SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

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

                        For the fiscal year ended June 30, 1996

                                          OR

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

                For the transition period from __________ to __________

                          Commission File Number 33-26782-NY

                                   U.S. BRIDGE CORP.
                (Exact name of registrant as specified in its charter)

            Delaware                              11-2974406
            (State or other jurisdiction of       (I.R.S. Employer Id. No.)
            Incorporation or organization)

                         53-09 97th Place, Corona, New York       11368

                       (Address of principal executive offices)   (Zip Code)

                                    (718) 699-0100
                 (Registrant's telephone number, including area code)

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

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

                             Common Stock, $.001 par value
                                   (Title of Class)

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


<PAGE>




     Check  if no  disclosure  of  delinquent  filers  in  response  Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ ].

     The  aggregate  market  value of the  voting  stock  on  October  18,  1996
(consisting of Common Stock,  $.001 par value per share) held by  non-affiliates
was  approximately  $2,178.523  based upon the closing bid price for such Common
Stock on said date ($1.0625), as reported by a market maker. On such date, there
were 6,662,531  shares of Registrant's  Common Stock  outstanding.  The issuer's
subsidiaries had aggregate revenues of $7,451,433 for its fiscal year ended June
30, 1996.




<PAGE>



                                        PART I


ITEM 1DESCRIPTION OF BUSINESS

History

     U.S.  Bridge Corp. (the  "Company") was  incorporated  as Colonial  Capital
Corp., in the State of Delaware on September 11, 1988 under the name of Colonial
Capital Corp. The Company  subsequently  changed its name to Cofis International
Corp.  during May 1991.  Effective  April 1994, in  connection  with the reverse
acquisition of its subsidiaries, Cofis changed its name to U.S. Bridge Corp.

     In December,  1990,  the Company  effected a merger with Mercado  Marketing
Corp.,  a  medical  device  marketing  company,  principally  of latex  condoms,
whereby,  the surviving  corporation  was Mercado  Marketing  Corp.,  a Delaware
corporation. Pursuant to which the Company changed its name to Mercado Marketing
Corp.  This  Company  did not engage in any  operations  and did not receive any
revenues  from  operations,  therefore,  the Company  continued to seek business
ventures.

     In May 1991, the Company  entered into an Agreement and Plan of Merger with
Cofis  International  Corp.,  and pursuant to which amended its  certificate  of
incorporation and changed its name to Cofis  International Corp. This merger was
never consummated, however, the Company kept the name Cofis International Corp.

     The Company was a development  stage company,  from its formation,  with no
operations  except the  search for  possible  business  acquisitions,  until its
acquisition  of both U.S.  Bridge of N.Y.,  Inc.  ("NY") and One Carnegie  Court
Associates,  Inc.  ("One  Carnegie")  on April 25, 1994,  (the  "Acquisitions").
Pursuant to the Acquisitions the Company issued an aggregate of 3,540,000 shares
of its  common  stock,  par value  $.001 per share (the  "Common  Stock") to the
stockholders  of NY and One Carnegie,  2,820,000 and 720,000,  respectively,  in
exchange  for all their  issued  and  outstanding  shares.  Joseph  Polito,  the
principal  stockholder of NY and the sole stockholder of One Carnegie,  received
in exchange  for his shares in each  company,  2,380,000  and 720,000  shares of
Common Stock, respectiveizations".  Accordingly, both NY and One Carnegie became
subsidiaries of the Company.

     In connection with the Acquisitions, the Company amended its Certificate of
Incorporation  to (i)  increase  its  authorized  shares  of Common  Stock  from
10,000,000 to 50,000,000 shares, (ii) increase the par value of the Common Stock
from  $.0001 to $.001 par value,  and (iii) to  authorize  10,000,000  shares of
preferred stock,  which shares may be issued in classes and series,  pursuant to
the  rights,  designations  and  preferences  as  determined  by  the  Board  of
Directors.





                                          3

<PAGE>




Recent Developments

     In  June  1996,  NY  received  notice  that  its  $3,900,000  bid to  erect
structural steel for the Louis Vuitton N.A. 27 floor Office Tower at 57th Street
in Manhattan has been accepted by Tishman  Construction  Corp.,  as construction
manager.  NY has  commenced  detailing  the steel  needed for the project and is
awaiting the execution of the contract.

     On May 13, 1996,  Joseph  Polito,  the Company's  president  entered into a
memorandum of  understanding  with an individual,  Lubov  Ulianova,  whereby Mr.
Polito borrowed  $300,000 from Mr.  Ulianova,  which loan was secured by 550,000
shares of the Company's Common Stock owned by Mr. Polito,  which shares were put
into an escrow account,  with Alan Berkun,  as the escrow agent.  The funds were
then  loaned  by Mr.  Polito to the  Company.  The loan  provided  that upon the
Company's  listing  of its  Common  Stock on the Nasdaq  SmallCap  Stock  market
("Nasdaq"),  the Company would call its loan to the Company, which would and was
repaid by the  issuance by the Company of 400,000  shares of Common Stock to Mr.
Ulianova  as payment  for the loan,  which  transaction  was to be  pursuant  to
Regulation S under the  Securities  Act of 1933,  as amended.  In addition,  Mr.
Polito granted Mr.  Ulianova an option to purchase  600,000 shares at a price of
$1.50,  which  option was to expire 6 months from the  listing of the  Company's
securities on Nasdaq and which option may only be exercised if the bid price for
the Company's  Common Stock is at least $3.00.  The  Company's  Common Stock was
approved  for  listing  on  Nasdaq on July 25,  1996 at which  time the loan was
repaid.  The option has not been exercised to date.  These matters were reviewed
for the Company by its special counsel Alan Berkun, Esq.

     In May 1996, Lehrer McGovern, Bovis, Inc. ("LMB"), as construction manager,
has  informed NY that its bid to demolish  certain  existing  structures  and to
furnish and perform the erection of structural  steel, as a  subcontractor,  for
the Gct has an  estimated  contract  value of  $3,350,000  to NY. The project is
subject to the  approval  of the owners of LMB and the parties  entering  into a
formal  agreement.  NY has begun  detailing  the steel  for the  project  and is
awaiting the execution of the contract.

     In April 1996, Eklec Co., the developer of the Palisades Power Mall project
in West Nyack, New York, has informed NY that its bid to perform the erection of
structural steel for the project has been accepted.  The mall is estimated to be
approximately  3,900,000  square  feet upon  completion.  The  project  is to be
performed in two phases at an estimated  aggregate  contract value of $8,200,000
reduced from $9,000,000.  NY has entered into a contract and expects to commence
work on the project during July or August.

     In September 1995, NY entered into a contract to be the general  contractor
in the  construction  of a  building  in  Queens,  New York,  with an  estimated
contract  value  of   $3,500,000.   The  project  is  considered  a  design  and
construction project, whereby NY will work with the architect in deciding on the
materials to be used in order to cost  effectively  construct the building.  The
signed  contract has been  submitted to the  builder's  bank for approval of its
terms and for a commitment for the project's financing.

                                          4

<PAGE>



     No  approval  has been  obtained  and NY  believes  that  this  project  is
indefinitely  on hold.  Also in  September  1995,  NY entered into a contract to
furnish and erect the  structural  steel in the  renovation of a building in New
York City with an estimated contract value of $1,600,000.  This project has been
completed.

     On August 9, 1995, NY, a 50.1% owned subsidiary of the Company, consummated
a public  offering of 700,000  shares of its common  stock and  494,500  (64,500
pursuant to the  exercise of the  underwriter's  over-allotment  option)  common
stock purchase  warrants at $5.00 per share and $.10 per warrant,  respectively,
through State Street Capital Markets Corp.  (formerly White Rock Partners & Co.,
Inc.) as underwriter.  At such time certain selling  shareholders  and a selling
warrantholder  sold through the underwriter  160,000 shares of NY's common stock
and 3,000,000 warrants,  respectively.  Each warrant exercisable for a period of
four years  commencing  August 7, 1996 and expiring  August 8, 2000, to purchase
one share of Common Stock,  at a purchase price of $6.00 per share. On September
1, 1995 the  underwriter  exercised  its  over-allotment  option to  purchase an
additional  91,850  shares  of NY's  common  stock.  At such  time  the  Company
exercised its Special  Warrant to purchase  5,665 shares of NY's common stock at
$2.50 per  share,  in order for the  Company to retain  over 50% of NY's  Common
Stock.  NY received net proceeds of $2,889,082  from the offering.  The proceeds
from NY's public offering were apportioned as follows (i) approximately $262,000
was used to repay a bridge loan made to NY, (ii) approximately $735,000 was used
to repay  certain  promissory  notes issued in NY's private  placement in March,
1995, and (iii) approximately $1,892,082 was deposited into NY's general account
to obtain bonding and for project start up expenses and other operating costs.

     On August 15, 1995, the Company issued 150,000  restricted shares of Common
Stock to  Joseph  Polito  under  the terms of the  Company's  Senior  Management
Incentive Plan ("Management Plan") and a restricted share agreement, at no cost.
These shares were issued as compensation  for Mr. Polito's work with the Company
and NY in the consummation of NY's initial public offering on August 9, 1995 and
for his  continued  employment  with the  Company.  Of the shares  issued to Mr.
Polito,  50,000 shares  immediately  vested and are owned by Mr. Polito  without
restriction  and the  remaining  100,000  shares  vest  pursuant  to  restricted
periods,  whereby  50,000  shares vest on each of August 15, 1996 and 1997.  The
shares  which  have been  issued  subject  to the  restriction  periods,  bear a
restrictive  legend to the effect that ownership of the restricted  shares,  and
the  enjoyment  of  all  rights   appurtenant   thereto,   are  subject  to  the
restrictions,  terms and  conditions  provided  in the  Management  Plan and the
restricted shares agreement. Such certificates have been deposited by Mr. Polito
with counsel for the Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to the Company of
all or any portion of the escrowed  restricted  shares and any  distributions on
said  shares in the event that they are  forfeited  or do not  become  vested in
accordance with the Management Plan and restricted shares agreement.

     In June 1995,  the Company  issued  Marlowe  500,000 shares of Common Stock
pursuant to the terms of a consulting agreement, 250,000 of which are being held
in escrow by Alan Berkun,  counsel for Marlowe & Compann of Securities Dealer's,
Inc. member broker

                                          5

<PAGE>



     dealer,  in which Alan Berkun is the president  and principal  stockholder,
pending the  Company's  securities  being  quoted on the Nasdaq  SmallCap  Stock
Market.  The  sale  of  the  500,000  shares  were  registered   pursuant  to  a
Registration  Statement  on Form S-8 filed by the Company on June 11,  1995.  In
addition to the shares issued the consulting  agreement provided for the payment
of a consulting fee of $4,000 per month for six months  commencing June 1995, as
additional  compensation.  Pursuant to the terms of the consulting  agreement in
addition to consulting services,  Marlowe must utilize its best efforts to raise
a minimum of $750,000 for the Company upon the Company's securities being quoted
on the  Nasdaq.  No funds were raised by Marlowe  for the  Company.  All 500,000
shares were  resold  pursuant to the S-8  registration  statement  filed by Alan
Berkun on behalf of the Company. On August 1, 1996, the Company amended its June
1995 agreement with Marlowe & Company  ("Marlowe"),  in which the Company agreed
to issue an  additional  250,000  shares of Common Stock to Marlowe,  which were
issued on August 1, 1996 and resold pursuant to Regulation S under the Act. Alan
Berkun acted as special counsel for the Company regarding these transactions.

     On September 21, 1994, the Company formed a wholly owned  subsidiary  named
U.S. Bridge Corp. (Maryland).  ("US Bridge MD"). The Company was incorporated in
the State of Delaware for the purpose of providing  Waldorf  Steel  Fabricators,
Inc., with employees to perform steel fabrication work.

     In  September,  1995,  NY engaged the services of a consultant to introduce
and provide services in helping NY obtain bonding from a company licensed in New
York,  which company is to be recognized by the City and State of New York. This
consultant  was paid a fee of $100,000 and has to date,  introduced NY to Willis
Corroon,  a consulting firm which works directly with several bonding companies.
NY made application to several bonding companies through its consultants and was
declined  by all  companies.  NY  has  terminated  its  relationship  with  this
consultant.

Business of U.S. Bridge of N.Y., Inc.

     U.S. Bridge of N.Y., Inc. ("NY"), was incorporated in the State of New York
on September 4, 1990, as Metro Steel Structures, Ltd. N.Y. filed an amendment to
its  Certificate  of  Incorporation  changing  its name to its  current  name on
January 11, 1995.  Additionally,  NY amended the authorized capital of NY to (i)
increase the number of authorized shares of Common Stock from 200 to 10,000,000;
(ii)  increase  the par value from no par value to $.001 par value per share and
(iii) authorized  500,000 shares of Preferred Stock par value $.01 per share. As
of such date NY effected a 29,687.50  for one forward split of its Common Stock,
pursuant to which there became  950,000 sant to an agreement  and plan of merger
by and between NY and the Company  effective as of April 25,  1994,  The Company
issued  an  aggregate  of  3,540,000  shares  of its  common  stock  to the sole
stockholder of NY, Joseph Polito,  whereby will receive 2,820,000 shares for all
the shares of NY and  720,000  shares for all the shares of common  stock of One
Carnegie,   Mr.   Polito.   The   "Acquisitions"   were   accounted   for  as  a
"recapitalization" of The Company.  Accordingly, both NY and One Carnegie became
wholly owned subsidiaries of The Company,  of which company Joseph Polito became
an 80% shareholder, which decreased to 75.4% upon the completion of the IPO.


                                          6

<PAGE>



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

     Pursuant to the terms of the  acquisition,  each  subscriber in the private
placement  exchanged each share of NY held prior to the  acquisition  for 20,000
post reverse split shares of common stock of The Company. The Company has agreed
to register  the shares  purchased in the private  placement  in a  Registration
Statement  under the  Securities  Act of 1933, as amended (the "Act"),  one time
only, upon demand by any of the investors in the private  placement,  after June
30,  1995.  The  Company  has agreed to include  the  securities  offered in any
appropriate  registration  statement which it files under the Act during the two
year period ending June 30, 1996.

Public Offering

     On August 14, 1995, NY consummated  an initial  public  offering of 700,000
shares of its Common Stock and 494,500  (64,500  pursuant to the exercise of the
underwriter's over-allotment option) Common Stock purchase warrants at $5.00 per
share and $.10 per warrant,  respectively,  through State Street Capital Markets
Corp.  (formerly White Rock Partners & Co., Inc.) as  underwriter.  At such time
certain  selling  shareholders  and a selling  warrantholder  sold  through  the
underwriter 160,000 shares of Common Stock and 3,000,000 Warrants, respectively.
On September 1, 1995 the  underwriter  exercised  its  over-allotment  option to
purchase an  additional  91,850  shares of NY's Common  Stock.  At such time The
Company  exercised its Special  Warrant to purchase  5,665 shares of NY's Common
Stock at $2.50 per share,  in order for The  Company to retain  over 50% of NY's
Common  Stock.  NY received net proceeds of $3,119,043  from the  offering.  The
proceeds from NY's public offering were apportioned as follows (i) approximately
$262,000 was used to repay a bridge loan made to NY, (ii) approximately $735,000
was used to repay certain  promissory notes issued in NY's private  placement in
March, 1995, and (iii) approximately  $1,892,082 was deposited into NY's general
account as working  capital to obtain  bonding and for project start up expenses
and other operating costs.

     The following table lists all companies in which Joseph Polito is either an
officer,  director or principal  shareholder,  and any activities  engaged in by
such companies with or any of its subsidiaries, as of June 30, 1996:



<PAGE>


<TABLE>


                         Year                          J. Polito's    Activities with               Place of
Company Name(1)          of Inc.        Title          Ownership(%)   with Company                  Business
<S>                      <C>            <C>            <C>            <C>                           <C>

U.S. Bridge Corp.(2)     1988           Pres./Director 69.5%          Parent Company                Queens, NY

One Carnegie Court       1990           Pres./Director 100%           Subsidiary of Bridge          Waldorf, MD
 Associates, Inc. (3)(5)(6)

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

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

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

Atlas Gem Erectors       1986           Pres./Director 100%           Sold certain construction     No office
  Co., Inc. (4)(7)                                                    contracts to NY
                                                                      Ceased operations

Gem Steel Erectors       1966           Pres./Director 100%           No Business relationship      No office
 Inc.(4)(8)                                                           Ceased Operations

Waldorf Steel            1990           Pres./Director 100%           Provided steel to the         Waldorf, MD
 Fabricators, Inc.(3)(5)                                              Company, ceased
                                                                      operation in 8/1/95

U.S. Bridge Corp.        1966           Pres./Director 100%           Leases steel fabricating      Queens, NY
 (Maryland) (4)(9)                                                    facilities from One Carnegie

U.S. Bridge of NY, Inc.  1990           Pres./Director 50.1%          Provides steel erection for   Queens, NY
  Inc. (4)(10)                                                        buildings, roadway and bridge
                                                                      repair projects
</TABLE>
     (1) Except as disclosed  hereunder no company listed is beneficially  owned
by another entity, nor does any company have any subsidiaries. No company listed
has  conducted any business  operations  under any name except for its corporate
name, except for U.S. Bridge Corp. See "-- History."

     (2) Incorporated in the State of Delaware.

     (3) Incorporated in the State of Maryland.

