces in Genoa  (Lit.  1.6  billion)  and land in Sardinia  (Lit.  3.0
billion).  The  Company  also  continued  to  collect  receivables,  principally
installments from the sale of real estate in prior years for Lit. 2.0 billion.

From such  proceeds,  the Company was able to fund 1999  losses,  repay Lit. 6.6
billion in respect of related party loans (which had been raised in 1998 to fund
the motorcycle  operations and the Company loan note repayments to the Company),
pay down debt  installments of its OAM subsidiary and set aside Lit. 3.1 billion
in short-term  investments to meet the estimated remaining loan installments and
expenses through eventual closure of its OAM subsidiary.

The discontinued  motorcycle  operations were financed in the first part of 1999
by the proceeds  from the merger of the  Company's  Moto Guzzi Corp.  subsidiary
with and into North Atlantic  Acquisition  Corp.,  as described in Item 1, above
and Note 3 to the  Financial  Statements.  In August  2000,  certain  Moto Guzzi
directors and their  affiliates  provided US$ 1.25 million (Lit. 2.3 billion) to
meet urgent cash needs of the  motorcycle  operations.  By the end of 1999,  the
motorcycle  operations  were  again  suffering  from a  liquidity  crisis  which
threatened  the  Company's  ability to effect an orderly  disposal.  The Company
raised  Lit.  10.7  billion,  net,  from  issuance  in  December  1999  of  a 5%
convertible  debenturebond  (See Note 10 to the Financial  Statements) to partly
meet these needs.

Of the  proceeds  of the 5%  Convertible  Debentures  issued by the  Company  in
December 1999,  US$3,500,000  (Lit. 6.9 billion at the then prevailing  exchange
rate) was used in February  2000 to  subscribe  to Series B  Preferred  Stock of
Centerpoint  Corporatation,  which  along  with  US$  6  million  from  external
investors,  was  sufficient to finance the motorcycle  operations  through their
eventual disposal.  See Item 1, above and Notes to the Financial  Statements for
details of the  Centerpoinyt  Series B Preferred Stock issuance and the disposal
of the motorcycle operations.

Future liquidity needs

Upon  disposal of the  motorcycle  operations,  the Company's  62.7%  subsidiary
received Lit. 60.3 billion in net proceeds. It also has the right to receive, in
September 2001 and 2007, any remaining part of two escrow accounts  containing a
total of Lit. 9.4 billion,  after satisfaction of any valid claims,  pursuant to
the sale  agreement,  on such escrow accounts by the purchaser of the motorcycle
operations.

From these proceeds,  Centerpoint  redeemed its Series B Preferred Stock,  along
with accrued dividends, on September 30, 2000. The Company received the proceeds
of US$ 3.5 million (Lit. 7.7 million at the then prevailing  exchange rate) from
the redemption of such stock,  and its OAM  subsidiary  received US$ 1.6 million
(Lit. 3.5 billion).  The Company also received Lit. 1.5 billion and will receive
a further Lit.1.0 billion in 2001 from the sale of its steel tube operations.


                                      -46-
<PAGE>

In July 2000, the Company  negotiated an agreement to purchase the shares of the
minority  shareholder in OAM for US$ 2.5 million,  and the Company acquired this
interest in March 2001.  This purchase will enable an orderly  winding-up of OAM
and the Company's corporate structure in Italy, though such winding-up is likely
to may take up to several years due to tax complications.

Centerpoint's  (then Moto Guzzi's) Agreement with the Company and OAM to present
a liquidation proposal to its stockholders  following the Closing of the Sale of
its operations to Aprilia

In order to induce OAM to deliver its letter to Aprilia, Centerpoint agreed with
OAM and the Company by letter dated April 14, 2000 that, among other things,  it
would pay IMI's fees in  connection  with the sale.  The April  14th  letter was
amended on June 8, 2000 to provide,  among other things, that Centerpoint would,
as promptly as practicable  after the closing of the sale, but in no event later
than 90 days following the closing,  hold a meeting of  stockholders to consider
and vote upon a proposal to liquidate all of  Centerpoint's  assets and dissolve
itself.  The date for  proceeding  to  propose a  liquidation  was  subsequently
extended by the Company and OAM to July 15, 2001.

Since the closing of the sale,  with the  knowledge  and consent of the Company,
Centerpoint has sought to find a suitable  operating company to acquire or merge
with using the proceeds from the sale.  Centerpoint has advised the Company that
if it finds a suitable  acquisition  or merger  candidate  then it will probably
propose the  acquisition  of, or merger with,  such entity as an  alternative to
liquidation.

Under Delaware Law, any liquidation of Centerpoint  will require the approval of
the holders of a majority of Centerpoint's  Class A common stock, and compliance
by Centerpoint with applicable  Securities and Exchange  Commission  regulations
concerning  any  proposed  liquidation.   However,   because  OAM  owns  58%  of
Centerpoint's  Class A common  stock,  it can approve a  liquidation  even if no
other Centerpoint  stockholders vote in favor of it.  Conversely,  a liquidation
will not be  approved  unless  OAM  votes in favor of it.  Although  OAM and the
Company  originally  insisted  that  Centerpoint  agree to submit a  liquidation
proposal its  stockholders,  OAM is not  committed to vote its shares of Class A
common stock for a  liquidation  proposal.  Unless the Company and OAM amend the
April  14th  letter to  eliminate  the  requirement  that  Centerpoint  submit a
liquidation  proposal to its  stockholders,  or otherwise  terminate the letter,
Centerpoint   will  be  required  to  submit  a  liquidation   proposal  to  its
stockholders.

Centerpoint Loan;  Early payoff of the Company's 5% Convertible Debentures

The Company's 5% Convertible  Debentures in an aggregate amount of US$ 6,250,000
were scheduled to come due in December  2001. On June 13, 2001 the Company,  OAM
and Centerpoint  entered into the Centerpoint Loan Agreement  wherein subject to
the terms and certain  conditions set forth therein  Centerpoint  agreed to lend
the Company  $4,200,000.  On June 13, 2001 Centerpoint made the Centerpoint Loan
and on June  15,  2001  the  Company  paid  the  holders  of  $6,000,000  of the
Debentures  $4,207,500 in cash, which the Debenture  holders accepted as payment
in full on the Debentures  (including  past due interest),  representing a 31.5%
discount from their face value.  $250,000 of the Debentures remains outstanding.
The Centerpoint  Loan bears interest at a rate of 5 % per annum, is repayable in
full on the earlier of June 13, 2002 and the date on which the Company causes or
permits a liquidation  of  Centerpoint,  and is secured by the 300,000 shares of
Centerpoint  common stock  currently


                                      -47-
<PAGE>

owned by the Company and  1,200,000  of the shares of  Centerpoint  common stock
currently owned by OAM.

Settlement of Wilson Litigation

As  discussed  in item 3 above,  in December  2000,  the Company and Gould,  the
co-defendant  in the Wilson  Litigation  executed  a  settlement  agreement  and
release  with the  plaintiff  under  which each of the Company and Gould paid US
$1,025,000 to settle the claims with the plaintiff.  On June 15, 2001, a verdict
was rendered by the Court of Common Pleas of  Philadelphia  County  holding that
the Company was  responsible  for paying all  settlement  funds and ordering the
Company to pay Gould US $1,025,000  plus interest at a rate of 7% per annum from
the date Gould paid the plaintiffs.


                                      -48-
<PAGE>

Item 8.       Financial Statements and Supplementary Data

                            TRIDENT ROWAN GROUP, INC.

                          INDEX TO FINANCIAL STATEMENTS

                                                                          Page
                                                                          ----

Report of Independent Public Accountants .............................     51

Consolidated Balance Sheets - Assets..................................     52

Consolidated Balance Sheets - Liabilities and Shareholders'
Equity (Deficit) .....................................................     53

Consolidated Statements of Operations ................................     54

Consolidated Statements of Changes in Shareholders'
Equity (Deficit) .....................................................     55

Consolidated Statements of Cash Flows ................................     56

Notes to Consolidated Financial Statements ...........................     58


                                      -49-
<PAGE>

                            TRIDENT ROWAN GROUP, INC.



                     Consolidated Financial Statements As of

                           December 31, 1999 and 1998

                                  Together with

                    Report of Independent Public Accountants


                                      -50-
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS





To the Shareholders and Board of Directors

     Trident Rowan Group, Inc.:

     We have audited the  accompanying  consolidated  balance  sheets of Trident
Rowan Group,  Inc. (a Maryland  corporation) and subsidiaries as of December 31,
1999  and  1998,  and  the  related   consolidated   statements  of  operations,
shareholders'  deficit  and cash flows for each of the three years in the period
ended December 31, 1999,  expressed in Italian Lire. These financial  statements
and the  schedule  referred  to below are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

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

     In our opinion, the financial statements referred to above, present fairly,
in all material  respects,  the financial  position of Trident Rowan Group, Inc.
and  subsidiaries  as of  December  31,  1999 and 1998 and the  results of their
operations  and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.

     In our  auditors'  report  dated  May 21,  1999,  our  opinion  on the 1998
consolidated  financial  statements  included an explanatory fourth paragraph to
call attention on the recurring  losses from  operations and negative cash flows
suffered by the  Company.  In  addition,  the Company had to meet  certain  debt
repayment  obligations for which financing had yet to be arranged.  All of these
matters  raised  substantial  doubt  about its  ability to  continue  as a going
concern.  The consolidated  financial  statements did not include any adjustment
that might result from the outcome of this uncertainty. As explained in Note 21,
on September 7, 2000, Centerpoint Corporation (formerly Moto Guzzi Corporation),
a  subsidiary  of Trident  Rowan  Group,  closed  the sale of all its  operating
subsidiaries.


                                      -51-
<PAGE>

     Total  proceeds from the sale were Lire 79,500 million  (approximately  US$
35.6 million).  As a result of this  transaction,  in our present opinion on the
1998 consolidated  financial  statements,  as presented herein, this explanatory
fourth paragraph has been removed.

ARTHUR ANDERSEN S.p.A.


October 16, 2000

(except with respect to the matters discussed in Note 21

"Centerpoint Loan: Early payoff of the Company's

5% Convertible Debentures" , "United States Litigation"

and "Aprilia Claims under the Share Purchase Agreement;

Payment by IMI; Request for Arbitration"

as to which the date is July 26, 2001)



Milan, Italy


                                      -52-
<PAGE>

TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                              Dec. 31                     Dec. 31
                                                               1999          1999           1998
                                                             --------     ----------     ----------
                                                              US$'000       Lit. m         Lit. m
<S>                                                          <C>          <C>            <C>
ASSETS
Cash and cash equivalents ................................   $  6,480     Lit.12,468     Lit.3,044
Marketable securities, at cost ...........................      2,113          4,066           955
Receivables ..............................................        917          1,764         3,255
     Trade ...............................................        249            478           681
     Other receivables ...................................        668          1,285         2,574
Prepaid Expenses .........................................        101            195           629
                                                             --------     ----------     ----------
TOTAL CURRENT ASSETS .....................................      9,611         18,493         7,883
                                                             --------     ----------     ----------
 Property, plant and equipment ...........................        152            292           418
     At cost .............................................        292            562           606
     Less allowance for depreciation .....................       (140)          (270)         (188)
Trademark and other intangibles, net of amortization of
     Lit. 1,450 (1998 - Lit. 1,350 million) ..............         78            150           650
Goodwill, net of amortization of Lit. 425 (1998 - Lit 405)         57            110           130
Unamortized debt charges .................................        446            858            --
Land for development .....................................         --             --         3,500
Concession rights ........................................         --             --         1,600
Tax receivables ..........................................      1,159          2,229         8,351
Other assets .............................................         19             36           331
Net assets of discontinued steel tube operations .........        800          1,538         1,075
                                                             --------     ----------     ----------
TOTAL ASSETS .............................................   $ 12,322     Lit.23,706     Lit.23,938
                                                             ========     ==========     ==========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -53-
<PAGE>

TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                 Dec. 31                     Dec. 31
                                                                  1999        Dec. 31 1999    1998
                                                                 US$'000        Lit. m       Lit. m
                                                                --------     -----------   -----------
<S>                                                             <C>          <C>           <C>
LIABILITIES
Current portion of long-term debt .......................            287             553         1,004
Amounts due to related parties ..........................             90             173         6,411
Accounts payable ........................................            981           1,888         2,433
Accrued expenses and other payables .....................          2,481           4,773         2,121
                                                                --------     -----------   -----------
TOTAL CURRENT LIABILITIES ...............................          3,839           7,387        11,969
                                                                --------     -----------   -----------
Net liabilities of discontinued motorcycle operations ...          4,521           8,697         3,665
Long-term debt, less current portion ....................          6,567          12,634         1,271
Provision for claims ....................................          2,963           5,700         3,120
Minority interests ......................................          3,306           6,362        10,907
Advances for subsidiary stock subscription ..............          1,250           2,405            --
Preferred stock of subsidiary ...........................                             --        13,132
SHAREHOLDERS' DEFICIT ...................................        (10,124)        (19,479)      (20,126)
Common stock, par value $0.01 per share:
Authorized 50,000,000 shares,4,119,900 (1998 - 4,419,900)
     shares outstanding, ................................             55             106           106
Additional paid-in capital ..............................         54,363         104,594       104,032
Treasury stock, at cost .................................        (24,701)        (47,524)      (45,865)
Accumulated other comprehensive income ..................           (373)           (717)           24
Accumulated deficit .....................................        (39,468)        (75,938)      (78,423)
                                                                --------     -----------   -----------
LIABILITIES AND SHAREHOLDERS' DEFICIT ...................       $ 12,322     Lit. 23,706   Lit. 23,938
                                                                ========     ===========   ===========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -54-
<PAGE>

TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                            Dec. 31 1999   Dec. 31 1999   Dec. 31 1998   Dec. 31 1997
                                            ------------   ------------   ------------   ------------
                                              US$'000       Lit. m           Lit. m          Lit. m
<S>                                              <C>            <C>            <C>            <C>
Net sales ..............................         1,033     Lit. 1,987     Lit. 3,775     Lit. 2,535
Cost of sales ..........................          (548)        (1,055)        (2,447)        (1,570)
                                             ---------     ----------    ------------   ------------
                                                   485            932          1,328            965
Selling, general and administrative
     expenses ..........................        (3,030)        (5,829)        (6,303)        (8,151)
Impairment expense .....................          (468)          (900)        (2,688)        (4,001)
                                             ---------     ----------    ------------   ------------
Operating loss .........................        (3,013)        (5,797)        (7,663)       (11,187)
Interest expense .......................          (306)          (589)          (761)          (832)
Interest income ........................           612          1,178          1,554          2,516
Other income, net ......................          (647)        (1,245)           546          2,046
                                             ---------     ----------    ------------   ------------
Loss from continuing operations before
     income taxes ......................        (3,354)        (6,453)        (6,324)        (7,457)
Income taxes ...........................           (46)           (88)          (161)          (222)
Charge for issuance of warrants ........            --             --             --         (2,124)
                                             ---------     ----------    ------------   ------------
Loss from continuing operations ........        (3,400)        (6,541)        (6,485)        (9,803)
Discontinued operations (Note 3) .......         1,728          3,324        (21,374)       (13,715)
     Loss of motorcycle operations after
     income taxes of Lit. 88, Lit. 519
     and Lit. 235 ......................       (11,942)       (22,976)       (21,802)       (14,164)
     Gain on merger of motorcycle
     operations ........................        13,429         25,837             --             --
     Profit of steel tube operations
     after income taxes of Lit. 164,
     Lit. 0 and Lit. 0 .................           368            708            428            449
     Provision for loss on disposal ....          (127)          (245)            --             --
Minority interests .....................         2,964          5,702          2,840          1,041
                                             ---------     ----------    ------------  ------------
Net profit/(loss) ......................        $1,292     Lit. 2,485    Lit.(25,019)  Lit. (22,477)
                                             =========     ==========    ============ =============
     PROFIT/(LOSS) PER SHARE ...........           US$           Lit.           Lit.           Lit.
Continuing operations ..................         (0.79)   Lit. (1,528)   Lit. (1,415)   Lit. (2,131)
Discontinued operations & minority
     interest ..........................          1.10          2,109         (4,043)        (2,755)
                                                  0.31            581         (5,458)        (4,886)
                                             =========     ==========    ============   ============
Weighted average number of shares
     Outstanding during the period:
Basic ..................................     4,280,767      4,280,767      4,584,237      4,600,285
                                             =========     ==========    ============   ============
Fully diluted ..........................     4,286,687      4,286,687      4,696,922      4,704,003
                                             =========     ==========    ============   ============
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      -55-
<PAGE>

TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
And Comprehensive Income/(Loss)
Years ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                                   Additional
                                                        Common      paid-in     Treasury   Translation
                   Lire million                          stock      Capital      stock      adjustment
                                                        --------    --------    --------    --------
<S>                                                           <C>     <C>        <C>           <C>
At January 1, 1997                              Lit.m         69      77,145     (27,411)      1,854

Net loss                                                      --          --          --          --
Translation adjustment                                        --          --          --      (2,008)
Reclassify shares subject to repurchase                       (2)     (1,608)         --          --
Repurchase of shares                                           2       2,459      (2,510)         --
Issuance of warrants                                          --       2,124          --          --
Issuance of shares                                            19      10,237          --          --
Accretion expense, net of exchange movements                  --          --          --          --
                                                        --------    --------    --------    --------

At December 31, 1998                            Lit.m         88      90,357     (29,921)       (154)

Net loss                                                      --          --          --          --
Translation adjustment                                        --          --          --         178
Accretion expense, net of exchange movements                  --          --          --          --
Repurchase of shares                                          14      13,203     (15,944)         --
Issuance of shares                                             4       1,680          --          --
Less: Shares not vested as at Dec. 31, 1998                   --      (1,208)         --          --
                                                        --------    --------    --------    --------

At Dec. 31, 1999                                Lit.m        106     104,032     (45,865)         24

Net profit                                                    --          --          --          --
Translation adjustment                                        --          --          --        (741)
Vesting of shares subject to forfeit                          --         562          --          --
Repurchase of shares                                          --          --      (1,659)         --
                                                        --------    --------    --------    --------
At December 31, 1999                            Lit.m        106     104,594     (47,524)       (717)

