<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                              FORM 10-KSB/A No. 5

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       -----------------

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD OF _________ TO _________.

Commission File Number:  0-29205
                         -------


         Lighthouse Fast Ferry, Inc. (f/k/a Lighthouse Landings, Inc.)
         -------------------------------------------------------------
                (Name of small business issuer in its charter)


               New Jersey                              22-3241823
      ------------------------------              -------------------
      State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization               Identification No.)


       195 Fairfield Avenue, Suite 3C, West Caldwell, New Jersey  07006
       ----------------------------------------------------------------
                   (Address of principal executive offices)

Issuer's telephone number: (973) 618-9036
Securities registered under Section 12(b) of the Act:   None
                                                        ----

             Securities registered under Section 12(g) of the Act:

                         Common Stock, $.01 Par Value
                         ----------------------------
                               (Title of Class)

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

Check here if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B 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.  [X]

Issuer's revenues for its most recent fiscal year: $3,285,978.


As of February 2, 2001, there were 6,725,087 shares of the Registrant's $.01 par
value Common Stock ("Common Stock"), the only outstanding class of voting
securities, outstanding.  Based on the closing price of the Common Stock as
reported on the "Pink Sheets" on February 2, 2001, the aggregate market value of
Common Stock held by non-affiliates of the Registrant was approximately
$1,043,775.

Transitional Small Business Disclosure Format (check one):  Yes [_]    No [X]
<PAGE>


                           Lighthouse Landings, Inc.
                              FORM 10-KSB/A No. 5

                                    PART I

ITEM 1.  DESCRIPTION OF BUSINESS

History of the Company
----------------------

     Lighthouse Landings, Inc. (the "Company") is a New Jersey corporation
formed on May 12, 1993 under the name Drydock Cafe, Inc.  On September 21, 1994,
the Company changed its name to Lighthouse Landings, Inc.  On September 19,
2000, the Company changed its name to Lighthouse Fast Ferry, Inc.

     Through 1997 the Company's principal business was the redevelopment of a
marina facility on a 2  1/2 acre site located on the Shrewsbury River in
Highlands, New Jersey (the "Property"), which it acquired in September 1993.
The Property is a mostly vacant parcel of land with 463 linear feet of
waterfront and has on its premises a 4,000 square foot building on the water's
edge and a small office building.  The Property has preliminary zoning approval
for a restaurant facility, retail building, bait and tackle shop, 23 slip
marina, concrete parking area and deep water boat fueling pier.

     In September 1993 the Company purchased the Property at a Sheriff's sale
for $1,000,000. Currently, the Property is encumbered by a promissory note with
the remaining principal balance of $60,000, all of which is delinquent.
However, the note holder has afforded the Company additional time to pay the
balance.  Relations with the note holder have historically been amenable.

     In December 1997, the Company purchased all outstanding shares of a
privately-owned company called The Cigar Box, Inc. ("Cigar Box"), a retail cigar
and accessories store, located in Ramsey, New Jersey.  The Cigar Box
stockholders received 75,000 shares of the Company's common stock.  The
acquisition was contemplated and consummated at a time when cigars were
increasingly popular and the Cigar Box was to be used to supply retail outlets
at ferry locations in New Jersey.  The Company had planned to operate additional
Cigar Box retail outlets, one of which would be included as part of a private
club at the Property's restaurant facility.


     In October 1998, the Company acquired 80% of the issued and outstanding
shares of the capital stock of Fast Ferry Holding Corporation, a New York
corporation, and its wholly owned subsidiaries, Fast Ferry I Corporation, Fast
Ferry II Corporation and New York Fast Ferry Services, Inc., all New York
corporations (collectively "NY Fast Ferry").  In July 2000, the Company entered
into an oral agreement with the holders of the remaining 20% of issued and
outstanding shares of Fast Ferry Holding Corporation for the purchase by the
Company of the remaining NY Fast Ferry shares for a combination of $28,753 in
cash and 102,271 restricted common shares of the Company. Management expects
that the parties will finalize and execute a written stock purchase agreement in
the first quarter of 2001.  NY Fast Ferry owns two vessels, the M/V Finest and
the M/V Bravest, and is in the business of operating high-speed commuter ferry
services in the greater New York City harbor area.  The Company issued 454,545
shares of its common stock to the NY Fast Ferry

                                       2
<PAGE>

shareholders. Of the 454,545 shares issued, 70,000 shares are subject to a put
under which two of the three selling shareholders can require the Company to
purchase an aggregate of 70,000 shares at a price of $5.00 per share.

     As a result of the acquisition of NY Fast Ferry, the Company's primary
business changed from the redevelopment of the Property to the operation of
existing fast ferry service and the development of new routes.  Accordingly, the
Company reevaluated all other business strategies and decided to sell all non-
core business assets and operations so it could focus solely on developing its
core business of ferry services.  In October 1999 the Company listed both the
Cigar Box and the Property for sale.  Efforts to sell the Cigar Box business
were unsuccessful.  The Company closed the Cigar Box on March 31, 2000.  The
Property is still listed for sale.

Current Business; Markets
-------------------------

     The Company is in the business of operating high-speed, passenger ferries.
At present, it owns two high-speed passenger ferries: the M/V Finest and the M/V
Bravest.  These ferries are 38-meter aluminum hull, low wake catamarans that
travel at speeds averaging 35 knots.  These vessels each have a capacity of 340
passengers and are equipped with TV monitors and a public announcement and
stereo system.  Both vessels also have a refreshment concession area onboard.

     The Company's primary passenger is the executive commuter.  The Company's
fast ferry service offers the executive commuter a fast, convenient, reliable,
clean and comfortable alternative to the crowded public transportation available
via train or bus, not to mention the congestion and stress faced by those
choosing to commute via automobile.  The market being served by NY Fast Ferry
includes the Rumson-Red Bank peninsula immediately south of Highlands, New
Jersey in Monmouth County which has an excellent market potential to support
present and expanded ferry service.  According to the New Jersey Department of
Transportation, there are approximately 22,000 Manhattan bound daily commuters
from Monmouth County, New Jersey alone.

     The Company's vessels travel 17 nautical miles across New York Harbor from
Highlands, New Jersey to Pier 11 in downtown Manhattan, New York.  Pier 11 is
located about two blocks from Wall Street.  This ferry also makes a stop at the
East 34th Street Pier on the eastside of midtown Manhattan.  The trip to Pier 11
is approximately 40 minutes long and an additional 10 minutes to the East 34th
Street dock.  Each day, the ferry makes two peak trips in the morning and two
peak return trips at the end of the business day, and it makes one off-peak
morning trip and one off-peak return trip in the evening four days a week.
Passengers on these trips are primarily commuters, the majority of whom purchase
40-trip tickets at the current cost of $450.

     The M/V Finest was under a bareboat charter arrangement until October 31,
1999 to the Massachusetts Steamship Authority, which operates a fast ferry
service in Massachusetts.  The M/V Finest recently underwent a scheduled engine
overhaul and is now available full-time for NY Fast Ferry operation.  The M/V
Finest will be used to add additional peak runs to and from Manhattan from the
Clam Hut site in the Highlands area, for which the Company has received site
approval from the Planning Board of the Borough of Highlands, New Jersey.  On
December 15, 2000 the Company executed a Parking License Agreement, Docking
Permit and Lease of Dock and Office Space (the "Clam Hut Lease) for the Clam Hut
site.  Pursuant to the terms of the Clam Hut Lease,

                                       3
<PAGE>

the Company has the right to use 125 of the parking spaces at the Clam Hut site
from Monday to Friday until December 31, 2001 for a fee of $1250 per week plus
5% of gross revenues of all excursions/charters originating and/or terminating
at the landlord's pier. The Clam Hut Lease is renewable at the end of each
period with terms to be decided upon renewal and in keeping with the
requirements of the municipality. In addition, pursuant to the terms of the Clam
Hut Lease, the Company has the right to use the pier and to install a parking
garage at the end of the pier and to use the outbuilding at the foot of the pier
for $800.00 per month as a ticket booth. The terms of use for the pier and
outbuilding are coincident with the terms of the parking space license. The
Company has begun making site improvements, and began ferry service from the
site on December 11, 2000.


     As of December 11, 2000, the Company offers regular, daily ferry service
from both the Clam Hut and the Aragon sites.  Each weekday morning, the Company
offers a 6:00 a.m. and an 8:00 a.m. departure from the Aragon site and a 6:55
a.m. departure from the Clam Hut site.  Each weekday afternoon, the Company
offers one return to the Clam Hut site at 5:00 p.m.  All of the remaining
afternoon runs dock at the Aragon site.