     (4) Incorporated in the State of New York.

     (5) One Carnegie owns the property,  building and equipment which it leased
to Waldorf Steel  Fabricators,  Inc.  ("Waldorf") prior to August 1, 1995, as of
which date it began leasing to US-MD.

     (6) Formed in December 1990,  One Carnegie is a wholly-owned  subsidiary of
The Company.  Mr. Polito,  through his ownership of  approximately  69.5% of the
outstanding  shares of The  Company  may be deemed the  beneficial  owner of the
shares of One Carnegie owned by The Company.

     (7) Ceased operations in September 1994.

     (8) Ceased operations in March 1991.

     (9) U.S. Bridge Corp. (Maryland) ("US-MD") was incorporated in the state of
Delaware on September  21, 1994 for the purpose of  providing  the labor for the
fabrication  of steel by Waldorf,  which it provided  until  August 1, 1995.  It
currently leases the building and equipment,  previously  leased to US-MD,  from
One Carnegie. It provides steel fabrication for projects of NY.

     (10) Mr.  Polito,  through  his  ownership  of  approximately  65.9% of the
outstanding  shares of The  Company  may be deemed the  beneficial  owner of the
shares of NY owned by the Company.

     NY was formed by Joseph  Polito,  its  president,  to serve  primarily as a
general  contractor for public and private  sector  construction  projects.  The
public  sector  projects  are  those  sponsored  by  federal,  state  and  local
governmental authorities in New York State and the metropolitan areas.

                                      8

<PAGE>



     Previously,  Mr. Polito,  through other entities has furnished and provided
steel  erection as a  subcontractor  for private and  governmental  construction
projects.  From its  commencement of operations in June 1993 and until recently,
NY has provided steel erection for building,  roadway and bridge repair projects
for   general    contractors    who   have   been   engaged   by   private   and
municipal/governmental clients. NY as of June 30, 1996 has completed 17 projects
as a  subcontractor  with an  aggregate  project  value  of  $12,987,215  and is
currently  engaged in 7 projects as a  subcontractor  with an aggregate value of
approximately  $17,400,000.  In  addition,  NY has  signed  a  contract  for the
Palisades  Power Mall project but has not  commenced  the  project.  NY plans on
continuing to undertake projects as a subcontractor, but upon receipt of bonding
will focus on obtaining projects as a general contractor.

<TABLE>
<CAPTION>
                        Schedule of Completed Contracts

Project Name             Contract Amount     Contract Date            Type of Contract
------------             ---------------     -------------            ----------------
<S>                      <C>                 <C>                      <C>
39th Street Bridge       $2,867,276          June 1993                Lump-Sum
Robert Moses Causeway    540,118             December 1994            Lump-Sum
Van Wyck                 146,000             April 1992               Lump-Sum
Centereach               186,500             June 1995                Lump-Sum
Pro-Camera               50,275              August 1995              Lump-Sum
VDC                      75,000              August 1995              Lump-Sum
39th Street (Demolition) 709,645             February 1993            Lump-Sum
New England Thruway      2,409,058           June 1993                Lump-Sum
Honeywell                1,100,000           June 1993                Joint Venture (1)
Cross Bronx Expressway   60,176              March 1994               Lump-Sum
KISKA Construction Corp.-USA/
Robert Moses Causeway    559,603             December 1994            Lump-sum
McKay Enterprises, Inc./
Kasciuszko Bridge        2,220,218           June 1993                Lump-sum
201 East 80th Street     1,600,000           May 1995                 Lump-sum
South Avenue Plaza       275,000             May 1996                 Lump-Sum
Others                   188,346             N/A                      N/A
                         $ 12,987,215

</TABLE>

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

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


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

                                      9

<PAGE>




Bridge and Roadway Construction Industry

     Throughout  the country,  inclusive of the New York  metropolitan  area and
surrounding  areas,  there are increasing signs of deterioration of the roadways
and  bridges,  which  are the  critical  links in the  country's  transportation
network  infrastructure.  Many bridges and roadways in the New York metropolitan
and surrounding areas are considered in poor condition and require major repairs
or replacement,  which make them eligible for federal funds for repairs. In 1983
the bridge over the Mianus River in Connecticut  collapsed.  Soon thereafter the
federal  government  enacted  legislation  whereby all bridges must be inspected
every two years. In connection  therewith,  the federal government increased the
amount of accessibility of federal funds to repair the country's  infrastructure
inclusive of its roadways and bridges.

     The  1991  InterModal  Surface  Transportation  Efficiency  Act  authorized
expenditures  of $151  billion over six years in order to repair and replace the
country's  roadways  and  bridges  pursuant  to certain  criteria  as to current
conditions  and usage of said roadways and bridges.  This  legislation  has only
recently  begun to benefit  the  construction  industry.  Through the repair and
replacement  of bridges and roadways are  primarily  the  responsibility  of the
state and federal  agencies  and  municipalities,  this  responsibility  is also
placed on those  companies  which  require  improvements  in the  transportation
infrastructure,  in order to provide for or supplement their own  transportation
network  requirements.  These  companies are  responsible  to build and maintain
bridges  and  roadways  for their use and for use by the  general  pubic,  where
appropriate,   with  the  approval  of  the  state  and  federal   agencies  and
municipalities,  which are necessary  for their  transportation  network  (i.e.,
Railroads).

Marketing

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

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

The Contract Process


                                      10

<PAGE>



     NY submits its bids after a detailed  review of the project  specification,
an  internal  review of NY's  capabilities  and  equipment  availability  and an
assessment of whether the project is likely to attain  targeted  profit margins.
In bidding on contracts  there are two types of bid  requests,  at the option of
the client  requesting  the bids,  a unit cost bid and a lump-sum  bid. The unit
cost bid is based upon a cost per unit basis,  where a lump sum bid obligates NY
to  complete  the  project  at a fixed  price.  In a  lump-sum  bid the  risk of
estimating  the quantity of units  required  for a  particular  project is on NY
while in a unit cost bid NY must  estimate the per unit cost,  not the number of
units  needed.  Any  increase  in NY's unit cost over its unit bid price or cost
over its lump-sum bid, whether due to inefficiency,  faulty estimates,  weather,
inflation or other  factors,  must be borne by NY and may  adversely  affect its
results of operations.  While Mr. Polito has been in the  construction  business
for many years, NY and Mr. Polito have just recently started bidding on projects
as a  general  contractor  and may incur  unanticipated  expenses,  problems  or
difficulties which may affect its bid prices and project  profitability.  Though
NY has been the low bidder on several  public sector and private  sector bids it
has not commenced any project as a general  contractor.  NY has entered into two
contracts for private  sector  projects,  both of which are  currently  awaiting
banking approval. See "-- NY," "-- Insurance and Bonding" and "Risk Factors."

     Upon  receipt  by a New York  City  agency  that a bid  submitted  has been
declared the low bid, the city's  procurement  policy requires that the New York
Finance Committee approve all funds to be allocated to such project. During this
time NY which was the low bidder must provide the  Department of  Transportation
with such documents as are required,  including a payment and performance  bond,
in order to be approved to undertake the project. Once the New York City Finance
Committee has cleared the  allocation of funds for a project and the  Department
of Transportation has cleared all the documentation  required to be submitted by
the contractor, a starting date and time table is set up for the project.

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

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

     NY anticipates  acting as general  contractor on most projects  received in
the future and will need to hire  subcontractors to perform certain jobs such as
electrical and mechanical  work. As general  contractor,  NY will be responsible
for  the  performance  of  the  entire  contract,  including  work  assigned  to
subcontractors.  Accordingly,  NY is subject to  liability  associated  with the
failure of  subcontractors  to perform as required  under the  contract.  NY may
require its su performance,  although  affirmative action regulations require NY
to use its best  efforts to hire  minority  subcontractors  for a portion of the
project and some of these subcontractors may not be able to obtain surety bonds.

     In connection  with both public and private  sector  contracts,  NY will be
required  to  provide  bid  and  performance   surety  bonds   guaranteeing  its
performance.   NY's   ability  to  obtain   surety   bonds   depends   upon  its
capitalization,  working capital,  past  performance,  management  expertise and
other factors.  Surety companies consider such factors in light of the amount of
NY's  surety  bonds  then   outstanding  and  the  surety   companies'   current
underwriting  standards,  which may change from time to time.  See "-- Insurance
and Bonding."

     NY has and anticipates  continuing to bid as a subcontractor at the request
of other general contractors. Although NY has not been required to provide bonds
to such general  contractors when acting as a subcontractor,  it may be required
to furnish bonds  guaranteeing its performance as a subcontractor in the future.
Currently,  NY is serving as a subcontractor on seven projects.  See "-- Work in
Progress; Backlog and Seasonality."

Insurance and Bonding

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

     NY will be  required  to  provide a surety  bond on most of the  project it
receives  as a general  contractor.  NY's  ability  to obtain  bonding,  and its
bonding  capacity,  is primarily  determined by NY's net worth,  liquid  working
capital (consisting of cash and accounts  receivable) and the number and size of
projects under construction.  The larger the project and/or the more projects in
which NY is  engaged,  the  greater the  bonding,  net worth and liquid  working
capital requirements.  Therefore,  NY may be required to maintain certain levels
of tangible net worth in connection with  establishing  and maintaining  bonding
limits.  As a practical  matter such limits may limit  dividends,  if any, which
might have been  declared and which would limit  corporate  funds  available for
other purposes.

     Bonding  requirements  vary  depending upon the nature of the project to be
performed. NY anticipates paying a fee to bonding companies of between 1 1/4% to
3 1/2% of the amount of the  contracts  to be  performed.  Since  these fees are
generally  payable at the beginning of a project,  NY must  maintain  sufficient
working capital to satisfy the fee prior to receiving  revenue from the project.
Bonding  fees are a line item in the  submitted  bid and are included as part of
NY's  billing of its  client.  If NY does not secure  bonding  from a company or
companies licensed in the State of New York and other states where NY may bid on
public sector projects,  NY will be unable to bid on these projects as a general
contractor. NY has approached several New York licensed bonding companies and is
currently undeth such

                                      12

<PAGE>



     companies,  but as of the date hereof has not been  approved by any company
to receive bonding. In order to obtain bonding, in addition to credit checks and
other due  diligence  disclosure  requirements  bonding  companies  look at NY's
capitalization,  working capital, past performance,  management's  expertise and
other factors. The bonding companies require companies receiving bonding to have
certain  amounts  of  capital  and  liquid  assets,  and will base the amount of
bonding  it will  issue  based on a formula,  devised  by the  bonding  company,
usually  based on certain  industry  standards,  which takes into  account  such
factors.

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

Work in Progress; Backlog and Seasonality

     The  following is a listing of the projects as of June 30, 1996 which NY is
currently engaged in as a subcontractor:
<TABLE>


                                                                      Backlog             Estimated
Customer/                     Contract                                Amount at           Completion     Type of        % of job
Project Name(1)               Amount         Contract Date            6/30/96             Date           Contract       Completed
<S>                           <C>            <C>                      <C>                 <C>            <C>            <C>
Perini Corporation/
 Stillwell Avenue Bridge      $ 8,376,728    June 93/Oct. 94          $  753,900          June 1997      Lump-sum       91%
Perini Corporation/
 39th Street Bridge           2,867,276      June 1993                21,500              March 1997     Lump-sum       99%
Eklec Co./
 Palisades Power Mall         8,050,000      June 1996                7,969,500           June 1996      Lump-sum       1%
McKay Enterprises, Inc./
 Reconstruction of 4th
  Avenue Bridge               420,996        November 1994            218,900             December 1996  Lump-sum       48%
Lehrer McGovern, Bovis, Inc./
 Grand Central Station        3,309,033      June 1996                3,110,500           June 1997                     6%
Tishman Construction/
 Louis Vuitton N.A.           3,908,000      June 1996                3,829,800           March 1997                    2%
Williamsburg Bridge           2,517,651      May 1996                 2,039,300           December 1997  Lump-sum       19%
Total Signed Contracts        $29,449,684                             $17,943,400
                              ===========                             ===========

</TABLE>

     For the  years  ended  June 30,  1996 and 1995,  NY had 3 and 2  customers,
respectively,  VJB  Construction,  Inc.,  DeFoe  Construction,  Inc., and Perini
Corporation and McKay Enterprises,  Inc. and Perini  Corporation,  respectively,
comprising four projects,  which accounted for an aggregate of approximately 62%
and 58%, respectively, of total revenues. At June 30, 1996 and 1995, amounts due
from the above customers with respect to such projects represented approximately
46% and 70%, respectively,  of total accounts receivable.  The discontinuance of
any of these projects,  or a general economic downturn in the State of New York,
in which the projects are located,  could have a material adverse affect on NY's
results of operations.Though  NY does not believe its business is seasonal,  its
operations  slow during the winter months due to the decreased  productivity  of
the workers, thereby increasing costs as well as the inability to work in severe
weather conditions.

Suppliers and Subcontractors


                                      13

<PAGE>



     For the year ended June 30, 1996, NY received 100% of the steel fabrication
it required  from US-MD a subsidiary  of U.S.  Bridge  Corp.,  the parent of NY.
US-MD  provides  NY  with  fabricated  steel,  which  it  also  sells  to  other
subcontractors and general  contractors.  Prior to August 1, 1995, Waldorf Steel
Fabricators,  Inc., a company wholly owned by Joseph Polito provided most of the
steel used by NY. NY also receives steel from several other  suppliers,  none of
which account for 10% of the steel purchased by NY. The price paid and the terms
for the steel  purchased from US-MD were  comparable to  competitive  prices and
terms and therefor,  in the event US-MD is unable to continue to provide NY with
the bulk of the steel it  requires,  NY  believes  it will be able to acquire it
through other suppliers.

     NY currently depends upon various vendors to supply spare parts, cranes and
other heavy  equipment and its ability to hire skilled  workers depends upon its
ability to comply with certain union  agreements and contracts.  NY rents cranes
from Crown Crane,  Ltd., a company of which Joseph  Polito is a 50%  shareholder
and rents generators and other equipment from Atlas Gem Leasing, Inc., a company
which is wholly owned by Joseph Polito.  NY believes that there are a sufficient
number of vendors,  so that in the event any  individual or group of vendors can
no  longer  service  NY's  needs,  NY will be able  to  find  other  vendors  at
competitive  prices.  NY does hire  skilled  steel  workers  represented  by the
International  Union of Structural  Ironworkers,  local 40, operating  engineers
locals 14, 14B, 15, 15A, 15C and 15D and cement  masons local 780  (collectively
referred to as the  "Unions") and must comply with  agreements  with the Unions,
which  agreements  regulate  all  employment  issues  between  NY and the  Union
employees including pay, overtime, working conditions, vacations benefits, etc.,
and which  agreements  expire on June 30, 1999.  NY believes  that it has a good
relationship with the Unions and is in compliance with all union agreements.  No
assurance can be given that NY will continue to be in compliance with the Unions
or successfully negotiate extensions to NY's agreements with such Unions. In the
event  problems or conflicts with the Unions arise or there is a loss of skilled
steel and  operating  engineers,  this would have a  detrimental  effect on NY's
operations.

     NY's success as a general  contractor,  in part, will be dependent upon its
ability to hire workers and comply with union  contracts and  agreements and its
ability to oversee and retain qualified  subcontractors to perform certain work.
Although  NY  believes  that it will be  able to  attract  s it bids as  general
contractor,  there can be no assurances.  NY will be responsible for performance
of the entire contract, including the work done by subcontractors.  Accordingly,
NY may be subject to substantial  liability if a subcontract fails to perform as
required. Also there may be unanticipated  difficulties in hiring and overseeing
subcontractors that NY is currently not aware of.

Competition

     All aspects of NY's business is and will continue to be highly competitive.
NY is one of many  subcontractors  which erect and furnish  steel for  projects,
many of whom have substantially  greater sales and financial resources than that
of NY. When  contractors  seek  construction  contracts,  they  request  bids of
several  subcontractors as to the different  requirements of the project.  These
subcontractors  compete  primarily  as to  price,  name  recognition  and  prior
performance.

     As a general contractor, NY will be competing with many larger, established
and more experienced  contractors,  who have name recognition and  relationships
with the  federal  and state  municipalities  and  agencies  as well as  private
companies  which  request  bids on the  projects NY intends  bidding on. NY is a
general contractor which specializes, but not exclusively, in bridge and roadway
repair  and  replacement  as well  as the  furnishment  and  erection  of  steel
structures  for  buildings.   NY's   competitors  are  numerous  and  many  have
substantially greater marketing, financial, bonding and human resources.

Government Regulation

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

One Carnegie Court Associates, Inc. ("One Carnegie")

     One  Carnegie  was  incorporated  in the State of Maryland on December  14,
1990, for the sole purpose of acquiring  certain land,  building,  machinery and
equipment, in the St. Charles Business Park, Waldorf, Maryland which it acquired
on January 14,  1991.  The  acquisition  by One  Carnegie  comprised 13 acres of
property,  a 4 1/2 acre  [170,000  square foot]  building and the  machinery and
equipment for the fabrication of steel. The note issued pursuant to the purchase
of this  property  is  personally  guaranteed  by the  Company's  president  and
principal shareholder,  Joseph Polito. This under-roof facility is equipped with
equipment capable of fabricating  structural steel of approximately  24,000 tons
per year.