At December 31, 1999                           $'000          55      54,363     (24,701)       (373)
                                                        ========    ========    ========    ========

<CAPTION>
                                                       Accretion                TOTAL       Shares    Comprehensive
                                                       expense,  Accumulated SHAREHOLDERS' subject to   income/
                                                         Net        deficit    EQUITY      Repurchase   (loss)
                                                       --------    --------    --------    --------    --------
<S>                                                      <C>        <C>           <C>        <C>        <C>
At January 1, 1997                              Lit.m       100     (30,927)     20,830      13,968

Net loss                                                     --     (22,477)    (22,477)         --     (22,477)
Translation adjustment                                       --          --      (2,008)         --      (2,008)
Reclassify shares subject to repurchase                      --          --      (1,610)      1,610          --
Repurchase of shares                                         49          --           0      (2,510)         --
Issuance of warrants                                         --          --       2,124          --          --
Issuance of shares                                           --          --      10,256          --          --
Accretion expense, net of exchange movements             (2,623)         --      (2,623)      2,623      (2,623)
                                                       --------    --------    --------    --------    --------

At December 31, 1998                            Lit.m    (2,474)    (53,404)      4,492      15,691     (27,108)

Net loss                                                     --     (25,019)    (25,019)         --     (25,019)
Translation adjustment                                       --          --         178          --         178
Accretion expense, net of exchange movements               (253)         --        (253)        253        (253)
Repurchase of shares                                      2,727          --          --     (15,944)         --
Issuance of shares                                           --          --       1,684          --          --
Less: Shares not vested as at Dec. 31, 1998                  --          --      (1,208)         --          --
                                                       --------    --------    --------    --------    --------

At Dec. 31, 1999                                Lit.m        --     (78,423)    (20,126)         --     (25,094)

Net profit                                                   --       2,485      2,4855          --       2,485
Translation adjustment                                       --          --        (741)         --        (741)
Vesting of shares subject to forfeit                         --          --         562          --          --
Repurchase of shares                                         --          --      (1,659)         --          --
                                                       --------    --------    --------    --------    --------

At December 31, 1999                            Lit.m        --     (75,938)    (19,479)         --       1,744

At December 31, 1999                            $'000        --     (39,468)    (10,124)         --         906
                                                        ========    ========    ========    ========    ========
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      -56-
<PAGE>

TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Consolidated Statements of Cash Flows
December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                          Dec.31       Dec.31       Dec.31       Dec.31
                                                           1999         1999         1998         1997
                                                          US$'000      Lit. m       Lit.m         Lit.m
                                                         ------------------------------------------------
<S>                                                       <C>          <C>          <C>          <C>
Net loss from continuing operations ................      (3,400)      (6,541)      (6,485)      (9,803)
Adjustments to reconcile net loss to net cash
     provided/(used)  by continuing operations:
Depreciation and amortization ......................         112          216          377          894
Non-cash finance income from discontinued operations        (476)        (916)        (443)        (179)
Issuance of Tamarix warrant ........................          --           --           --        2,124
Loss on disposals of subsidiaries ..................         295          567           --           --
Impairment reserves ................................         208          400        2,688        4,001
Other operating activities .........................         772        1,486           32         (954)
Changes in operating assets and liabilities:
Receipt of tax receivable ..........................       3,120        6,002           --          956
Trade and other receivables ........................       1,016        1,955        2,938        4,682
Prepaid expenses ...................................         175          334         (303)         582
Accounts payable and accrued expenses ..............        (310)        (597)          83         (606)
Related party payables .............................         (57)        (110)         199           87
                                                         ------------------------------------------------
Net cash provided/(used) by operating activities ...       1,455        2,796         (914)       1,784
                                                         ------------------------------------------------
Investing activities:
Net (increase)/ decrease in investments ............      (1,617)      (3,111)      17,103       (4,025)
Sale of subsidiaries, less cash disposed ...........       2,368        4,556           --        5,467
Proceeds from disposal of other assets .............          63          122          284           --
Purchases of property, plant and equipment .........          (3)          (6)         (76)        (128)
                                                         ------------------------------------------------
Net cash provided/(used) by investing activities ...         811        1,561       17,311        1,314
                                                         ------------------------------------------------
Financing activities
Decrease in advances from banks ....................          --           --           --       (3,329)
Proceeds from share issuance .......................          --           --           --       10,256
Repurchase of shares ...............................          --           --      (15,582)      (2,510)
Advances/proceeds Guzzi preferred stock issuance ...       1,182        2,274           --        2,933
Loans from related parties .........................          --           --        6,466           --
Repayment of loans to related parties ..............      (3,450)      (6,638)          --           --
Proceeds from long-term debt .......................       5,563       10,704           --           --
Principal payments of long-term debt ...............        (578)      (1,113)      (4,228)      (1,231)
                                                         ------------------------------------------------
Net cash provided by financing activities ..........       1,535        5,227      (13,344)       6,119
                                                         ------------------------------------------------
Increase in cash from continuing operations ........       4,983        9,584        3,053        9,217
Cash from merger with NAAC .........................       8,319       16,006           --           --
Cash used by discontinued operations ...............      (8,407)     (16,174)      (3,975)     (11,400)
Exchange movement on opening cash ..................           4            8           (9)          89
Cash, beginning of period ..........................       1,581        3,044        3,975        6,069
                                                         ------------------------------------------------
Cash, end of period ................................     $ 6,480  Lit. 12,468   Lit. 3,044   Lit. 3,975
                                                         ================================================
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -57-
<PAGE>

SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES

1999 - As described in Note 10, the Company  repurchased  shares for US$ 862,500
(Lit.  1,659  million) on December 28, 1999,  payment being  effected in January
2000.

The Company  issued US$ 250,000  (Lit.  481  million) of its 5% US$  denominated
convertible debentures to Emanuel Arbib, Joint-CEO of the Company, in connection
with the placement of US$ 6 million of such  debentures  with Italian  financial
institutions. See Note 10.

Lit. 562 million has been charged as  compensation  expense in respect of shares
issued in 1998, as described below and in Note 14.

Cash disposed of on the sales of Pastorino  S.r.l.  and Grand Hotel Bitia S.r.l.
aggregated Lit. 44 million.

1998 - In 1998,  as described in Note 14, in relation to  employment  contracts,
the Company issued 205,000 shares with contractual transfer restrictions lapsing
as to one-third  thereof on each of December 31, 1998, 1999 and 2000, and 32,000
shares with contractual transfer restrictions lapsing on December 31, 1998. Lit.
475  million  was  charged as  compensation  expense in 1998 in respect of these
shares.

1997 - In March 1997,  the  Company  disposed  of its  Finprogetti  Investimenti
Immobiliari S.p.A.  subsidiary which owned its Cologne, Italy property.  Part of
the sale price was settled by way of delivery of 120,000 shares of the Company's
common  stock,  valued at Lit.  1,610  million  at the date of the  transaction.
Pursuant to the  disposal,  the Company  eliminated  real estate of Lit.  15,100
million and real estate loans of Lit. 9,379 million from its balance sheet. Cash
disposed of was Lit. 411 million.

As an  inducement  for  Tamarix to acquire  the  Company's  shares from the then
largest  shareholder,  the Company  issued to the  Manager of Tamarix  1,250,000
warrants valued at Lit. 2,124 million. See Note 1.

OTHER SUPPLEMENTAL INFORMATION

Interest  paid  amounted to Lit.  864  million,  Lit.  718 million and Lit.  933
million in 1999, 1998 and 1997, respectively.

                 See Notes to Consolidated Financial Statements


                                      -58-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
                   Notes To Consolidated Financial Statements

1.       BACKGROUND AND ORGANIZATION

2000   disposal  of  all  operating   subsidiaries   -  In  2000,  in  unrelated
transactions,  the  Company  disposed  of  all of  its  operating  subsidiaries.
Following these  disposals,  the Company's only  significant  assets are a 62.7%
interest in Centerpoint  Corporation (Moto Guzzi  Corporation  through September
2000), a publicly  traded company in the United States  (OTC/BB/CPTX)  plus cash
and  certain  receivables,  principally  from  the  disposal  of  its  operating
subsidiaries  and for Italian tax  repayments.  The  disposals  are described in
further  detail in Note 3 -  Discontinued  Operations  and Note 21 -  Subsequent
events. The Company has not yet made any decisions as to its future activities.

Activities - Through the 2000 disposals of its operating  subsidiaries,  Trident
Rowan Group, Inc. was a holding company  incorporated in the United States whose
subsidiaries  operated  primarily  in  Italy.  Trident  Rowan  Group,  Inc.  and
subsidiaries  are  referred  to herein as the  Company.  The  Company  primarily
operated in two industry  segments:  the manufacture  and  distribution of "Moto
Guzzi" brand  motorcycles  in Italy,  Europe and  elsewhere in the world and the
manufacture  and  distribution  of steel tubes for the  automotive and furniture
markets.  Additionally,  the Company provided temporary  management  services to
third parties,  which activities were also disposed in 2000.  Information on the
Company's operations by geographic area are included in Note 17 to the Financial
Statements.

Merger of Moto Guzzi Corp.  subsidiary - In March 1999,  the Company  merged its
Moto Guzzi Corp.  subsidiary  into North  Atlantic  Acquisition  Corp.,  a shell
company,  raising  approximately  US$ 8 million for the Moto Guzzi business.  In
September 2000, Moto Guzzi Corporation changed its corporate name to Centerpoint
Corporation in August 2000 and sold its operating subsidiaries to Aprilia S.p.A.
See Note 3 - Discontinued operations and Note 21 - Subsequent events.

1997 Public offering of the Company's  securities - On June 6, 1997, the Company
completed  a  public  offering  of  its  securities  (the  "Offering"),  issuing
1,250,000  shares of common  stock at $6.00 per share and  1,437,500  Redeemable
Common Stock Purchase Warrants at $0.10 per Warrant. Each Warrant is exercisable
for five  years at an  exercise  price of $7.20 per share of Common  Stock.  The
Company  may redeem the  Warrants at a price of $0.01 per Warrant at any time if
notice of not less than 30 days is given and the last sale  price of the  Common
Stock has been at least  $9.60 on all 20  trading  days  ending on the third day
prior to the day on which notice is given. The Company also sold for $100 to GKN
Securities Corp., the Company's  Representative  for the Offering,  an option to
purchase up to 125,000  shares of Common  Stock  and/or  125,000  Warrants.  The
option is  exercisable  for four years  commencing  June 6, 1998 at an  exercise
price of $6.12 per  share of Common  Stock and  $0.102  per  Warrant.  The gross
proceeds of the Offering  amounted to  $7,643,750  and the net  proceeds,  after
underwriting  commissions and other costs,  received by the Company  amounted to
approximately  $6,037,000,  equivalent  to  Lit.  10,256  million  at  the  then
prevailing exchange rate.


                                      -59-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

1997 Change of control - Finprogetti S.p.A., then the largest shareholder of the
Company,  sold to Tamarix  Investors,  LDC on May 2, 1997, 900,000 shares of the
Company's  common stock and  subsequently a further 100,000 shares.  Tamarix and
Finprogetti  agreed that  Finprogetti  shall have a put right and Tamarix  shall
have a call right with respect to an additional  635,000  shares of common stock
owned by  Finprogetti.  During such  two-year  period,  Tamarix has a proxy from
Finprogetti to vote such 635,000 shares.  The put option was exercised in May 3,
1998,  and a settlement  date in the second quarter of 1999 was  negotiated.  In
connection with a restructuring of Tamarix, discussed below, 317,500 such shares
were purchased by Mr.  Giovanni  Bulgari and the other 317,500 shares by Tamarix
in 1999.

In addition,  Finprogetti delivered the resignations from the Company's Board of
Directors of five persons who had been nominated at the request of  Finprogetti.
In connection with the foregoing, the Company entered into an agreement on April
8, 1997 to: (a) engage Tamarix Capital Corporation to provide financial advisory
services  to the  Company  at a cost of US$  200,000  per  year;  (b)  issue  to
Centaurus  Management  LDC,  the  Manager  of  Tamarix,  a warrant  to  purchase
1,250,000  shares of common  stock with an exercise  price equal to the offering
price per share of common  stock of $6.00 in the public  securities  offering of
the Company completed on June 6, 1997,  exercisable for a three year period; (c)
register the shares of the Company  purchased  from  Finprogetti  as well as the
shares  underlying  such warrants;  and (d) cause the By-Laws or the Articles of
Incorporation of the Company to be amended to provide for: (i) a staggered Board
of  Directors  which shall  include at least one person  nominated by Tamarix in
each of three  classes;  (ii)  provide  for a  representative  of  Tamarix to be
Chairman of the Board of the Company;  (iii) provide that Tamarix's consent will
be required to further amend the Company's  Articles of Incorporation;  and (iv)
require  that the Board of Directors be expanded and limited to not more than 11
members,  such Board to include the Tamarix  nominees  and an  additional  three
independent  directors  who are  experienced  in business  matters and otherwise
reasonably acceptable to Tamarix.

In March 1998,  the terms for the engagement of Tamarix  Capital  Corporation to
provide financial  advisory services to the Company at a cost of US$ 200,000 per
year was amended.  The terms of the revised  agreement  require  Tamarix Capital
Corporation to provide financial advisory services for a period of one year from
May 1, 1998.  Compensation  for the period of the  agreement  is US$ 90,000 plus
32,000 shares of the Company. Options to purchase 17,000 shares,  exercisable at
$5.00, were also issued to Tamarix Capital Corporation. - See Note 15.

The  Company  estimated  the fair  value of the  warrants  issued  to  Centaurus
Management  Ltd.,  the manager of Tamarix  Investors  LDC, as an  inducement  to
acquire  Finprogetti  S.p.A's shares of the Company's  Common Stock, at US$ 1.00
per warrant. The Company accounted for the issuance of the warrants by crediting
additional paid-in capital in the amount of US$ 1,250,000 (Lit. 2,124 million at
the then prevailing  exchange rate) and charging such amount to the statement of
operations as a charge for issuance of warrants.


                                      -60-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

In October  1998, in  connection  with bridge loans  provided by Tamarix and Mr.
Gianni  Bulgari,  formerly an  affiliate of Tamarix,  the exercise  price of the
1,250,000  warrants was reduced to $5.50 and their  duration was extended by two
years.  See Note 15 for a summary  of the  potential  dilutive  effects of these
warrants.

In March 1999,  in  connection  with an internal  restructuring  in which former
equity  interest  owners  of  Tamarix  relinquished  their  interests,   Tamarix
transferred 571,429 shares of the Company's Common Stock to Mr. Giovanni Bulgari
and 63,492 shares to Mr. Emanuel Arbib.  Tamarix  retained  ownership of 365,079
shares.  Mr. Bulgari also assumed  one-half of Tamarix's  obligation to purchase
635,000  shares  from  Finprogetti  pursuant  to  the  1997  Finprogetti/Tamarix
agreement.  Tamarix and Messrs.  Bulgari and Arbib report that they  continue to
act as a group with respect to all of the shares of the  Company's  Common Stock
they each own.

Reporting currency - The primary financial  statements are shown in Italian Lira
because all of the Company's  material  operating entities are based and operate
entirely in Italy.  Translation  of Lira  amounts  into U.S.  Dollar  amounts is
included solely for the  convenience of the readers of the financial  statements
and has been  calculated at the rate of Lit. 1,924 to US$ 1.00, the  approximate
exchange rate at December 31, 1999.  It should not be construed  that the assets
and liabilities,  expressed in U.S. dollar equivalents, can actually be realized
in or  extinguished  in U.S.  dollars at that or any other  rate.  All  currency
amounts in these financial statements are in Lira unless specifically designated
in other currencies.

2.       SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation - The consolidated  financial statements include the
accounts  of the  Company  and  its  majority  owned  subsidiaries.  Significant
intercompany accounts and transactions have been eliminated in consolidation.

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

Foreign currency  translation - The financial statements of non-Italian entities
have been  translated  from the applicable  functional  currency to Italian Lira
using the  year-end  exchange  rate for  balance  sheet  items  and the  average
exchange rate for the year for  statement of operation  items.  The  translation
differences  resulting  from the change in exchange rates from year to year have
been reported separately as a component of shareholders' equity.


                                      -61-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

Foreign   currency   transactions  -  Transactions,   receivables  and  payables
denominated in currencies other than the functional currency are recorded at the
exchange rate in effect on the transaction  date. Such  receivables and payables
are adjusted to current  exchange rates as of the date paid or the balance sheet
date, whichever is earlier. Gains and losses are included in "other income, net"
in the statements of operations.

Cash  equivalents - The Company  considers all highly liquid  investments with a
maturity of three months or less when purchased to be cash equivalents.

Revenue  recognition - Revenues from sale of services of the Company's temporary
management operations are recorded when the services have been performed.

Long-lived  assets - The Company records  impairment losses against the carrying
values of  long-lived  real estate  assets to reflect  their  eventual  disposal
values -- see Notes 6 and 7. The Company  continually reviews the carrying value
of long-lived assets and long-lived assets to be disposed of. In determining the
un-discounted  cash flows  estimated to be generated by the Company's  temporary
management subsidiary,  the Company considers estimated cash flows from services
to third parties and from eventual  realization of managed  portfolio  companies
through  divestiture.  The  Company  made,  at  December  31,  1997,  impairment
adjustments  to write down the  trademarks  and other  intangible  assets of its
temporary management  subsidiary by Lit. 3,000 million and to write down related
goodwill  by Lit.  1,001  million.  In the fourth  quarter  of 1999 the  Company
recorded  a further  impairment  adjustment  of Lit.  400  million in respect of
trademarks  of its temporary  management  subsidiary,  reflecting  the 2000 sale
price for this business.

Goodwill and other  intangibles - On purchases of businesses,  the excess of the
purchase  price  over the fair  value of assets  acquired  is  accounted  for as
goodwill and is amortized on a straight-line  basis over a period  determined by
the  Company  taking into  consideration  the nature of the  business  acquired.
Trademarks and other intangibles  relating to the Company's temporary management
subsidiary and related goodwill, net of amounts recorded for impairment reserves
above,  were being amortized over 10 years.  Concession  rights,  disposed of in
1999, which last through 2041, were amortized over 40 years.