     NY Fast Ferry also runs excursions during non-commuter times and on
holidays and weekends when the vessel is not operating scheduled trips.  These
excursions include whale watching trips off the coast in the winter, summer
sunset cruises in New York Harbor, and fall foliage tours up the Hudson River
Valley.  The ferries also make trips to sporting events including baseball games
at Shea Stadium and football games at West Point, and for special events such as
4th of July fireworks.  The Company also rents its vessels for charters and
private parties.

     The Property is not in operational condition for fast ferry service because
of the condition of the bulkhead, the surface of the parking area, and the
site's limited parking capacity.  Accordingly, NY Fast Ferry operates from a
leased facility known as the Aragon Marina ("Aragon") located on Willow Street,
Highlands, New Jersey.  The site is leased by NY Fast Ferry on a passenger trip
basis, with a remaining term of approximately four years, renewable at the same
rates and basis for an additional five years.  Under this lease, the property
owner provides and maintains all land side facilities, including providing
parking attendants in the morning, snow plowing, lighting, docks, shuttle bus to
offsite lot, etc.  It is Aragon's obligation to provide 300 parking spaces, but
only 250 are available, and there are payment reductions for the lost parking
spaces.  The monthly lease payment to Aragon has averaged $24,900 over the last
12 months.

     The Company believes the Aragon site is better suited to providing first-
class, convenient commuter fast ferry service than the Property it owns.
Accordingly, the Company is in negotiations with the owner of Aragon to purchase
that site and has placed its Property on the market for sale. However, the
Aragon property needs improvements and the parking space needs to be expanded.

     The Company is also actively seeking other sites in the New York, New
Jersey and Connecticut areas suitable for providing fast ferry service to
commuters to Manhattan, in order to maximize ferry capacity.  If the Company is
unsuccessful in negotiating acceptable terms for the Aragon property, there is
sufficient time remaining on the Aragon lease to permit the Company to explore
other options.

     The Company entered into a five-year lease agreement, renewable for a
further five-year term, with The Connecticut Light and Power Authority (the
"Landlord") for approximately 3.6 acres

                                       4
<PAGE>


together with a docking facility located at Atlantic Street and Washington
Boulevard in Stamford, Connecticut (the "Stamford Property") for the purpose of
operating a high-speed ferry service. The lease commenced on November 1, 1999
with rent payments commencing on March 1, 2000. Rent for the first six months
(March through August) is based on an annual rate of $100,000, or $8,333.33 per
month, and for the seventh through the twenty-fourth month, rent is based on an
annual rate of $150,000, or $12,500 per month. On August 7, 2000, the Company
received a notice from a subsidiary of its Landlord terminating the lease. The
Company disputes the Landlord's right to terminate the lease and has filed legal
action to enforce the lease. See Item 3, Legal Proceedings, below.

     The Company plans to operate high-speed ferry service from the Stamford
Property to LaGuardia airport and to Manhattan, stopping at the pier at East
34th Street and at Pier 11 downtown utilizing one newly-designed aluminum hull
catamaran with a capacity of 275 passengers and a 38 knot service speed.  The
Company plans to expand service to up to four vessels.  The design work for the
new boats was completed in January 2000.  The Company entered into a contract
with Derecktor Shipyards ("Derecktor") for the construction of at least three
vessels.  Work on the first vessel has been suspended by Derecktor until the
Company obtains a commitment for construction and permanent financing of the
vessel.  The Company is in negotiations with a number of private lenders for
permanent financing of the vessel.  Actual construction of the vessel will
commence immediately upon the Company receiving permanent financing of the
vessel.  Construction is expected to be completed eight to ten months after
financing is in place.  The U.S. Coast Guard must issue a certificate of
inspection for any new vessel the Company uses.


     Before ferry service can begin, the Company must first obtain various
governmental approvals and complete site improvements on the Stamford Property.
The Company expects the refurbishment to be completed within approximately 120
days from the time construction begins. The Stamford site has been zoned for
parking and the Company has received oral assurances from the local authorities
that it can operate fast ferry service from this site.  The site will have
approximately 600 parking spaces.  The Company has met with its engineers and
government officials, and is attempting to resolve its dispute with the Landlord
on the Stamford site in a favorable manner (see the discussion in Item 3, Legal
Proceedings).  The Company is unable to make site improvements until the dispute
with the Landlord is resolved.  The Company originally applied for a Certificate
of Permission ("COP") with the Connecticut Department of Environmental
Protection ("DEP").  The Company received correspondence dated October 30, 2000
from the Connecticut DEP advising the Company that the proposed activities do
not conform to the statutory criteria for which a COP may be issued.  The
correspondence further stated that the proposed activities cannot be authorized
by a COP, but require a permit pursuant to Section 22A-361 of the Connecticut
general statutes.  On December 15, 2000 the Company filed an application with
DEP in accordance with Section 22A-361.  The Landlord issued notice to the DEP,
objecting to the Company's application and as a result, the Company's
application was dismissed.  Any further applications for permits relating to the
Stamford site will require the consent of the Landlord.  The Company is
presently engaged in litigation with the Landlord in an effort to have its lease
for the Stamford property reinstated which would also require the Landlord to
cooperate with the Company and not to withhold its consent to file for an
application with the DEP.  The initial trial date is set for February 26, 2000.


                                       5
<PAGE>

     The operation of ferry vessels requires U.S. Coast Guard (USCG)
certificates of inspection (See Government Regulations) and permits to dock.
New York City has recently expanded its facilities at Pier 11 located at the
South Street Seaport in the Wall Street area of lower Manhattan. This provides
more times for ferries to dock and disembark passengers.  In order to dock the
ferry vessels at any pier under the City's control, the Company must obtain a
permit and will then be given specific docking times around which it can
schedule its trips to and from Manhattan.  The Company plans to apply for the
docking permit immediately upon obtaining a vessel to operate from Stamford. The
Company believes it will not take more than 30 days to obtain the permit once
the vessel is acquired.

     After the requisite site improvements are completed and operations have
commenced from Stamford, the Company plans to construct a small terminal,
consisting of a totally enclosed waiting room, a ticket office and necessary
facilities, including rest rooms.

Competition
-----------

     The Company currently operates in the Monmouth County, New Jersey area.  In
that market its main competitor is Seastreak, a well-capitalized, wholly-owned
subsidiary of Sea Container Corporation, a United Kingdom based corporation.
This ferry service operates from a nearby site on the Shrewsbury River, the
former Connors Hotel property, and from Atlantic Highlands Yacht Harbor
approximately a mile west.  Seastreak has undertaken an improvement and
expansion program whereby it will increase parking capacity at its Highlands
facility, expand its off-peak and weekend schedules and construct a new
Highlands terminal.  Seastreak has substantially greater financial resources
through its parent corporation, Sea Container, and the use of those resources
could adversely impact the Company.  In addition, Seastreak has ordered two new
vessels, which are comparable to the Company's vessels, one of which is expected
to be completed in February 2001 and the other is expected to be completed three
months thereafter.

     Monmouth County has indicated it is contemplating an additional high speed
ferry terminal and operation in a town about seven miles northwest of the
Company's site in the Highlands. Although the Company previously thought that
the ferry operator that would be servicing that facility would be New York
Waterways, Monmouth County recently announced that new bids will be sought and
the project would be delayed at least another year.

     The Company's competitors have longer and profitable operating histories,
and substantially greater financial resources than the Company.  The Company's
inability to fund the necessary site and facilities improvements, to purchase
additional ferries, or to take advantage of opportunities as they might arise,
could have a significant adverse impact on its results of operations.

Dependence on Suppliers
-----------------------

     Parking at docking sites is the Company's biggest issue.  The Company
currently is dependent on the lease with Aragon (on which four years remain).
Management is confident it could find other temporary dock space with available
parking on a short term basis until permanent arrangements could be made if
Aragon breaches its lease arrangement with the Company.

                                       6
<PAGE>

Government Regulation
---------------------

     The operations of the ferry vessels is under the jurisdiction of the USCG.
The vessels are required to pass an inspection and must have valid certificates
of inspection from the USCG.  The USCG conducts an in-water inspection of the
vessel annually and an out-of-water inspection about every 18 months.  If a
violation or other problem is found, the Company is given a period within which
it can correct the problem, during which time the vessels are free to operate.
If the USCG deems it to be a safety hazard, the certificate of inspection is
suspended immediately and the ferry cannot be operated until the necessary
repairs/corrections are made.  The vessels' captains and mates must also have
required USCG licenses.  To date, the Company has an excellent safety record and
maintains the only boats in the Greater New York harbor that are American Bureau
of Shipping (ABS) classified.

     The Company also obtains permits from New York - New Jersey Port authority
for docking at city-owned ferry terminals.  Obtaining these permits has not been
a problem.