     One Carnegie rented this land, building, machinery and equipment to Waldorf
Steel Fabricators, Inc., a Maryland corporation, ("Waldorf") an affiliate of the
Company,  which  corporation is wholly owned by Joseph  Polito,  pursuant to the
terms of a lease agreement.  Waldorf facilitated the steel fabrication for NY as
well as for other subcontractors and contractors.  The Company believes that the
terms of the lease of the property by Waldorf was equivalent to that which would
be obtained from an  unaffiliated  third party.  On August 1, 1995, One Carnegie
entered into a lease surrender  agreement with Waldorf,  whereby as of August 1,
1995 Waldorf

                                      15

<PAGE>



     ceased  operations.  Pursuant to such  agreement,  Waldorf  surrendered the
premises  and  waived  any and  all  rights  to  possession  of  such  premises.
Simultaneously, One Carnegie entered into a lease agreement with U.S. Bridge MD.
Such lease expires on December 31, 2001 and provides for monthly rental payments
of $50,000.  The lease also  provides  for all real estate  taxes and  operating
costs to be paid directly by U.S.  Bridge of MD. In  connection  with the lease,
U.S.  Bridge  MD paid  approximately  $82,000  on  account  towards  rent to One
Carnegie on October 2, 1995.

Employees

     As of June 30,  1995,  the  Company  had three  executive  officers  and no
employees.   As  of  June  30,  1996,  NY  had  three  executive  officers,  two
administrative assistants, one comptroller,  and two employees in the accounting
department.  NY employs such number of union employees,  depending on the number
and size of projects  engaged in,  ranging from 25-100  employees on a full-time
and part-time basis.  These union employees are represented by the International
Union of Structural Ironworkers,  locals 40, Operating Engineers locals 14, 14B,
15 15A, 15C and 15D. NY's contracts with these Unions, which agreements regulate
all  employment  issues  between  NY and  the  union  employees  including  pay,
overtime, working conditions, vacations, benefits, etc., which agreements expire
on June 30, 1999. NY considers  relations with the unions and their employees to
be good.

ITEM 2.DESCRIPTION OF PROPERTY

     The  Company's  offices  are  located at the  offices of NY,  which  leases
approximately 25,000 square of executive office space and utilizes approximately
24,000 square feet of storage space at 53-09 97th Place, Corona, New York 11368.
The lease is with an affiliate company, RSJJ Realty Corp., which is owned by the
Company's  majority  stockholder  and the Company's  president,  Joseph  Polito,
pursuant to a lease  agreement  expiring in March 1998.  NY pays rent of $20,000
per  month.  NY also  leases a yard for  storage  material  pursuant  to an oral
agreement which requires monthly  payments of $3,500.  The Company believes that
the terms of this lease are  comparable  and  competitive  with that which would
have been negotiated with an unaffiliated landlord.

     In addition, the Company,  through One Carnegie,  owns 13 acres of property
in St.  Charles  Business  Park,  Waldorf,  Maryland,  inclusive of a 4 1/2 acre
[170,000  square foot]  building.  In  connection  with the  acquisition  of the
property and equipment,  One Carnegie entered into a $3,000,000 installment loan
agreement, which loan was collateralized by all the property and equipment owned
by One Carnegie and personally  guaranteed by the Company's majority shareholder
and an  affiliated  company.  The loan  bears  interest  at a rate of 11%  until
December  1994,  at which time it increases to 13% for the term of the loan.  On
October 21, 1993,  One Carnegie  entered into a forbearance  agreement  with the
lender, restructuring certain terms and provisions of the loan.


                                      16

<PAGE>



     On December 13, 1994, in connection  with the original  acquisition  of the
property and equipment,  One Carnegie  signed a modification  to the forbearance
agreement with the lender. Pursuant to such modification  agreement,  the lender
has agreed not to  accelerate  and demand full  payment of the note and to allow
One Carnegie to reduce its monthly payments to $40,000 pursuant to a new two (2)
year amortization  schedule provided by the lender. Such modification  agreement
required One Carnegie to make timely payments after December 31, 1994, which One
Carnegie has not complied with.

     On October 12, 1995, in  connection  with the original  acquisition  of the
property  and  equipment,   One  Carnegie  signed  a  letter  agreement  to  the
modification agreement discussed above with the lender.  Pursuant to such letter
agreement,  although One Carnegie was in default as at June 30, 1996, the lender
has agreed not to  accelerate  and demand full  payment of the note and to allow
One Carnegie to bring the  indebtedness  current in accordance with the two year
amortization  schedule discussed above. As of October 18, 1996, One Carnegie was
in default in connection with the letter agreement.

     This under-roof  facility is equipped with equipment capable of fabricating
structural steel of  approximately  24,000 tons per year. The Company leases the
facility to a related  party on terms  believed to be  equivalent to those which
would be obtained from an unaffiliated third party.


ITEM 3.LEGAL PROCEEDINGS

     NY is a party to legal  proceedings in the ordinary course of its business.
NY and its subsidiaries  believe that the nature and number of these proceedings
are typical for a construction firm of its size and scope and that none of these
proceedings  is  material to its  financial  condition.  NY, in March,  1995 was
served with a summons  and  complaint  with  respect to the  commencement  of an
action in the Supreme  Court of the State of New York,  pursuant to the personal
injury of a worker at a construction site. The worker was not an employee of NY,
but was  employed  by another  subcontractor  at the job site.  NY,  through its
insurance  company  is  defending  the  action,  and has served an answer to the
complaint.  The amount demanded is below NY's insurance  policy maximum,  and NY
believes  that its  insurance  coverage  will  completely  cover  any  awards or
settlement.


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

     Neither  the  Company  nor NY  submitted  any  matters  to a vote of  their
security holders during its fiscal year ended June 30, 1996.





                                      17

<PAGE>



                                    PART II


ITEM 5.MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
       MATTERS

     The Company's Common Stock,  $.001 par value per share, is currently traded
sporadically  and on a limited basis in the  over-the-counter  market on the OTC
Bulletin  Board.  The  following  table sets forth  representative  high and low
closing bid prices by calendar  quarters as reported by a market  maker,  during
the periods  provided  for  herein.  Bid  quotations  represent  prices  between
dealers,   do  not  include  resale  mark-ups,   mark-downs  or  other  fees  or
commissions,  and do not necessarily  represent  actual  transactions.  Prior to
August 25, 1994 there was no trading market for the Company's Common Stock.


            Calendar Quarter       Bid Prices
            Ended (1)              Low       High

            08/25/94 - 09/30/94    3 1/2     4
            10/01/94 - 12/31/94    2         4
            01/01/95 - 03/31/95    1 1/2     1 1/2
            04/01/95 - 06/30/95    5/8       2
            07/01/95 - 09/30/95    1/4       1 1/4
            10/01/95 - 12/31/95    1/4       1
            01/01/96 - 03/31/96    1 1/4     2
            04/01/96 - 06/30/96    2 1/4     3
            07/01/96 - 09/30/96    1 1/2     3 1/8
            10/01/96 - 10/18/96    1         2
--------------------------

     (1) The Company's  Common Stock began trading on the Nsadaq  SmallCap Stock
Market on July 25, 1996.

     As of October 18, 1996,  the number of registered  holders of record of the
Common  Stock,  $.001 par value,  of the  Company was 117 as  determined  by the
Company's  stockholder  records,  and does not include  beneficial owners at the
Common Stock whose shares are held in names of various security holders, dealers
and  clearing  agencies.  The  Company  believes  there  are  in  excess  of 300
beneficial holders of the Common Stock.

     The Company has paid no dividends and has no present plan to pay dividends.
Payment of future dividends will be determined from time to time by its Board of
Directors, based upon its future earnings, if any, financial condition,  capital
requirements and other factors. The

                                      18

<PAGE>



     Company is not presently subject to any contractual or similar  restriction
on its present or future ability to pay such dividends.

     Of  the  6,662,531   shares  of  the  Company's   Common  Stock   presently
outstanding,  400,000 were issued in July 1996, 500,000 was issued in June 1996,
250,000 was issued in August 1996,  3,540,000 were issued in April 1994,  20,000
were issued in August 1994,  1,282,155  were issued between April and June 1994,
10,000 were issued in January 1995, and 500,000 shares were issued in June 1995,
all of such shares are "restricted securities", which in the future, may be sold
upon  compliance  with Rule 144 adopted  under the  Securities  Act of 1933,  as
amended  (the  "Act"),  or other  applicable  exemptions  from the  registration
requirements  of  the  Act.  On  June  16,  1995  pursuant  to the  filing  of a
Registration  Statement on Form S-8 with the Securities and Exchange Commission,
the Company registered the public sale of 500,000 shares, previously issued to a
broker-dealer,  as  consideration  for  a two  (2)  year  consulting  agreement.
Pursuant to the consulting agreement,  such consultant will serve as a financial
consultant and advisor to the Company on a  non-exclusive  basis for a period of
twenty-four  (24) months  commencing on June 1, 1995. Such agreement was amended
on August 1, 1996 and an additional  250,000 shares were issued under Regulation
S under the Act. In  addition,  pursuant to a loan to the  Company's  president,
which  loan was then  loaned to the  Company,  the  Company  issued  400,000  as
repayment  of the  loan in July  1996,  such  shares  were  issued  pursuant  to
Regulation S under the Act.

     Rule  144  provides,   in  essence,   that  a  person  holding  "restricted
securities"  for a period of two years may sell every three  months in brokerage
transactions an amount equal to the greater of: (a) one percent of the Company's
outstanding  shares of Common Stock;  (b) the average weekly  reported volume of
trading  for  the  securities  on all  national  exchanges  and/or  through  the
automated  quotation system of a registered  securities  association  during the
four (4) calendar week period  preceding  each  transaction;  or (c) the average
weekly  trading  volume in the  securities  reported  through  the  consolidated
transaction  reporting system during the four (4) calendar week period. Rule 144
also requires that current information about the securities must be available to
shareholders and brokers.

     Persons who are not  "affiliates"  of the Company,  as that term is defined
under the Act, who have been non-affiliates for the ninety (90) days immediately
preceding  the sale,  and who have owned  their  shares for a period of at least
three (3) years, may sell such shares without limitation.

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



                                      19

<PAGE>



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

     The following Management's Discussion and Analysis for the years ended June
30,  1996 and 1995 are that of the  Company's  subsidiaries  since  the  Company
itself did not have any material operations of its own.

            GENERAL

     On April 25, 1994, after giving effect to a 1-for-4 reverse stock split, US
Bridge Corp. ("the Company") issued 2,820,000 and 720,000 shares,  respectively,
of its common stock to the  stockholders of U.S. Bridge of N.Y., Inc. ("NY") and
One Carnegie  Court  Associates,  Ltd.  "(One  Carnegie") in exchange for all of
their issued and outstanding shares.

     The acquisition by the Company has been treated as a  recapitalization  for
accounting purposes. Accordingly, after such transaction and before NY's private
offering and initial public  offering,  NY was a wholly owned  subsidiary of the
Company. As of June 30, 1996 NY is a 50.01% owned subsidiary and One Carnegie is
a wholly owned subsidiary of the Company.

     On September 21, 1994, the Company formed a wholly owned  subsidiary  named
U.S. Bridge of Maryland Corp. ("US Bridge MD"). US Bridge MD was incorporated in
the State of Delaware for the purpose of providing material and labor to perform
fabrication work for US Bridge of NY and other unrelated parties.

     One  Carnegie  was  incorporated  in the State of Maryland  and is a wholly
owned  subsidiary of the Company.  One Carnegie was incorporated on December 14,
1990 for the  purposes  of  acquiring  on  January  14,  1991,  land,  building,
machinery and  equipment.  One Carnegie  rented said  facilities to an affiliate
under terms pursuant to a signed lease agreement through August 1995. Subsequent
to August 1995, said facilities have been rented to US Bridge MD.

     NY was formed by Joseph  Polito,  its  President,  to serve  primarily as a
general  contractor for public and private  sector  construction  projects.  The
public  sector  projects are  sponsored by Federal,  State and local  Government
authorities  in New York  State  and the  Metropolitan  areas.  Previously,  Mr.
Polito,  through  other  entities,  furnished and provided  steel  erection as a
subcontractor  for  private and  governmental  construction  projects.  From its
commencement of operations in June 1993, NY provided steel erection services for
building,  roadway and bridge  repair  projects for genand  municipal/government
clients. NY plans to continue to undertake projects as a subcontractor, but will
focus on  obtaining  projects  as a general  contractor  in both the  public and
private sectors.

     In the New York Metropolitan area, there are an abundance of subcontractors
known to the NY who have significant experience and are competitive with respect
to pricing and level of service.  NY will be responsible  for performance of the
entire contract, including the work done

                                      20

<PAGE>



     by subcontractors.  Accordingly, NY may be subject to substantial liability
if a subcontractor fails to perform as required. Also there may be unanticipated
difficulties  in hiring and overseeing  subcontractors  that NY is currently not
aware  of.  In  the  event  the  bonding  company  pays  a  claim  related  to a
subcontractor's  non-performance  or similar  event,  the  bonding  company  has
recourse  against  NY. NY  requires  bonding  from a New York  licensed  bonding
company in order to bid on projects as a general contractor.

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

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

     The Company's operations are substantially controlled by Mr. Pog shares and
may be considered the beneficial owner of the shares of NY. Mr. Polito is also a
100%   shareholder  of  R.S.J.J.   Realty  Corp.   ("RSJJ").   RSJJ  leases  the
administrative  offices and  storage  space to NY at a cost of $20,000 per month
pursuant to a signed lease  agreement  expiring on March 31, 1998.  Lastly,  Mr.
Polito has ownership interests in Waldorf Steel Fabricators,  Inc. (which ceased
operations on August 1, 1995), Crown Crane, Inc., Atlas Gem Leasing, Inc., Atlas
Gem Erectors Co., Inc. and Gem Steel Erectors.

     NY recognizes  revenue under the percentage of completion  method.  Cost of
contract revenues include all direct material and labor costs and those indirect
costs related to contract  performance.  The asset, costs and estimated earnings
in excess of billings on uncompleted  contracts,  represents costs and estimated
earnings in excess of amounts billed  through June 30, 1996.  Billings in excess
of costs and estimated earnings on uncompleted  contracts,  represents  billings
which exceed costs and estimated  earnings on individual  uncompleted  contracts
through June 30, 1996.

                                      21

<PAGE>





RESULTS OF OPERATIONS

Year ended June 30, 1996 as compared to the year ended June 30, 1995

     Contract  revenues  for the years ended June 30, 1996 and 1995  amounted to
$7,401,433 and $6,671,649, respectively. This net increase amounting to $729,784
or  approximately  11% is a direct  result of the Company  obtaining  additional
contracts  during the year.  During the year ended June 30, 1996 the Company has
obtained  new  contracts  and  additional  change  orders to  previous  contract
amounting  to  approximately  $22,500,000.  Included  in contract  revenues  are
revenues from joint venture profit sharing agreements on certain projects. Joint
ventures  revenues  for the year ended June 30, 1996  amounted to  approximately
$200,000 as compared to the year ended June 30, 1995 which amounted to $680,000.
Accordingly,  revenues for the year ended June 30, 1996 from the Company's  core
business,  construction  contract,  increased  by  approximately  $1,209,784  as
compared to the year ended June 30, 1995.

     The  Company's  gross  profit for the year  ended  June 30,  1996 is 37% as
compared  to June 30,  1995  which was 43%.  This  decrease  in gross  profit is
partially  due to the Company's  revising its contract  cost  estimates for jobs
coming to an end in the current period, pursuant to the percentage of completion
method.  As  discussed  previously,  the Company  revenue  from  profit  sharing
agreements on certain  projects during the year ended June 30, 1996 decreased by
approximately $470,000, which reduced the gross profit by an equal amount.

     As  of  June  30,  1996,  the  Company  has  a  backlog  of   approximately
$17,943,400.  Backlog  represents  the amount of revenue the Company  expects to
realized from work to be performed on uncompleted contracts in progress and from
contractual agreements which work has not yet begun.

     General and  administrative  expenses have  increased by $391,644 or 15% to
$3,003,890  for the year ended June 30, 1996 from  $2,612,246 for the year ended
June 30, 1995.  The increase in o an increase in  consulting  fees  amounting to
$150,000 in connection with the process in obtaining  additional contracts which
resulted in approximately $22,000,000 of additional contracts.  Additional,  the
Company's   payroll  and  related  payroll  taxes  and  benefits   increased  by
approximately  $150,000  for the  administrative  staff  of US  Bridge  MD.  The
remaining increase was attributable to professional fees and other miscellaneous
general or corporate overhead expenses.

     During the year ended June 30, 1996,  the Company has provided an allowance
for doubtful accounts amounting to $1,000,000  against the contract  receivable.
The majority of the allowance  has been provided for one unrelated  party who is
experiencing a cash flow problem.  Management is currently negotiating with this
customer  and has not  commenced  legal  action as of  September  27,  1996.  In
managements  opinion, the allowance for doubtful accounts at June 30, 1996, will
be sufficient to absorb any losses that may be sustained from a settlement  with
this customer.

                                      22

<PAGE>




Liquidity and Capital Resources

     At June 30, 1996, the Company's  consolidated  working capital  amounted to
$1,528,934.  As of June 30, 1996, the Company's net contract receivable amounted
to $3,613,665, of which approximately $723,000 or 20% has been collected through
September 27, 1996.