Property,  plant and  equipment - Property,  plant and equipment are recorded at
cost.  Depreciation is provided on the  straight-line  method over the estimated
useful lives of the assets.  Buildings are  depreciated  over 30 years and plant
and  machinery,  tooling and computer  equipment over lives ranging from 3 to 10
years.

Marketable  and  other   securities  -  Marketable  and  other   securities  and
investments consist primarily of fixed income investments. Marketable securities
as of December 31, 1999 are represented by units in a monetary fund  denominated
in Euro and are carried at cost plus accrued interest.


                                      -62-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

Income  taxes -  Income  taxes  are  provided  by each  entity  included  in the
consolidation  in accordance  with local laws.  Deferred  income taxes have been
provided using the liability  method in accordance  with FASB Statement No. 109,
"Accounting for Income Taxes."

Net  profit/(loss)  per common share -Basic  earnings per share from  continuing
operations  excludes any dilutive  effects of options,  warrants and convertible
securities.  Diluted earnings per share from continuing  operations gives effect
to all  potentially  dilutive  common  shares that were  outstanding  during the
period. As the Company has incurred losses from continuing operations in each of
the years 1997 to 1999,  potentially dilutive common shares are antidilutive for
each of these years.

Statements  of cash  flows  - The  cash  flows  for the  roll-over  of  maturing
fixed-term  securities  into new  securities  is included  in the  caption  "Net
(increase)/decrease  in  investments"  in the  Consolidated  Statements  of Cash
Flows.  Advances from banks arise primarily under the Company's short-term lines
of credit with its banks.  These  short-term  obligations are payable on demand.
The cash flows for these  items are  included in the  caption  "Net  increase in
advances from banks" in the Consolidated Statements of Cash Flows.

Accumulated  Other  Comprehensive  Income -  Comprehensive  income  includes net
income and  translation  difference  from the  conversion  of balance  sheets of
non-Italian entities. The Company has chosen to disclose comprehensive income in
the Consolidated Statements of Stockholders' Equity.

New Accounting Standard - In 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative   Instruments  and  Hedging  Activities"  SFAS  No.  133  establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance  sheet as either an asset or  liability  measured at its
fair value. SFAS No. 133 requires that changes in the derivative's fair value be
recognized  in earnings  unless  specific  hedge  accounting  criteria  are met.
Special  accounting for qualifying hedges allows a derivative's gains and losses
to offset related results on the hedged item in the income  statement.  SFAS No.
133 as amended by SFAS No. 137, is effective  for fiscal years  beginning  after
June 15, 2000 but may be adopted earlier. The Company has not yet determined the
effect of adoption of SFAS No. 133 and has not  determined  the timing or method
of adoption.

Reclassifications - Comparative figures for 1998 and 1997 have been reclassified
to conform with the 1999 presentation.


3.        DISCONTINUED OPERATIONS


Discontinued Steel Tube Operations

In July 2000, as detailed in Note 21 - Subsequent  Events,  the Company sold its
LITA subsidiary, thus exiting from the steel tube segment.


                                      -63-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

Discontinued Motorcycle Operations

In September 2000, the Company's 62.7% owned subsidiary,  Moto Guzzi Corporation
closed its sale of all "Moto Guzzi" motorcycle  operations to Aprilia.  From May
2, 2000 through the date of sale, Moto Guzzi's operations were under the control
of Aprilia  management.  The  measurement  date of the disposal  will be July 1,
2000,  reflecting  the  latest  date  prior to sale for  which the  Company  has
complete  financial  information.  Net proceeds from the disposal exceed the net
assets of the  operations  sold and the Company  will record a gain in the third
quarter  of 2000.  The  results  of Moto  Guzzi are  reflected  in  discontinued
operations in the financial statements.  Moto Guzzi Corporation changed its name
to Centerpoint  Corporation pursuant to the sale of its motorcycle operations to
Aprilia  and is listed  on the  over-the-counter  market  in New York  under the
ticker  "CPTX."  The Company  owns,  directly  and  through its OAM  subsidiary,
approximately 62.7% of the outstanding common stock of Centerpoint  Corporation.
The sale to Aprilia is discussed in more detail in Note 21 - Subsequent Events.

<TABLE>
<CAPTION>
                                                Dec.31      Dec.31        Dec.31      Dec.31
                                                 1999        1999          1998        1997
                                               -----------------------------------------------
                                                US$'000     Lit.m          Lit.m       Lit.m
<S>                                             <C>          <C>          <C>          <C>
Net sales ................................      44,819       86,232       83,760       80,987
Loss before taxes ........................     (11,896)     (22,888)     (19,780)     (10,334)
Provisions for taxes .....................         (46)         (88)        (519)        (235)
Amortization of premium for redemption  of
     preferred stock .....................          --                    (1,503)      (3,595)
                                               -----------------------------------------------
Net loss from discontinued operations of
     Motorcycle operations ...............     (11,942)     (22,976)     (21,802)     (14,164)
                                               ===============================================
</TABLE>

The statement of operations  includes  interest income charged to the motorcycle
operations of Lit. 1,088 million, Lit. 533 million and Lit. 371 million in 1999,
1998 and 1997 respectively.

Gain on merger of discontinued motorcycle operations

On August 18, 1998, the Company's subsidiary,  Moto Guzzi Corp., and for limited
purposes,  the  Company,  entered  into a merger  agreement  to merge with North
Atlantic  Acquisition Corp. ("North  Atlantic").  The preferred  stockholders of
Moto Guzzi Corp. were also a party to the merger, which was consummated on March
5, 1999. North Atlantic was organized in August 1995 as a specialized merger and
acquisition  allocated risk company with the objective of acquiring an operative
business  and had not engaged in any  substantive  commercial  business.  At the
effective time of the merger,  North Atlantic had  approximately US$ 8.9 million
(Lit.  16,006 million) in cash, from which merger expenses of approximately  US$
0.8  million  (Lit.  1,400  million)  were  subsequently  paid,  to finance  the
operations of Moto Guzzi.  On completion of the merger,  North Atlantic  changed
its name to Moto  Guzzi  Corporation.  As a result of the  merger,  the  Company
recorded a gain of Lit.  25,837 million in the first quarter of 1999,  including
the effects of the exchange of  redeemable  preferred  stock of Moto Guzzi Corp.
into common


                                      -64-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

stock of North  Atlantic.  Through  December 31, 1998, the Company had accounted
for the contingent  redemption of such preferred  stock and included Lit. 13,132
million in the balance  sheet at December  31, 1998 to reflect  such  contingent
obligation.

In October 1996, the Company's newly formed wholly-owned subsidiary,  Moto Guzzi
Corp.,  had  acquired  all of the equity  interest  of the Company in Moto Guzzi
S.p.A. and in Moto America Inc. in exchange for 6,000,000 shares of common stock
of Moto Guzzi  Corp.  In  December  1996 and  January  1997,  Moto  Guzzi  Corp.
consummated a private  offering of convertible  preferred stock and common stock
purchase warrants which raised an aggregate of approximately US$ 5,250,000 (Lit.
8,034 million at the then prevailing exchange rate) for Moto Guzzi Corp., net of
expenses.

Moto Guzzi Corp. issued 1,500,000 units, each consisting of one share of Class A
Convertible  Preferred Stock and one Common Stock purchase  warrant  exercisable
for three years for the lesser of $4.00 or the initial public  offering price of
the Common  Stock.  The  Preferred  Stock was  convertible  at the option of the
holder into an equal number of shares of Common Stock,  subject to adjustment to
protect  against events of dilution and was to be  automatically  converted upon
consummation of an initial public offering of Moto Guzzi Corp. Common Stock that
raised gross  proceeds of at least US$ 8,000,000.  The  conversion  rate for the
Preferred  Stock in such  event  would  be the  lesser  of the  then  applicable
conversion  rate or 75% of the per  share  initial  offering  price.  If such an
initial public  offering was not  consummated by June 30, 1998, the holders of a
majority  of the  shares of  Preferred  Stock  would  have the right to select a
majority  of the  Moto  Guzzi  Corp.  board of  directors.  The  holders  of the
Preferred  Stock  would  also have a right to redeem  their  shares at $8.00 per
share if no public offering was completed on or before January 16, 2002.

The Moto Guzzi Corp.  Preferred Stock was recorded in the  consolidated  balance
sheet as preferred  stock of subsidiary  in the amount of Lit.  5,101 million at
December 31, 1996, and a further Lit. 2,933 million was recorded in January 1997
as a result of the  completion of the private  placement.  The Company  recorded
Lit. 3,595 million in 1997 and Lit.1,503 million in 1998 as accretion expense in
the statement of operations to reflect  amortization  of the difference  between
the net  proceeds  received  and the  contingent  redemption  of such  shares in
January  2002 and the  effects of  changing  exchange  rates on such  repurchase
commitment.  As part of the  merger  of Moto  Guzzi  Corp.  with and into  North
Atlantic  Acquisition  Corp. in March 1999, the Preferred Stock and the warrants
to  purchase  Common  Stock were  exchanged  for  shares of Common  Stock of the
surviving company.


                                      -65-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

Net liabilities of the discontinued motorcycle operations are as follows:

<TABLE>
<CAPTION>
                                                         Dec.31 1999   Dec.31 1999   Dec.31 1998
                                                         ---------------------------------------
                                                           US$'000         Lit.m         Lit.m
<S>                                                         <C>           <C>           <C>
           Current assets ...........................       32,186        61,926        58,480
           Property, plant and equipment ............        7,608        14,638        16,787
           Other assets .............................          462           889         1,988
           Current liabilities ......................      (41,260)      (79,385)      (73,128)
           Other liabilities ........................       (5,198)      (10,000)      (10,559)
           Net advances due from operations, sold as
                part of disposal transaction ........        1,681         3,235         2,767
                                                         ------------------------  ------------
           Net liabilities of discontinued motorcycle
                operations ..........................     $ (4,521)  Lit. (8,697)  Lit. (3,665)
                                                         ========================  ============
</TABLE>

In 1999 the Company provided the discontinued  motorcycle  operations with cash,
in the form of capital  and  advances,  of Lit.  14,331  million to finance  its
operations.


Discontinued steel tube operations

<TABLE>
<CAPTION>
                                                                        Dec.31       Dec.31        Dec.31      Dec.31
                                                                         1999         1999          1998        1997
                                                                        --------------------------------------------
                                                                        US$'000       Lit.m        Lit.m       Lit.m
<S>                                                                      <C>          <C>          <C>         <C>
              Net sales ...........................................      11,877       22,852       23,193      20,480
              Profit before taxes .................................         453          872          428         449
              Provisions for taxes ................................         (85)        (164)          --          --
              Net  profit  from  discontinued  operations  of steel
                   tube operations ................................         368          708          428         449
</TABLE>

Included in the income  statement of the Company are management  fees charged to
the steel tube  operations  of Lit. 389  million,  Lit. 287 million and Lit. 204
million in 1999,  1998 and 1997  respectively.  Net  assets of the  discontinued
steel tube operations are as follows:


                                      -66-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

<TABLE>
<CAPTION>
                                                           Dec.31      Dec.31       Dec.31
                                                            1999        1999         1998
                                                         ------------------------------------
                                                           US$'000     Lit.m        Lit.m
<S>                                                        <C>         <C>          <C>
    Current assets .................................       6,433       12,378       12,270
    Property, plant and equipment ..................         785        1,510        1,413
    Other assets ...................................         112          215          282
    Current liabilities ............................      (5,720)     (11,005)     (11,429)
    Other liabilities ..............................        (683)      (1,315)      (1,461)
    Provision for loss on disposal .................        (127)        (245)          --
                                                         ------------------------------------
    Net assets of discontinued steel tube operations         800        1,538        1,075
                                                         ====================================
</TABLE>

4.     REPURCHASE OF SHARES AND SHARES SUBJECT TO REPURCHASE

1999 share repurchases - On December 28, 1999, the Company  repurchased  300,000
shares  at the then  market  price of US$  2.875  per  share  for a total of US$
862,500 or Lit.  1,659 million in connection  with the issuance of US$ 6 million
of two year convertible debentures. See Note 10.

1998 share  repurchases - In April 1995,  the Company  entered into an agreement
with Mr.  Alejandro De Tomaso (De Tomaso  Agreement),  the then  Chairman of the
Board, under which the Company would repurchase Mr. De Tomaso's 1,000,000 shares
of preferred  stock and 480,304 shares of common stock at a negotiated  price of
Lit. 18,400 per share,  converted into dollars at the exchange rate in effect on
the closing date of Lit. 1,637. Prior to the closing of that transaction, Mr. De
Tomaso had conveyed such shares,  subject to the DeTomaso Agreement,  by gift to
two trusts.

703,774 of the preferred and common shares  formerly owned by Mr. De Tomaso were
repurchased  by the Company in July 1995.  The  remaining  preferred  and common
shares  formerly  owned by Mr. De Tomaso were  exchanged  for an equal number --
776,530 shares -- of newly issued common stock. Under the terms of the De Tomaso
Agreement,  if these  remaining  776,530  shares were not sold by their  current
owner prior to June 30,  1998,  the Company  committed  to acquire the shares at
$11.27 per share. The Company  obtained a letter of credit to guarantee  payment
of  the  repurchase  price  which  was   collateralized  by  certain  investment
securities owned by the Company. The 776,530 shares were recorded on the balance
sheet at June 30, 1995 at estimated market value of $10.00 (then Lit. 16,400 per
share) as shares  subject to repurchase  and were not included in  shareholders'
equity.  The difference  between  $10.00 and the redemption  price of $11.27 was
amortized  over the period to June 30, 1998. In June 1998,  the trust owning the
shares  exercised its right to have the Company  repurchase  them for a total of
US$ 8,751,000 or Lit. 15,374 million at the net effective rate on closing.

In 1998,  the  Company  also  repurchased  28,350  shares for Lit.  570  million
pursuant to a 1996  commitment  connected  with the resolution of issues arising
from its 1995 acquisition of certain operations from Finprogetti S.p.A.


                                      -67-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

1997 share repurchases - As described in Note 5, below, the Company  repurchased
120,000  shares  as of  December  31,  1997 in  connection  with the sale of its
Cologne,  Italy real  estate and also  repurchased  44,760  shares for Lit.  900
million  pursuant to a 1996  commitment  connected with the resolution of issues
arising from its 1995 acquisition of certain operations from Finprogetti S.p.A.

Pro forma loss and loss per share information

Interest income on investments securing share repurchase commitments and on cash
and investments  maintained  against  unsecured share repurchase  commitments is
included in the statements of operations. On a pro forma basis, the net loss and
the net loss per share for 1998 and 1997, as if all shares subject to repurchase
had  been  repurchased  as of  the  earlier  of the  date  on  which  repurchase
commitments  were made or January 1 of each respective  year, would have been as
follows.

                                                       1998      1997
                                                      Lira m.   Lira m.
                                                     ------------------
     Net loss......................................  (25,412)  (23,555)
                                                     ==================
     Net loss per share............................   (6,077)   (6,206)
                                                     ==================

All shares subject to repurchase commitments were repurchased in 1998.

5.        MERGERS, ACQUISITIONS AND DISPOSALS

The March 1999 merger of the Company's Moto Guzzi Corp. subsidiary with and into
North Atlantic and the 1996/1997 issuance of convertible preferred stock by Moto
Guzzi Corp. are described in Note 3 - Discontinued operations.

1997  agreement to sell real estate  affiliate and loans due by such affiliate -
In December  1997,  the Company  entered into an agreement to dispose of its 25%
interest in Domer S.r.l.  and loans due by Domer S.r.l.  The  consideration  for
such sale was Lit.  2,900 million in cash, of which Lit.  1,400 million was paid
on December 31, 1997 and Lit. 1,500 million was paid on March 31, 1998, plus the
proceeds from the sale of 45,977 shares of the Company's Common Stock,  plus the
proceeds  from the sale of certain  apartments  located in Bergamo,  Italy.  The
Company  received  Lit.  980 million in  installment  payments  from the sale of
apartments  in 1998,  Lit.  1,681  million in 1999 and the  balance of Lit.  910
million in 2000 for a total of Lit.  6,470  million,  compared  to the  carrying
value of the disposed shares and loans of Lit. 6,236 million.

1997 sale of real estate  subsidiary  - On March 18, 1997,  the Company  entered
into an agreement to sell its Cologne,  Italy  property to a company  affiliated
with  Rag.  Bertoni,  a  shareholder  of the  Company  and of  Finprogetti,  the
Company's then largest  shareholder.  The agreement was consummated on April 15,
1997 by transfer of the shares of Finprogetti  Investimenti  Immobiliari S.p.A.,
the subsidiary  holding the Cologne property.  Under the terms of the agreement,
the purchaser assumed the mortgage loans over the


                                      -68-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

property  and paid Lit.  500 million on March 18, 1997,  Lit.  1,928  million on
April 15, 1997 and Lit.  2,040  million on July 1, 1997. As part of the terms of
sale,  the  Company  granted  the  purchaser  an  option  to  settle  the  final
installment  in cash of Lit.  2,040 million or by way of paying in up to 120,000
shares of the Company's Common Stock to be valued at the higher of $10.00 or the
market  value of the shares as at December 31,  1997.  The Company  reclassified
these  120,000  shares  subject to the  option  from  "Shareholders'  equity" to
"Shares  subject to repurchase" at their estimated fair value at the date of the
transaction of $8.00 (Lit. 13,416) per share for an amount of Lit. 1,610 million
(US$  960,000).  At December 31, 1997,  the  purchaser  exercised  its option to
settle the final installment by way of delivery of such 120,000 shares.

6.        LAND FOR DEVELOPMENT

Undeveloped  land  represented an area in Sardinia for  development of hotel and
leisure  facilities and is owned by the Company through an 80% interest in Grand
Hotel Bitia  S.r.l.  In  accordance  with FASB  Statement  No. 121,  the Company
recorded a reserve of Lit.  2,500  million  against  the  property  in the third
quarter of 1996 to reflect  development  uncertainties  and a further  Lit.  500
million in the third quarter of 1999 to reflect the November 1999 disposal price
of Lit. 3,000 million.