Employees
---------

     As of December 6, 2000 the Company had 25 full-time employees and 5 part-
time employees.  Fast Ferry Holding Corporation employs 22 of the 25 full-time
employees and all of the part-time employees.  The number of employees will
increase as additional ferries become operational and the Stamford Property
service becomes operational.

     Fast Ferry Holding Corporation has a collective bargaining agreement with
Local 333, United Marine Division of the International Longshoreman Association,
AFL-CIO, dated September 9, 1997.  The contract runs through September 15, 2001.
The contract contains a no-strike clause, specified pay rates, medical benefit
guarantee and union shop provision.  Pay increases of 3% are specified in the
year following any year in which a profit is made.

     Management believes its relationship with its union and non-union employees
is good.

ITEM 2.   DESCRIPTION OF PROPERTY

     The Property, located on the Shrewsbury River in Highlands, New Jersey,
which the Company acquired in September 1993, is a mostly vacant parcel of land
with 463 linear feet of waterfront and has on its premises, a 4,000 square foot
vacant building on the water's edge and a small office building.  The Company
has preliminary zoning approval for a restaurant facility, retail building, bait
and tackle shop, a 23 slip marina, a concrete parking area and deep water boat
fueling capacity.

     The Property is subject to a first mortgage and note with an outstanding
balance of $58,262. The Property is also subject to a second mortgage lien
related to a note payable to Ashley North Fairfield, Inc. ("ANF Note").  The
current outstanding principal balance of the ANF Note is $40,177.47 with an
annual interest rate of 18%.  The Company made monthly principal and interest
payments in the amount of $10,000 through December 1999, and made payments of
$15,000 through May 10, 2000.  On June 10, 2000 any outstanding balance would
have been due in full.  However,

                                       7
<PAGE>

the Company is renegotiating the terms of the note, such that the Company will
make interest only payments on the balance until a final payment is made on or
before March 31, 2001. To date, the Company is current in its obligation.
Payment and satisfaction of the remaining indebtedness will be satisfied from
the Company's cash reserves on or before December 31, 2000. The Property is also
subject to real estate tax liens due to the non-payment of property taxes.

     The total sum due and outstanding on all tax liens as of December 31, 1999
was approximately $340,000.  This amount includes principal and interest.  The
lien holder cannot proceed with foreclosure for a period of two years after the
purchase of the liens.  After the two year period, a foreclosure complaint can
be filed, which would afford the Company an approximate three to six month
period to satisfy the liens.  As of this date, foreclosure papers have not been
filed, nor has there been a threat of foreclosure.

     Since the Company has been operating its high-speed ferry service in the
Highlands from a another site (Aragon) in close proximity to the Property that
offers more parking, it has determined that it is economically more feasible to
buy rather than lease the other site.  Accordingly, the Company plans to sell
the Property, and has listed it with a real estate broker at a value of $1.2
million.

     The Cigar Box in Ramsey, New Jersey was located in a strip mall complex.
The Cigar Box, Inc. had approximately 1  1/2 years remaining on the lease, for
approximately 1,500 square feet at $2,000 per month, at the time the Company
surrendered the premises to the Landlord.  By virtue of the surrender of the
premises to the Landlord, the Company believes it has no further liability for
lease payments on the premises, and the Landlord has not sought further payments
from the Company.

Corporate Offices
-----------------

     The Company's corporate offices are located at 195 Fairfield Avenue, Suite
3C, West Caldwell, New Jersey 07006, phone number 973-618-9036, and are being
occupied by the Company under a sublease agreement with Anthony Colasanti, a
director of the Company, at a cost of $2,750 per month.  For the six months
prior to March 1, 2000, the Company leased smaller office space in Summit, New
Jersey, with fewer amenities, at a base cost of $2,038 per month.

ITEM 3.  LEGAL PROCEEDINGS

     On November 25, 1997 New York Fast Ferry Services, Inc. ("NY Fast Ferry")
filed suit, in the Supreme Court of the State and County of New York, against
the City of New York (the "City") alleging, among other things, breach of
agreement by the City for a lease of a ferry franchise agreement (the
"Agreement").

     In September 1993, based on NY Fast Ferry's response to the City's Request
for Proposal ("RFP"), NY Fast Ferry was awarded the ferry route contemplated in
the RFP.  As part of the RFP process, the City solicited NY Fast Ferry to spend
approximately $12,000,000 to build two ferries to serve the route.  The City
provided data to NY Fast Ferry related to the economic viability of the service.
Continuation of the fundamental premises in the data was necessary for the
service to be

                                       8
<PAGE>

economical for NY Fast Ferry. The Agreement between NY Fast Ferry and the City
stated that the City intended to construct landing and terminal facilities at
one end of the route, and to make improvements to the terminals at the other end
of the route. The City also agreed to use its "best efforts" to provide
connecting transit links to one of the terminals on the route.

     NY Fast Ferry claims that the City, for the most part, has not made the
improvements on the terminals.  NY Fast Ferry also claims that the City has
breached its duty under the Agreement to act in good faith, and instead, has
acted in a manner to undermine or destroy NY Fast Ferry's business. NY Fast
Ferry is seeking $4,000,000 in compensatory damages or, alternatively,
rescission of the Agreement.  The proceeds, if any, of the suit are pledged 50%
to the original shareholders of NY Fast Ferry and 50% to debis Financial
Services, Inc. as a pledge of collateral against amounts owing to them pursuant
to a note payable.

     On June 30, 2000, D. Weckstein & Co., Inc. ("Weckstein") filed suit against
the Company in the Supreme Court of the State of New York.  The Complaint
alleges that the Company owes Weckstein $360,000 for services rendered by
Weckstein in connection with the Company's purchase of The Cigar Box, pursuant
to a letter agreement between Weckstein and the Company.  In the alternative, if
the Court finds that Weckstein is not entitled to damages for breach of the
letter agreement, Weckstein seeks an award in quantum meruit for services
rendered.  Weckstein also seeks an award of its costs and disbursements.

     On July 28, 2000, the Company filed an Answer, denying that the Company
owes Weckstein damages for breach of contract or in quantum meruit; raising
several defenses, including that Weckstein failed to perform its obligations
under the letter agreement; and seeking dismissal of the Complaint and an award
of the Company's attorney's fees, costs and further relief that the Court deems
just and equitable.

     On July 28, 2000, the Company filed a Notice of Removal, and the case has
been removed from the Supreme Court of the State of New York to the United
States District Court for the Southern District of New York, based on the
diversity jurisdiction of the Federal Court.

     On August 3, 2000, the Company received a notice from a subsidiary of The
Connecticut Light & Power Co. (the "Landlord"), terminating its lease for the
property that is the proposed site for the Company's Stamford, Connecticut ferry
terminal.  The Landlord based the termination of the lease on the failure of the
Company to get certain necessary permits for its use of the site.  The Company
disputes the Landlord's right to terminate the lease.


     On August 8, 2000, the Company filed a complaint against the Landlord in
Connecticut Superior Court against alleging breach of lease, promissory
estoppel, breach of the duty of good faith and fair dealing, intentional
misrepresentation, negligent misrepresentation, and violation of the Connecticut
Unfair Trade Practices Act by the Landlord.  The Company claims that the
Landlord had agreed that the permits issue would not be used to attempt to
terminate the lease.  The Company is seeking specific performance of the lease,
compensatory and punitive damages, attorneys fees, and other relief.  The
initial trial date is set for February 26, 2000.

                                       9
<PAGE>

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

     None.

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

Market Information
------------------


     The Company's Common Stock has been traded on the NASD Over-the-Counter
Bulletin Board under the symbol LHFF, but it currently trades on the "Pink
Sheets."  The Company's stock was de-listed from the Bulletin Board pursuant to
new NASD Rules, permitting only those companies who file periodic reports with
the SEC to be listed.  The Company intends to re-apply for listing on the
Bulletin Board as soon as the Company completes the registration process under
this Registration Statement.  The following table sets forth the high and low
bid prices of the Company's common stock during the periods indicated as
reported by the internet source www.cnbc.com.

<TABLE>
<CAPTION>


                       Calendar       High Bid Price     Low Bid Price
                      -----------     --------------     -------------

<S>                   <C>             <C>                <C>
2000                  4th Quarter     $        2.250     $        1.75
                      3rd Quarter              2.950              1.70
                      2nd Quarter               3.00              1.25
                      1st Quarter              3.062              0.50

1999                  4th Quarter     $         3.50     $        1.50
                      3rd Quarter             5.3125             1.625
                      2nd Quarter               4.00              1.50
                      1st Quarter               4.75              2.00

1998                  4th Quarter     $        2.875     $        1.25
                      3rd Quarter               4.50              2.00
                      2nd Quarter              5.375              2.25
                      1st Quarter               5.25              3.50

1997                  4th Quarter     $        6.625     $        2.75
                      3rd Quarter               6.50             3.125
                      2nd Quarter               6.00              2.00
                      1st Quarter                *                 *
</TABLE>
------------
*  Trading did not commence until 2nd Quarter.