     Net cash used for operating  activities amounted to $2,055,771 for the year
ended  June 30,  1996.  The major  components  of such use of cash was  directly
attributed  to the  increases  in accounts  receivable  and costs and  estimated
earnings in excess of billing on uncompleted  contracts of  $2,318,819.  For the
year ended June 30, 1995, the net cash used for operating activities amounted to
$994,615  principally  attributable to increases in account receivable and costs
and estimated  earnings in excess of billings on uncompleted  contracts.  In the
past two years the  Company's  business has shifted  towards the  municipal  and
government  markets.  Municipal  contract  generally  require the  contractor to
accumulate more costs before they can requisition the  municipality for payment.
Accordingly,  costs and estimated earnings in excess of billing's on uncompleted
contracts have increased principally for this reason.

     Contract  receivables  for the year ended June 30,  1996 as compared to the
year ended  June 30,  1995 has  increased  by  $1,692,488  before  recording  an
allowance for  uncollectibles.  The increase is principally  attributable to one
customer who has been experiencing a cash flow problem.  As of June 30, 1996 the
Company has provided an allowance of $1,000,000 which  management  believes will
be sufficient to absorb any future loss.

     With regards to financing  activities,  the Company provided  $2,249,177 of
cash for the year ended  June 30,  1996.  Such cash was  provided  primarily  by
$3,104,252 from the Company's subsidiary's initial public offering and repayment
of notes payable amounting to $1,071,649.

     During  September  1994,  the  Company's  subsidiary,  NY,  entered into an
instaiquidate  delinquent  payroll taxes of approximately  $231,535 and remove a
tax lien filed by such authority. The agreement requires that NY pay $25,000 per
month  until such amount is fully paid.  As per the terms of the  agreement,  NY
must also pay timely all current  payroll taxes.  As of June 30, 1996 NY has not
made all the  required  monthly  payments  and has not paid  timely all  current
payroll taxes. Additionally,  US Bridge MD also became delinquent with regard to
its payroll  taxes  which  amounted  to $93,423 as of June 30,  1996.  The total
payroll tax  liability as of June 30, 1996,  excluding  the related  penalty and
interest amounted to $382,135

     On August 14, 1995 NY  successfully  completed  its public  offering.  As a
result,  it sold 791,850 shares which included  91,850 shares in connection with
the exercise of the  underwriter's  over-allotment  options and 494,500 warrants
which included  64,500  warrants  pursuant to the  underwriter's  over-allotment
option.   NY  yielded  a  total  net  proceeds  of  $2,077,903  after  deducting
underwriter  selling expenses and expense  allowance,  repayment of bridge loans
and  promissory  notes and related  accrued  interest to the bridge  lenders and
private investors, and the

                                      23

<PAGE>



     pre-payment of the first two year's financial consulting agreement with the
underwriter.  Simultaneously with the offering, NY charged all deferred offering
costs incurred to additional paid-in capital which totalled $903,820.

     In  connection  with the  initial  public  offering  of NY,  the  Company's
ownership  percentage  in NY was  reduced to 49.95%  before the  exercise of the
special warrant as discussed below. Accordingly,  at June 30, 1996 the Company's
minority  interest  amounting to $2,409,028  which represents the effect of NY's
private  offering and the initial public  offering and the cumulative  effect of
NY's operations since the private offering and initial public offering.

     On September 9, 1995, the Company purchased at $2.50 per share 5,665 common
shares of NY by exercising its right pursuant to the terms of a special  warrant
issued  only to  such  stockholder.  As a  result,  the  Company  increased  its
ownership of NY to 50.01% from 49.95%.

     Lastly,  in  connection  with  NY's IPO,  the  Company  recorded  a gain of
$832,571 as a result of reducing its ownership percentage to 50.01% of NY.

     On October 12, 1995, in  connection  with the original  acquisition  of the
property and equipment,  One Carnegie signed with the lender a letter  agreement
revising the  modification  agreement.  Pursuant to such letter  agreement,  One
Carnegie was in default as of June 30, 1996. The mortgage has been classified as
current at June 30, 1996,  since One Carnegie has not paid the required  monthly
installments  timely as stipulated in the letter agreement  thereby allowing the
lender to call the loan at anytime.

     On May 13, 1996, an unrelated party loaned the Company's President $300,000
pursuant to a memorandum of  understanding.  The loan bears interest at 1% above
prime, and its due 90 days from receipt of funds.  Simultaneously  therewith, on
May 20,  1996,  the  Company's  President  loaned the Company the  $300,000.  As
collateral  for the  loan,  the  unrelated  party  received  from the  Company's
President  550,000  share of common  stock.  Upon the  Company  being  listed on
NASDAQ,  the Company will liquidate such loan by issuing 400,000 shares of newly
registered  shares  pursuant to  Regulati  the  Company  issued  400,000 to such
unrelated party for satisfaction of the loan.

     Additionally,  the Company's  President  issued to such unrelated  party an
option to purchase  600,000  share at $1.50 per share from the day the funds are
received until six months after the Company attains NASDAQ  listing.  The option
may be exercised at any time within the exercise period subject to a minimum bid
prize of $3 per share.  Lastly, the Company's President may borrow an additional
$100,000 under the same terms as discussed above for a period of 30 days.

     As of June 30,  1996,  of the total due to officer  amounting  to $358,779,
$275,500 represents the remaining amount owed for the original $300,000 loan and
the  remaining  balance  amounting to $83,279  represents  advances  made by the
President to the  Company's  subsidiaries  which bear no interest and are due on
demand.

                                      24

<PAGE>




ITEM 7.   FINANCIAL STATEMENTS

      See attached Financial Statements.

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

      Not applicable.

                                   PART III

ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors.

     The names,  ages and  positions  of the  Company's  executive  officers and
directors are as follows:
<TABLE>

Name                          Age            Position with the Company
<S>                           <C>            <C>
Joseph M. Polito              61             President and Director
Ronald J. Polito              36             Secretary and Director
Steven J. Polito              33             Treasurer and Director

</TABLE>

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

     Joseph M. Polito has been the  president  and  director of the Company from
the date of the  Acquisitions in April 1994 to present.  Mr. Polito has been the
president  and a  director  of NY since its  inception  in 1990 and prior to the
Acquisitions  in  April  1994  was the  sole  shareholder  of NY.  Prior  to the
Acquisitions,  the Company was a shell  company with no  operations  named Cofis
International  Corp.,  which was formed in  September  1988 as Colonial  Capital
Corp. Mr. Polito oversees the running of all of the Company's  operations.  From
December  1990 to present,  Mr.  Polito has been the president and sole director
and  shareholder of One Carnegie Court  Associates,  Inc.  ("One  Carnegie"),  a
wholly owned subsidiary of Bridge. Mr. Polito is the president and sole director
and shareholder of Waldorf Steel Fabricators,  Inc. ("Waldorf"), a company which
fabricated  steel  prioreholder  of Gem Steel  Erectors,  Inc., a  non-operating
entity.  Neither  Atlas nor Gem Steel  have  transacted  any  business  or other
operations  since  ceasing  operations  and  neither  company  has  any  present
intention to resume  operations.  From 1983 to present,  Mr. Polito has been the
President and 100%  shareholder  of R.S.J.J.  Realty Corp., a company which owns
and  leases  real  property.  From  1986 to  present,  Mr.  Polito  has been the
president  and 100%  shareholder  of Atlas Gem Leasing,  Inc.,  a company  which
leases generators and other construction  equipment.  From 1988 to present,  Mr.
Polito has been a 50%  shareholder of Crown Crain,  Ltd., a company which leases
cranes for construction  projects. Mr. Polito is currently Chairman of the Steel
Institute of New York,  Co-Chairman  of the  International  Union of  Structural
Ironworkers,  locals 40, 361 and 417 union fund and a current  director and past
president of Allied  Metal  Building,  an industry  organization  authorized  to
negotiate with the structural iron worker local 40 and 361, operating  engineers
local 14 and local 15a and 15d,  cement  masons local 780 as well as chairman of
the negotiating committee solely for the structural  engineers.  Mr. Polito is a
member  of the  safety  committee  for the  City  of New  York,  Building  Trade
Employers Association.

     Ronald J. Polito has been the  secretary,  treasurer  and a director of the
Company from the date of the Acquisitions in April, 1994 to present.  Mr. Polito
has been the  secretary  and a director of NY since its  inception in 1990.  Mr.
Polito  oversees  the daily  progress on all projects in process and analysis of
the final costs and profits of jobs completed and the preparation and bidding on
new projects.  From its inception in 1990 until March 1995,  Mr. Polito was also
the  treasurer  of NY.  From 1985  until the  present,  Mr.  Polito has been the
secretary of Gem Steel Erectors,  Inc. From December 1990 to present, Mr. Polito
has been the  secretary of One  Carnegie  and Waldorf.  From 1983 to present Mr.
Polito has been the secretary of R.S.J.J.  Realty Corp.  Mr.  Polito  received a
Bachelor of Science  Degree in Civil  Engineering  from  Brooklyn  Polytechnical
Institute in 1981. Ronald J. Polito is the son of Joseph M. Polito.

     Steven J. Polito has been a director  of the Company  since the date of the
Acquisitions  in April 1994.  Mr.  Polito was elected  treasurer  of NY in March
1995. He had previously been a Project Manager and has been a director of the NY
since its  inception  in 1990.  Mr.  Polito  oversees the daily  operations  for
projects in process and projects completed, including; purchasing and leasing of
materials  and machinery and the  distribution  of labor.  From 1988 until April
1994, Mr. Polito worked as a Project  Manager of Atlas Gem Erectors Cand erected
steel structures.  Steven J. Polito is the son of Joseph M. Polito. From 1988 to
present, Mr. Polito has been the treasurer of Gem Steel Erectors, Inc. From 1988
to present,  Mr.  Polito has been the  treasurer  of One  Carnegie,  Waldorf and
R.S.J.J. Realty Corp.

Significant Employees of NY

     John G. Bauer, has been the chief  administrative  officer (a non-executive
position) of the Company since February 1995.  From March 1992 to February 1995,
Mr. Bauer was the President of Dynamic Construction Consulting,  Inc., a company
which provided construction management

                                      25

<PAGE>



     services.  From July 1988 to March 1992,  Mr. Bauer was a Vice President of
Tishman Construction Corp. of N.Y., a construction company.

     Michael  Panayi,  has been a structural  engineer for the Company since the
commencement  of  operations  in June  1993.  Prior to his  employment  with the
Company, Mr. Panayi was a structural engineer for Atlas from 1987.

     As permitted under Delaware Corporation Law, the Corporation's  certificate
of  incorporation  eliminates  the personal  liability  of the  directors to the
Corporation  or any of its  shareholders  for  damages  for  breaches  of  their
fiduciary duty as directors.

     As a result of the inclusion of such provision,  stockholders may be unable
to recover damages against  directors for actions taken by them which constitute
negligence  or gross  negligence  or that are in  violation  of their  fiduciary
duties.  The inclusion of this  provision in the  Corporation's  Certificate  of
Incorporation  may  reduce  the  likelihood  of  derivative  litigation  against
directors and other types of shareholder litigation.

Compliance with Section 16(a) of the Exchange Act

     The  Company was not subject to the  requirements  of Section  16(a) of the
Securities  Exchange Act of 1934, as amended,  during the period covered by this
Report. In general,  Section 16(a) requires a Company's officers,  directors and
persons who  beneficially own more than ten percent of a registered class of the
Company's equity securities to file reports of securities  ownership and changes
in such ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors  and greater than ten percent  beneficial  owners also are required by
rules  promulgated  by the SEC to furnish the Company with copies of all Section
16(a) forms they file.




ITEM 10.  EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

     The following provides certain information concerning all Plan and Non-Plan
(as  defined in Item 402 (a)(ii) of  Regulation  S-B)  compensation  awarded to,
earned by, paid by NY, the Company's subsidiary, during the years ended June 30,
1995, 1994 and 1993.







                                      26

<PAGE>



<TABLE>
<CAPTION>
                          Summary Compensation Table

                                       Annual Compensation

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

<S>                      <C>            <C>            <C>            <C>            <C>
Joseph Polito            1996           $300,000       -              $111,911(2)    -
 President and Director  1995           378,000        -              68,200 (2)     -
                         1994           300,000        -              13,800 (2)     -

Ronald Polito            1996           $125,000       -              $15,144 (3)    -
 Secretary and Director  1995           121,000        -              21,200 (3)     -
                         1994           109,600        -              17,451 (3)     -

Steven Polito            1996           $94,000        -              $ 8,275 (4)    -
  Treasurer and Director 1995           91,575         -              9,900 (4)      -
                         1994           19,980         -              -              -
</TABLE>

     (1)The  Company did not engage in any operations  prior to June,  1993 and,
therefore, did not compensate any of its executive officers prior to such time.

     (2)Includes  (i) the  payment of  premiums  on a life  insurance  policy of
$54,362,  $46,000  and $5,119  (ii) the  payment of travel  expenses of $50,000,
$22,200  and  $23,139  for the  years  ended  June  30,  1996,  1995  and  1994,
respectively and the payment of an automobile lease of $7,549 for the year ended
June 30, 1996. See " - Employment Agreements."

     (3)Includes  (i) payments on the lease of an automobile  of $5,416,  $8,000
and $8,574,  (ii) the payment of  premiums  on a term life  insurance  policy of
$4,684, $5,800 and $8,877 and (iii) a travel allowance of $2,971, $7,400 and $0,
for the years ended June 30, 1996, 1995 and 1994, respectively.

     (4)Includes  payment on a lease  automobile of $5,304 & $6,700 and a travel
allowance of $2,971 & $3,200 for the years ended June 30, 1996 and 1995.

Stock Options

     The following table sets forth certain information  concerning the grant of
stock  options made during the year ended June 30, 1996 under the  Corporation's
1994 Senior Management Incentive Plan.










                                      27

<PAGE>


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


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


                              Individual Grants
-------------------------------------------------------------------------------------------
(a)                           (b)                 (c)                 (d)                 (e)
                                                  % of Total
                              # of Securities     Options/SAR's
                              underlying          Granted to
                              Options/SAR's       Employees in        Exercise or Base
Name                          Granted(1)          Fiscal Year         Price ($/SH)        Expiration Date
-------------------------------------------------------------------------------------------
<S>                           <C>                 <C>                 <C>                 <C>
Joseph M. Polito              25,000              100%                $5.50               04/04/99
===========================================================================================
</TABLE>

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

     The following table contains  information  with respect to employees of the
Corporation concerning options held as of June 30, 1996.
<TABLE>
<CAPTION>


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

=======================================================================================
(a)                           (b)                      (c)                 (d)                 (e)
---------------------------------------------------------------------------------------
                                                                                               Value of
                                                                           Number of           Unexercised In-
                                                                           Unexercised         The-Money
                                                                           Options/SAR's at    Options/SAR's
                                                                           FY-End (#)          at FY-End($)
                              Shares Acquired          Value Realized($)   Exercisable/        Exercisable/
Name                          on Exercise (#)                              Unexercisable       Unexercisable(1)
---------------------------------------------------------------------------------------
<S>                           <C>                      <C>                 <C>                 <C>
Joseph M. Polito              0                        0                   7,500/17,500        0/0
=======================================================================================
</TABLE>

     (1) Based upon the  average bid and asked  prices for such Common  Stock on
October 18, 1996 ($1.875),  as reported by a market maker. Since the Options are
exercisable at $5.50, there is no value to such options as of such date.



                                      28

<PAGE>



Employment Agreement

     Joseph Polito  entered into an employment  agreement with NY dated April 4,
1995, whereby Mr. Polito shall devote 80% of his business time to the affairs of
NY. The agreement is for a term of  approximately  three years expiring June 30,
1998.  Pursuant to the terms of the agreement Mr. Polito is to receive an annual
salary of $300,000  per annum  until June 30, 1996 with 10% yearly  escalations,
subject to adjustment by the Board of Directors. Mr. Polito is also to receive a
yearly  non-accountable  expense allowance of $50,000. Mr. Polito received stock
options under the NY's 1994 Senior Management  Incentive Plan to purchase 25,000
share at $5.00 per share,  vesting  at the rate of 7,500 in each of April,  1996
and 1997 and 10,000 in April,  1998.  Mr. Polito also has the right to receive a
yearly bonus equal to five percent (5%) of the first  $1,000,000,  upon reaching
$1,000,000 and five percent (5%) of the next $500,000,  upon reaching $1,500,000
and five percent  (5%) after  $1,500,000,  of all the pre-tax  profits of NY. NY
shall pay to Mr. Polito a monthly draw of $10,000 against the bonus. Pursuant to
the agreement NY shall pay the premiums on a $3,500,000  life  insurance  policy
for the benefit of  individuals  as directed by Mr.  Polito,  with an  estimated
yearly  premium of $80,000.  The agreement  restricts Mr. Polito from  competing
with NY for a period of one year after the  termination of his  employment.  The
agreement  provides for severance  compensation  to be paid to Mr. Polito if his
employment with NY is terminated or there is a decrease in  responsibilities  or
duties following a change in control of NY. The severance  compensation shall be
made in one payment equal to three times the aggregate annual  compensation paid
to the Employee during the preceding calendar year.