7.        CONCESSION RIGHTS

The Company sold these rights in July 1999 for Lit. 1,600  million.  The Company
has  previously  recorded  impairment  expense of Lit. 2,688 million in the last
quarter of 1998 to reflect the sale price.

8.        TAX RECEIVABLES

Tax receivables  represent  amounts for which  reimbursement has been requested.
The times for  reimbursement in Italy have, in the recent past,  invariably been
in excess of 12 months and,  accordingly,  amounts for which  reimbursement  has
been requested are not classified as current assets.  Interest  accrues on these
receivables at rates set from time to time by the Italian Government. Lit. 6,000
million was received in February 1999.


                                      -69-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

9.        ACCRUED EXPENSES AND OTHER PAYABLES

<TABLE>
<CAPTION>
                                                        Dec. 31 1999 Dec. 31 1999 Dec. 31 1998
                                                        --------------------------------------
                                                          US$'000       Lit. m       Lit. m
<S>                                                        <C>           <C>          <C>
Salaries, wages and related items .....................      376           723          478
Value added and other taxes ...........................       72           138          217
Due for settlement of share repurchases ...............      863         1,660           --
Other .................................................    1,170         2,252        1,426
                                                        -------------------------------------
                                                           2,481         4,773        2,121
                                                        =====================================
</TABLE>

10.       LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                 Dec. 31     Dec. 31  Dec. 31
                                                                  1999       1999       1998
                                                                 US$'000    Lit. m     Lit. m
                                                                --------------------------------
<S>                                                                 <C>      <C>        <C>
Convertible 5% US$ Debentures due December 28, 2001,
         Convertible into TRG stock at $5.00....................    6,250    12,025         --
12.4% note payable in annual installments through 2001..........      604     1,162      1,665
12.36% note payable in annual installments through 1999.........       --        --        610
                                                                --------------------------------
                                                                    6,854    13,187      2,275
Less current portion ...........................................     (287)     (553)    (1,271)
                                                                --------------------------------
                                                                    6,567    12,634      1,004
                                                                ================================
</TABLE>

On  December  28,  1999,  the  Company  issued a US$ 6  million  5%  convertible
debentures due December 28, 2001 to provide funds for Moto Guzzi Corporation and
for general  corporate  purposes.  In connection  with raising these funds,  the
Company paid  $250,000,  in the form of a Debenture on the same terms as for the
$6 million raised, to affiliates of Emanuel Arbib, joint-CEO of the Company. The
Company also paid $360,000 to an Italian  intermediary  and $60,000 plus $26,106
for legal expenses to Investec Ernst & Company in connection  with the issuance.
Mark  Segall,  a director  of the  Company is an  officer  of  Investec  Ernst &
Company. Interest on the debentures at 5% is payable annually in arrears on each
anniversary of the debenture  issuance date, and the debentures are  convertible
at any time,  in full or in part,  into stock of the Company at $5.00 per share,
subject to provisions  for  dilution.  In connection  with this  financing,  the
Company  repurchased  300,000 of its own  shares  from  entities  related to the
purchasers of the debentures for a total of US$ 862,500 (Lit.  1,659 million) or
$2.875 per share, the then prevailing share price.

The Company's 5% Convertible  Debentures in an aggregate amount of US$ 6,250,000
were scheduled to come due in December  2001. On June 13, 2001 the Company,  OAM
and Centerpoint  entered into the Centerpoint Loan Agreement  wherein subject to
the terms and certain  conditions set forth therein  Centerpoint  agreed to lend
the Company  $4,200,000.  On June 13, 2001 Centerpoint made the Centerpoint Loan
and on June  15,  2001  the  Company  paid  the  holders  of  $6,000,000  of the
Debentures


                                      -70-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

$4,207,500 in cash,  which the Debenture  holders accepted as payment in full on
the Debentures (including past due interest), representing a 31.5% discount from
their  face  value.   $250,000  of  the  Debentures  remains  outstanding.   The
Centerpoint Loan bears interest at a rate of 6 % per annum, is repayable in full
on the  earlier  of June 13,  2002 and the date on which the  Company  causes or
permits a liquidation  of  Centerpoint,  and is secured by the 300,000 shares of
Centerpoint  common stock  currently  owned by the Company and  1,200,000 of the
shares of Centerpoint common stock currently owned by OAM.

Maturities of long-term debt as of December 31, 1999:

                               1999        1999
                             --------------------
                              US$'000     Lira m.
               2000             287         553
               2001           6,567      12,634
                             --------------------
                              6,854      13,187


11.      AMOUNTS DUE TO RELATED PARTIES

                                       Dec. 31 1999  Dec. 31 1999  Dec. 31 1998
                                       ----------------------------------------
                                          US$'000     Lit. m         Lit. m
    Loan due to Dr. Giovanni Bulgari .....    --        --           3,000
    Loan due to Tamarix ..................    --        --           3,312

    Other amounts due to Tamarix .........    90       173              99
                                       ----------------------------------------
                                              90       173           6,411
                                       ========================================

On October 1, 1998,  two bridge loans were made by Tamarix and by Mr. Bulgari to
provide  financing  to Moto Guzzi in  anticipation  of the  consummation  of the
merger with North Atlantic Acquisition Corp. (See Notes 1 and 3). The loans were
of US$ 2,000,000  (Lit.  3,312 million) and Lit. 3,000 million and bore interest
at 10% and a flat  commission  of 1%.  Each loan was  secured by 500,000  common
shares of Moto Guzzi Corp. (207,337 shares of Moto Guzzi Corporation,  following
the merger with North  Atlantic  Acquisition  Corp.).  As an inducement  for the
loans to be made, the Centaurus warrants (See Note 1), which were exercisable at
$6.00 through May 1, 2000,  were  extended  through May 1, 2002 and the exercise
price reduced to $5.50. The closing price of the Company's Common Stock had been
at $5.00 or below in the  preceding  month and was at $4.00 on  October  1, 1998
when the loans  were made.  The  Company  sought  similar  financing  from third
parties,  and the terms  and  conditions  above  were  more  favorable  than any
expressions of interest by third parties.

The Lit.  3,000 million loan was repayable to Mr.  Bulgari on March 31, 1999 and
was extended to April 30, 1999 and repaid in May 1999.  The US$  2,000,000  loan
was  repayable  on  completion  of the  merger of Moto  Guzzi  Corp.  into North
Atlantic  Acquisition  Corp.,  which occurred on March 5, 1999 and was extended,
with part payments of $300,000 in May and August 1999, and the balance repaid in
December 1999.


                                      -71-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)



As  described in Note 10, Lit.  481 million  ($US  250,000) of the  Company's 5%
convertible  debentures  are held by entities  affiliated  with Emanuel Arbib, a
director of the Company.


12.      OTHER INCOME

<TABLE>
<CAPTION>
                                                   Dec. 31 1999  Dec. 31 1999  Dec. 31 1998  Dec. 31 1997
                                                   ------------------------------------------------------
                                                      US$'000      Lit. m       Lit. m        Lit. m
<S>                                                     <C>            <C>         <C>         <C>
           Foreign exchange ...................         (1)            (2)         (2)         1,851
           Release of reserves for claims .....        524          1,009         714             --
           Additional reserve for litigation ..     (1,544)        (2,970)         --             --
           Rental income ......................         42             80         150            477
           Net expense of finance activities in
                liquidation ...................         --             --          --           (295)
           Other ..............................        332            638        (316)            13
                                                   ------------------------------------------------------
                                                      (647)        (1,245)        546          2,046
                                                   ======================================================
</TABLE>

In 1997, the principal element of favorable exchange gains of Lit. 1,851 related
to bridge  financing,  until completion of the Company's June 1997 public Common
Stock  offering,  by the  Company's  Italian  subsidiaries  to the U.S.  parent.
Reserves  for  claims  have  been  released  in 1998  and  1999 as such  claims,
principally  relating to activities in Italy dating from businesses sold in 1993
have been closed.  Additional  reserves of Lit.  2,970 million have been made in
1999 in respect of the litigation in the Unites States  detailed in Part I, Item
3 of this report,  which is  incorporated  herein by reference.  Other  includes
differences  in  estimated   impairment   losses  on  disposals  of  assets  and
subsidiaries and miscellaneous.

13.       INCOME TAXES

Profit/(loss)  before  income  taxes and  minority  interests  consisted  of the
following:

<TABLE>
<CAPTION>
                                              1999         1999          1998         1997
                                            --------------------------------------------------
                                            US$'000       Lira m.      Lira m.       Lira m.
<S>                                          <C>           <C>           <C>           <C>
          United States..................    (3,404)       (7,031)       (3,959)       (5,009)
          Italy..........................       312           600        (2,354)       (2,442)
          Elsewhere......................       (11)          (22)          (11)           (6)
                                            --------------------------------------------------
                                             (3,353)       (6,453)       (6,324)       (7,457)
                                            ==================================================
</TABLE>


                                      -72-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)



The provision for income taxes consisted of the following:

                                     1999     1999     1998     1997
                                    -----------------------------------
                                    US$'000  Lira m.  Lira m.  Lira m.
           Current:
                  United States       --       --       --     (195)
                  Italy .......       --       88      161      417
                                    -----------------------------------
                                      46       88      161      222
                                    -----------------------------------
           Deferred: ..........       --       --       --       --
                                    -----------------------------------
           Total ..............       46       88      161      222


Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Valuation allowances have
been recorded for the deferred tax assets, as management believes it more likely
than not that these assets will not be realized.  Significant  components of the
Company's deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                               1999        1999       1998         1997
                                              -------     -------    -------      -------
                                              US$'000     Lira m.    Lira m.      Lira m.
       <S>                                    <C>         <C>         <C>         <C>
       Short-term reserves .............        770       1,482         948          60
       Carrying value of fixed assets ..         --          --       2,164       1,186
       Net operating loss carry forwards      1,490       2,867       6,463       8,250
                                             -------     -------    -------      -------
                                              2,260       4,349       9,575       9,496
       Valuation allowance .............     (2,260)     (4,349)     (9,575)     (9,496)
                                              -------     -------    -------      -------
       Net deferred tax assets .........         --          --          --          --
                                              -------     -------    -------      -------
</TABLE>

The  effective  provision  for income  taxes  varied  from the income tax credit
calculated at the statutory U.S. federal income tax rate as follows:

<TABLE>
<CAPTION>
                                                                    1999      1999        1998        1997
                                                                  -------    -------     -------     -------
                                                                   US'000    Lira m.     Lira m.     Lira m.
<S>                                                                <C>       <C>         <C>         <C>
Computed  tax  credit at U.S.  federal  rate on losses  from
     continuing operations .................................       (815)     (1,569)     (2,214)     (2,610)
Losses  and  reversals  of  short-term  reserves  for  which
     valuation allowance provided ..........................        765       1,473       3,042       3,029
Utilization of tax losses ..................................                               (123)       (270)
Non-deductible expenses and local taxes ....................         96         184        (544)         73
                                                                    ---       -----       -----       -----
                                                                     46          88         161         222
                                                                    ===       =====       =====       =====
</TABLE>

For U.S.  federal  income tax  purposes,  the  Company  has net  operating  loss
carry-forwards  of  approximately  U.S. $1.0 million at December 31, 1999. These
losses expire from 2004 through  2013.  United States income taxes have not been
provided on unremitted earnings of subsidiaries located outside


                                      -73-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

the United States as such earnings are considered to be permanently  reinvested.
Approximately  Lit. 4,800 million of retained  earnings of Italian  subsidiaries
cannot be distributed under local laws.

AT  DECEMBER  31, 1999 THE COMPANY HAD NET  OPERATING  LOSS  CARRY-FORWARDS  FOR
ITALIAN FEDERAL INCOME TAX PURPOSES WHICH EXPIRE AS FOLLOWS:

                                                     1999           1999
                                                   US$000's        Liram.
                                                   --------        ------
       2000 ..............................
       2001 ..............................                4             8
       2002 ..............................               --            --
       2003 ..............................               --            --
       2004 ..............................              117           225
       2005 ..............................            3,384         6,511
       ----                                           -----         -----
                                                      4,027         7,749
                                                      =====         =====


14.       SHARES ISSUED IN CONNECTION WITH EMPLOYMENT AGREEMENTS

On March 18,  1998,  the Board of  Directors  approved a three  year  employment
contract  commencing  May 1,  1998 with Mark S.  Hauser as  President  and Chief
Executive Officer, a three year contract  commencing May 1, 1998 with Emanuel M.
Arbib as Chief Financial Officer and a one year,  renewable agreement commencing
May 1, 1998 with Tamarix Capital Corporation,  which supercedes a prior existing
contract,  for  provision  of  merchant  banking  services  to the  Company.  In
connection  with  these  contracts,  the  Company  issued  205,000  shares  with
contractual  transfer  restrictions  lapsing as to one-third  thereof on each of
December 31, 1998,  1999 and 2000, and 32,000 shares with  contractual  transfer
restrictions lapsing on December 31, 1998. The issuance of these shares has been
accounted for at the fair value of the Company's  Common Stock as of the date of
the  agreements of $4.06 per share and will be charged to  compensation  expense
over the life of the contracts. Amounts in respect of future compensation at the
balance sheet date have been included in the financial statements as a deduction
from additional paid-in capital.


15.       STOCK OPTIONS AND WARRANTS

Tamarix  warrant - As  described  in Note 1, the Company  also issued  1,250,000
Warrants  exercisable  through  May 2,  2000  at an  exercise  price  of  $6.00,
subsequently revised to $5.50, to the manager of Tamarix.

Publicly traded warrants  (OTC/BB:  TRGIW) - As discussed in Note 1, the Company
issued 1,437,500 Warrants in connection with its June 1997 public offering. Each
Warrant is exercisable for five years at an exercise price of $7.20 per share of
Common  Stock.  The  Company  may  redeem the  Warrants  at a price of $0.01 per
Warrant  at any time if notice  of not less than 30 days is given,  and the last
sale price of


                                      -74-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

the Common  Stock has been at least  $9.60 on all 20 trading  days ending on the
third day prior to the day on which notice is given.

1995 Non  Qualified  Plan  Options - The  Company's  "1995  Non-Qualified  Plan"
provides  for the grant of  non-qualified  stock  options for  officers  and key
employees.  Total options of 2,000,000 shares have been authorized by the Board.
Grants were made in 1996 and 1995 of 22,500 and 960,000 shares respectively, all
at an exercise price of $12.26. 130,000 of these options were forfeited in 1997,
60,000  forfeited in 1998 and 710,000 were  exchanged in 1998 for new options at
$5.00, as described below. A further 17,500 of the $12.26 options were forfeited
in 1999.

On March 18,  1998,  the Company  granted  Messrs.  Hauser and Arbib and Tamarix
options  to  purchase  an  aggregate  of  212,000  shares of Common  Stock at an
exercise price of $ 5.00,  granted to other  officers of and  consultants to the
Company  options to purchase an aggregate of 280,000 shares at an exercise price
of $5.00 in exchange  for 710,000  previously  granted  options  exercisable  at
$12.26, and granted a further 105,000 options to persons not previously included
in its "1995 Non-Qualified Plan" for officers and key executives.

Outstanding  options  under the "1995  Non-Qualified  Plan" can be  exercised as
follows:

                                            Exercisable  Exercisable
                                             at $12.26     at $5.00
                                            ------------------------
              Currently exercisable .....      64,000     532,000
              Exercisable at future dates       1,000          --

1995  Director's  Plan - Under the "1995  Director's  Plan,"  5,000  options are
granted  annually  on  January  2 of each  calendar  year  to each  non-employee
Director serving at such date and a  proportionately  reduced number of options,
at the date of  election,  to Directors  initially  elected at a date other than
January 2. The  exercise  price is fixed at the  reported  closing  price of the
stock on January 2, or date of election of Directors for subsequent  grants. All
options  granted on January 2, 1996 and January 2, 1997 were  forfeited  in 1997
pursuant to changes in the  composition  of the Board. A total of 18,751 options
were granted in 1997 at a weighted  average  exercise price of $7.446 in respect
of incoming  Board  members of which 6,250 were  forfeited  in 1999 and 6,667 in
January  2000.  40,000  options  were  granted on January 2, 1998 at an exercise
price of $4.875,  of which  15,000 were  forfeited in 1999 and 15,000 in January
2000.  20,000  options  were issued on January 2, 1999 at an  exercise  price of
$4.625 of which  5,000 were  forfeited  in 1999 and 15,000 in  January  2000.  A
further  20,000  options were issued on January 3, 2000 at an exercise  price of
$3.6525.

Other options

      The Company issued to GKN Securities  Corp.  125,000  options  exercisable
through June 10, 2002 at an exercise price of $6.12 and issued 173,306  warrants
exercisable through June 10, 2000 at an exercise


                                      -75-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

price  of $6.00  to  certain  shareholders  as an  inducement  for them to enter
lock-up  agreements with the Company and with GKN Securities Corp. in connection
with its June 1997 public offering.

As the Company incurred losses from continuing  operations in each of 1997, 1998
and 1999, all warrants and options described above are considered  antidilutive.
The potentially  dilutive effects of outstanding options and warrants in 1999 is
summarized below:

<TABLE>
<CAPTION>
                                                     1999          1998          1997
                                                ---------------------------------------
<S>                                              <C>           <C>           <C>
    Weighted average number of common shares
         outstanding during the year:
    Basic ..................................     4,280,767     4,584,237     4,600,205
    Shares subject to restricted vesting ...         5,920        47,882            --
    Non Qualified Plan options .............            --        39,712            --
    1995 Director's Plan options ...........            --         5,252           619
    Tamarix warrants .......................            --        19,839        85,116
    GKN options and lock-up warrants .......            --            --        17,983
                                                 ---------     ---------     ---------
    Diluted ................................     4,286,687     4,696,922     4,704,003
                                                 =========     =========     =========
</TABLE>

The Company has elected the  disclosure-only  provisions  of FASB  Statement No.
123,  "Accounting for Stock Based  Compensation"  and applies APB Opinion No. 25
and related  interpretations  in accounting  for their stock option  plans.  Pro
Forma  compensation  costs under the Company's stock option plans for 1999, 1998
and 1997 based on the value of awards at the grant date were not material.