                                      10
<PAGE>


     The closing bid price of the Common Stock on the Pink Sheets on December
29, 2000, was $2.20 per share.

Holders
-------

     As of December 6, 2000, there were approximately 125 holders of the
Company's Common Stock, who collectively held 6,645,587 issued and outstanding
shares.

Dividends
---------

     The Company did not declare or pay cash or other dividends on its Common
Stock during the last two fiscal years.  The Company has no plans to pay any
dividends, although it may do so if its financial position changes.

Recent Sales of Unregistered Securities.
---------------------------------------

     In September 1997 the Company granted options to acquire 56,250 shares
exercisable at $4.00 per share to a consultant, Hazlett Investors Co.  In
October 1997 the consultant exercised options to acquire 8,750 shares of common
stock at $4.00 per share.  Both the grant and the exercise were exempt under
Section 4(2) of the Securities Act of 1933 (the "Act").  The options to purchase
the remaining 47,500 shares expired in 1998.  No commissions or finder's fees
were paid on the transaction.

     In October 1997 the Company issued 2,500 shares of its common stock to a
consultant, Hazlett Investors Co. (at a value of $1.00 per share), in lieu of
interest owed to the consultant.  The transaction was exempt under Section 4(2)
of the Act.  No commissions or finder's fees were paid on the transaction.

     In October 1997 the Company issued 25,000 shares of its common stock to an
accredited investor (Gerald Kay) for $3.75 per share in a transaction exempt
under Section 4(2) of the Act.  No commissions or finder's fees were paid on the
transaction.

     In December 1997 the Company issued 75,000 shares of its common stock to
Edward Meyer in exchange for all of the outstanding shares of the Cigar Box,
Inc. in a transaction exempt under Section 4(2) of the Act.  No commissions or
finder's fees were paid on the transaction.

     In April 1998 the Company issued 30,000 shares of its common stock to
Robert Corey and Oscar Perez for $3.25 per share in a transaction exempt under
Section 4(2) of the Act.  No commissions or finder's fees were paid on the
transaction.

     In October 1998 the Company issued an aggregate of 454,545 shares of its
common stock to the three shareholders of Fast Ferry Holding Corp. (John Koenig,
Paul Derecktor, and John Davis) in exchange for 80% of the outstanding shares of
Fast Ferry Holding Corp. in a transaction exempt under Section 4(2) of the Act.
No commissions or finder's fees were paid on the transaction.

                                      11
<PAGE>

     In October 1998 the Company granted one of its noteholders (debis Financial
Services, Inc.), as part of refinancing negotiations, warrants to purchase
200,000 shares of its common stock exercisable at $2.60 per share until March
16, 2004.  The transaction was exempt under Section 4(2) of the Act.  No
commissions or finder's fees were paid on the transaction.

     In October 1998 the Company granted an option to purchase 10,000 shares of
common stock to John Koenig.  The option was exercisable at $2.53 per share
until October 6, 2001.  The transaction was exempt under Section 4(2) of the
Act.  No commissions or finder's fees were paid on the transaction.  Those
options were cancelled.

     In June 1999, the Company entered into a loan agreement with Ashley North,
Inc., and in connection with that loan, issued a promissory note and 25,000
shares of its common stock in June 1999 and an additional 25,000 shares in
December 1999.  The transaction was exempt under Section 4(2) of the Act.  No
commissions or finder's fees were paid on the transaction.

     In June 1999, the Company issued 100,000 shares of its common stock to
Anthony F. Cappaze, an accredited investor, for $50,000.  The transaction was
exempt under Section 4(2) of the Act.

     In July 1999, the Company issued a $200,000 promissory note, and warrants
to purchase 200,000 shares of common stock at $1.00 per share exercisable for
three years, for a $200,000 investment by Joseph Giamanco, an accredited
investor.  The note is convertible to common stock at the option of the holder.
The transaction was exempt under Section 4(2) of the Act.  No commissions or
finder's fees were paid on the transaction.

     In September 1999, a consultant (Raymond Wright) purchased 50,000 shares of
common stock at a price of $0.10 per share in a transaction exempt under Section
4(2) of the Act.  No commissions or finder's fees were paid on the transaction.

     In October 1999, the Company granted an option to purchase 20,000 shares of
common stock to John Koenig, as part of his employment agreement.  The option is
excisable at $1.50 per share until October 6, 2001.  The transaction was exempt
under Section 4(2) of the Act.  No commissions or finder's fees were paid on the
transaction.

     In October 1999, the Company issued, as a bonus to an employee (Judi
Herkloz), warrants to purchase 5,000 shares of common stock at $1.00 per share,
exercisable for one year.

     In October 1999, the Company issued an aggregate of 1,250,000 shares to
Michael Lauer and two companies controlled by that investor (Lancer Offshore and
the Viator Fund, Ltd.), all of them accredited investors, for gross proceeds of
$1,250,000 or $1.00 per share.  The Viator Fund also received warrants to
purchase an aggregate of 750,000 shares of common stock exercisable at $1.25 per
share until October 31, 2002.  A finder's fee was paid to Capital Research on
this portion of the offering in the amount of $125,000 and warrants to acquire
75,000 shares of common stock exercisable at $1.25 per share for five years.

                                      12
<PAGE>

     The Company also issued 150,000 shares of common stock for gross  proceeds
of $150,000. The investors, all accredited, also received warrants to purchase
an aggregate of 150,000 shares of common stock, exercisable at $1.25 per share
for one year.  Aggregate commissions of $15,000 were paid on this portion of the
offering.  The offering was conducted in reliance on Section 4(2) of the Act and
Rule 506 promulgated thereunder.  The month of the issuance, the investors'
names, and the shares issued are as follows:

     Stock issued in October 1999:

<TABLE>
<CAPTION>
                                                     Number of Shares
               Name                                    and Warrants
                                                     ----------------
               <S>                                   <C>
               Joseph Roselle                              50,000

               Anthony R. Mautone                          15,000

               Christopher Colasanti                       15,000

               Michael Hunt                                15,000

               Vincent Bonomo                               7,500

               Catherine Bonomo                             7,500
</TABLE>

     Stock issued in November 1999:

<TABLE>
<CAPTION>
                                                     Number of Shares
               Name                                    and Warrants
                                                     ----------------
               <S>                                   <C>
               Dennis Mautone                              15,000

               Joseph Capozza                              12,500

               Daniel Coiro                                12,500
</TABLE>

     In January 2000, the Company sold 97,500 shares of common stock at $1.00
per share, less a finder's fee of $8,500, and an equal number of warrants good
for purchasing shares of common stock for $1.25 per share, exercisable for one
year, to the following accredited investors:

<TABLE>
<CAPTION>
                                                     Number of Shares
               Name                                    and Warrants
                                                     ----------------
               <S>                                   <C>
               Joseph Pontoriero                           25,000

               Anthony R. Mautone                          15,000

               Joseph Capozza                              25,000

               Daniel Coiro                                25,000
</TABLE>

                                      13
<PAGE>

<TABLE>
<CAPTION>
                                                     Number of Shares
               Name                                    and Warrants
                                                     ----------------
               <S>                                   <C>
               Andrew Scott                                 7,500
</TABLE>

     The offering was conducted in reliance on Section 4(2) of the Act and Rule
506.  No commissions or finder's fees were paid on the transactions.

     In February 2000, the Company sold 50,000 shares of common stock at $1.00
per share, and an equal number of warrants good for purchasing shares of common
stock at $1.25 per share, exercisable for one year, to the following accredited
investors:

<TABLE>
<CAPTION>
                                                     Number of Shares
               Name                                    and Warrants
                                                     ----------------
               <S>                                   <C>
               Arthur Anastasia and David Del Monaco       10,000

               Trebor Trading & Investment Limited         25,000

               Andrew Scott                                 5,000

               John Gluszak                                10,000
</TABLE>

     The offering was conducted in reliance on Section 4(2) of the Act and Rule
506.

     In March 2000, the Company sold 450,000 shares of common stock at $0.50 per
share, and an equal number of warrants good for purchasing shares of common
stock at $1.00 per share, exercisable for two years, to the following accredited
investors:

<TABLE>
<CAPTION>
                                                     Number of Shares
               Name                                    and Warrants
                                                     ----------------
               <S>                                   <C>
               Joseph Roselle                             150,000

               Joseph Giamanco                            150,000

               Gary Herman                                150,000
</TABLE>

     The offering was conducted in reliance on Section 4(2) of the Act and Rule
506.