     Steven and Ronald Polito receive annual salary compensations of $94,000 and
$125,000,  respectively,  from NY, which compensation  levels commenced in March
1995 and April 1994, respectively. Both individuals also receive a car allowance
equal to the  monthly  lease  payments on their  automobiles  and the payment of
premiums on life  insurance  policies of which they choose their  beneficiaries.
Neither  individual  has entered  into an  employment  agreement  with NY or the
Company.

1994 Senior Management Incentive Plan

     In  December,  1994,  the  Board  of  Directors  adopted  the  1994  Senior
Management  Incentive  Plan  (the  "Management  Plan"),  which  was  adopted  by
shareholder  consent. The Plan provides for the issuance of up to 150,000 shares
of the Company's  Common Stock in connection  with the issuance of stock options
and other stock purchase  rights to executive  officers and other key employees.
The Board of Directors,  subject to  shareholder  approval,  have  authorized an
increase in the number of shares issuable under the Management Plan to 1,000,000
shares.  The Company issued 150,000 restricted shares to Joseph Polito in August
1995,  of which  100,000  shares are vested,  and whereby  50,000 shares vest on
August 1997.

     was prompted by the Company's  desire to provide the Board with  sufficient
flexibility regarding the forms of incentive compensation which the Company will
have  at its  disposal  in  rewarding  executive  officers,  key  employees  and
consultants  who  render  significant  services  to the  Company.  The  Board of
Directors intends to offer key personnel equity ownership in the Company through
the grant of stock options and other rights  pursuant to the Management  Plan to
enable the Company to attract and retain qualified personnel

                                      29

<PAGE>



     without unnecessarily depleting the Company's cash reserves. The Management
Plan is designed to augment the Company's existing  compensation programs and is
intended  to  enable  the  Company  to  offer  executives,   key  employees  and
consultants  a personal  interest in the  Company's  growth and success  through
awards of either  shares of Common  Stock or rights to acquire  shares of Common
Stock.

     The  Management  Plan is  intended  to attract  and  retain  key  executive
management  personnel whose performance is expected to have a substantial impact
on the  Company's  long-term  profit and growth  potential  by  encouraging  and
assisting  those persons to acquire  equity in the Company.  It is  contemplated
that only those executive  management  employees  (generally the Chairman of the
Board,   Vice-Chairman,   Chief  Executive  Officer,  Chief  Operating  Officer,
President and  Vice-Presidents  of the Company) who perform  services of special
importance  to the Company will be additional  management  employees and has not
engaged in any  solicitations or negotiations  with respect to the hiring of any
management employees. As of the date of this Prospectus,  the Company's officers
and directors are Joseph Polito and his sons, Ronald and Steven, though the Plan
also  includes  Messrs.  Bauer and Panayi.  A total of 150,000  shares of Common
Stock are reserved for issuance  under the  Management  Plan. It is  anticipated
that awards made under the Management Plan will be subject to three-year vesting
periods,  although  the vesting  periods are  subject to the  discretion  of the
Administrator.

     Unless  otherwise  indicated,  the Management Plan is to be administered by
the Board of Directors or a committee of the Board, if one is appointed for this
purpose (the Board or such  committee,  as the case may be, shall be referred to
in the following  description as the  "Administrator").  Subject to the specific
provisions of the Management Plan, the Administrator will have the discretion to
determine the recipients of the awards,  the nature of the awards to be granted,
the dates such awards will be granted,  the terms and  conditions  of awards and
the  interpretation of the Management Plan, except that any award granted to any
employee of the  Company  who is also a director  of the  Company  shall also be
subject,  in the event the persons  serving as members of the  Administrator  of
such plan at the time such award is  proposed  to be granted do not  satisfy the
requirements regarding the participation of "disinterested persons" set forth in
Rule 16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934,
as amended (the  "Exchange  Act"),  to the  approval of an  auxiliary  committee
consisting of not less than two  individuals  who are considered  "disinterested
persons" as defined under Rule 16b-3. As of the date hereof, the Company has not
yet determined who will serve on such auxiliary  committee,  if one is required.
The Management Plan generally provides that, unless the Administrator determines
otherwise, each option or right granted under a plan shall become exercisable in
full upon certain  "change of control"  events as  described  in the  Management
Plan,  or  subject  to any right or option  granted  under the  Management  Plan
(through  merger,   consolidation,   reorganization,   recapitalization,   stock
dividend,  dividend  in  property  other than  cash,  stock  split,  liquidating
dividend,  combination  of  shares,  exchange  of  shares,  change in  corporate
structure or otherwise),  the Administrator will make appropriate adjustments to
such  plans  and the  classes,  number  of  shares  and price per share of stock
subject to outstanding rights or options.  Generally, the Management Plan may be
amended by action of the Board of

                                      30

<PAGE>



     Directors,  except that any amendment which would increase the total number
of shares  subject to such plan,  extend the  duration of such plan,  materially
increase the benefits accruing to participants  under such plan, or would change
the  category of persons who can be eligible  for awards under such plan must be
approved by affirmative vote of a majority of stockholders entitled to vote. The
Management Plan permits awards to be made thereunder until November, 2004.

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

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

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

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

                                      31

<PAGE>



     optionee,  the vested portion of the option shall remain  exercisable for a
period of twelve (12) months thereafter.

     Incentive  Stock Rights.  Incentive stock rights consist of incentive stock
units  equivalent  to one share of Common  Stock in  consideration  for services
performed for the Company.  Each  incentive  stock unit shall entitle the holder
thereof to receive,  without  payment of cash or property  to the  Company,  one
share of Common Stock in consideration for services performed for the Company or
any subsidiary by the employee,  subject to the lapse of the incentive  periods,
whereby the Company  shall  issue such number of shares upon the  completion  of
each  specifiservices  of the holder with the Company terminate prior to the end
of the  incentive  period  relating  to the  units  awarded,  the  rights  shall
thereupon  be null and void,  except that if  termination  is caused by death or
permanent disability,  the holder or his/her heirs, as the case may be, shall be
entitled to receive a pro rata portion of the shares  represented  by the units,
based upon that portion of the  incentive  period which shall have elapsed prior
to the death or disability.

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


                                      32

<PAGE>



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

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

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

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

     Upon expiration of the applicable  restriction  period and the satisfaction
of any other applicable conditions, all or part of the restricted shares and any
dividends or other  distributions  not  distributed to the holder (the "retained
distributions")  thereon  will  become  vested.  Any  restricted  shares and any
retained  distributions  thereon  which do not so vest will be  forfeited to the
Company.  If prior to the expiration of the restricted period a holde of a total
disability  (in each case as defined in the  Management  Plan),  or dies,  then,
unless otherwise  determined by the  Administrator at the time of the grant, the
restricted  period  applicable to each award of restricted shares will thereupon
be deemed to have expired.  Unless the Administrator  determines otherwise, if a
holder's  employment  terminates  prior  to the  expiration  of  the  applicable
restricted  period for any reason other than as set forth above,  all restricted
shares and any retained distributions thereon will be forfeited.


                                      33

<PAGE>



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

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

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

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

1994 Employee Stock Option Plan

     In December,  1994, the Board of Directors  adopted the 1994 Employee Stock
Option Plan (the "Employee Plan"), which was adopted by shareholder consent. The
Employee Plan provides for the issuance of up to 150,000 shares of the Company's
Common Stock in connection with the issuance of stock options key employees. The
Board of Directors, subject to shareholder approval, have authorized an increase
in the number of shares issuable under the Employee Plan to 1,000,000 shares.


                                      34

<PAGE>



     The Employee Plan is intended to assist the  Corporation  in attracting and
retaining qualified employees for the Corporation. The Board of Directors intend
to offer  employees,  equity  ownership in the Corporation  through the grant of
stock  options,  in order for the  Corporation  to attract and retain  qualified
personnel,  without  depleting  the  Corporation's  cash  reserves.   Management
believes that, in view of the Corporation's anticipated operations over the next
several  years,  the  Corporation  may be faced  with an  increasing  demand for
additional  qualified  personnel,  the Corporation  will require a wide array of
compensation  alternatives.  The  Employee  Plan  is  designed  to  augment  the
Corporation's  existing  compensation  programs  and is  intended  to enable the
Corporation to offer employees a personal interest in the  Corporation's  growth
and success through the granting of stock options.

     The Employee  Plan is intended to attract and retain key  employees,  whose
performance is expected to enhance the growth and success and  profitability  of
the  Corporation by encouraging and assisting those persons to acquire equity in
the  Corporation.  Under the Employee Plan,  options to purchase an aggregate of
not more than 150,000 shares of Common Stock may be granted from time to time to
key employees,  advisors and independent  consultants to the Corporation and its
subsidiaries. It is anticipated that awards made under the Employee Plan will be
subject to vesting  periods,  although  the  vesting  periods are subject to the
discretion of the Board of Directors or  Administrator of the plan. If approved,
awards  under  the  Employee  Plan may be made  until  January  1, 2004 when the
Employee Plan terminates.

     The Board of Directors is charged with administration of the Employee Plan.
The Board is generally empowered to interpret the Employee Plan, prescribe rules
and regulations relating thereto,  determine the terms of the option agreements,
amend them with the consent of the optionee,  determine  the employee  determine
the number of shares subject to each option and the exercise price thereof.  The
per share exercise price for incentive  stock options  ("ISOs") will not be less
than 100% of the fair  market  value of a share of the Common  Stock on the date
the option is granted  (110% of fair market value on the date of grant of an ISO
if the optionee owns more than 10% of the Common Stock of the Corporation).

     Options will be exercisable  for a term  determined by the Board which will
not be less than one year.  Options  may be  exercised  only while the  original
grantee  has  a  relationship  with  the  Corporation  or a  subsidiary  of  the
Corporation which confers eligibility to be granted options or up to ninety (90)
days after  termination  at the sole  discretion  of the Board.  In the event of
termination  due to  retirement,  the  Optionee,  with the consent of the Board,
shall have the right to  exercise  his option at any time during the twelve (12)
month period after such  retirement.  Options may be exercised up to twelve (12)
months after death or total and  permanent  disability.  In the event of certain
basic  changes  in  the  Corporation,  including  a  change  in  control  of the
Corporation  (as defined in the Employee  Plan) in the  discretion of the Board,
each  option  may  become  fully  and  immediately  exercisable.  ISOs  are  not
transferable other than by will or the laws of descent and distribution. Options
may be exercised  during the holder's  lifetime  only by the holder,  his or her
guardian or legal representative.


                                      35

<PAGE>



     Options  granted  pursuant to the Employee  Plan may be designated as ISOs,
with the  attendant  tax  benefits  provided  under  Section 421 and 422A of the
Internal Revenue Code of 1986. Accordingly,  the Employee Plan provides that the
aggregate  fair market value  (determined  at the time an ISO is granted) of the
Common  Stock  subject to ISOs  exercisable  for the first  time by an  employee
during  any  calendar  year  (under  all  plans  of  the   Corporation  and  its
subsidiaries)  may not  exceed  $100,000.  The  Board  may  modify,  suspend  or
terminate  the  Employee  Plan;   provided,   however,   that  certain  material
modifications  affecting the Plan must be approved by the shareholders,  and any
change in the Employee Plan that may adversely affect an optionee's rights under
an option previously granted under the Employee Plan requires the consent of the
optionee.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     The  following  table sets forth certain  information  at October 18, 1996,
based upon information  obtained by the persons named below, with respect to the
beneficial  ownership  of shares of Common Stock by (i) each person known by the
Company to be the owner of 5% or more of the outstanding shares of Common Stock;
(ii) by each officer and director;  (iii) and by all officers and directors as a
group. 
<TABLE> 
<CAPTION>

                                                  Percent of
                                   Number of      Common Stock
Name                               Shares         Owned

<S>                                <C>            <C>
Joseph Polito (1)(2)               4,261,156      62.5%
c\o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

Steven Polito (2)                  50,000         *
c\o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

Ronald Polito (3)                  50,000         *
c\o U.S. Bridge Corp.
53-09 97th Place
Corona, New York  11368

All officers and directors
as a group (3 persons) (1)-(4)     4,361,156      64.0%
</TABLE>

      * Less than 1%.

                                      36

<PAGE>




(footnotes from previous page)

     (1) Includes 150,000 shares of Common Stock issued pursuant to the terms of
the Company's Senior Management Incentive Plan. Does not include an aggregate of
251,000  shares gifted by Mr.  Polito,  of which  181,000  shares were gifted to
members  of Mr.  Polito's  family  (50,000  shares of each of Ronald  and Steven
Polito) and 70,000 shares were gifted to employees of the Company, as of January
23, 1995. Mr. Polito disclaims beneficial ownership of all shares transferred to
his family members.

     (2) Joseph Polito is the father of Steven and Ronald Polito.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On July 1, 1991, One Carnegie  leased to Waldorf Steel  Fabricators,  Inc.,
"Waldorf",  an  affiliate  owned  by the  Company's  majority  stockholder,  the
facilities  it purchased in January  1991.  Such lease is for five (5) years and
provides  for  monthly  rental  payments  of  $50,000.  Pursuant  to such  lease
agreement, any funds collected in excess of the total annual rent of $600,000 is
to be credited to the next respective  subsequent  year. The lease also provides
for all real estate taxes and operating costs to be paid directly by the lessee.
All of the rental income was derived and the entire rent  receivable  balance of
$975,378  and $709,844 as of June 30, 1995 and 1994,  respectively,  is due from
Waldorf. One Carnegie has made a $975,398 and $300,000 provision related to such
receivables at June 30, 1995 and 1994,  respectively.  Pursuant to an assignment
agreement entered during 1994, Waldorf has assigned all of its rights, title and
interests in certain accounts  receivable  amounting to $571,172 to One Carnegie
as collateral to secure the amounts owed to One Carnegie.

     As a part  of the  acquisition  of NY and  One  Carnegie,  pursuant  to the
consent  of the Board of  Directors  and the  written  consent  of  shareholders
holding approximately 68.1% of the outstanding shares, the Company's (i) amended
its  certificate  of  incorporation  to (a) change the Company's name from Cofis
International  Corp.,  to U.S.  Bridge Corp.,  (b) authorized a 1-for-4  reverse
stock split,  (c) increase the par value on the  Company's  Stock from $.0001 to
$.001 per  share,  (d)  increase  the  authorized  shares of Common  Stock  from
10,000,000  shares to  50,000,000  shares and (e)  authorized  the  issuance  of
10,000,000  shares of  preferred  stock,  which shares are to be issued upon the
terms,  designations  and  preferences  as determined by the Company's  Board of
Directors;  (ii)  authorized the actions  necessary to effect and consummate the
agreement and plan of reorganization  and the issuance of shares of Common Stock
to The Company and One Carnegie and (iii) to elect Joseph Polito,  Ronald Polito
and  Steven  Polito  as  directors  of  the  Company.  In  connection  with  the
Acquisitions, the Company changed its fiscal year from December 31 to June 30.

     On June 13, 1993,  NY executed an  agreement to pay $400,000 in  connection
with the purchase from Atlas Gem Erectors  Co.,  Inc.  ("Atlas") of six existing
contracts to perform  steel  erection  services,  which  included the  following
projects; Stillwell Avenue, 39th Street Bridge Rehabilitation, Honeywell Street
Bridge, New England Throughway, Lemon Creek and

                                      37

<PAGE>



     Kosciuszko  Bridge projects.  Atlas is wholly owned by Joseph Polito.  Upon
the sale of the  contracts  to NY and its  completion  of its final  project  in
September  1994,  Atlas  ceased  operations.  During June 1994,  Atlas agreed to
capitalize  such debt in exchange  for 320,000  shares of the  Company's  Common
Stock. As a result of such conversion,  NY's additional paid in capital had been
increased  by  $400,000.  The shares  received  by Atlas were issued to its sole
shareholder, Joseph Polito, simultaneously with the conversion.

     On August  27,  1994,  the  Company  purchased  a resort  hotel  located in
Liberty,  New York named Swan Lake Hotel from the Resolution  Trust  Corporation
("RTC"), for the total purchase price of $450,000. The RTC as the conservator of
the Yorkline Federal Savings Association. Simultaneously with the acquisition of
the hotel, the Company, assigned the title of the is conversion of approximately
$1,202,694 of debt to equity. Prior to, but in connection with the assignment of
the property to Mr. Polito,  Mr. Polito retired $900,000 and $302,694 of debt on
April 30, 1994 and June 30,  1994,  respectively,  for an  aggregate  of 962,155
shares of the Company's  Common Stock.  The hotel has not been occupied for over
four  years and has  deteriorated  significantly  due to  deterioration  through
weather infiltration,  vandalism and lack of maintenance.  The hotel consists of
five  buildings and 323 rooms.  Mr. Polito has no current plans to renovate this
hotel at this time and in the event that he decides to renovate this property he
will use a general  contractor  located in the area of the hotel to perform  the
renovation and will not use the Company to perform any of the renovations.

     NY leases its  administrative  office space and certain  storage space from
R.S.J.J. Realty Corp., an affiliate owned by the Company's majority stockholder,
Joseph Polito, based on a signed lease agreement expiring on March 31, 1998 with
a rental payment of $20,000 per month. Mr. Polito is the majority shareholder of
the  Company,  he owns  approximately  69.5% of the  outstanding  shares  of the
Company  and  therefore,  may be deemed to control the shares of NY owned by the
Company which is 50.1% of the outstanding shares.