The fair value of the Company's  options is the  estimated  present value at the
date of grant using the  Black-Scholes  option-pricing  model with the following
weighted-average  assumptions:  risk-free  interest rate of approximately  5.5%;
expected volatility of approximately 60%; expected life of 4 years; and dividend
yield of 0%.


                                      -76-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

The following is a summary of transactions pertaining to the Plans:



<TABLE>
<CAPTION>
                           December 31, 1999    December 31, 1998       December 31, 1997
                           -----------------    -----------------       -----------------
                                     Weighted             Weighted               Weighted
                                      Average              Average                Average
                           Shares    Exercise   Shares    Exercise      Shares   Exercise
                           (000's)    Price     (000's)    Price       (000's)    Price
                           -------  --------    -------  --------      -------   --------
         <S>                 <C>      <C>         <C>      <C>         <C>        <C>
         Outstanding,
         January 1           673      $5.95       871      $12.16      1,003      $12.26
         Granted              20      $4.63       637        4.99         18        7.45
         Exercised            --         --        --          --         --          --
         Forfeited or
         exchanged           (44)     $8.24      (835)      11.69       (150)      12.26
                           -----     ------     -----     -------     ------     -------
         Outstanding,
         December 31         649      $5.76       673      $ 5.95        871      $12.16
                           =====     ======     =====     =======     ======     =======
         Options
         Exercisable,
         December 31         633      $5.77       469      $ 6.23        389      $12.16
                           =====     ======     =====     =======     ======     =======
</TABLE>

The  following  is a summary  of the  status of stock  options  outstanding  and
exercisable under the Plans as of December 31, 1999:

<TABLE>
<CAPTION>
                                            Stock Options Outstanding          Stock Options Exercisable
                                            -------------------------          -------------------------
                                                                  Weighted
                                                    Weighted      Average
                                                     Average     Remaining
                 Range of                Shares      Exercise    Contractual    Shares    Weighted Average
              Exercise Price            (000)'s       Price         Life      (000's)     Exercise Price
              --------------            -------       -------   ----------    --------     --------------
            <S>                            <C>      <C>       <C>                 <C>       <C>
            $12.26                           65       $12.26    0.00 years          64        $12.26
            $5.00                           532        $5.00    2.25 years         532         $5.00
            $5.125 - $7.95                   52        $5.35    2.14 years          37         $5.64
                                           ----       ------                      ----        ------
                                            649        $5.76                       633         $5.77
</TABLE>


16.       RELATED PARTY TRANSACTIONS

Loans from  related  parties - As  described  in Note 11,  both  Tamarix and Dr.
Giovanni Bulgari made loans to the Company in October 1998, repaid in 1999.

Tamarix  Capital  Corporation  / Mr.  Mark Hauser - Details of  agreements  with
Tamarix  Capital  Corporation to provide  financial  services to the Company are
described in Note 1. Mark Hauser,  a principal of Tamarix  Capital  Corporation,
became Chief Executive Officer of the Company  commencing May 1, 1998. The terms
of his 3 year employment  contract with the Company provide for  compensation of
US$  160,000  per year and the  issue of  130,000  shares  of the  Company  with
contractual transfer


                                      -77-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

restrictions  lapsing as to one-third thereof on each of December 31, 1998, 1999
and 2000 and 130,000 options  exercisable at $5.00. Cash compensation  under the
contract with Tamarix Capital  Corporation and the employment contract with Mark
Hauser  is  payable  only  when  the  Company  has  sufficient  cash to meet its
financial  commitments  for the  following 12 months,  and no cash  compensation
under the  agreements  was paid in 1998.  The  Company met this test in 1999 and
commenced  payment of a portion of the accrued  compensation  in 1999.  In March
1999,  pursuant to the merger of the Company's Moto Guzzi Corp.  subsidiary with
and into North Atlantic (See Note 3), Mark Hauser became Executive  Chairman and
a director of the merged company, with an annual compensation of US$ 90,000 plus
US$ 108,000 in respect of the expense of maintaining the U.S.  corporate  office
for Moto Guzzi, and in respect of handling administrative and regulatory matters
for Moto Guzzi.  150,000  options to acquire stock of Moto Guzzi  Corporation at
$10.6875 were also issued to Mr. Hauser.  This agreement was terminated in April
2000 in connection with the sale of Moto Guzzi operations to Aprilia.

Mr.  Emanuel Arbib - As described in Note 10, Emanuel Arbib was paid US$ 250,000
in the form of 5% convertible  debentures in connection  with the issue of US$ 6
million of such debentures to Italian institutional  investors in December 1998.
As  described  in Note 1,  the  Company  entered  into a  three-year  consulting
contract commencing May 1, 1998 with Emanuel Arbib as Chief Financial Officer of
the Company.  The terms of the contract  provide for compensation of US$ 100,000
per year and the  issuance  of 75,000  shares of the  Company  with  contractual
transfer  restrictions  lapsing as to one-third  thereof on each of December 31,
1998, 1999 and 2000 and options to purchase 65,000 shares  exercisable at $5.00.
Cash compensation  under the employment  agreement is deferred until the Company
has  sufficient  cash to meet its  financial  commitments  for the  following 12
months,  and no cash  compensation  under the  agreement  was paid in 1998.  The
Company met this  financial  test in 1999 and began making  payments in 1999. In
December 1999, Emanuel Arbib was appointed joint-CEO of the Company,  though his
compensation  arrangements were unchanged. In March 1999, pursuant to the merger
of the Company's Moto Guzzi Corp.  subsidiary  with and into North Atlantic (See
Note 3),  Emanuel  Arbib  became a  director  of Moto Guzzi and  entered  into a
consulting  contract to provide financial  consulting  services,  with an annual
compensation  of US$ 90,000.  30,000  options to acquire  stock of Moto Guzzi at
$10.6875 were also issued to Mr. Arbib.

Mr.  William Spier - In August 1999,  William  Spier,  a director of the Company
from May 1997 to December 1999 and director of Moto Guzzi from March 1999,  made
an  advance  of  $250,000  to the  Company's  Moto  Guzzi  subsidiary.  Entities
associated with Mr. Barry Fingerhut,  a Director of Moto Guzzi. from March 1999,
also advanced  $1,000,000.  The total of US$ 1,250,000  (Lit.  2,405 million) is
included as advances for subsidiary  stock  subscription in the balance sheet at
December 31, 1999.  The advances,  together with other advances to Moto Guzzi by
the  Company in 2000 and funds  raised from an Italian  institutional  investor,
were  converted  into Series B Preferred  Stock of Moto Guzzi in February  2000.
Interest is payable at 7% on the advances through their February 2000 conversion
into Series B Preferred  Stock of Moto Guzzi.  The Series B Preferred  Stock was
redeemed in full in September 2000. See Note 21 - Subsequent events, for further
description  of the  issuance  of  Series B  Preferred  Stock  by Moto  Guzzi in
February 2000.


                                      -78-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

Deborah S. Novick - Deborah S. Novick,  a Director of the Company from September
7, 1997 to December 6, 1999 is Executive Vice President  Investment  Banking for
GKN Securities  Corp.,  who acted as underwriters for the public offering of the
Company's  Common Stock in June 1997 (see Note 1) and for the private  placement
of Moto Guzzi Corp.  preferred stock in December 1996 and January 1997 (see Note
3). GKN Securities  Corp. was paid  $1,368,000 in  underwriting  commissions and
expenses in relation to these transactions.


17.       EXPORT SALES AND GEOGRAPHIC INFORMATION

Net  sales, primarily management services, by destination were as follows:



                                      1999        1999        1998        1997
                                    US$'000     Lira m.     Lira m.      Lira m.
                                  ----------------------------------------------
          United States...........       47          91          43          68
          Italy...................      986       1,896       3,732       2,467
                                  ----------------------------------------------
                                      1,033       1,987       3,775       2,535
                                  ==============================================


          Identifiable assets                   Dec. 31     Dec. 31     Dec. 31
                                                  1999        1999        1998
                                                US $'000    Lira m.     Lira m.
                                                --------------------------------
          Italy ..............................    4,857       9,344      20,563
          United States ......................    6,652      12,798       2,274
          Elsewhere ..........................      813       1,564       1,101
                                                --------------------------------
                                                 12,322      23,706      23,998
                                                ================================

Assets held elsewhere principally relate to the investment in LITA, held through
Trident Rowan International SA, a Luxembourg company.

18.       CONCENTRATION OF CREDIT RISKS

Concentrations  of credit risk with  respect to trade  accounts  receivable  are
limited  due to the  number  of  entities  in the  customer  base.  The  Company
maintains cash and cash  equivalents  and short and long-term  investments  with
various  financial  institutions  of  national  standing in Italy and the United
States.


                                      -79-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)


19.       FINANCIAL INSTRUMENTS

The Company does not enter into foreign exchange  contracts in the normal course
of its operating activities.  In 1998, the Company made forward purchases of US$
4,000,000 as partial coverage of its US Dollar share  repurchase  commitments at
June 30, 1998. The Company has not hedged against  foreign  exchange risk on its
US Dollar denominated bridge loan, incurred in October 1998.

Fair value of financial instruments - The following methods and assumptions were
used by the  Company in  estimating  its fair  value  disclosure  for  financial
instruments.

Cash and cash  equivalents:  the  carrying  amount of cash and cash  equivalents
reported by the Company approximates their fair value.

Short and long term debt: the carrying amount of the Company's  borrowings under
its  short-term  credit  arrangements  approximates  their fair value.  The fair
values of the Company's  long-term debt are estimated  using cash flow analyses,
based  on the  Company's  incremental  borrowing  rates  for  similar  types  of
borrowing arrangements.

Fixed interest  securities  which have maturities from one to three years:  fair
value  for  marketable  quoted  securities  is based  on  market  price  and for
non-marketable  securities,  is estimated  using  discounted  cash flow analysis
based on similar  investments  available as at the balance sheet date. There are
no significant  differences between fair value and carrying value for any of the
Company's financial instruments as at December 31, 1998 and 1997.

20.       LEGAL PROCEEDINGS

The Company is a defendant in two pending lawsuits which are described in detail
in Item 3 of Part I of this Report, which is incorporated herein by reference.


                                      -80-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)


21.       SUBSEQUENT EVENTS

Disposal of motorcycle operations

In December 1999, the Company engaged IMI, a leading Italian investment bank, to
pursue strategic  alternatives to enhance  shareholder value in its shareholding
in Centerpoint (Moto Guzzi through September 18, 2000).

The Moto Guzzi motor cycle  operations were sold to Aprilia pursuant to an April
14, 2000 Preliminary Sale and Purchase  Agreement,  closed in September 2000. In
this transaction,  Centerpoint, in which the Company owns a 62.7% interest, held
directly and indirectly through a subsidiary, sold its operating subsidiaries to
Aprilia.  To finance  operations  through the date of sale,  Centerpoint  raised
bridge financing in February 2000 by way of issuance of Series B 7.0 % Preferred
Stock,  redeemable  December 2001,  which was subscribed for cash by the Company
with US$ 3,500,000 (from funds raised in December 1999 by way of issuance of its
5% convertible  debentures) and for $6,000,000 by Fineco,  a third party Italian
institutional  investor group.  Certain  existing  advances by the Company's OAM
subsidiary of $1,600,000 and by Messrs.  Fingerhut and Spier of $1,250,000  were
also applied to subscribe to the Series B Preferred  Stock.  Centerpoint  agreed
with  holders of the Series B Preferred  Stock to redeem such Series B Preferred
Stock on September 30, 2000, following the closing of the sale by Centerpoint of
its  operating  subsidiaries.  See Item 1 of Part 1 of this  report  for  fuller
details of these events.

On  September  7,  2000,  Centerpoint  closed  the  sale  of all  its  operating
subsidiaries.  On August 11, 2000, at a special  meeting of  stockholders,  Moto
Guzzi's stockholders had approved the sale of the operating subsidiaries and the
change of  corporate  name  from Moto  Guzzi to  Centerpoint  Corporation,  with
stockholders  holding in excess of two-thirds of all outstanding shares of Class
A Common Stock voting for the sale and the name change.

Total proceeds from the sale were Lit.  79,500  million.  In accordance with the
Share  Purchase  Agreement,  Aprilia  also  reimbursed  Centerpoint  Lit.  2,074
million, the amount owed to Centerpoint by the operating  subsidiaries  pursuant
to loans made to them.  Lit.  9,375 million of the total  proceeds was placed in
escrow to cover any  claims  Aprilia  might have in the future in respect of the
representations  and  warranties  given by  Centerpoint  in the  Share  Purchase
Agreement.  Funds from the escrow account will be released to Centerpoint in two
tranches,  subject to any claims  Aprilia  may have in respect of  Centerpoint's
representations  and  warranties:  up to Lit. 7,000 million is to be released on
September 8, 2001;  and up to Lit. 2,375 is to be released on September 8, 2007.
Aprilia  has  undertaken  to  evaluate,  on a best  efforts  basis,  an  earlier
resolution of the escrow accounts.


                                      -81-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

SIREF S.p.A. and San Paolo Finanziaria  S.p.A. (both affiliates of IMI) acted as
fiduciary agents for the closing. In accordance with invoices submitted to them,
they paid IMI Lit. 11,401 million, in respect of fees and expenses claimed to be
due to IMI, paid Lit. 505 million to Carnelutti,  the Company's Italian counsel,
and then paid the remaining proceeds of Lit. 60,293 million to Centerpoint.  The
Company  has  since  early  July  2000  disputed  IMI's  interpretation  of  the
calculation  of the fee due to them under  their  engagement  letter,  following
indication by IMI of their basis of calculation. See "Subsequent Events--Closing
by Moto Guzzi (now  Centerpoint)  on the sale of its Operating  Subsidiaries  to
Aprilia;  Dispute  With IMI  concerning  its  fee",  in item 1  above,  which is
incorporated herein by reference.

The Lit. 60,293 million received by Centerpoint was applied first to pay amounts
due for transaction expenses and other payables and obligations estimated in the
aggregate  to be  approximately  Lit.  2,700  million  and to  redeem,  prior to
September 30, 2000,  all  outstanding  shares of Series B Preferred  Stock for a
price equal to $100 per share plus any accrued and unpaid dividends thereon, for
a total of approximately US$ 12.6 million  (approximately Lit. 28,300 million at
the then prevailing  exchange rate). Of such  redemption,  the Company  received
approximately  US$ 5.2 million  (approximately  Lit.  11,400 million at the then
prevailing   exchange  rate).   Following  such   redemption,   Centerpoint  has
approximately  Lit. 29.3 billion in cash and rights to the remaining  balance at
the time of release of the Lit. 9,375 million being held in escrow, as described
above.  Cash has been invested in short-term fixed interest  securities  pending
evaluation of the alternatives available with respect to such funds.

The Share Purchase Agreement  providing for the sale of Centerpoint's  operating
subsidiaries to Aprilia  (described  below)  contained a condition that OAM (the
holder  of   approximately   58%  of  the  issued  and  outstanding   shares  of
Centerpoint's  Class A common stock,  and a subsidiary of the Company)  agree to
vote its capital  stock for the sale,  and by letter to Aprilia  dated April 14,
2000, OAM agreed to vote its shares for the sale.

In order to induce OAM to deliver its letter to Aprilia, Centerpoint agreed with
OAM and the Company by letter  dated  April 14,  2000 (the "April 14th  letter")
that,  among other things,  it would pay IMI's fees in connection with the sale.
The April  14th  letter  was  amended on June 8, 2000 to  provide,  among  other
things,  that Centerpoint would, as promptly as practicable after the closing of
the sale,  but in no event  later than 90 days  following  the  closing,  hold a
meeting of stockholders to consider and vote upon a proposal to liquidate all of
Centerpoint's  assets and dissolve itself.  The date for proceeding to propose a
liquidation was subsequently extended by the Company and OAM to July 15, 2001.

Disposal of steel tube operations

In July 2000,  the Company  disposed of LITA.  Lit.  1,470  million of the total
consideration of Lit. 2,470 million was paid for at the time of sale by way of a
dividend of Lit.  670 million  paid  immediately  prior to the sale and Lit. 800
million paid by the purchaser in cash.  Lit.  1,000 million is due in July 2001,
secured


                                      -82-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

by a first call bank guarantee. In connection with the disposal, the Company has
released a first call bank guarantee for Lit. 1,000 million through December 31,
2003 to secure any claims the purchaser may have for breaches of representations
and  warranties  given  by  the  Company.  LITA  has  been  accounted  for  as a
discontinued operation - See Note 3.

Disposal of temporary management operations

Effective January 1, 2000, the Company disposed of TIM, its temporary management
services subsidiary. TIM was sold to affiliates of Albino Collini, a Director of
the Company  through  December 2000 for 80,000 shares of the Company with a fair
value of Lit.  320  million at the date of sale.  The  Company  has  recorded an
impairment  loss of Lit.  400 million as at December  31, 1999 in respect of the
trademarks of TIM to reflect the post year-end disposal.

Purchase of minority interests

In  September  2000,  the Company  agreed to purchase the  outstanding  minority
interests in its 84.35% owned  subsidiary for OAM for US$ 2,500,000 (Lit.  4,810
million).  The  purchase  price is at a discount  to the net asset  value of the
15.65%  OAM,  which the  Company  will  acquire  and will  permit the Company to
rationalize its corporate structure and eliminate certain fiscal inefficiencies.
The agreement to purchase the minority interests closed in March 2001.

Centerpoint Loan;  Early payoff of the Company's 5% Convertible Debentures

The Company's 5% Convertible  Debentures in an aggregate amount of US$ 6,250,000
were scheduled to come due in December  2001. On June 13, 2001 the Company,  OAM
and Centerpoint  entered into the Centerpoint Loan Agreement  wherein subject to
the terms and certain  conditions set forth therein  Centerpoint  agreed to lend
the Company  $4,200,000.  On June 13, 2001 Centerpoint made the Centerpoint Loan
and on June  15,  2001  the  Company  paid  the  holders  of  $6,000,000  of the
Debentures  $4,207,500 in cash, which the Debenture  holders accepted as payment
in full on the Debentures  (including  past due interest),  representing a 31.5%
discount from their face value.  $250,000 of the Debentures remains outstanding.
The Centerpoint  Loan bears interest at a rate of 5 % per annum, is repayable in
full on the earlier of June 13, 2002 and the date on which the Company causes or
permits a liquidation  of  Centerpoint,  and is secured by the 300,000 shares of
Centerpoint  common stock  currently  owned by the Company and  1,200,000 of the
shares of Centerpoint  common stock  currently  owned by OAM. In connection with
the  Centerpoint  Loan,  OAM also  entered  into  the OAM  Guaranty  wherein  it
guaranteed the Company's obligations under the Centerpoint Loan Agreement. OAM's
liability  under the OAM  Guaranty  is limited  to the value of the  Centerpoint
shares pledged by OAM, as that term is used in the OAM pledge agreement.