     In March 2000, the Company sold 25,000 shares of common stock at $0.50 per
share, and an equal number of warrants good for purchasing common stock at $1.25
per share, exercisable for one year, to Trebor Trading & Investment Limited, an
accredited investor.  The offering was conducted in reliance on Section 4(2) of
the Act and Rule 506.

     In March 2000, the Company issued 10,000 shares of its common stock to Fred
Ferguson and 2,000 shares to William Mills, both accredited investors, at $1.00
per share, with an equal number

                                      14
<PAGE>

of warrants at $1.00 per share, exercisable for one year. The offering was
conducted in reliance on Section 4(2) of the Act and Rule 506.

     In March 2000, the Company issued 125,000 shares of its common stock to The
Orbiter Fund and 125,000 shares to The Viator Fund, both accredited investors,
in consideration of a $1,000,000 bridge loan to the Company.  Capital Research,
Ltd., which acted as the finder in the transaction, received 25,000 shares.  The
transaction was conducted in reliance on Section 4(2) of the Act and Rule 506.

     In May 2000, the Company sold 21,000 shares of common stock, at $1.00 and
$1.25 per share, to the following three accredited investors.  The offering was
conducted in reliance in Section 4(2) of the Act and Rule 506.

     In May 2000, the Company sold 8,000 shares of common stock, at $1.00 and
$1.25 per share, to the following accredited investor.  The offering was
conducted in reliance on Section 4(2) of the Act and Rule 506.

<TABLE>
<CAPTION>
               Name                              Number of Shares
               ----                              ----------------
               <S>                               <C>
               Christopher Karounos                    7,000
               Jason Karounos                          7,000
               Peter Karounos                          7,000
               Dana Schwartz                           8,000
                                                      ======
                                                      29,000
</TABLE>

     During June 2000, the Company issued 3,500 shares, having a fair market
value on the date of issuance of $4,375, to the following purchasers of the
Company's convertible promissory notes. Each convertible promissory note holder
was issued 125 shares of common stock for each $5,000 of indebtedness owed to
the convertible promissory note holder at the date of issuance.  The offering
was conducted in reliance on Section 4(2) of the Act and Rule 506.

<TABLE>
<CAPTION>
Name                              Principal Amount of Note       Number of Shares
----                              ------------------------       ----------------
<S>                               <C>                            <C>
Robert Powless                             $20,000                      500
Arthur Klowden                             $ 5,000                      125
Herman and Danny Vaden                     $20,000                      500
Steve Carcaterra                           $20,000                      500
Edward Holst                               $ 5,000                      125
Lowell Kupfer                              $10,000                      250
Frederick Keifer                           $20,000                      500
Herbert and Lois Rake                      $20,000                      500
Loren and Judith Hanson                    $20,000                      500
                                                                       ====
                                                                       3500
</TABLE>

                                      15
<PAGE>

     During June 2000, the Company issued 20,000 shares of common stock, having
a fair market value on the date of issuance of $40,000, to providers of
professional services.  The shares were issued as follows: 10,000 were issued to
Colasanti & Scott, L.L.P. for outside legal services and 10,000 were issued to
Patricia Beene, CPA, for financial services rendered.

     In June 2000, the Company sold 12,500 shares of common stock at $1.25 per
share, to the following accredited investor. The offering was conducted in
reliance on Section 4(2) of the Act and Rule 506.

<TABLE>
<CAPTION>
               Name                           Number of Shares
               ----                           ----------------
               <S>                            <C>
               Dana Schwartz                       12,500
                                                   ======
                                                   12,500
</TABLE>

     In June 2000, the Company sold 12,500 shares of common stock at $1.00 per
share, to the following accredited investor.  The offering was conducted in
reliance on Section 4(2) of the Act and Rule 506.

<TABLE>
<CAPTION>
               Name                           Number of Shares
               ----                           ----------------
               <S>                            <C>
               Felice Barone                       12,500
                                                   ======
                                                   12,500
</TABLE>

     In June 2000, the Company issued 100,000 shares of common stock, in
satisfaction of debt outstanding on the discontinued operation, to the following
accredited investor. The offering was conducted in reliance on Section 4(2) of
the Act and Rule 506.

<TABLE>
<CAPTION>
               Name                           Number of Shares
               ----                           ----------------
               <S>                            <C>
               Nathan Plafsky                     100,000
                                                  =======
                                                  100,000
</TABLE>

     During July 2000, the Company issued 2,000 shares, having a fair market
value on the date of issuance of $4,000, to the following purchasers of the
Company's convertible promissory notes and returned $5,000, in exchange for the
cancellation of 125 shares, to Edward Holst.  Each convertible promissory note
holder was issued 125 shares of common stock for each $5,000 of indebtedness
owed to the convertible promissory note holder at the date of issuance.  The
offering was conducted in reliance on Section 4(2) of the Act and Rule 506.

                                      16
<PAGE>

<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Frederick Keifer                     $ 40,000                     1,000
          Charles Consagra                     $ 40,000                     1,000
          Edward Holst                          ($5,000)                     (125)
                                                                            =====
                                                                            1,875
</TABLE>


     During July 2000, the Company issued 272,000 shares, having a fair market
value on the date of issuance of $544,000, to the following purchasers of the
Company's senior convertible promissory notes.  Joseph Giamanco received 75,000
shares in consideration for his modification and conversion of his $200,000
secured convertible promissory note of the Company to an unsecured convertible
promissory note of the Company and in consideration for his lending an
additional $100,000 to the Company.  The offering was conducted in reliance on
Section 4(2) of the Act and Rule 506.

<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Joseph Giamanco                      $300,000                    75,000
          Lancer Offshore, Inc.                $500,000                   125,000
          Capital Research, Ltd.               $ 88,000                    22,000
          James Kelly                          $100,000                    25,000
          Joseph Roselle                       $100,000                    25,000
                                                                          =======
                                                                          272,000
</TABLE>

     During August 2000, the Company sold 6,667 common shares and warrants to
acquire 6,667 common shares at $2.00 per share to Thomas Coleman for $10,000 and
sold 20,000 shares to Robert Garcia for $25,000.  Both investors were accredited
investors. The offering was conducted in reliance on Section 4(2) of the Act and
Rule 506.

     During August 2000, the Company issued 3,125 shares, having a fair market
value on the date of issuance of $6,250, to the following purchasers of the
Company's 10.5% convertible promissory notes.  The number of shares issued in
connection with the convertible promissory notes was negotiated on an individual
investor basis.  The offering was conducted in reliance on Section 4(2) of the
Act and Rule 506.

<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Frederick Keifer                     $40,000                      2,000
          Lowell Kupfer                        $10,000                        250
          Gary Von Bargen                      $15,000                        750
          Arthur Klowden                       $ 5,000                        125
                                                                            =====
                                                                            3,125
</TABLE>

                                      17
<PAGE>

     During September 2000, the Company issued 2,500 shares, having a fair
market value on the date of issuance of $5,000, to the following purchasers of
the Company's 10.5% convertible promissory notes.  Each convertible promissory
note holder was issued 125 shares of common stock for each $5,000 of
indebtedness owed to the convertible promissory note holder at the date of
issuance.  The number of shares issued in connection with the convertible
promissory notes was negotiated on an individual investor basis.  The offering
was conducted in reliance on Section 4(2) of the Act and Rule 506.


<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Herman and Danny Vaden               $20,000                      1,000
          Herbert and Lois Rake                $20,000                        500
          Dorothy Bushnell                     $10,000                        250
          Dorothy Bushnell                     $10,000                        250
          John Head                            $20,000                        500
                                                                            =====
                                                                            2,500
</TABLE>

     During October 2000, the Company issued 138,750 shares, having a fair
market value on the date of issuance of $208,125, to the following purchasers of
the Company's senior convertible promissory notes.  The offering was conducted
in reliance on Section 4(2) of the Act and Rule 506.


<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Capital Research, Ltd.              $ 55,000                     13,750
          Lancer Offshore, Inc.               $200,000                     50,000
          Lancer Partner, L.P.                $300,000                     75,000
                                                                          =======
                                                                          138,750
</TABLE>

     During October of 2000, the Company issued 2,375 shares, having a fair
market value on the date of issuance of $3,126, to the following purchasers of
the Company's 10.5% convertible promissory notes.  Each convertible promissory
note holder was issued 125 shares of common stock for each $5,000 of
indebtedness owed to the convertible promissory note holder at the date of
issuance.  The offering was conducted in reliance on Section 4(2) of the Act and
Rule 506.