     During the years ended June 30,  1995 and 1994 NY  purchased  from  Waldorf
Steel  Fabrications,  Inc.  ("Waldorf")  approximately  $478,000 and $3,085,786,
respectively,  of  fabricated  steel.  Such amounts paid to Waldorf  represented
approximately 58% and 82% of the total steel purchased by NY for the years ended
June 30, 1995 and 1994, respectively.  From July 1995 to September 1995, NY paid
Waldorf approximately $180,000 for fabrication services. In addition,  Atlas Gem
Erectors Co., Inc. paid $193,538 of NY's general and administrative expenses for
the years ended June 30,  1994.  Amounts  payable  related to such  transactions
total  $134,549  and are  included in accounts  payable at June 30,  1994.  Such
amounts are non-interest  bearing.  Said affiliates are under the common control
of the majority stockholder of the Company.

     In June 1995,  the Company  issued  Marlowe  500,000 shares of Common Stock
pursuant to the terms of a consulting agreement, 250,000 of which are being held
in escrow by Alan Berkun, counsel for Marlowe & Company ("Marlowe"),  a National
Association of Securities  Dealer's,  Inc.  member broker dealer,  in which Alan
Berkun  is the  president  and  principal  stockholder,  pending  the  Company's
securities being quoted on the Nasdaq SmallCap Stock

                                      38

<PAGE>



     Market.  The sale of the  500,000  shares  were  registered  pursuant  to a
Registration  Statement  on Form S-8 filed by the Company on June 11,  1995.  In
addition to the shares issued the consulting  agreement provided for the payment
of a consulting fee of $4,000 per month for six months  commencing June 1995, as
additional  compensation.  Pursuant to the terms of the consulting  agreement in
addition to consulting services,  Marlowe must utilize its best efforts to raise
a minimum of $750,000 for the Company upon the Company's securities being quoted
on the  Nasdaq.  No funds were raised by Marlowe  for the  Company.  All 500,000
shares were  resold  pursuant to the S-8  registration  statement  filed by Alan
Berkun on behalf of the Company. On August 1, 1996, the Company amended its June
1995 agreement with Marlowe & Company  ("Marlowe"),  in which the Company agreed
to issue an  additional  250,000  shares of Common Stock to Marlowe,  which were
issued on August 1, 1996 and resold pursuant to Regulation S under the Act. Alan
Berkun acted as special counsel for the Company regarding these transactions.

     On August 1, 1995, One Carnegie  entered into a lease  surrender  agreement
with Waldorf.  Pursuant to such agreement,  Waldorf surrendered the premises and
waived any and all rights to  possession  of such  premises,  whereby as of such
time Waldorf  ceased  operations.  Simultaneously,  One Carnegie  entered into a
lease agreement with U.S. Bridge MD. Such lease expires on December 31, 2001 and
provides for monthly rental payments of $50,000. The lease also provides for all
real estate taxes and operating  costs to be paid directly by U.S. Bridge of MD.
In  connection  with the lease,  U.S.  Bridge MD paid  approximately  $82,000 on
account towards rent to One Carnegie on October 2, 1995.

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

     On October 11, 1995, NY paid One Carnegie  $50,000 on behalf of U.S. Bridge
MD for  fabrication  services  performed  by U.S.  Bridge MD.  Such  payment was
treated as an on  account  payment  by NY to U.S.  Bridge MD.  From July 1995 to
October  1995 NY paid  U.S.  Bridge  MD  approximately  $183,000  for the  labor
associated with the fabrication of steel.

     On May 13, 1996,  Joseph  Polito,  the Company's  president  entered into a
memorandum of  understanding  with an individual,  Lubov  Ulianova,  whereby Mr.
Polito borrowed  $300,000 from Mr.  Ulianova,  which loan was secured by 550,000
shares of the Company's Common Stock owned by Mr. Polito,  which shares were put
into an escrow  account,  with Alan Berkun as the escrow  agent.  The funds were
then  loaned  by Mr.  Polito to the  Company.  The loan  provided  that upon the
Company's  listing  of its  Common  Stock on the Nasdaq  SmallCap  Stock  market
("Nasdaq"),  the Company would call its loan to the Company, which would and was
repaid by the  issuance by the Company of 400,000  shares of Common Stock to Mr.
Ulianova  as payment  for the loan,  which  transaction  was to be  pursuant  to
Regulation S under the  Securities  Act of 1933,  as amended.  In addition,  Mr.
Polito granted Mr.  Ulianova an option to purchase  600,000 shares at a price of
$1.50, which option was to expire 6 months from the listing of the Company's

                                      39

<PAGE>



     securities  on Nasdaq  and which  option may only be  exercised  if the bid
price for the Company's  Common Stock is at least $3.00.  The  Company's  Common
Stock was approved for listing on Nasdaq on July 25, 1996 at which time the loan
was repaid. The option has not been exercised to date.

     The terms of Joseph  Polito's  employment  agreement  are  described in the
Executive Compensation section of this report.

                                    PART IV

ITEM 1EXHIBITS AND REPORTS ON FORM 8-K

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

<TABLE>
<CAPTION>
                                                  Page
<S>                                               <C>
Independent Auditors Report                       F-1

Consolidated Balance Sheet                        F-2

Consolidated Statements of Operations             F-3

Consolidated Statement of Stockholders' Equity    F-4

Consolidated Statements of cash flows             F-5 - F-6

Consolidated Notes to financial statements        F-7 - F-22
</TABLE>
     (b) During the last quarter, the Company filed no reports on Form 8-K.

     (c) The Exhibits not filed  herewith  have been  previously  filed with the
Securities & Exchange Commission and incorporated by reference herein.

<TABLE>
<CAPTION>

<S>            <C>       <C>
2.1            -         Agreement and Plan of Reorganization dated effective as of April 25, 1994.
3.1            -         Certificate of Incorporation of the Company filed June 15, 1994.
3.2            -         By-Laws of the Company.
3.3            -         Specimen Common Stock Certificate.
4.1            -         Form of Special Warrant.
4.2            -         Form of restricted stock agreement issued to Joseph Polito
10.1           -         Lease Agreement between One Carnegie Court Associates and
                         Waldorf Steel Fabrications, Inc., dated March 27, 1990.
10.2           -         Promissory note from the Company to Trinity Industries, Inc.

                                      40

<PAGE>



10.3           -         Forbearance Agreement between the Company and Trinity Industries, Inc., dated October 14, 1993.
10.4           -         Lease Agreement between R.S.J.J. Realty Corp. and NY, dated June 30, 1993
10.5           -         Employment Agreement of Joseph Polito
10.6           -         The Company's Senior Management Incentive Plan.
10.7           -         The Company's Employee Stock Option Plan.
10.8           -         Agreement between Iron Workers Local Union 40 and NY.
10.9           -         Agreement between Local Union 14, 14B, 15, 15A, 15C, 15D, International Union of Operating Engineers,
                         AFL-CIO and NY.
10.10          -         Agreement between Local 780 and NY.
10.11          -         Agreement to capitalize the $400,000 of debt.
10.12          -         Consulting Agreement with Marlowe and Company.
10.13          -         Lease surrender agreement between One Carnegie and Waldorf dated August 1, 1995.
10.14          -         Lease Agreement between One Carnegie and U.S. Bridge Corp.(Maryland), dated August 1, 1995.
24.1           -         Consent of Scarano & Lipton, P.C.
</TABLE>


                                      41

<PAGE>


                                  SIGNATURES


     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
has duly  caused  this  report to be signed  on its  behalf by the  undersigned,
thereunto duly authorized, this 30th day of October, 1996.


                                 U.S. BRIDGE CORP.



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



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



\s\ Joseph M. Polito          President and Director
Joseph M. Polito              (Principal Executive               10/30/96
                              Officer)                           Date


\s\ Ronald J. Polito          Secretary and Director
Ronald J. Polito                                                 10/30/96
                                      Date


\s\ Steven J. Polito          Treasurer (Chief Financial         10/30/96
Steven J. Polito              Officer and Chief Accounting       Date
                              Officer and Director

                                      42

<PAGE>



                       U.S. BRIDGE CORP. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED JUNE 30, 1996 AND 1995











































<PAGE>



                         U.S. BRIDGE CORP. AND SUBSIDIARIES
                     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE YEARS ENDED JUNE 30, 1996 AND 1995



                                                                     Page
                                                                    Number

   Independent auditors' report                                       F-1

   Consolidated balance sheet                                         F-2

   Consolidated statements of operations                              F-3

   Consolidated statement of stockholders' equity                     F-4

   Consolidated statements of cash flows                           F-5 - F-6

   Notes to consolidated financial statements                     F-7 - F-22



<PAGE>

















                          INDEPENDENT AUDITORS REPORT




To the Board of Directors and Stockholders of
U.S. Bridge Corp. and Subsidiaries

     We have audited the accompanying  consolidated balance sheet of U.S. Bridge
Corp. and its  Subsidiaries  (the "Company") as of June 30, 1996 and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the years ended June 30, 1996 and 1995. These consolidated  financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audits.

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

     In our opinion,  based on our audits, the consolidated financial statements
referred to above present fairly,  in all material  respects,  the  consolidated
financial  position of the  Company as of June 30,  1996,  and the  consolidated
results of its  operations  and cash flows for the years ended June 30, 1996 and
1995, in conformity with generally accepted accounting principles.



Scarano & Lipton, P.C.
Garden City, New York
September 27, 1996


<PAGE>



                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                                 JUNE 30, 1996

<TABLE>
<CAPTION>


                                 ASSETS
<S>                                                                        <C>
Current assets:
   Cash                                                                    $399,652
   Contracts and retainage receivable, net                                 3,613,665
   Costs and estimated earnings in excess of billings
    on uncompleted contracts                                               2,433,524
   Other current assets                                                    55,116

      Total current assets                                                 6,501,957

Property and equipment, net                                                3,042,090

Deferred Compensation                                                      33,000
Deferred consulting costs, net                                             239,583

Total assets                                                               $  9,816,630
                                                                           ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable, including cash overdrafts of $63,274                  $936,445
   Accrued expenses                                                        397,729
   Payroll taxes payable                                                   382,135
   Mortgage payable                                                        2,735,531
   Notes payable                                                           145,837
   Billings in excess of costs and estimated earnings
    on uncompleted contracts                                               16,567
   Due to officer                                                          358,779

      Total current liabilities                                            4,973,023

Minority interest                                                          2,409,028

Commitments and contingencies (Note 13)                                    -

Stockholders' equity:
   Preferred stock, authorized 10,000,000, issued and outstanding
   -0- shares                                                              -

   Common stock, $.001 par value, authorized 50,000,000 shares,
    issued and outstanding 6,162,530                                       5,766
   Additional paid-in capital                                              2,641,002
   Accumulated deficit                                                     (212,189)

      Total stockholders' equity                                           2,434,579

Total liabilities and stockholders' equity                                 $9,816,630

</TABLE>





















         See accompanying notes to consolidated financial statements.

                                     F-2

<PAGE>


<TABLE>
<CAPTION>

                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                         FOR THE YEARS ENDED JUNE 30,



                                                       1996           1995
                                                       -------------------
<S>                                                    <C>            <C>
Revenue:
   Contract revenue                                    $7,401,433     $6,671,649
   Rental income                                       50,000         600,000
                                                       ------         -------

      Total revenue                                    7,451,433      7,271,649
                                                       ---------      ---------

Costs and expenses:
   Cost of contract revenues                           4,668,473      3,780,169
   General and administrative expenses                 3,003,890      2,612,246
   Bad debt expense                                    1,019,127      675,699
                                                       ---------      -------

      Total costs and expenses                         8,691,490      7,068,114
                                                       ---------

(Loss) income from operations before other income (expense),
 minority interest and (benefit) provision for
 income taxes                                          (1,240,057)    203,535

Other income (expenses):

   Interest expense                                    (341,610)      (455,402)
   Unusual item (Note 10c)                             (441,863)      (198,137)
   Gain on sale of subsidiary's stock (Note 11)        832,571        -
   Interest income                                     27,766         -
                                                       ------         -

      Total other income (expenses)                    76,864         (653,539)
                                                       ------         --------

Loss before minority interest and (benefit)
 provision for income taxes                            (1,163,193)    (450,004)

Minority interest in net loss                          342,802        30,817
                                                       -------        ------

Loss before (benefit) provision for income taxes       (820,391)      (419,187)

(Benefit) provision for income taxes                   (860,960)      274,571
                                                       --------       -------

Net income (loss)                                      $  40,569      $ (693,758)
                                                       =========      ==========

Net income (loss) per common equivalent share:

   (Loss) income from operations before other income (expense),
     minority interest and (benefit) provision for
     income taxes                                      $(.20)         $ .04

   Loss before minority interest (benefit) provision
     for income taxes                                  $(.19)         $ (.08)
                                                       =====          ======

   (Benefit) Provision for income taxes                $(.14)         $ .05
                                                       =====          =====

   Net income (loss)                                   $ NIL          $(.13)
                                                       =====          =====

Weighted average number of common shares outstanding   6,137,530       5,523,363
                                                       =========      ==========

</TABLE>




















         See accompanying notes to consolidated financial statements.

                                     F-3

<PAGE>



                            U.S. BRIDGE CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

<TABLE>
<CAPTION>


                                      Common
                                       stock
                                                                 Additional     Retained       Total
                                                                 paid-in        (deficit)      Stockholders'
                                   Shares         Amount         capital        earnings       equity

<S>                                <C>             <C>           <C>            <C>            <C>            <C>          <C>
Balances at June 30, 1994          5,482,530      $5,086         $2,049,682     $441,000       $2,495,768

Issuance of common stock in consideration
 for loans made to the Company     20,000         20             34,980         -              35,000

Issuance of common stock in consideration
 for the payment of
 Subsidiary's debt                 10,000         10             7,490          -              7,500

Issuance of common stock in consideration
 for services                      500,000        500            499,500        -              500,000

Net loss for the year ended
June 30, 1995                      -              -              -              (693,758)      (693,758)
                                   ---            ---            ---            --------        -------

Balances at June 30, 1995          6,012,530      5,616          2,591,652      (252,758)      2,344,510

Issuance of common stock in consideration
 for services pursuant to senior management
 incentive plan                    150,000        150            49,350         -              49,500

Net income for the year ended
 June 30, 1996                     -              -              -              40,569         40,569
                                   ---            ---            ---            ------         ------

Balances at June 30, 1996          6,162,530      $5,766         $2,641,002     $(212,189)     $2,434,579
                                   =========      ======         ==========     =========      ==========

</TABLE>





































               See accompanying notes to consolidated financial statements.

                                           F-4

<PAGE>



                            U.S. BRIDGE CORP. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED JUNE 30,
<TABLE>
<CAPTION>


                                                            1996                1995
                                                            -------             ----
<S>                                                         <C>                 <C>
Operating activities:
   Net income (loss)                                        $40,569             $(693,758)
   Adjustments to reconcile net (loss) income to net
    cash (used for) provided by operating activities:
      Depreciation and amortization                         882,549             483,166
      Minority interest in net loss                         (342,802)           (30,817)
      Bad debt expense                                      1,019,127           675,699
      Gain on sale of subsidiary's stock                    (832,571)           -
   Changes in assets and liabilities:
      Contracts and retainage receivable                    (1,711,424)         (550,379)
      Rent receivable                                       -                   (409,844)
      Costs and estimated earnings in excess of
       billings on uncompleted contracts                    (607,395)           (1,026,504)
      Other current assets                                  (18,750)            (15,696)
      Accounts payable                                      489,597             52,561
      Accrued expenses                                      (189,545)           73,901
      Payroll taxes payable                                 62,570              191,361
      Billings in excess of costs and estimated
       earnings on uncompleted contracts                    16,567              (17,518)
      Income taxes payable                                  (864,263)           273,213
                                                            --------            -------
        Net cash used for operating activities              (2,055,771)         (994,615)
                                                            ----------           -------

Investing activities:
   Purchase of equipment                                    -                   (11,275)
   Other assets                                             -                   4,981
                                                            -                   -----
        Net cash (used for) provided by investing
        activities                                          -                   (6,294)
                                                            -                   ------

Financing activities:
   Principal Payments on mortgage payments                  (164,992)           (163,090)
   Proceeds from (repayments to) officer                    358,779             (46,390)
   Decrease (increase) in deferred offering costs           103,554             (103,554)
   Proceeds from notes payable                              -                   1,472,000
   Repayment of notes payable                               (1,071,649)         (254,514)
   Repayment of loans to affiliates                         (80,767)            (65,947)
   Proceeds from issuance of Subsidiary's
    common stock and warrants                               3,104,252           190,000
                                                            ---------
        Net cash provided by financing activities           2,249,177           1,028,505
                                                            ---------           ---------

Net increase in cash                                        193,406             27,596
Cash, beginning                                             206,246             178,650
                                                            -------             -------
Cash, ending                                                $399,652            $206,246
                                                            ========            ========

</TABLE>

























               See accompanying notes to consolidated financial statements.