                                      -83-
<PAGE>

                   TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
                                December 31, 1999
             Notes To Consolidated Financial Statements (continued)

United States Litigation

On December 19, 2000,  a  Settlement  Agreement  and Release was executed by and
between  plaintiffs,  the  Company  and I.T.E.  Imperial  Corporation  and Gould
Electronics,  Inc., the co-defendants in the Wilson Litigation.  The Company and
Gould each agreed to pay 50% of the  $2,050,000  settlement  amount,  subject to
resolution of certain issues between them.  The remaining  issue,  the Company's
claim against Gould for indemnification, was litigated on February 16, 2001.

On June 15,  2001,  a verdict  was  rendered  by the  Court of  Common  Pleas of
Philadelphia  County  holding  that the  Company is  responsible  for paying all
settlement  funds and ordering the Company to pay Gould $1,025,000 plus interest
at a rate of 7% per annum from the date Gould  paid the  plaintiffs.  The appeal
period for the judgment  expired on July 15, 2001,  and the judgment  became due
and payable to Gould on that date.

Given the status of these legal  actions,  the Company has  recorded  additional
provisions of Lit. 2,970 million and the full amount of the  $2,050,000  payable
by the Company is accrued at December  31,  1999.  Although no judgment has been
rendered with respect to the Company's claims against Travelers  relating to the
Wilson Litigation,  and it is possible that the Company may recover  significant
amounts  from  Travelers,  no  amounts  have  been  offset  or  accouted  for as
receivables in respect of these claims.

Aprilia Claims under the Share Purchase  Agreement;  Payment by IMI; Request for
Arbitration

On June 2001 Aprilia's legal counsel sent a letter to Centerpoint  which alleged
that it had  various  claims  under the  Share  Purchase  Agreement  aggregating
approximately Lit. 9,600 million.

On July 13,  2001  Centerpoint's  Italian  counsel  sent a letter  to  Aprilia's
counsel contesting all of the Alleged Claims.

On July 13, 2001 Aprilia  requested  that IMI, the escrow agent under the Escrow
Agreement, pay them Lit. 7.611 million in respect of the Alleged Claims. On July
26,  2001,  in spite of being  aware of  Centerpoint  contesting  of each of the
Alleged Claims and its intention to seek  arbitration,  IMI advised  Centerpoint
that it had paid Lit.  7,611  million  from the  escrow  account  to  Aprilia in
respect of the Alleged Claims.

Pursuant to the Share Purchase  Agreement and Escrow  Agreement,  which provides
that  disputes  among the  parties be  arbitrated,  Centerpoint  has  prepared a
Request  for  Arbitration  in  Accordance  with  Article  4 of the ICC  Rules of
Arbitration relating to the Alleged Claims and the payment by IMI and requesting
restitution of the funds paid to Aprilia, which Centerpoint is in the process of
filing with the International  Chamber of Commerce.  Centerpoint has advised the
Company  that it expects a decision by the ICC with  respect to the request will
be  rendered  approximately  twelve to eighteen  months  after the filing of the
request.


                                      -84-
<PAGE>

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

None.

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

The following information concerns the directors, officers, key employees of and
consultants to the Registrant.

Directors

As of December 31, 1999, and as of the date of this report, the Directors of the
Company were as follows:



Name                              Age     Position
----                              ---     --------
Mark S. Hauser ................   43      President and Joint Chief Executive
                                              Officer, Director
Emanuel Arbib .................   34      Joint Chief Executive Officer, Chief
                                              Financial Officer, Director
Howard E. Chase ...............   64      Director
Gianni Bulgari ................   64      Director
Duncan Chapman(1)  ............   47      Director
Andrea Della Valle(2) .........   42      Director
Mark B. Segall(2) .............   38      Director and Secretary

-----------------------------
(1)  Independent  director  nominated  by Mark  Hauser  in  accordance  with the
     provisions of the Settlement Agreement.

(2)  Independent  director  nominated by Gianni  Bulgari in accordance  with the
     provisions of the Settlement Agreement.


Mark S. Hauser,  President and Chief Executive Officer of the Company from March
1998 through  December 1999, and President and Joint Chief Executive  Officer of
the Company since December 1999, became a Director of the Company on May 2, 1997
upon consummation of the Tamarix/Finprogetti  Acquisition Agreement.  Mr. Hauser
is a Managing  Director  of FdG  Associates,  a private  equity  fund.  He is an
attorney and a founder and Managing Director of Tamarix Capital  Corporation,  a
New York-based  merchant and investment banking firm. Between 1986 and 1990, Mr.
Hauser was Managing  Director of Ocean  Capital  Corporation,  an  international
investment banking firm. In 1991, Mr. Hauser founded Hauser, Richards & Company,
also an international investment banking firm.


                                      -85-
<PAGE>

Emanuel Arbib, the Chief Financial Officer since March 1998, and the Joint Chief
Executive  Officer since December 1999,  became a Director of the Company on May
2, 1997 upon consummation of the  Tamarix/Finprogetti  Acquisition Agreement. He
is the  Managing  Director of Capital  Management  Ltd, an  international  money
management firm based in Jersey,  Channel Islands. He is also the co-founder and
Managing  Director of Global  Investment  Advisors,  a  London-based  investment
company.  Since June 1998,  he has served as a director  of and chief  executive
officer of Integrated  Asset  Management  plc, a U.K.  publicly  traded company.
Since  January 1996, he has served as Managing  Director of BioSafe  Europe,  an
affiliate of BioSafe  International  Inc., a publicly  traded company engaged in
waste management and landfill reclamation. From September 1996 to November 1997,
he served as a director of  International  Capital Growth Ltd., and its European
subsidiary,  Capital Growth (Europe) Ltd.,  investment  banking firms. From 1990
until 1991,  Mr. Arbib headed the Italian desk for Eurobond  sales at Prudential
Bache Securities (UK) Ltd.

Howard E. Chase has served as a Director of the Company  since 1971, as Chairman
of the Board and  Secretary of the Company until  September  1999 and as Company
counsel  from 1971 until  September  1995 and as President  and Chief  Executive
Officer of the Company from October 1995 to March 1998. He is also  President of
Carret  Holdings,  Inc.,  an asset  management  company.  He has also  served as
Vice-President  of the Company from 1986 to October  1995; a partner of Morrison
Cohen  Singer &  Weinstein,  LLP from  April 1984 until  September  1995;  and a
director  of  Thoratec  Corporation,  a  Nasdaq-traded  company,  since 1987 and
International Diamalt Co., Ltd., a U.K. based company.

Gianni  Bulgari was  Chairman of the Board of FILA  Holdings,  S.p.A.,  maker of
sportswear,  from 1989 until 1998.  From 1966 until 1987 he served as a Chairman
of the Board and Chief  Executive  Officer of "BULGARI," a family-owned  jewelry
business.

Duncan  Chapman  has been a  principal  at Butler,  Chapman & Co., a private New
York-based investment banking firm for more than the past five years.

Andrea Della Valle has served as Executive  Director for Lehman Brothers (Milan)
since  1988.  From 1986 until  1988 he served as  director  for Lehman  Brothers
(Switzerland).

Mark B.  Segall  has been a  partner  at Kramer  Levin  Naftalis  & Frankel  LLP
("Kramer  Levin"),  a New York law firm for more  than the past five  years.  In
October  1999,  he became a Senior Vice  President  and the  General  Counsel at
Investec Ernst & Company.  Kramer Levin  represented the Company in its December
1999 Debenture offering,  and since that time has rendered legal services to the
Company on request. Until the end of September 1999, Kramer Levin provided legal
services to Gianni Bulgari in connection  with the  Settlement  Agreement by and
among the Company, Mark Hauser, Gianni Bulgari,  Howard Chase, Emanuel Arbib and
William Spier.  Prior to that,  Kramer Levin provided advice to Ixion LDC (which
was  controlled by Gianni  Bulgari and Emanuel  Arbib),  an affiliate of Tamarix
Investors LDC, an affiliate of Mark Hauser,  Gianni  Bulgari,  Emanuel Arbib and
William Spier.

The Board of  Directors  established  an Audit  Committee  in 1995,  which until
December 6, 1999  consisted of Howard E. Chase and Deborah S. Novick.  The Audit
Committee is charged with the  responsibility  to review the  performance of the
independent  accountants  as auditors  for the  Company,  discuss and review the
scope and the fees of the prospective annual audit, review with the auditors the
corporate accounting practices and policies and recommend to whom reports should
be submitted  within the Company,  review


                                      -86-
<PAGE>

their  final  report  with  the  auditors,  review  with  the  auditors  overall
accounting and financial  controls,  and be available to the auditors during the
year for consultation purposes. In addition, the Audit Committee is charged with
conducting an appropriate review of all related party transactions on an ongoing
basis and a review of potential  conflict of interest  situations.  The Board of
Directors has  established a  Compensation  Committee  which is charged with the
responsibility  to  review  and  make  recommendations  to the  Board  regarding
salaries,  compensation and benefits of executive  officers and key employees of
the Company.  All of the current  members of the Board of Directors  attended at
least 75% of the meetings held in each of 1998 and 1999.

Non-employee  directors are  compensated for their services as such, at the rate
of $4,000 per year.

Each of Messrs.  Chase and Hauser is a director of  Centerpoint  Corporation  an
affiliate  of the Company and a company  with a class of  securities  registered
pursuant to Section 12 of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"). None of the other above-described persons is a director of such
a company  or of any  company  registered  as an  Investment  Company  under the
Investment Company Act of 1940.

The  following  persons were  Directors of the  Registrant  from January 1, 1999
through  December  6,  1999,  but  were  not  re-elected  as  Directors  at  the
Registrant's Annual Meeting of Shareholders held on December 6, 1999:

    Name                   Age       Position
    ----                   ---       --------
    William Spier          66        Director
    Mario Tozzi-Condivi    76        Director
    Deborah S. Novick      37        Director
    Albino Collini         59        Director and member of the Executive
                                      Committee
    Giovanni Caronia       60        Director
    Nicola Caiola          75        Director

William Spier became a Director of the Company on May 2, 1997 upon  consummation
of the  Tamarix/Finprogetti  Acquisition Agreement and served as Chairman of the
Board until March 1998.  From May 1991 until September 1996, he was chairman and
chief executive  officer of DeSoto,  Inc., a manufacturer of household  cleaners
and detergents. DeSoto was acquired by Keystone Consolidated Industries, Inc., a
Texas-based  manufacturer  of steel  and wire  rods,  of  which  Mr.  Spier is a
director.  Mr. Spier is also currently the chairman of the board of directors of
Geotek Communications,  Inc., a wireless  telecommunications company, and acting
chief  executive  officer and a director of Integrated  Technology  USA, Inc., a
computer  peripheral and  telecommunications  device and software company.  From
1982 until 1989,  Mr. Spier was a private  investor and retired as Vice Chairman
of Phibro-Salomon, Inc. in 1982.

Mario  Tozzi-Condivi  served as a  Director  of the  Company  from 1993  through
December  1999,  and served as Vice  Chairman of the Company  from  October 1995
until March 1998.  He has also served as Director of Moto Guzzi since July 1995;
President of Maserati Automobiles Incorporated, the Company's former subsidiary,
from February 1989 until 1996; Chairman of the Board of Maserati U.K. Ltd., 1986
to


                                      -87-
<PAGE>

1987;  and  has  been  an  independent   consultant  to  automobile   importers,
distributors and dealers in England,  Italy,  Singapore and South Africa,  since
1984.

Deborah S. Novick has been Vice President  Investment Banking for GKN Securities
Corp. for more than the past five years. She is also a director of Netplex Group
Inc., a Nasdaq traded networked  information  systems  company,  and of Dalewood
Associates, Inc., the corporate general partner of Dalewood Associates, L.P., an
investment  partnership.  She became a Director of the Company on  September  7,
1997 and served as a Director through December 1999.

Albino  Collini  served as a Director of the Company from 1995 through  December
1999, and Executive Vice  President and Chief  Operating  Officer of the Company
from October  1995 until March 1998.  He also served as a Director of Moto Guzzi
since July 1995;  founder and President of T.I.M. and  predecessors  since 1987;
Managing  Director of Finprogetti from July 1995 until May 1996; and Director of
Finprogetti International Holding, S.A. since October 1993.

Nicola Caiola became a Director of the Company on May 2, 1997 upon  consummation
of  the  Tamarix/Finprogetti   Acquisition  Agreement.  He  has  been  the  sole
shareholder, chairman and Managing Director of Sefin-Services Financiers S.A., a
Swiss private financial  consulting firm in the mergers and acquisitions  field,
since 1979.

Giovanni  Caronia  became a Director  of the  Company in June 1997 and served as
Chairman  of the Board of  Finprogetti  since July 1996.  He served as  Managing
Director or Eurotecnica  S.p.A. (a holding company operating in different fields
such as engineering and contracting,  real estate, financing) from March 1981 to
October  1996,  when he was  appointed  Chairman  of the  Board  of  Eurotecnica
Contractors and Engineers  S.p.A. He has also served as Chairman of the Board of
A.S.T.  S.p.A.,  a  manufacturer  of  valves,  since May  1985,  as  Auditor  of
Assocapital S.p.A., an investment company,  since September 1985, as Director of
Caio Co. N.V. (Curacao, Netherlands) from May 1992 to November 1995, as Director
of Eascon S.p.A., a process control software development company, from September
1989 to May 1996, as Director of Etiam S.r.l.  since  December 1994, as Director
of Eurotecnica  USA Inc.  (Chicago) for over fifteen years,  as Director of Euro
P.A.  S.r.l.  from  October  1991 to October  1994,  as Chairman of the Board of
Fiblog S.A., a  Luxembourg  based  holding  company,  since July 1990,  as Chief
Executive  Officer of Fiborg S.p.A.  since April 1993, as Director of Indograsco
(Santo Domingo) since March 1988, as Auditor of Iniziativa  S.r.l.  from 1991 to
1992, as Director of Sacit S.p.A.,  a high technology air  conditioning  systems
manufacturer,  since December  1991, as Director of Savon Holding  Participation
B.V.  (Amsterdam,  Holland) from July 1990 to July 1997, and as Auditor of Tegia
since June 1996.

Each of Mr.  Spier and Ms.  Novick is a  director  of a company  with a class of
securities  registered  pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). None of the other above-described persons
is a director of such a company or of any company  registered  as an  Investment
Company under the Investment Company Act of 1940.


                                      -88-
<PAGE>

Executive Officers

                                             Position with Company and Business
     Name                             Age    Experience During Past Five Years
     ----                             ---    ---------------------------------
     Mark S. Hauser (1)...........
     Howard Chase (1) ............
     Emanuel Arbib (1) ...........

     (1)  Information  relating to the ages, positions with the Company and past
          business experience of Messrs.  Hauser,  Arbib and Chase, is set forth
          above under  "Directors."  All executive  officers will serve in their
          respective capacities in accordance with the forms of their employment
          agreements,  until  their  successors  shall  have  been  elected  and
          qualified.

ITEM 11. EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following  table shows,  for the three fiscal years ended December 31, 1999,
1998 and 1997 the cash and certain other  compensation paid or accrued for those
years to the  President  of the  Company  and each of the other five most highly
compensated  executive  officers of the Company other than the  President  whose
aggregate annual salary and bonus exceeded $100,000 in the Company's fiscal year
ended  December 31, 1999 ("Named  Executive  Officers") in all the capacities in
which they served:


                                      -89-
<PAGE>

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                          Long-Term
                                                                                     Compensation Awards
                                                                                     -------------------
                                                 Annual             Other
                                              Compensation          Annual          Restricted         Options/
Name and Principal Position          Year  Salary (Lit./$)(1)    Compensation          Stock          SARs(#)(7)
---------------------------          ----  ------------------    ------------          -----          ----------
<S>                                  <C>   <C>                    <C>                <C>                <C>
Mark S. Hauser(2)                    1999  $235,000               $90,000
President and Chief Executive
Officer since March 1998             1998  $106,667                                  $552,000           132,000


Emanuel Arbib(3)                     1999  $125,000               $250,000
Chief Financial Officer since March
1998                                 1998  $66,667                -0-                $301,172             -0-


Howard E. Chase                      1999  $145,000               -0-                -0-                  -0-
President and Chief Executive
Officer from October, 1995 until
March, 1998                          1998  $250,000               -0-                -0-                  -0-

                                     1997  $400,313               -0-                -0-                  -0-

Albino Collini(4)                    1999  Lit.267,000,000        -0-                -0-                  -0-
Executive Vice President from              ($138,773)
October, 1995 until March 1998
                                     1998  Lit. 381,150,000/      Lit.82,800,000/    -0-                  -0-
                                           ($230,163)             ($50,000)

                                     1997  Lit. 410,197,000/      Lit.88,450,000/    -0-                  -0-
                                           ($247,704)             ($53,412)
Mario Tozzi-Condivi(5)               1999  $96,238                $69,000            -0-                  -0-
Vice Chairman from October, 1995
until March 1998                     1998  Lit.199,830,000/       Lit. 89,813,999/   -0-                  -0-
                                           ($120,670)             ($54,235)
                                     1997  Lit. 316,209,000/                         -0-                  -0-
                                           ($190,948)

Nick Speyer(6)                       1999  $160,000               -0-                -0-                  -0-
Chief Financial Officer of
Centerpoint Corporation              1998  $113,464               -0-                -0-                  -0-

                                     1997   $103,000              -0-                -0-                  -0-
Domenico Costa                       1999  Lit.267,000,000        -0-                -0-                  -0-
President of T.I.M.                        ($138,773)
                                     1998  Lit. 412,000,000/      -0-                -0-                  -0-
                                           ($248,792)
                                     1997  Lit. 240,000,000/      -0-                -0-                  -0-
                                           ($144,144)
</TABLE>

-----------
     The aggregate amount of all perquisites and other personal benefits paid to
     each of the Named Executive  Officers did not exceed the greater of $50,000
     or 10% of such Officer's salary.