                                      18
<PAGE>

<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Gary Von Bargen                      $ 5,000                        125
          Dorothy Bushnell                     $40,000                      1,000
          Frederick Keifer                     $40,000                      1,000
          Lynn J. or Raymond M. Flower         $10,000                        250
                                                                            =====
                                                                            2,375
</TABLE>

     During November of 2000, the Company issued 36,500 shares, having a fair
market value on the date of issuance of $54,750, to the following purchasers of
the Company's 10.5% convertible promissory notes.  The number of shares issued
in connection with the convertible promissory notes was negotiated on an
individual investor basis.  The offering was conducted in reliance on Section
4(2) of the Act and Rule 506.

<TABLE>
<CAPTION>
          Name                        Principal Amount of Note        Number of Shares
          ----                        ------------------------        ----------------
          <S>                         <C>                             <C>
          Frederick Keifer                     $60,000                     20,000
          Dorothy Bushnell                     $60,000                      1,500
          Dorothy Bushnell                     $20,000                     15,000
                                                                           ======
                                                                           36,500
</TABLE>

     In December 2000, the Company sold 16,000 shares to the following two
accredited investors at $1.25 per share.  The offering was conducted in reliance
on Section 4(2) of the Act.

<TABLE>
<CAPTION>
          Name                                     Number of Shares
          ----                                     ----------------
          <S>                                      <C>
          Michael and Eileen Graham                     16,000
                                                        ======
                                                        16,000
</TABLE>

     In all transactions above, the stock was issued for an amount that the
Board of Directors of the Company believed was a fair market value for
restricted securities of the Company.

                                      19
<PAGE>

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

     The following discussion should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto, along with the other
information contained elsewhere in this Form 10-KSB.

Comparison of the Year Ended December 31, 1999 vs. December 31, 1998.

     Consolidated revenues for the twelve month period ended December 31, 1999
totaled $3,285,978 and were comprised of $2,214,884, or 67%, from passenger
tickets from the NY Fast Ferry service operating from Highlands (NJ), $789,859,
or 24%, from the charter of the M/V Finest to the Massachusetts Steamship
Authority, which terminated in October 1999, and about $281,000, or 9%, from
excursion trips and galley sales.  During the twelve months ended December 31,
1999, the Company ran a total of 1,198 revenue trips from its Highlands (NJ)
site at a 47% load factor.  The ferry service ran over 98% of its scheduled
trips, missing only a single trip due to weather conditions or the condition of
the vessels.  As the Company acquired the NY Fast Ferry operation in October
1998, the consolidated revenues generated in the period of the prior year under
review reflect only three months of operations of the ferry service, which
totaled $681,167.  Of the revenues, about $438,000, or 64%, was attributable to
passenger tickets sales, $217,500, or 32%, was attributable to the charter of
the M/V Finest, and $25,675, or 4%, was generated from excursion trips and
galley sales.

     Consolidated operating costs for the twelve month period under review of
$2,493,582 are directly attributable to the ferry operations as compared to
$509,742 for the twelve months ended December 31, 1998.  Of the $2,493,582 about
64%, or $1,597,574, are direct operating costs and $896,008, or 36%, represent
depreciation of the ferry vessels and other boat equipment.  By comparison, in
1998 direct operating costs totaled $287,116, or 56%, and depreciation of the
ferry vessels and other boat equipment totaled $222,626, or 44%.

     Payroll and related costs for the ferry vessel crew represented 29% of the
total direct operating costs for the period or approximately $461,600 for the
twelve months ended December 31, 1999 as compared to $93,594, or 33%, in the
comparable period in 1998.  Fuel and oil costs accounted for 19% of the category
or about $306,700 in 1999 as compared to $68,075, or 24%, of the category, in
for the comparable period in 1998.  The decline in fuel as a percentage of the
category was a result of improved buying procedures.  Docking fees and fees to
the owner of the parking facility totaled $347,500, or 22%, of the direct
operating costs in 1999 as compared to $65,939, or 23%, of the category in the
prior year.  Boat maintenance and supplies, which included a scheduled engine
overhaul, accounted for almost $246,300, or 15%, and insurance costs totaled
$99,659, or 6%, of the total direct operating costs.  For the same period in
1998, boat maintenance and supplies accounted for almost $27,000, or 10%, and
insurance totaled $ 22,552, or 8%, of the total direct operating costs.

     Direct excursion expenses represented 2%, or about $30,300, of the
operating costs and costs of sales related to galley sales totaled $92,939 or
6%.  Other direct operating costs amounted to $35,189, or 2%, of the category.
By comparison, for the prior year ended December 31, 1998, direct excursion
expenses and costs of sales related to galley sales represented less than 1%, or
about

                                      20
<PAGE>

$1,390, of the operating costs and other direct operating costs amounted to
$8,570, or 3%, of the category.

     Marketing and administrative expenses totaled $1,223,374 and $514,036, for
the years ended December 31, 1999 and 1998, respectively.  Of the total
marketing and administrative expenses in 1999, $486,624, or 40%, is attributable
to administration of the ferry service and $710,920, or 58%, is attributable to
corporate administration.  For the comparable period in the prior year, 18%, or
$91,120, of the total marketing and administrative expenses was attributable to
the administration of the ferry service and $287,056, or 56%, was attributable
to corporate administration.  Salaries and related benefits for ferry
administration totaled $285,150, or 23%, and $64,028, or 12%, of the marketing
and administrative expenses for the years ended December 31, 1999 and 1998,
respectively. The increase was attributable to the addition of headcount as the
operation expanded.  Corporate management compensation represented $374,229, or
31%, and $183,334, or 36%, of the total category for the period ended 1999 and
1998, respectively.  The Company incurred occupancy expense, including utilities
and maintenance for the 1999 period under review totaling $41,013 as compared to
$8,068 for the prior period in 1998 when it utilized available space in the
offices of certain officers and directors, as well as at the Cigar Box.

     Marketing and promotional expenses accounted for 2% of the category, or
$27,337, as compared to $147, less than 1%, in 1998.

     Other marketing and administrative expenses amount to approximately
$239,163 and $143,893 for the twelve-month periods ended December 31, 1999 and
1998, respectively, and include legal and auditing services, in part due to the
audit of the Company's financial statements, as well as other professional
services related to the development of business plans, market strategies and
funding of the Company.  Of the remaining $195,400, approximately $60,400 is
attributable to travel expenditures and certain other expenses, such as
stationary and supplies, and telephone, related to the increased headcount and
corporate activity, totaled $135,000.  By comparison, of the remaining $110,640
approximately $43,500 is attributable to travel expenditures and certain other
expenses, such as stationary and supplies, and telephone, related to the
increased headcount and corporate activity, totaled $67,140.

     Depreciation expense, related to office equipment, totaled $9,439 for the
twelve months ended December 31, 1999 as compared to $2,460 in the prior period.
Amortization of goodwill related to the acquisition of New York Fast Ferry
amounted to $70,000 and 16,741, for the years ended December 31, 1999 and 1998
respectively.

     Interest expense for the twelve months ended December 31, 1999 totaled
$1,473,735, which was primarily attributable to the current obligations of the
NY Fast Ferry, including the mortgages on the boats, and debt financing of the
Company's current operations and business development.  Of the total interest
expense, interest paid in connection with the vessel mortgages and line of
credit totaled $969,982.  For the comparable period ended December 31, 1998,
interest expense totaled $348,249, of which about $ 290,000 was primarily
attributable to the current obligations of the NY Fast Ferry and the mortgages
on the boats.

                                      21
<PAGE>

     Discontinued operations consist of revenues and costs from the Cigar Box
operation as well as certain costs related to the Property, both of which have
been reclassified as discontinued operations. In accordance with management's
decision to cease operations at the Cigar Box and place the related assets and
the Property for sale, the appropriate impairment of assets has been recorded.
For the twelve month period under review, the discontinued operations resulted
in a loss of $155,347 and an impairment of $391,654 for 1999, and $113,392 and
$331,161, respectively, for 1998.

Liquidity and Capital Resources
-------------------------------


     Since inception, the Company has funded its operations primarily through
cash generated from private placements of debt and equity securities and
institutional financing.  In October 1998, the Company acquired 80% of the stock
of NY Fast Ferry and commenced operating fast ferry service from Highlands, New
Jersey.  As part of the transaction, the Company guaranteed payment and
satisfaction of NY Fast Ferry's outstanding liabilities, which included
mortgages on its two ferry vessels and a line of credit.  In July 2000, the
Company entered into an oral agreement with the holders of the remaining 20% of
issued and outstanding shares of Fast Ferry Holding Corporation for the purchase
by the Company of the remaining NY Fast Ferry shares for a combination of
$28,753 in cash and 102,271 restricted common shares of the Company. Management
expects that the parties will finalize and execute a written stock purchase
agreement in the first quarter of 2001. The NY Fast Ferry operation generates
sufficient cash-flow to cover its direct operating costs.  However, the NY Fast
Ferry operation does not yet generate enough cash to make principal and interest
payments for both boat mortgages, carry its other debt, to fund the capital
improvements and capital expenditures necessary for the Company to expand its
operations and to implement its strategic business objectives.