                                           F-5

<PAGE>



                            U.S. BRIDGE CORP. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE YEARS ENDED JUNE 30,

<TABLE>
<CAPTION>


                                                            1996                1995
                                                            ----                ----
<S>                                                         <C>                 <C>
Supplemental disclosure of cash flow information:
   Cash paid during the year for:
   Interest                                                 $    236,610        $     327,863
                                                            ============        =============

Supplemental disclosure of non-cash financing activities:
   Capitalization of stockholder and affiliate loans in
    exchange for common stock                               $       -           $       7,500
                                                            ============        =============

     In connection with the issuance of common stock,  20,000 shares were issued
     as consideration for loans
     made to the Company                                    $   -               $      35,000

     In connection with the issuance of common stock, 500,000 shares
     were issued as consideration for services              $       -           $     500,000
                                                            ============        =============

     In connection with the issuance of the Subsidiary's  common stock,  160,000
     shares of Subsidiary's common stock were issued as
     consideration for loans made to Subsidiary             $       -           $     640,000
                                                            ============        =============

     In connection with issuance of common stock, 150,000 shares were
     issued as deferred compensation                        $     49,500        $        -
                                                            ============        ==========

</TABLE>
                                           F-6

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 1   -  ORGANIZATION

     US Bridge Corp. "the Company" was  incorporated in the State of Delaware on
September  11,  1988  under  the name of  Colonial  Capital  Corp.  The  Company
subsequently  changed its name to Cofis International Corp. ("Cofis") during May
1991.  Effective April 1994, in connection  with the reverse  acquisition of its
subsidiaries, (See Note 12a) Cofis changed its name to US Bridge Corp.

     US Bridge of N.Y. Inc. ("US Bridge NY") is a New York Corporation and as of
June 30, 1996 is a 50.1% owned  subsidiary of the Company which  provides  steel
erection to contractors  pursuant to  governmental  construction  projects.  The
Company's  ownership  in US Bridge NY was  diluted  to a 50.1% as a result of US
Bridge NY's initial public offering ("IPO")  completed on August 14, 1995. Prior
to  the  IPO  the  Company  owned  85.6%  of US  Bridge  NY.  US  Bridge  NY was
incorporated on September 4, 1990.

     One Carnegie Court Associates, Ltd. "One Carnegie", was incorporated in the
State of Maryland and is a wholly owned subsidiary of the Company.  One Carnegie
was  incorporated  on December 14, 1990 for the purposes of acquiring on January
14, 1991, building,  machinery and equipment. One Carnegie rents said facilities
to US Bridge of Maryland Corp.  ("US Bridge MD"). US Bridge MD is a wholly owned
subsidiary of the Company.

     US Bridge MD was  incorporated  in the State of Delaware for the purpose of
providing  laborers  to perform  fabrication  work for US Bridge of NY and other
unrelated customers.

     Effective  April 1994,  the Company has adopted a new fiscal year that ends
on June 30, which is the same year end date as its  subsidiaries.  In connection
therewith,  the Company has reported its  operations for the twelve months ended
June 30, in order to correspond with its operating subsidiaries.

NOTE 2   -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a) Consolidated statements

     The consolidated financial statements at June 30, 1996 and 1995 include the
accounts of the Company and its majority owned  subsidiaries,  US Bridge NY, One
Carnegie and US Bridge MD, after  elimination  of all  significant  intercompany
transactions and accounts.

         b) Contracts and retainage receivables

     Contracts  and  retainage   receivables   represent   amounts   billed  but
uncollected on completed  construction  contracts and construction  contracts in
progress.

     The Company  utilizes the  allowance  method of  recognizing  uncollectible
receivable.  The allowance method  recognizes bad debt expense based on a review
of the  individual  accounts  outstanding,  and the  Company's  prior history of
uncollectible receivable. As of June 30, 1996, an allowance has been established
for receivable which are deemed uncollectible.


                                     F-7

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


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

         c) Property and equipment

     Property and equipment are recorded at cost. Depreciation is provided using
the straight- line method over the estimated  useful lives of the related assets
which range from 10 to 40 years.

         d) Deferred offering costs

     Deferred  offering  costs  consisted  of  professional  fees related to the
initial  public  offering  of US Bridge NY.  Deferred  offering  costs have been
charged to additional paid-in capital upon the completion of the offering.

         e) Deferred financing costs

     Deferred  financing costs consisted of shares issued to investors  pursuant
to US Bridge NY's  private  offering  memorandum  and have been  amortized  on a
monthly  basis  until the  earlier of March  1996,  the due date of the  related
promissory notes, or the initial public offering of US Bridge of NY.

         f) Deferred consulting costs

     Deferred  consulting costs consist of consulting fees in the form of common
stock  issued to a broker  dealer.  A portion of the deferred  consulting  costs
amounting  to $250,000 are being  amortized on a monthly  basis until June 1997,
the expiration date of the related consulting agreement.  The remaining $250,000
portion  will be amortized  commencing  August 10, 1996,  which  represents  the
commencement  date with which the  Company  was  quoted on the NASDAQ  Small Cap
Stock Market System. ("NASDAQ")

         g) Contract acquisition costs

     Contract  acquisition  costs  consisted  of  costs  of  acquiring  existing
contracts from an affiliate of the Company and were amortized on a straight line
basis over the lives of the respective long term contracts which ranged from one
to three years.

         h) Income taxes

     The Company  accounts  for income  taxes in  accordance  with  Statement of
Financial  Accounting  Standards  No. 109,  "Accounting  for Income Taxes" which
requires  the use of the  "liability  method" of  accounting  for income  taxes.
Accordingly,  deferred tax  liabilities  and assets are determined  based on the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities,  using  enacted  tax  rates in  effect  for the  year in which  the
differences  are  expected to  reverse.  Current  income  taxes are based on the
year's taxable income for Federal, State and City income tax reporting purposes.


                                     F-8

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


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

         i) Revenue recognition

     US  Bridge  of  NY  recognizes  revenue  and  costs  from  fixed-price  and
modified-price  contracts  for all current  contracts  under the  percentage  of
completion  method.  Cost of contract  revenues  include all direct material and
labor costs and those  indirect costs related to contract  performance.  General
and  administrative  expenses  are  accounted  for  as  period  costs  and  are,
therefore,  not  included  in the  calculation  of  the  estimates  to  complete
construction contracts in progress.  Material project losses are provided for in
their entirety without  reference to the percentage of completion.  As contracts
can extend over one or more accounting  periods,  revision in costs and earnings
estimated  during the  course of the work are  reflected  during the  accounting
period in which the facts become known.

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

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

         j) Net income (loss) per share

     Net income  (loss) per share for the years ended June 30, 1996 and 1995 are
based upon the weighted average number of common shares  outstanding  during the
respective years.

        k)  Use of estimates

     The  preparation of the financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that effect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

         l) Statements of cash flows

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


                                     F-9

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


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

        m)  Impact of recently issued accounting standards

     In March 1995, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of", which requires
impairment  losses to be recorded on long-lived  assets used in operations  when
indicators of impairment are present and the  undiscounted  cash flows estimated
to be  generated  by those  assets are less than the  assets'  carrying  amount.
Statement  121 also  addresses  the  accounting  for long- lived assets that are
expected to be disposed of. The Company  adopted  Statement  121 during the year
ended June 30, 1996.

         n) Accounting for stock-based compensation

     The  Company  has  elected  earlier  adoption  of  Statement  of  Financial
Accounting Standards No. 123, "Accounting for Stock-Based  Compensation",  which
requires the  recognition of compensation  expense for stock-based  awards based
upon the fair value of the award at the grant date.

         o) Fair value disclosure as of June 30, 1996

     The  carrying  value of cash,  accounts  receivable,  accounts  payable and
accrued  expenses and  short-term  debt are a reasonable  estimate of their fair
value.  The carrying value of the long-term  debt including the current  portion
approximate  fair value based upon the interest factors for the debt being based
upon the prime rate which reflects market value.

         p) Reclassifications

     Certain  reclassifications have been made to the June 30, 1995 consolidated
financial statements in order to conform to the June 30, 1996 presentation.

NOTE 3   -  CONTRACT AND RETAINAGE RECEIVABLE

     At  June  30,  1996,  contract  and  retainage  receivable  consist  of the
following:


            Contracts in progress                                   $1,038,344
            Completed contracts                                     2,718,681
            Retainage                                                 683,366
                                                                    ---------
                                                                    4,440,391

            Less:  allowance for doubtful accounts                  1,000,000

                                                                    $3,440,391


                                     F-10

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 4   -  CONTRACTS IN PROGRESS

     At June 30, 1996,  costs and  estimated  earnings in excess of billings and
billings  in excess of costs and  estimated  earnings on  uncompleted  contracts
consist of the following:

            Costs incurred on uncompleted contracts              $  7,079,625
            Profits earned to date                                  3,914,660
                                                                    ---------
                                                                    10,994,285

            Less: billings to date                                  8,577,328

                                                                    $2,416,957

     Included in the accompanying  balance sheet under the following captions at
June 30, 1996:

            Costs and estimated earnings in excess of
             billings on uncompleted contracts                      $2,433,524
            Billings in excess of costs and estimated
             earnings on uncompleted contracts                        (16,567)

                                                                    $2,416,957

NOTE 5   -  BACKLOG

     The following  schedule  summarizes  changes in backlog on contracts during
the year ended  June 30,  1996.  Backlog  represents  the amount of revenue  the
Company expects to realize from work to be performed on uncompleted contracts in
progress at year end and from  contractual  agreements on which work has not yet
begun.



            Backlog balance at July 1, 1995                         $2,464,372
            New contracts during the year ended
             June 30, 1996                                          22,570,424
                                                                    ----------

                                                                    25,034,796
            Less: contract revenue earned during the year
             ended June 30, 1996                                    7,091,396

            Backlog balance at June 30, 1996                        $17,943,400
                                                                    ===========


                                     F-11

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 6   -  PROPERTY AND EQUIPMENT

     Property and equipment, net consisted of the following at June 30, 1996:

                  Land                                              $ 550,000
                  Building                                          2,200,000
                  Equipment                                         1,261,924
                                                                    ---------
                                                                    4,011,924
                  Less: accumulated depreciation                     (969,834)

                                                                    $3,042,090

     All property and equipment are pledged pursuant to a mortgage payable. (See
Note 8).

NOTE 7   -  ACCRUED EXPENSES

            Accrued expenses consist of the following at June 30, 1996:

                  Wages and related union benefits                  $  22,462
                  Professional fees                                    20,000
                  Insurance expense                                   118,934
                  Rent                                                 22,500
                  Interest and penalties                              170,102
                  Other                                                43,731
                                                                    ---------

                                                                    $ 397,729

NOTE 8   -  MORTGAGE PAYABLE

     On October 12, 1995, in  connection  with the original  acquisition  of the
property and equipment,  One Carnegie signed with the lender a letter  agreement
revising the modification  agreement  discussed  below.  Pursuant to such letter
agreement,  One Carnegie  was in default as of June 30,  1996.  The mortgage has
been classified as current at June 30, 1996, since One Carnegie has not paid the
required  monthly  installments  timely as  stipulated  in the letter  agreement
thereby allowing the lender to call the loan at anytime.

     On December  13,  1994,  One Carnegie  signed a  modification  to the first
forbearance agreement with the lender.  Pursuant to such modification agreement,
the lender  agreed not to  accelerate  and demand  full  payment of the note and
allowed One Carnegie to reduce the monthly payments to $40,000 pursuant to a new
two (2) year  amortization  schedule  provided by the lender.  Such modification
agreement required One Carnegie to make timely payments after December 31, 1994,
which One Carnegie did not make timely.


                                     F-12

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 8   -  MORTGAGE PAYABLE (Cont'd)

     The above terms had been  previously  modified  as follows.  On February 1,
1991, One Carnegie  originally  entered into a $3,000,000  installment loan with
interest at 11% per annum through November 1994, with interest increasing to 13%
per annum in  December  1994;  monthly  payments  including  interest of $50,000
through November 1993,  increasing to $60,000 in December 1993 and increasing to
$177,430 on December 14, 1994 until January 15, 1996,  the due date of the loan.
The mortgage is collateralized by all property and equipment of One Carnegie and
is  personally  guaranteed  by the  majority  stockholder  of the Company and an
entity owned by such stockholder.

     On October 21, 1993, One Carnegie  signed the first  Forbearance  Agreement
staying  foreclosure  and  restructuring  the terms  under  the  above  original
mortgage  agreement.  The  respective  terms under said  agreement  required One
Carnegie to make  monthly  payments of $50,000 to October  14,  1994,  a $60,000
payment on November 14, 1994, and monthly payments of $177,430  thereafter until
maturity on January  15,  1996.  Interest is payable at 11% per annum.  Upon the
earlier to occur of October  14,  1994 or a public or  private  issuance  by One
Carnegie  of  either  equity  or debt  with a term of  three  (3)  years or more
(including  sale/leaseback  or  other  off  balance  sheet  financing),  or  any
combination  thereof,  One  Carnegie was  required to pay to the  mortgagor  the
amount  sufficient  to pay in full all  interest  then accrued and unpaid on the
indebtedness and to reduce the outstanding  principal amount of the indebtedness
to $2,331,965  which is the amount that would have been outstanding on such date
had One Carnegie timely made all of the payments based on the original  mortgage
agreement.  Pursuant to such forbearance agreement,  the Mortgagor may terminate
immediately,  irrevocably and without notice such  forbearance  agreement if One
Carnegie defaults on such terms.

     One  Carnegie  did not make the  required  payment on October  14,  1994 to
reduce the outstanding principal amount of the indebtness to $2,331,965 pursuant
to such forbearance agreement. The lender did not but could have accelerated and
demanded  the  total  balance  due  under  the  note  and  could  terminate  the
forbearance agreement immediately, irrevocably and without notice.

NOTE 9   -  INCOME TAXES

     Effective  July 1, 1992,  the Company has adopted  Statement  of  Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". Income taxes
are  provided  for the tax effects of  transactions  reported  in the  financial
statements  and  consist of taxes  currently  due plus  deferred  taxes  related
primarily  to  differences  between  the  financial  and tax basis of assets and
liabilities.  The deferred tax assets and  liabilities  represent the future tax
return consequences of these temporary differences, which will either be taxable
or deductible  when the assets and  liabilities  are  recovered or settled.  The
Company's  only such  significant  item relates  primarily to net operating loss
carryfowards (NOL's).


                                     F-13

<PAGE>


     U.S.  BRIDGE  CORP.  AND  SUBSIDIARIES  NOTES  TO  CONSOLIDATED   FINANCIAL
STATEMENTS FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 9   -  INCOME TAXES (Cont'd)

     The Company has elected not file a consolidated  income tax return with its
subsidiaries.  As such,  at June 30, 1996 the Company has federal net  operating
loss carryforwards of approximately $215,000 which expires during 2008.

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

            Federal statutory income tax benefit rate 34% Increases (reductions)
            resulting from:
               State and local income taxes net of federal benefit         (6%)

            Effective income tax benefit rate                              28%

     The  tax  effects  of  significant  item  comprising  the  Company  and its
subsidiary's net deferred tax assets as of June 30 1996 is as follows:

            Net operating loss carryforwards                         $1,700,000
            Less valuation allowance                                 (1,700,000)

            Long-term portion of deferred tax assets                 $     -0-
                                                                     =========

     At June 30, 1996, a 100% valuation allowance,  in the approximate amount of
$1,700,000 has been provided for the Company and its  subsidiaries to reduce the
net deferred  tax assets for the amount by which the deferred tax asset  related
to the NOLs  exceeded the net deferred tax  liability  resulting  from all other
temporary  differences.  The  Company and its  subsidiaries  have  provided  the
allowance  since  management  could not determine  that it was "more likely than
not" that the benefits of the deferred tax assets would be realized.

NOTE 10  -  NOTES PAYABLE

        a)  Line of credit $250,000

     During August 1994, the Company  secured a $250,000 credit line with a bank
at an interest  rate of one and one half percent  (11/2%)  above the prime rate.
Interest  is payable on the first day of each month which  commenced  October 1,
1994.  Said credit  line is payable on demand.  At June 30, 1996 the balance was
$145,837.

         b) Bridge Loan

     On January 10, 1995, pursuant to a private  transaction,  US Bridge NY sold
to one (1)  individual  10 units  comprising  one (1)  promissory  note totaling
$252,000 and 3,000,000  warrants  purchased  for $30,000 which  provided for the
right to  acquire  3,000,000  common  shares  of US  Bridge  NY.  Each  unit was
comprised of a $25,200 12% promissory note and 300,000 warrants for $3,000 for a
total price of $28,200 per unit.  The warrants were  identical  and  exercisable
under the same term as the IPO  warrants  of US Bridge NY. The  promissory  note
which beared interest at twelve percent (12%) was repaid on August 14, 1995 upon
completion of US Bridge NY's Initial Public Offering

                                     F-14

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995



NOTE 10  -  NOTES PAYABLE (Cont'd)

         c) Promissory Notes

     On January 16, 1995 an  Underwriter  commenced and  privately  offered on a
best-efforts basis,  sixteen (16) units of US Bridge NY securities at a price of
$55,000 per unit.  Each unit  consisted  of a promissory  note in the  principal
amount of $45,000 bearing interest at 12% per annum, and 10,000 shares of common
stock at $1.00 per share. The 160,000 shares sold in this offering were assigned
a value of 100% of the  initial  public  offering  price of $5.00 per share.  In
relation  to the  common  stock  sold in the  offering,  US Bridge  NY  recorded
deferred  financing  costs of $640,000  (160,000  shares at $5.00 per share less
original cost of $1.00 per share).  Deferred financing costs were amortized on a
monthly  basis  until the  earlier of March  1996,  the due date of the  related
promissory  notes or the initial  public  offering of US Bridge NY. As a result,
for the years ended June 30,  1996 and 1995 US Bridge NY  recorded  amortization
expense of  $441,863  and  $198,137,  respectively.  The  holders of such shares
included  their shares in US Bridge NY's initial public  offering.  The offering
was  completed  on March 9, 1995  resulting in all sixteen (16) units being sold
netting proceeds to US Bridge NY of approximately $696,851.