(1)  Lira amounts  have been  converted to dollars at the rate of 1,924 Lira per
     U.S. Dollar, the approximate rate in effect on December 31, 1999.

(2)  1999  compensation  includes cash  compensation  received from  Centerpoint
     Corporation (formerly Moto Guzzi Corporation) , a subsidiary of the Company
     and the value office space provided to Mr. Hauser in 1999.


                                      -90-
<PAGE>

(3)  Other Annual  Compensation  for Mr. Arbib in 1999  includes the $250,000 5%
     Convertible  Debenture  issued in connection  with Mr.  Arbib's  efforts in
     placing $6,000,000 of such Debentures in 1999.

(4)  Does not  include  Lit.  376,767,000  ($227,516)  received  in respect of a
     certain T.I.M.  engagement predating the Company's acquisition of T.I.M. as
     part of the Finprogetti Acquisition.

(5)  The above amounts plus expenses were paid to Como Consultants  Limited,  an
     Isle of Jersey company, which provides the Company with the services of Mr.
     Tozzi-Condivi.  No other form of compensation  was paid to Como Consultants
     or to Mr. Tozzi-Condivi.

(6)  Compensation   includes  cash   compensation   received  from   Centerpoint
     Corporation (formerly Moto Guzzi Corporation) , a subsidiary of the Company
     and other subsidiaries of the Company.

(7)  See "Options/SARs Repricing, " below.

Employment Contracts

On March 18,  1998,  the Board of  Directors  approved a three  year  employment
contract  commencing  May 1,  1998 with Mark S.  Hauser as  President  and Chief
Executive Officer, a three year consulting  contract commencing May 1, 1998 with
Emanuel M. Arbib as Chief Financial Officer and a one year,  renewable agreement
commencing May 1, 1998 with Tamarix Capital Corporation, a company controlled by
Mr.  Hauser,  which  supercedes  a prior  existing  contract,  for  provision of
merchant  banking  services to the Company.  The  employment  agreement with Mr.
Hauser,  which was amended on July 15, 1999, and the  consulting  agreement with
Mr.  Arbib,  which was amended on July 6, 1999,  has been  further  amended,  in
connection with the Settlement Agreement as described below.

The terms of Mr.  Hauser's  employment  contract  with the  Company  provide for
compensation  of US$ 160,000 per year and  provided  for the issuance of 130,000
shares of the  Company's  Common Stock with  contractual  transfer  restrictions
lapsing as to one-third  thereof on each of December 31, 1998, 1999 and 2000 and
130,000  options  exercisable  at $5.00 per share.  Pursuant  to the  Settlement
Agreement,  Mr. Hauser has agreed that his compensation will terminate upon, and
as of, any liquidation of the Company.

Cash  compensation  under the contract with Tamarix Capital  Corporation and the
employment  agreement  with Mr.  Hauser  was  originally  payable  only when the
Company had sufficient cash to meet its financial  commitments for the following
12 months,  and no cash compensation under the agreements was paid in 1998. From
March 1999 through  April 2000 Mr.  Hauser was engaged as Executive  Chairman of
Moto Guzzi at a salary of US$ 90,000 per year plus reimbursement of expenses and
the grant of stock options.  Mr. Hauser's  employment  agreement with Moto Guzzi
was  terminated in April 2000 in  connection  with the proposed sale to Aprilia.
Mr. Hauser was paid $169,500 in severance in connection with such termination of
his employment agreement. Mr. Hauser continues to serve as Executive Chairman of
Centerpoint without compensation.

Under  the  terms of the  consulting  agreement  with Mr.  Arbib,  Mr.  Arbib is
entitled to  compensation  of US$  100,000  per year and the  issuance of 75,000
shares of the  Company's  Common Stock with  contractual  transfer  restrictions
lapsing as to one-third  thereof on each of December 31, 1998, 1999 and 2000 and
65,000  options  exercisable  at $5.00 per share.  Cash  compensation  under the
employment   agreement  was  originally  deferred  and  accrued,   and  no  cash
compensation  under the  agreement  was paid in 1998.  Those  restrictions  were
satisfied in 1999 and the Company commenced payment of the accrued  compensation
in 1999.  Pursuant to the  Settlement  Agreement,  Mr. Arbib has agreed that his
compensation will terminate upon, and as of, any liquidation of the Company


                                      -91-
<PAGE>

From March 1999  through  April 2000 Mr.  Arbib was also  engaged as a financial
consultant  to  Moto  Guzzi  at   compensation  of  US$  30,000  per  year  plus
reimbursement  of  expenses  and the  grant of  stock  options.  The  employment
agreement  with Mr. Arbib was  terminated in April 2000 in  connection  with the
proposed  sale to Aprilia.  Mr. Arbib was paid $37,900  severance in  connection
with such termination.

Messrs.  Howard E. Chase,  Albino Collini and Domenico Costa had been engaged as
executive  officers of the Company or one of its  subsidiaries  under multi-year
employment  agreements  which  were  terminated  by mutual  agreement  effective
December  1, 1997.  Messrs.  Collini and Costa  continue  to serve as  executive
employees on an at-will  basis,  each at a base salary of Lit. 267 million.  Mr.
Chase was also engaged as Special Counsel to Moto Guzzzi at annual  compensation
of US$ 60,000 plus reimbursement of expenses. This arrangement was terminated in
September  2000 in connection  with the sale of the Moto Guzzi  operations.  Mr.
Chase  was paid US$  51,400  in  connection  with such  termination.  Mr.  Chase
continues to serve as a director of the Company, without compensation.

The  compensation of the Named Executive  Officers in 1999 was the result of the
negotiated employment agreements described above and not the implementation of a
compensation policy.

Stock Option Plans

In order to attract and retain employees,  the Board of Directors  adopted,  and
the shareholders  approved,  the 1995 Non-Qualified  Stock Option Plan ("1995 NQ
Plan") and the 1995 Stock Option Plan for Outside  Directors  ("1995  Directors'
Plan").  The  1995  NQ  Plan  and the  1995  Directors'  Plan  are  referred  to
collectively  as the "1995 Plans." Options to purchase an aggregate of 2,150,000
shares of Common  Stock  (subject  to  antidilution  adjustments  under  certain
circumstances) may be awarded under the 1995 Plans.

1995 NQ Plan

The 1995 NQ Plan is administered by the Compensation  Committee.  Members of the
committee are not entitled to receive grants under the 1995 NQ Plan. The maximum
number of options which any optionee may receive is 350,000 per calendar year.

All officers and employees who, in the opinion of the committee have made or are
expected to make key contributions to the success of the Company are eligible to
receive  options under the Plan.  The committee  may  determine,  subject to the
terms of the 1995 NQ Plan,  the persons to whom  options  will be  awarded,  the
number of shares and the specific terms of each option granted. Officers and key
employees of companies  acquired or operated by the Company or its  subsidiaries
may also be option recipients.  Specific performance or other criteria governing
the  granting of the  remaining  options  have not yet been  established  by the
committee. Options may not be granted at an exercise price below the fair market
value on the date of grant.

If  an  option   expires   unexercised,   is  surrendered  by  the  grantee  for
cancellation,  is  canceled  or  otherwise  becomes  unexercisable,  the  shares
underlying the grant will again become available for the granting of new options
under the 1995 NQ Plan.

The plan is subject to amendment by a majority of those  members of the Board of
Directors  who are  ineligible  to  receive  options,  but the Board may not (i)
change the total number of shares of stock available for options;  (ii) increase
the  maximum  number of options;  (iii)  extend the  duration of the plan;


                                      -92-
<PAGE>

(iv)  decrease the minimum  option price or  otherwise  materially  increase the
benefits  accruing  to  recipients;  or (v)  materially  modify the  eligibility
requirements.

1995 Directors' Plan

All non-employee directors, who were never previously employed by the Company or
eligible to receive  options,  annually  receive,  on each January 2, options to
purchase 5,000 shares under the 1995 Directors' Plan. Newly appointed or elected
non-employee directors receive a grant upon taking office.

A total of 20,000  options  under the plan were  granted  in 1999 and 1998,  and
15,000  options were granted in January 1997 and 18,751  options were granted in
the  balance  of 1997.  Options  granted in 1999 are  exercisable  at $4.625 per
share,  options granted in 1998 are  exercisable at $5.4375 per share,  and 1997
options  were  exercisable  at $9.313 per share.  The January  1997 options were
forfeited  later in 1997 as a result of changes in the  composition of the Board
of  Directors.  The 18,751  options  granted in 1997 to incoming  members of the
Board were granted at exercise  prices ranging  between $5.125 and $8 per share.
Options to be  granted  in future  years  will be  exercisable  at the  reported
closing  price of the stock on January 2 of the year of grant.  Options  are not
exercisable  until the later of  January  2 of the year  succeeding  the date of
grant or six months following the date of grant.

The authority to grant options under the 1995  Directors' Plan will terminate on
the earlier of December  1, 2005 or upon the  issuance of the maximum  number of
shares of stock reserved for issuance under the plan,  which is 150,000,  91,249
of which remained available for issuance on Decvember 31, 1999.

The 1995 Directors'  Plan may be amended by the Board of Directors'  except that
provisions thereof  concerning  granting of options may not be amended more than
once every six months unless  necessary to comply with the Internal Revenue Code
or the Employee Retirement Income Security Act.


                             STOCK OPTION REPRICING

In 1998, the Company cancelled stock options previously granted to the following
Named Executive  Officers,  and issued new options at an exercise price of $5.00
per share, the then current market price of the Company's Common Stock:


                  Name                Cancelled    Exercise Price    Granted
             ----------------       ------------  ----------------  ---------

             Howard E. Chase           300,000        $12.26         140,000

             Albino Collini            150,000        $12.26          50,000

             Mario Tozzi-Condivi       200,000        $12.26          50,000

             Domenico Costa             60,000        $12.26          40,000


                                      -93-
<PAGE>

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

The following  table  summarizes  the number of  exercisable  and  unexercisable
options  held by the Named  Executive  Officers at the end of 1999.  None of the
unexercised options held by the Named Executive Officers at the end of 1999 were
exercisable  at a price  equal to or less than the  market  price of the  Common
Stock on the date of issuance.

<TABLE>
<CAPTION>
                                                             Number of Shares Underlying Unexercised
                                                                Options/SARs at Fiscal Year-End
                                     Number of Shares        ---------------------------------------
              Name                Acquired on Exercise(1)       Exercisable          Unexercisable
              ----                -----------------------       -----------          -------------
<S>                                         <C>                   <C>                <C>
Mark S. Hauser....................           -                    130,000
Emanuel Arbib.....................           -                     65,000
Howard E. Chase...................           -                    140,000
Mario Tozzi Condivi...............           -                     50,000
Albino Collini....................           -                     50,000
Domenico Costa....................           -                     40,000
Nick Speyer ......................           -                     40,000
-----------
</TABLE>

(1)  None of the Named Executive Officers exercised any stock options in 1999.



Compensation of Directors

Non-employee  members of the Board of Directors of the Company will each be paid
$4,000 per year by the Company for services  rendered in their  capacity as such
and will receive automatic grants of stock options. See "Stock Option Plans-1995
Directors' Plan." Officers of the Company or its subsidiaries who are members of
the Board of Directors of the Company and  employees  receive  compensation  for
services  rendered in their  capacities as officers only, and may be entitled to
discretionary grants of stock options.

Compensation Committee Interlocks and Insider Participation

The Company's Board of Directors established a compensation committee on October
28, 1995. The Company and each of its subsidiaries have, to date,  addressed all
compensation issues through its or their respective boards of directors.  Of the
present members of the Board of Directors, Messrs. Hauser, Arbib, Chase, Collini
and Tozzi-Condivi  served as executive  officers and/or employees of the Company
and/or one or more of the Company's subsidiaries in 1999.

Each of Messrs. Tozzi-Condivi,  Chase, Collini, Hauser , Arbib and Spier engaged
in  transactions  with the  Company  during  1999 in  addition  to  serving as a
director and/or officer of the Company.  See "Certain  Relationships and Related
Transactions" below.


                                      -94-
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Principal Security Holders

The following  table sets forth certain  information  concerning  the beneficial
ownership of Common Stock as of June 28, 2001,  the date of this report,  by (i)
each  person who is known by the Company to own  beneficially  5% or more of the
Common Stock, (ii) each of the Company's directors and Named Executive Officers,
and (iii) all  directors  and executive  officers as a group.  Unless  otherwise
indicated,  each person in the table has sole voting and  investment  power with
respect to the shares shown.

<TABLE>
<CAPTION>
                                                          Number of Shares          Percentage
       Name and Address of Beneficial Owner*             Beneficially Owned      Beneficially Owned
       ---------------------------------------------------------------------------------------------
       <S>                                                <C>                          <C>
       Mark S. Hauser ..................................  1,571,866(1)(2)               32.2
       Gianni Bulgari ..................................  1,468,827(2)(3)               32.6
       c/o Gruppo G.B. Bulgari
       via M. Mercati, 17A
       00187 Rome, Italy
       Emanuel Arbib ...................................    475,972(2)(4)               10.7
       Howard E. Chase .................................    150,000(5)                   2.8
       Albino Collini...................................    173,972(6)                   3.5
       Mario Tozzi-Condivi..............................     50,000(7)                   1.1
       Domenico Costa...................................     40,000(7)                  **
       Nick Speyer .....................................     40,000(7)                  **
       Duncan Chapman                                         5,000                     **
       Andrea della Valle                                     5,000                     **
       Mark B. Segall                                         5,000                     **

       All directors and officers as a group ...........  3,985,637                     71.2
</TABLE>

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

*    Beneficial  ownership is  determined  in  accordance  with the rules of the
     Securities  and  Exchange   Commission  (the  "COMMISSION")  and  generally
     includes voting or investment  power with respect to securities.  Shares of
     Common Stock  issuable  upon the exercise of options or warrants  currently
     exercisable,  or  exercisable  or  convertible  within 60 days,  are deemed
     outstanding  for computing the  percentage  ownership of the person holding
     such options or warrants but are not deemed  outstanding  for computing the
     percentage ownership of any other person.

**   Less than one percent.

(1)  Includes  warrants to purchase  500,000  shares owned of record by Azzurra,
     Inc., a Delaware corporation controlled by Mr. Hauser, 682,579 shares owned
     of record by Tamarix  Investors,  LDC, a Cayman  Islands  Limited  duration
     company  controlled  by Mr.  Hauser and  presently  exercisable  options to
     purchase 137,917 shares.

(2)  As part of a reporting  group,  Mark Hauser,  Tamarix  Investors,  Azzurra,
     Gianni Bulgari and Emanuel Arbib report  beneficial  ownership of 3,516,665
     shares, consisting of 2,062,831 shares and warrants and options to purchase
     an additional 1,477,834 shares. Such group constitutes beneficial ownership
     of  approximately  62.8%  of all  shares  outstanding  on a  diluted  basis
     pursuant to Regulation 13D-G under the Securities  Exchange Act of 1934, as
     amended.

(3)  Includes warrants to purchase 381,067 shares from the Company.


                                      -95-
<PAGE>

(4)  Includes  warrants to purchase  264,563  shares owned of record by entities
     controlled  by Mr. Arbib and options  held by Mr. Arbib to purchase  72,917
     shares.

(5)  Includes 140,000 presently exercisable options.

(6)  Includes 50,000 presently exercisable options.

(7)  Represents presently exercisable options.

Item 13--Certain Relationships and Related Transactions

Settlement Agreement and Charter Amendments

On March 9, 1999,  Tamarix  distributed  to  entities  controlled  by two of its
principals,  Gianni Bulgari and Emanuel Arbib, 634,921 shares of common stock of
the Company  theretofore  owned by Tamarix pursuant to a December 1998 amendment
to  an  agreement  among  the  Tamarix  shareholders.  In  connection  with  the
resolution  of certain  disputes  between Mr.  Bulgari and the Company,  Messrs.
Hauser,  Bulgari,  Arbib, Spier and Chase entered into an agreement on September
21, 1999 (the  "Settlement  Agreement ") with the Company  providing that, among
other  things,  the Company  would  propose for election a new slate of director
nominees  and would vote their  shares of the Company in support of the election
of such persons and certain  proposed  amendments to the  Company's  Articles of
Incorporation.

The parties to the Settlement  Agreement  beneficially  owned, in the aggregate,
approximately  58.4% of the  outstanding  shares of Common Stock of the Company.
See "Principal  Security Holders." The Settlement  Agreement was approved by the
Board  of  Directors  after  determining  that  it  was in  the  Company's  best
interests.

The amendments,  which were intended to eliminate the governance  changes in the
Articles of  Incorporation  which had been  adopted in 1997 to assure  Tamarix's
continued   participation   in  the   governance  of  the  Company  were  deemed
inconsistent  with the  terms of the  Settlement  Agreement.  As a result of the
amendments  it is  anticipated  that it may be  easier  to  effect a change in a
majority of the members of the Board of Directors.  The amendments are described
above in "Matters Submitted to a Vote of Security Holders".

The Company's  By-Laws were also amended to eliminate all amendments  adopted in
accordance with the Inducement Agreement granting special rights to Tamarix.