     In the first quarter of 2000, the Company successfully raised a net of
approximately $390,000 in equity funding through private placements with
accredited investors of 634,500 shares with warrants for the purchase of an
additional 634,500 shares of common stock at $1.00 to $1.25 per share
exercisable for one year from date of issuance.

     On March 1, 2000 the company received a total of $1,000,000 in proceeds
from senior convertible promissory notes from two investment funds, originally
due December 11, 2000 with interest at 10% per annum, and is payable quarterly.
The Company issued a $110,000 senior convertible promissory note to a third
investment fund a finder's fee.  In addition to the 10% interest, the Company
issued 250,000 common shares, which the Company valued at $0.50 per share, as
additional consideration. Further shares are issuable in the event of a default.
In December 2000 the Company and the investment funds agreed to extend the
maturity date of the notes to June 30, 2001 and in consideration therefor, the
Company agreed to issue to the investment funds shares of the Company's Common
Stock at a rate of one share for each $2.00 of the outstanding indebtedness then
due and owing.  Further, the Company agreed to reduce the conversion price from
$1.50 per share to $1.00 per share and upon a ninety day default, the conversion
price is reduced from $1.00 per share to $0.75 per share.  Each lender has the
right at its sole and exclusive option to convert the outstanding indebtedness
under the notes to common stock of the Company at any time prior to the Company
making payment and should such conversion rights be exercised, the Company shall
issue common stock to the lender at the rate of one share for each $1.00 of
indebtedness then due and

                                      22
<PAGE>

owing. The loans may be prepaid at any time, but must be repaid out of the
proceeds of any financing in excess of $2,000,000.

     As of September 30, 2000, two outstanding notes payable and preferred ship
mortgages held by debis Financial Services, Inc. ("Debis"), one on the ferry M/V
Finest and one on the ferry M/V Bravest, were $5,029,965 and $4,995,903,
respectively, which bear interest at 9.25% per annum. Both ship mortgages each
require monthly payments of principal and interest in the amount of $56,719
through September 10, 2005, with final payments of $3,626,691 and $3,572,971,
respectively, due on October 10, 2005.  The Company is current in these
payments.

     The line of credit held by Debis assumed by the Company had an outstanding
balance at September 30, 2000 of $920,410 with the same financial institution
that holds the preferred ship mortgages.  The line of credit, secured by the M/V
Finest and the M/V Bravest, required monthly payments of $15,000 through April
10, 2000, plus principal payments of $45,000 in January 1999, $920,410 on May 1,
1999 and October 1, 1999, a payment of $343,333 on March 1, 2000, and originally
required a final payment of $934,319 on December 10, 2000.  The Company and
Debis have agreed to restructure the payment of the debt.  The remaining
principal balance on the line of credit shall be paid through eight quarterly
principal payments, plus accrued interest.  The first payment was due December
31, 2000 with seven subsequent payments due at each calendar quarter.  In
consideration for the restructuring of the debt payment, Debis will receive a
restructure fee of $50,000, $25,000 of which was payable on December 31, 2000
and $25,000 of which is payable on March 31, 2001. The Company expects to make
the first of such payments in the first quarter of 2001.  Quarterly principal
and interest payments will be equal, except that the first payment on December
31, 2000 will be divided in half, and the second half of such payment will be
due January 31, 2001 with accrued interest.  The note carries no interest, but
has been discounted to a net present value using a discount rate of 9.25% per
annum.  These two preferred ship mortgages and the line of credit are further
secured by cross collateralization agreements, assignment of personal property,
a pledge of a potential receivable arising out of a lawsuit against the City of
New York, and a Company guarantee.  Moreover, the financial institution was
granted warrants to purchase 200,000 shares of Company stock at $2.60 per share
exercisable through March 16, 2004.

     During June 2000 the Company received proceeds from eight 10.5% convertible
promissory notes, (six for $20,000, one for $10,000 and one for $5,000),
totaling $135,000.  During July 2000 the Company received proceeds from two
10.5% convertible promissory notes (two for $40,000) totaling $80,000.  During
August 2000 the Company received proceeds from four 10.5% convertible promissory
notes (one for $40,000, one for $10,000, one for $15,000 and one for $5,100)
totaling $70,100.  During September 2000 the Company received proceeds from five
10.5% convertible promissory notes (three for $20,000 and two for $10,000)
totaling $80,000.  Each convertible promissory note carries a simple interest
rate of 10.5%, interest only is payable quarterly, and matures one-year from
date of issuance.

     The lender has the right, at its sole and exclusive option, to convert the
outstanding indebtedness to common shares (the "Conversion Rights") of the
company at any time prior to borrower making payment.  Should such Conversion
Rights be exercised, the Company shall issue such shares to the Lender at the
rate of one share of common stock for each $2.00 of the indebtedness then due
and owing.  The shares issued by the company through the exercise of the

                                      23
<PAGE>

Conversion Rights will be restricted securities.  The option and conversion will
be exercised by the lender issuing written notice to the borrower.

     On June 14, 2000, New York Fast Ferry Services Inc. received proceeds of
two bridge loans aggregating $60,000.  New York Fast Ferry Services Inc. has
since paid off the balance on the loans. The loans were paid with funds from
ferry operations.

     In July 2000, the Company received a total of $1,000,000 in proceeds from
senior convertible promissory notes from four lenders, originally due January
14, 2001 with interest at 10% per annum, payable quarterly, and paid a finder's
fee by issuance of an $88,000 note.  One of these lenders exchanged a $200,000
note for its $200,00 mortgage note receivable.  In December 2000 the Company and
the lenders agreed to extend the maturity date of the notes to June 30, 2001 and
in consideration therefor, the Company agreed to issue to the lenders shares of
the Company's common stock at a rate of one share for each $2.00 of outstanding
indebtedness then due and owing.  Further, the Company agreed to reduce the
conversion price from $1.50 per share to $1.00 per share and upon a ninety day
default, the conversion price is reduced from $1.00 per share to $0.75 per
share.  Each lender has the right at its sole and exclusive option to convert
the outstanding indebtedness under the notes to common stock of the Company at
any time prior to the Company making payment and should such conversion rights
be exercised, the Company shall issue common stock to the lender at the rate of
one share for each $1.00 of indebtedness then due and owing.  The loans may be
prepaid at any time, but must be repaid out of the proceeds of any financing in
excess of $2,000,000.


     In June 1999, the Company obtained financing in the net amount of $200,000
from a then unrelated third party that was secured by a second mortgage on the
property of the Shrewsbury River, subject to a real estate tax lien, and by a
personal guarantee of a major shareholder.  The note carried an annual interest
rate of 18% and was payable in monthly installments, applied first to interest,
as follows: from July 10, 1999 through December 10, 1999, $10,000 per month;
from January 10, 2000 through May 10, 2000, $15,000 per month; and commencing
June 10, 2000, three monthly installments each equal to one-third of the
outstanding balance on June 10, 2000.  The Company made a principal payment in
July 2000, reducing the balance to $58,694.  In July 2000, the lender agreed to
modify and convert his secured note into an unsecured convertible note and also
loaned the Company an additional $100,000 and in exchange therefor, received
75,000 restricted shares of common stock of the Company.  The Company is
currently renegotiating the terms of the note, such that the Company will make
interest only payments on the balance until a final payment is made before March
1, 2001.  To date, the Company is current in its obligation.  As an inducement
to enter into the loan, the Company issued the lender 25,000 shares of common
stock in June 1999 and an additional 25,000 shares in December 1999.

     In the nine months ended September 30, 2000, the Company had raised
proceeds of $482,600 through the private placement of 712,667 shares of
restricted common stock to accredited investors. The Company also issued 252,500
shares of restricted common stock to three directors and officers in
satisfaction of unpaid compensation amounting to $214,625.  In addition, the
company issued 100,000 shares of restricted common stock on June 13, 2000 and
$25,000 on July 11, 2000 to a mortgage holder of the discounted operation in
satisfaction of $150,000 of debt.