     The  placement  agent  received a commission  of 10% and a  non-accountable
expense allowance of 3% of the gross proceeds of the offering.

         d) Line of credit $200,000

     On  January  17,  1995,  US  Bridge  NY  borrowed  $200,000  pursuant  to a
promissory  note with a  financial  institution  at a rate of 81/2%  per  annum.
Interest was payable on the last day of each month  beginning  January 31, 1995.
Such note was fully collaterized by a $200,000 certificate of deposit and it was
due on June 21, 1996. Accordingly, as of June 30, 1996 the loan was repaid.

NOTE 11  -  MINORITY INTEREST

     In connection  with US Bridge NY's private  placement on March 9, 1995 (see
Note 10c) and its IPO (see Note 12c(i)),  the Company's interest in US Bridge NY
was reduced to 49.95% before its exercise of the special  warrant.  On September
9, 1995 the Company  purchased at $2.50 per share,  5,665 shares of common stock
of US  Bridge NY by  exercising  its  right  pursuant  to the terms of a special
warrant  issued only to the  Company.  As a result,  the Company  increased  its
ownership  in US Bridge NY to  50.01%  from  49.95%.  As of June 30,  1996,  the
minority  interest  balance  amounting to  $2,409,028  is a result of all of the
above transactions and the proportionate share of income and losses attributable
to the minority stockholders.

     Lastly,  in connection  with US Bridge NY's IPO, the Company  generated net
proceeds of  $3,104,880  and recorded a gain of $832,571 as a result of reducing
its ownership percentage to 50.01% of US Bridge NY.


                                     F-15

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 12  -  STOCKHOLDERS' EQUITY

         a)   Recapitalization

     On April 24, 1994,  after giving  effect to a 1-for-4  reverse stock split,
the Company issued  2,820,000 and 720,000  shares,  respectively,  of its common
stock to the  stockholders  of US Bridge NY and One Carnegie in exchange for all
of their issued and outstanding  shares. The acquisition by the Company has been
treated as a recapitalization for accounting purposes.  Accordingly,  after such
transaction  and before US Bridge  NY's  private  offering  and  initial  public
offering,  US Bridge NY was a wholly owned subsidiary of the Company. As of June
30, 1996 US Bridge NY is a 50.01% owned  subsidiary and One Carnegie is a wholly
owned subsidiary of the Company.

         b) Issuance of shares

     (i) On August 15, 1995,  the Company  issued 150,000 shares of common stock
to its  President  pursuant  to the  terms of the  Company's  Senior  Management
Incentive  Plan.  Such shares were issued as  compensation  for the  President's
efforts with the Company and US Bridge NY in the  consummation of US Bridge NY's
initial  public  offering on August 14, 1995. Of the total 150,000 shares issued
to the President,  50,000 shares are immediately vested without restrictions and
the remaining  100,000 shares vest pursuant to the restricted  periods,  whereby
50,000 shares vest on each August 15, 1996 and 1997.

     (ii) On June 16, 1995  pursuant to Form S-8  Registration  Statement  filed
with  Securities  and  Exchange  Commission  the Company  registered  and issued
500,000  shares to a broker dealer as  consideration  for a two year  consulting
agreement.  Pursuant to the consulting agreement, the consultant will serve as a
financial  consultant and advisor to the Company on a non-exclusive  basis for a
period of  twenty-four  (24)  months  commencing  on June 1, 1995.  Of the total
500,000 shares issued to the consultant,  250,000 of such shares were to be held
in escrow and  released to the  consultant  upon the  approval of the  Company's
common stock on NASDAQ.  The Company had also agreed that upon NASDAQ  approval,
an  additional  100,000  shares  of  restricted  stock  were to be issued to the
consultant. Pursuant to a consent of the Board of Directors, the company amended
such  consulting  agreement  whereby such shares in escrow were released to such
consultant during February 1996 even though the Company was not listed on NASDAQ
until  July 25,  1996.  Lastly,  the  Board of  Directors  further  amended  the
consulting agreement to increase the additional number of shares from 100,000 to
250,000.  Accordingly  during August 1996, the Company issued 250,000 restricted
shares to such consultant.


                                     F-16

<PAGE>


     U.S.  BRIDGE  CORP.  AND  SUBSIDIARIES  NOTES  TO  CONSOLIDATED   FINANCIAL
STATEMENTS FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 12  -  STOCKHOLDERS' EQUITY (Cont'd)

        c)  Equity transaction of US Bridge NY

            (i)  Initial public offering

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

     In  connection  with the  initial  public  offering  of US Bridge  NY,  the
Company's ownership  percentage in US Bridge NY was reduced to 49.95% before the
exercise of the special  warrant as discussed  below.  Accordingly,  at June 30,
1996 the Company's  minority  interest  amounting to $2,377,577  represents  the
effect of US Bridge NY's private  offering and the initial  public  offering and
the cumulative  effect of US Bridge NY's operations  since the private  offering
and initial public offering.

            (ii) Special Warrant

     On September 9, 1995, the Company purchased at $2.50 per share 5,665 common
shares of US  Bridge  NY by  exercising  its  right  pursuant  to the terms of a
special  warrant  issued  only to such  stockholder.  As a result,  the  Company
increased its ownership of US Bridge NY to 50.01% from 49.95%.


                                     F-17

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 13  -  COMMITMENT AND CONTINGENCIES

        a)  Leases

     US Bridge NY leases its  administrative  offices pursuant to a signed lease
agreement with an affiliate owned by the Company's  majority  stockholder  which
requires  monthly  payments of $20,000.  Such lease  expires on March 31,  1998.
Under such lease  agreement,  US Bridge NY is required  to make  future  minimum
lease payments as follows:

                     Year Ending
                      June 30,
                        1997                  $  240,000
                        1998                     180,000
                                              ----------

                            Total             $  420,000
                                              ==========

     Included in selling,  general and  administrative  expenses is rent expense
which amounted to $240,000 for the years ended June 30, 1996 and 1995. US Bridge
NY also leases a yard for storage  material  pursuant to a oral agreement  which
requires  monthly  payments of $3,500.  As a result,  total rent expense for the
years ended June 30, 1996 and 1995 amounted to $282,000.

b) Significant customers and vendors

     1.For the year ended June 30, 1996 and 1995, US Bridge NY had three (3) and
two (2) unrelated  customers  respectively,  which  accounted for  approximately
sixty two (62%) and fifty-eight (58%) respectively,  of total revenues.  At June
30,  1996 and 1995  amounts  due from such  customers  represented  46% and 70%,
respectively, of total accounts receivable.

     2. For the years ended June 30, 1996 and 1995 US Bridge NY  purchased  from
Waldorf Steel Fabrications, Inc. ("Waldorf") approximately $180,333 and $478,000
respectively,  of the  materials and labor  necessary to perform steel  erection
services.  Effective August 1, 1995, Waldorf ceased  operations.  Said vendor is
under the common control of the President of the Company.  Lastly, for the years
ended  June  30,  1996  and  1995,  US  Bridge  NY paid  $622,050  and  $271,495
respectively,  to US Bridge of  Maryland,  Inc.  ("US  Bridge  MD") for  certain
materials and labor necessary to perform steel erection  services.  US Bridge MD
is a wholly owned subsidiary of Bridge Corp.

        c)  Seasonality

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


                                     F-18

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 13  -  COMMITMENT AND CONTINGENCIES (Cont'd)

        d)  Bonding requirements

     US Bridge  NY is  required  to  provide  bid  and/or  performance  bonds in
connection with governmental  construction  projects.  To date, US Bridge NY has
been able to sufficiently obtain bonds for all its projects, but there can be no
assurance  that  it  will be able to  continue  to do so.  In  addition,  new or
proposed  legislation  in  various  jurisdictions  may  require  the  posting of
substantial   additional  bonds  or  require  other  financial   assurances  for
particular projects.

        e)  Payroll taxes

     During  September 1994, US Bridge NY entered into an installment  agreement
with  a tax  authority  in  order  to  liquidate  delinquent  payroll  taxes  of
approximately  $231,535  and  remove a tax lien  filed  by such  authority.  The
agreement  required  US Bridge NY to pay  $25,000 per month until such amount is
fully paid. As per the terms of the agreement, US Bridge NY must also pay timely
all current payroll taxes. As of June 30, 1996 US Bridge NY has not made all the
required  monthly  payments and has not paid timely all current  payroll  taxes.
Additionally,  US Bridge MD also became  delinquent  with regards to its payroll
taxes which  amounted to  approximately  $93,423 as of June 30, 1996.  The total
payroll tax  liability as of June 30, 1996,  excluding  the related  penalty and
interest amounted to $382,135.

         f) Employment agreement

     On April 4, 1995,  US Bridge NY entered into an employment  agreement  with
its President and Director for a term of approximately  three (3) years expiring
on June 30, 1998.  The  employment  agreement  provides for an annual  salary of
$300,000 with a 10% annual escalation.  Pursuant to the agreement, the President
and  Director is also  entitled  to receive a $50,000  per year  non-accountable
expense  allowance  payable in equal  weekly  installments.  The  President  and
Director is also  entitled to receive an annual  bonus of $50,000 if the Company
nets  $1,000,000  before  taxes in any year and an  additional  $25,000 for each
$500,000 of additional pre-tax profits. Advances against such bonus are equal to
$10,000 payable monthly until the end of the employment agreement.  At such time
any excess  advances will be re-paid to US Bridge NY. No advances have been made
as of June 30, 1996 under this agreement.


                                     F-19

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 13  -  COMMITMENT AND CONTINGENCIES (Cont'd)

         f) Employment agreement (Cont'd)

     In addition, the President and Director were be granted options to purchase
25,000  shares of US Bridge NY's common  stock,  all of which  options  shall be
vested as of the dates  outlined as follows.  The options  shall be  exercisable
commencing April 4, 1996 and continuing until April 4, 2004; providing, however,
options to purchase 7,500 shares shall become vested and exercisable on April 4,
1996 and April 4, 1997,  respectively,  10,000  vesting  on April 4,  1998.  The
option shall  contain such other terms and  conditions as set forth in the stock
option  agreement.  The exercise price of the options shall be equal to the 110%
of the stock price in the initial  public  offering.  The foregoing  options are
intended to qualify as incentive stock options.  Lastly,  US Bridge NY, pursuant
to such  agreement will pay premiums on a $3,500,000  life insurance  policy for
the benefit of individuals as directed by such President and Director.  Any cash
surrender value is US Bridge NY's property until the employment agreements ends.
The estimated premium on such policy is $80,000 per year.

NOTE 14  -  RELATED PARTY TRANSACTIONS

        a)  Due to officer

     On May 13, 1996, an unrelated party loaned the Company's President $300,000
pursuant to a memorandum of  understanding.  The loan bears interest at 1% above
prime, and its due 90 days from receipt of funds.  Simultaneously therewith, the
Company's President loaned the Company the $300,000. As collateral for the loan,
550,000 shares of the Company's  common stock owned by the President were put in
an escrow  account.  Upon the Company  being listed on NASDAQ,  the Company will
liquidate such loan by releasing  400,000 shares from the escrow account to such
unrelated  party pursuant to Regulation "S" under the Securities Act of 1933, as
amended.  Accordingly,  during  September 1996, the Company  released 400,000 to
such unrelated party for satisfaction of the loan.

     Additionally,  the Company's  President  issued to such unrelated  party an
option to purchase  600,000  share at $1.50 per share from the day the funds are
received until 6 months after the Company attains NASDAQ listing. The option may
be  exercised at any time within the  exercise  period  subject to a minimum bid
prize of $3 per share.  Lastly, the Company's President may borrow an additional
$100,000 under the same terms as discussed above for a period of 30 days.

     As of June 30,  1996,  of the total due to officer  amounting  to $358,779,
$275,500 represents the remaining amount owed for the original $300,000 loan and
the  remaining  balance  amounting to $83,279  represents  advances  made by the
President to the  Company's  subsidiaries  which bear no interest and are due on
demand.


                                     F-20

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995


NOTE 14  -  RELATED PARTY TRANSACTIONS (Cont'd)

        b)  Rental income

     On July 1, 1991,  One Carnegie  leased to Waldorf Steel  Fabricators  Inc.,
"Waldorf",  an  affiliate  owned  by the  Company's  majority  stockholder,  the
facilities  it purchased in January  1991.  Such lease is for five (5) years and
provides  for  monthly  rental  payments  of  $50,000.  Pursuant  to such  lease
agreement, any funds collected in excess of the total annual rent of $600,000 is
to be credited to the next respective  subsequent  year. The lease also provides
for all real estate taxes and operating costs to be paid directly by lessee. All
of the rental  income was  derived  and the entire  rent  receivable  balance of
$975,699 as of June 30, 1996 and 1995,  respectively,  is due from Waldorf.  The
Company has provided a $943,398  provision  related to such  receivables at June
30,  1995,  which  represents  100%  of  the  rent  receivable.  Pursuant  to an
assignment  agreement  entered  during  1994,  Waldorf has  assigned  all of its
rights, title and interests in certain accounts receivable amounting to $571,172
to One Carnegie as collateral to secure the amounts owed to One Carnegie.

        c)  Acquisition of contracts

     On June 15,  1993,  US Bridge NY signed an  agreement  to pay  $400,000  in
connection  with its  purchase  of certain  of Atlas Gem  Erectors,  Co.  Inc.'s
("Atlas  Gem")  existing  contracts  to perform  steel  erection  services.  The
purchase price was determined based on 4% of the approximate  total value of the
contracts purchased. Atlas Gem is an affiliate owned by the Company's President.
Such amount due was payable  simultaneously  with the  Company's  collection  of
revenue.  The payment amount was computed by  multiplying  the purchase price by
the  percentage  generated  as a result  of  dividing  related  project  revenue
collected to date (progress payments) by the total project revenue.  The Company
has recorded $100,000 of amortization  expense for the year ended June 30, 1995.
Accordingly,  as of June 30,  1995 such  contract  acquisition  costs were fully
amortized.

        d)  Purchase of material and labor

     For the years  ended  June 30,  1996 and 1995 US Bridge NY  purchased  from
Waldorf Steel Fabrications, Inc. ("Waldorf") approximately $180,333 and $478,000
respectively,  of the  materials and labor  necessary to perform steel  erection
services.  Effective August 1, 1995, Waldorf ceased  operations.  Said vendor is
under the common control of the President of the Company.  Lastly, for the years
ended  June  30,  1996  and  1995,  US  Bridge  NY paid  $622,050  and  $271,495
respectively,  to US Bridge of  Maryland,  Inc.  ("US  Bridge  MD") for  certain
materials and labor necessary to perform steel erection  services.  US Bridge MD
is a wholly owned subsidiary of Bridge Corp.

        e)  Office leases

     US Bridge NY leases its  administrative  offices pursuant to a signed lease
agreement with an affiliate owned by the Company's  majority  stockholder  which
requires monthly payments of $20,000. Such lease expires on March 31, 1998.


                                     F-21

<PAGE>


                      U.S. BRIDGE CORP. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 14  -  RELATED PARTY TRANSACTIONS (Cont'd)

        f)  Employment agreement

     On April 4, 1995 US Bridge NY entered into an employment agreement with its
President and Director for a term of  approximately  three (3) years expiring on
June 30,  1998.  The  employment  agreement  provides  for an  annual  salary of
$300,000 with a 10% annual escalation.  Pursuant to the agreement, the President
and  Director is also  entitled  to receive a $50,000  per year  non-accountable
expense  allowance  payable in equal  weekly  installments.  The  President  and
Director is also  entitled to receive an annual  bonus of $50,000 if the Company
nets  $1,000,000  before  taxes in any year and an  additional  $25,000 for each
$500,000 of additional pre-tax profits. Advances against such bonus are equal to
$10,000 payable monthly until the end of the employment agreement,  at such time
any excess  advances will be re-paid to US Bridge NY. No advances have been made
as June 30, 1996 under this agreement.

     In addition, the President and Director were be granted options to purchase
25,000  shares of US Bridge NY's common  stock,  all of which  options  shall be
vested as of the dates  outlined as follows.  The options  shall be  exercisable
commencing April 4, 1996 and continuing until April 4, 2004; providing, however,
options to purchase 7,500 shares shall become vested and exercisable on April 4,
1996 and April 4, 1997,  respectively,  10,000  vesting  on April 4,  1998.  The
option shall  contain such other terms and  conditions as set forth in the stock
option  agreement.  The exercise price of the options shall be equal to the 110%
of the stock price in the initial  public  offering.  The foregoing  options are
intended to qualify as incentive stock options.  Lastly,  US Bridge NY, pursuant
to such  agreement will pay premiums on a $3,500,000  life insurance  policy for
the benefit of individuals as directed by such President and Director.  Any cash
surrender value is US Bridge NY's property until the employment agreements ends.
The estimated premium on such policy is $80,000 per year.

NOTE 15  -  SUBSEQUENT EVENTS

            Issuance of shares

     During August 1996, the Company  issued 250,000 shares of restricted  stock
pursuant to a consulting agreement entered on during June 1995.




                                     F-22

<PAGE>