Loans to the Company by Tamarix and Bulgari

On October 1, 1998,  two bridge loans were made to the Company by Tamarix and by
Mr.  Bulgari to provide  financing to Moto Guzzi Corp.  in  anticipation  of the
consummation  of the merger with North Atlantic  Acquisition  Corp. (See Notes 1
and 11). The loans were of Lit.  3,000 million and  US$2,000,000,  respectively,
and bore  interest at 10% and a flat  commission of 1%. Each loan was secured by
500,000 shares of Moto Guzzi Corp.  common stock  (207,337  shares of Moto Guzzi
Corporation,  following the merger with North Atlantic Acquisition Corp.). As an
inducement  for the  loans  to be  made,  the  Centaurus  warrants,  which  were
exercisable  at $6.00 through May 1, 2000 were extended  through May 1, 2002 and
the exercise price reduced to $5.50.  The closing price of the Company's  common
stock  had been at $5.00 or  below in the  preceding  month  and was at $4.00 on
October 1, 1998 when the loans were made. The


                                      -96-
<PAGE>

Company sought similar financing from  unaffiliated  third parties and the terms
and conditions  above were more  favorable  than any  expressions of interest by
third parties. The Lit. 3,000 million loan was repayable to Mr. Bulgari on March
31,  1999,  and was  extended to April 30, 1999 and was repaid in May 1999.  The
US$2,000,000  loan was repayable on completion of the merger of Moto Guzzi Corp.
into North Atlantic Acquisition Corporation, which occurred on March 5, 1999 and
was  extended,  with part  payments of $300,000 in May and August 1999,  and the
balance repaid in November 1999.

Loans by Spier, Fingerhut Affiliates and the Company to Moto Guzzi

In August  1999,  William  Spier,  a director  of the  Company  from May 1997 to
December  1999 and  director of Moto Guzzi  Corporation  from March 1999 made an
advance of $250,000 to the Company's Moto Guzzi subsidiary.  Entities associated
with Mr. Barry Fingerhut,  a Director of Moto Guzzi Corporation from March 1999,
also advanced  $1,000,000 in 1999. The advances,  together with advances to Moto
Guzzi  Corporation  by the Company in 1999 and in 2000 and funds  raised from an
Italian institutional  investor, were converted into Series B Preferred Stock of
Moto Guzzi Corporation in February 2000.

Issuance of 5% Debentures and Lending of Proceeds

On  December  28,  1999,  the  Company  issued US$ 6 million  of 5%  Convertible
Debentures Due December 28, 2001 to provide funds for Moto Guzzi Corporation and
for general  corporate  purposes.  In connection  with raising these funds,  the
Company issued a $250,000 5% Convertible  Debenture on the same terms as for the
$6 million raised to Emanuel Arbib, joint-CEO of the Company, for his efforts in
connection  with such  placement.  The Company also paid  $360,000 to an Italian
intermediary  and $60,000  plus $26,106 for legal  expenses to Investec  Ernst &
Company.  Mark Segall, a director of the Company is an officer of Investec Ernst
& Company.

Issuance and Redemption of Series B Preferred Stock

On February 25, 2000,  Moto Guzzi  Corporation,  the  Company's  majority  owned
subsidiary,  issued 123,500  shares of a new Series B Preferred  Stock to Fineco
Sim S.p.A.,  an Italian  institutional  investor  ("Fineco"),  and affiliates of
Fineco,  the Company,  OAM, S.p.A.,  a majority-owned  subsidiary of the Company
("OAM"),  and  William  Spier,  a director  of Moto Guzzi and the  Company,  and
Wheatley Partners LP and Wheatley International Partners LP, each of which is an
affiliate of Barry  Fingerhut,  a director of Moto Guzzi, for $100 per share (an
aggregate price of $12,350,000). The shares were issued as follows (i) 60,000 to
Fineco and its affiliates for cash,  (ii) 35,000 shares to the Company for cash,
(iii)  16,000 to OAM in  repayment  of  outstanding  loans  due to OAM,  (iv) an
aggregate  of 10,000  shares to Wheatley  Partners  and  Wheatley  International
Partners,  in repayment of loans made by them to Moto Guzzi, and 2,500 shares to
Mr. Spier in repayment of loans made by him to Moto Guzzi.

In July 2000 Moto Guzzi  entered into an  agreement  with the Series B preferred
stockholders  in which it agreed  to  redeem  the  Series B  preferred  stock by
September 30, 2000, in exchange for their  agreement not to convert their Series
B preferred stock into Class A common stock prior to that date.

Moto Guzzi closed on the sale of its operating subsidiaries on September 6, 2000
and in the last  week of  September  2000 it  redeemed  in full all  outstanding
shares of Series B  Preferred  Stock  for a price  equal to


                                      -97-
<PAGE>

$100 per share plus accrued dividends thereon,  for a total of approximately US$
12.6 million  (approximately  Lit.  28,300  million at the  prevailing  exchange
rate).

April 14th Share Purchase Agreement

The Share Purchase Agreement  providing for the sale of Centerpoint's  operating
subsidiaries to Aprilia (described below) contained a condition that OAM, S.p.A.
(the  holder  of  approximately  58% of the  issued  and  outstanding  shares of
Centerpoint's  Class A common stock,  and a subsidiary of the Company)  agree to
vote its capital  stock for the sale,  and by letter to Aprilia  dated April 14,
2000, OAM agreed, among other things, to vote its shares for the sale.

In order to induce OAM to deliver its letter to Aprilia, Centerpoint agreed with
OAM and the Company by letter dated April 14, 2000 that, among other things,  it
would pay IMI's fees in  connection  with the sale.  The April  14th  letter was
amended on June 8, 2000 to provide,  among other things, that Centerpoint would,
as promptly as practicable  after the closing of the sale, but in no event later
than 90 days following the closing,  hold a meeting of  stockholders to consider
and vote upon a proposal to liquidate all of  Centerpoint's  assets and dissolve
itself.  The date for  proceeding  to  propose a  liquidation  was  subsequently
extended by the Company and OAM to July 15, 2001.

In connection  with the sale,  Aprilia  required the  terminations of certain of
Moto Guzzi's  executives  and further  required that Moto Guzzi pay all costs of
such terminations. Accordingly, Moto Guzzi agreed to pay severance to two of its
directors,  Mark S. Hauser and Howard E. Chase, and to Emanuel Arbib, one of its
former directors, of $169,500,  $51,400 and $37,900,  respectively,  in exchange
for termination of their  employment and consulting  agreements with Moto Guzzi.
See "Subsequent Events -- Execution and Delivery by Moto Guzzi of Share Purchase
Agreement and -- "Centerpoint's (then Moto Guzzi) Agreement with the Company and
OAM to present a liquidation proposal to its stockholders  following the Closing
of the sale of its operations to Aprilia" for further details.

Centerpoint Loan;  Early payoff of the Company's 5% Convertible Debentures

The Company's 5% Convertible  Debentures in an aggregate amount of US$ 6,250,000
were scheduled to come due in December  2001. On June 13, 2001 the Company,  OAM
and Centerpoint  entered into the Centerpoint Loan Agreement  wherein subject to
the terms and certain  conditions set forth therein  Centerpoint  agreed to lend
the Company  $4,200,000.  On June 13, 2001 Centerpoint made the Centerpoint Loan
and on June  15,  2001  the  Company  paid  the  holders  of  $6,000,000  of the
Debentures  $4,207,500 in cash, which the Debenture  holders accepted as payment
in full on the Debentures  (including  past due interest),  representing a 31.5%
discount from their face value. The Centerpoint Loan bears interest at a rate of
5 % per annum, is repayable in full on the earlier of June 13, 2002 and the date
on which the Company  causes or permits a  liquidation  of  Centerpoint,  and is
secured by the 300,000 shares of Centerpoint common stock currently owned by the
Company and 1,200,000 of the shares of Centerpoint  common stock currently owned
by OAM. In connection with the  Centerpoint  Loan, OAM also entered into the OAM
Guaranty wherein it guaranteed the Company's  obligations  under the Centerpoint
Loan  Agreement.  OAM's liability under the OAM Guaranty is limited to the value
of the Centerpoint shares pledged by OAM, as that term is used in the OAM pledge
agreement.


                                      -98-
<PAGE>

Centerpoint Engagement of Investec Ernst to explore Strategic Alternatives

In  June  2001,  with  the  consent  of the  Company,  Centerpoint  engaged  the
investment  banking firm of Investec  Ernst & Co. to assist  Centerpoint  in its
evaluation  of strategic  alternatives,  including  potential  acquisitions  and
investments.  Mark Segall, a Director of the Company, is a Senior Vice President
and General Counsel of Investec Ernst.

Other Transactions

Messrs.  Mark Hauser and William Spier, who became directors of the Company upon
consummation of the  Tamarix/Finprogetti  Acquisition  Agreement,  were Managing
Directors  of  Tamarix  Capital  Corporation  in 1999.  Mr.  Hauser  became  the
President and Chief Executive  Officer of the Company in March 1998 at an annual
salary of  $160,000.  In  connection  with his  engagement,  in March 1998,  the
Company also issued to Mr. Hauser 130,000 shares of Common Stock. The consulting
services  of Mr.  Emanuel  Arbib,  who,  with  Messrs.  Hauser  and  Spier,  was
affiliated with Tamarix in 1999, was engaged by the Company in March 1998 as its
Chief  Financial  Officer  at an  annual  consulting  fee  of  US$  100,000.  In
connection with this  engagement,  in March 1998, the Company also issued to Mr.
Arbib 75,000 shares of Common Stock.

In March  1999,  pursuant  to the  merger  of the  Company's  Moto  Guzzi  Corp.
subsidiary  with and into  North  Atlantic  (See  Note 3),  Mark  Hauser  became
Executive  Chairman  and a  director  of the  merged  company,  with  an  annual
compensation  of US$  90,000  plus US$  108,000  in  respect  of the  expense of
maintaining  the U.S.  corporate  offices  for Moto  Guzzi,  and in  respect  of
handling  administrative and regulatory matters for Moto Guzzi.  150,000 options
to acquire stock of Moto Guzzi at $10.6875 were also issued to Mr. Hauser.  This
agreement was terminated in April 2000 in connection with the sale of Moto Guzzi
operations to Aprilia.

In March  1999,  pursuant  to the  merger  of the  Company's  Moto  Guzzi  Corp.
subsidiary with and into North Atlantic, Emanuel Arbib became a director of Moto
Guzzi  entered  into a  consulting  contract  to  provide  financial  consulting
services  with an annual  compensation  of US$ 90,000 and was issued  options to
acquire  30,000  shares of Moto Guzzi Common  Stock at $10.6875 per share.  This
agreement was terminated in April 2000 in connection with the sale of Moto Guzzi
operations to Aprilia.

Disposal of TIM to affiliates of Albino Collini, a Director of the Company

Effective January 1, 2000, the Company disposed of TIM, its temporary management
services  subsidiary.  TIM was  sold to two  companies  affiliated  with  Albino
Collini,  a Director of the Company  through  December 1999 for 80,000 shares of
the Company's  Common Stock with a fair value of Lit. 320 million at the date of
sale.  The Company has  recorded an  impairment  loss of Lit.  400 million as at
December  31,  1999 in respect of the  trademarks  of TIM,  to reflect  the post
year-end disposal.


                                      -99-
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Based on a  review  of the  Forms  3, 4 and 5 which  have  been  filed  with the
Securities and Exchange  Commission with respect to transactions  which occurred
in 1999, it appears that the following  officers and/or directors of the Company
did not comply with Section 16 reporting requirements:

Nicola Caiola:      as to options to purchase 5,000 shares granted in
                    January 1999;

Giovanni Caronia:   as to options to purchase 5,000 shares granted in
                    January 1999;

Deborah S. Novick:  as to options to purchase 5,000 shares granted in
                    January 1999; and

William Spier:      as to option to purchase 5,000 shares granted in
                    January 1999.

                                     PART IV

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

         (a)   (1)      Contained in Item 8 of this Report.

               (2)      Contained in Item 8 of this Report.

               (3)      Contained in paragraph (c) below.

         (b)   The Company  did not file any Current  Reports on Form 8-K
               during the three month period ending December 31, 1999.

         (c)   Exhibits.

               Exhibit No.       Description                           Page
               -----------       -----------                           ----
               3.1  Amendment  to  Restated  Articles  of  Incorporation  of the
               Company,  as amended.  Filed as Exhibit 3.1 to the Company's Form
               10-K for the year ended December 31, 1998.

               3.2 Amended and Restated  Bylaws of the Company (filed as Exhibit
               3.3 to Registration Statement on Forms S-1, Amendment No. 1, file
               No. 333-21595).

               4.3 Warrant Agreement with Warrant Certificate, each dated May 2,
               1997, with respect to 1,250,000  shares of Common Stock issued to
               Centaurus  Management  LDC  (Filed  as  Exhibits  4.1  and 4.2 to
               Current report on Form 8-K for Event Dated May 2, 1997).

               4.4 Loan Agreement  between the Company and Tamarix Investors LDC
               dated  October 1, 1998 (filed as Exhibit 4.1 to November 17, 1998
               Current Report on Form 8-K).

               4.5 Warrant  Agreement  dated October 1, 1998 between the Company
               and  Centaurus  Management  LDC (filed as Exhibit 4.2 to November
               17, 1998 Current Report on Form 8-K).


                                     -100-
<PAGE>

               4.6 Warrant  Agreement  dated October 1, 1998 between the Company
               and  Azzurra,  Inc.  (filed as Exhibit 4.3 to  November  17, 1998
               Current Report on Form 8-K).

               4.7 Warrant  Agreement  dated October 1, 1998 between the Company
               and Ixion, LDC (filed as Exhibit 4.4 to November 17, 1998 Current
               Report on Form 8-K).

               10.1 1995 Non-Qualified  Stock Option Plan (filed as Exhibit A to
               the Company's Preliminary Proxy Statement filed May 24, 1996).

               10.2 1995  Director's  Plan (filed as Exhibit B to the  Company's
               Preliminary Proxy Statement filed May 24, 1996).

               10.3  Description  of  8%  2  year  promissory  notes  issued  in
               connection with the Company's  Stock  Repurchase Plan included in
               the Company's  Schedule 13E-4 dated  September 20, 1996 (filed as
               Exhibit 10.23 to 1996 Annual Report on Form 10-K).

               10.4  Retainer   Agreement   dated  March  7,  1997  between  the
               Registrant  and  Tamarix  Capital  Corporation  (filed as Exhibit
               10.24 to  Registration  Statement on Form S-1,  Amendment  No. 1,
               file No. 333-21595).

               10.5  Inducement  Agreement  dated  April  8,  1997  between  the
               Registrant  and Tamarix  Investors LDC (filed as Exhibit 10.25 to
               Registration  Statement  on Form S-1,  Amendment  No. 1, File No.
               333-21558).

               10.6  Employment  Agreement  dated  March  25,  1998 with Mark S.
               Hauser  (filed as Exhibit  10.1 to the March 31,  1998  Quarterly
               Report on Form 10-Q).

               10.7  Novation of March 7, 1997  agreement  with Tamarix  Capital
               Corp.  (filed as Exhibit 10.2 to March 31, 1998 Quarterly  Report
               on Form 10-Q).

               10.8  Agreement  and Plan of Merger dated August 18, 1998 between
               Moto Guzzi Corp.  and North  Atlantic  Acquisition  Corp. and the
               Company  (filed as Exhibit  10.1 to  December  11,  1998  Current
               Report on Form 8-K).

               10.9 First Amendment dated December 3, 1998 to Agreement and Plan
               of  Merger  dated  August  18,  1998  (filed as  Exhibit  10.2 to
               December 11, 1998 Current Report on Form 8-K).

               10.10  Consulting  Agreement  dated March 25,  1998 with  Emanuel
               Arbib.

               21. Subsidiaries:  The Company's  significant  subsidiaries,  the
               jurisdiction   of  their   incorporation   and  nature  of  their
               respective activities is contained in this Report.


                                     -101-
<PAGE>

               27. Financial Data Schedule.

          (c)  None.

                                   SIGNATURES

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

                            TRIDENT ROWAN GROUP, INC.


August 10, 2001                      /s/ Mark S. Hauser
                                     --------------------
                                     Mark S. Hauser
                                     President and Joint Chief Executive Officer


August 10, 2001                      /s/ Emanuel Arbib
                                     -----------------------
                                     Emanuel Arbib
                                     Joint Chief Executive Officer and Chief
                                     Financial officer


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


August 10, 2001                      /s/ Emanuel Arbib
                                     -----------------------
                                     Emanuel Arbib, Director

August 10, 2001                      /s/ Howard E. Chase
                                     --------------------------
                                     Howard E. Chase, Director

August 10, 2001                      /s/ Mark S. Hauser
                                     -------------------------
                                     Mark S. Hauser, Director

August 10, 2001                      /s/ Gianni Bulgari
                                     ------------------------
                                     Gianni Bulgari, Director

August 10, 2001                      /s/ Duncan Chapman
                                     -------------------------
                                     Duncan Chapman, Director

August 10, 2001                      /s/ Andrea Della Valle
                                     --------------------------
                                     Andrea Della Valle, Director

August 10, 2001                      /s/ Mark B. Segall
                                     -------------------------
                                     Mark B. Segall, Director


                                     -102-
<PAGE>


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

(a)  1.  FINANCIAL   STATEMENTS  -  The  financial   statements  listed  in  the
     accompanying  Index to  Consolidated  Financial  Statements  and  Financial
     Statement  Schedules are filed as part of this annual report and such Index
     to Consolidated  Financial  Statements and Financial Statement Schedules is
     incorporated herein by reference.

     2. FINANCIAL  STATEMENT SCHEDULES - The financial statement schedule listed
     in  the  accompanying  Index  to  Consolidated   Financial  Statements  and
     Financial  Statement  Schedules is filed as part of this annual  report and
     such Index to  Consolidated  Financial  Statements and Financial  Statement
     Schedules is incorporated herein by reference.

     3. EXHIBITS - The exhibits listed on the accompanying  List of Exhibits are
     filed  as part  of  this  annual  report  and  such  List  of  Exhibits  is
     incorporated herein by reference.


                                     -103-
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES
                               (Item 14(a)1 and 2)

                                                                          Page
                                                                          ----

        Report of Independent Public Accountants                            51

        Consolidated Balance Sheets - Assets                                52

        Consolidated Balance Sheets - Liabilities and                       53
             Shareholders' Equity (Deficit)

        Consolidated Statements of Operation                                54

        Consolidated Statements of Changes in the Shareholders'             55
             Equity (Deficit)

        Consolidated Statements of Cash Flows                               56

        Notes to Consolidated Financial Statements                          58

All other schedules are omitted since the required information is not present or
is not present in amounts sufficient to require submission of the schedules.

                                      -104-