                                      24
<PAGE>

     The Company, as of September 30, 2000, had a working capital deficiency of
$4,900,471. Furthermore, in the planned development of its commercial
operations, the Company's combined losses are expected to continue as the
Company divests its non-core assets and until it increases its ferry service
when each of its sites become fully operational.  The Company's ability to meet
its obligations in the ordinary course of business is dependent upon its ability
to continue to obtain adequate financing and/or to successfully expand its ferry
operations.  Furthermore, capital expenditures to acquire additional fast ferry
vessels and improve and expand its landside ferry facilities will require
significant funding.

     The Company has been successful to date in its efforts to raise funds and
believes that proceeds from interim financing from convertible promissory notes
sold during the second, third and fourth quarters, together with available funds
and cash flows expected to be generated by operations will be sufficient to meet
its anticipated cash needs for working capital and capital expenditures for at
least the next twelve months.  As of September 30, 2000, $2,165,000 was raised
from the sale of convertible promissory notes.  Furthermore, the Company has
negotiated more favorable terms with certain creditors, and is negotiating more
favorable payment terms with other creditors, that require significant principal
payments in the next twelve months.  In the event the Company's plans change,
its assumptions change or prove to be inaccurate or if the proceeds of the
interim financing or cash flows prove to be insufficient to fund operations, the
Company may find it necessary or desirable to reallocate funds within the above
described business strategies, seek additional financing or curtail its
activities.  There can be no assurance that additional financing will be
available on terms favorable to the Company, or at all, or that the Company will
be able to negotiate more favorable payment terms with its existing creditors.
If adequate funds are not available or are not available on acceptable terms,
the Company may not be able to meet its current obligations, take advantage of
unanticipated opportunities, develop new services or otherwise respond to
unanticipated competitive pressures.  Such inability could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Subsequent Events
-----------------

     In October, the Company received a total of $500,000 in proceeds from
senior convertible promissory notes from two lenders, originally due January 30,
2001 with interest at 10% per annum, payable quarterly, and issued a $55,000
note as a finder's fee.  In December 2000 the Company and the lenders agreed to
extend the maturity date of the loans to June 30, 2001 and in consideration
therefor, the Company agreed to issue to the lenders shares of the Company's
common stock at a rate of one share for each $2.00 of outstanding indebtedness
then due and owing.  Further, the Company agreed to reduce the conversion price
from $1.50 per share to $1.00 per share and upon a ninety day default, the
conversion price is reduced from $1.00 per share to $0.75 per share.  Each
lender has the right at its sole and exclusive option to convert the outstanding
indebtedness under the notes to common stock of the Company at any time prior to
the Company making payment and should such conversion rights to exercised, the
Company shall issue common stock to the lender at the rate of one share for each
$1.00 of indebtedness then due and owing.  The loans may be prepaid at any time,
but must be repaid out of the proceeds of any financing in excess of $2,000,000.

     In addition, during the month of October, the Company received proceeds
from four 10.5% convertible promissory notes (one for $5,000, two for $40,000
and one for $10,000) totaling

                                      25
<PAGE>

$95,000. During the month of November, the Company received proceeds from three
10.5% convertible promissory notes (two for $60,000 and one for $20,000)
totaling $140,000. Each convertible promissory note carries a simple interest
rate of 10.5%, interest only is payable quarterly, and matures one-year from
date of issuance.

     The lender has the right, at its sole and exclusive option, to convert the
outstanding indebtedness to common shares (the "Conversion Rights") of the
company at any time prior to borrower making payment.  Should such Conversion
Rights be exercised, the Company shall issue such shares to the Lender at the
rate of one share of common stock for each $2.00 of the indebtedness then due
and owing.  The shares issued by the company through the exercise of the
Conversion Rights will be restricted securities.  The option and conversion will
be exercised by the lender issuing written notice to the borrower.

     The loan balance for the twenty-six 10.5% convertible promissory notes
including interest accrued as of November 30, 2000 was approximately $511,000.

Forward-Looking Statements
--------------------------

     Discussions and information in this document which are not historical facts
should be considered forward-looking statements.  With regard to forward-looking
statements, including those regarding the potential revenues from the additional
ferry operations from the Stamford Property, and the business prospects or any
other aspect of the Company, actual results and business performance may differ
materially from that projected or estimated in such forward-looking statements.
The Company has attempted to identify in this document certain of the factors
that it currently believes may cause actual future experience and results to
differ from its current expectations.  In addition to the risks cited above
specific to the ferry business, differences may be caused by a variety of
factors, including but not limited to, adverse economic conditions, entry of new
and stronger competitors in the ferry business, insufficient parking space for
potential ferry customers, inadequate capital and the inability to obtain
funding from third parties, unexpected costs and the inability to obtain or keep
qualified personnel.

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


     See Financial Statements and Supplementary Data immediately preceding the
     ---
signature page of this Form 10-KSB.


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

          None.

                                      26
<PAGE>

                                   PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     The names, ages, municipalities of residence, positions with the
Registrant, and principal occupations of the directors and executive officers of
the Registrant as of January 2, 2001 are as follows:


<TABLE>
<CAPTION>
       Name, Age and
   Municipality Residence                            Office                              Other Business Experience
   ----------------------                            ------                              -------------------------
<S>                                   <C>                                          <C>
Anthony Cappaze                       Chairman, Chief Executive Officer of the     President of Trinity Group since 1998;
Short Hills, NJ                       Company and Director since its inception.    Regional Manager for Northern Telecom 1983
Age:     56                                                                        - 1998.

Anthony Colasanti                     Vice President, General Counsel and          Partner in the law firm of Colasanti and
West Orange, NJ                       Director of the Company since 1996.          Scott July 1998 - 2000; partner in the law
Age:     57                           Secretary of the Company since January       firm Colasanti, Ermel & Cosale 1994 - 1998.
                                      1999.

Francis Matusek                       Director of the Company since its            Partner in the accounting and tax
Matawan, NJ                           inception; Officer of the Company from its   consulting firm of Matusek & Company since
Age:     48                           inception until January 1999.                1974.

Gregory J. Hauke                      Director of the Company since June 2000.     President of Hauke Realty, Inc. since
Freehold, NJ                                                                       1985.  Chief Financial Officer of Phoenix
Age:       50                                                                      Funding since 1996.

John Ferreira, Jr.                    Chief Financial Officer of the Company       Corporate Controller of ESC Sharplan
Washington Township, NJ               since May 2000.                              Medical Systems, North American Operations
Age:      37                                                                       from November 1995 to April 2000.  Senior
                                                                                   Financial and Operating Analyst for Volvo
                                                                                   Car Finance from August 1994 to November
                                                                                   1995.
</TABLE>

     The Board of Directors currently serves as the Company's Audit Committee.
The Company may appoint a separate committee before the end of the year.

                                      27
<PAGE>

Compliance with Section 16(a) of the Securities Exchange Act of 1934.
--------------------------------------------------------------------

     Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's directors and certain of its officers to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission and NASDAQ.  Executive officers and directors are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.  Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that all reports on Forms 3, 4 or 5 required to
be filed were filed on a timely basis for the fiscal year ended December 31,
1999, other than Mr. Ferreira; the Viator Fund Ltd.; and Michael Lauer; who all
failed to timely file Forms 3.

ITEM 10.  EXECUTIVE COMPENSATION

Compensation and other Benefits of Executive Officers.
-----------------------------------------------------

     The following table sets out the compensation received for the fiscal years
ended April 30, 1997 and 1998, and December 31, 1999 in respect to each of the
individuals who were the Company's chief executive officer at any time during
the last fiscal year and the Company's four most highly compensated executive
officers whose total salary and bonus exceeded $100,000 (the "Named Executive
Officers").

<TABLE>
<CAPTION>
                                                    SUMMARY COMPENSATION TABLE

          FISCAL YEAR COMPENSATION                                         LONG TERM COMPENSATION

                                                              Awards                                   Payouts
                                                              ------                                   -------

                                                                                         Restricted
                                                                                           Shares
                                                                   Securities under    or Restricted      LTIP        All other
    Name and                  Salary(1)   Bonus    Other Annual      Option/SARs           Share        Payouts     Compensation
Principal Position    Year      ($)        ($)     Compensation        Granted             Units          ($)            ($)
------------------    ----    ---------   -----    ------------    ----------------    -------------    -------     ------------
<S>                   <C>     <C>         <C>      <C>             <C>                 <C>              <C>         <C>
Anthony Cappaze/      1999     100,000      0           0              300,000               0             0            5,700
Chairman              1998      75,000      0           0                    0               0             0                0
and CEO               1997      75,000      0           0                    0               0             0                0
</TABLE>

------------
(1)  The base compensation is recorded and accrued, but payment is deferred in
the interest of optimizing the Company's cash flow.

Stock Option Plan.
-----------------

     The Board of Directors of the Company has adopted a stock option plan
effective March 10, 2000, which was approved by the shareholders on August 21,
2000.  The stock option plan was adopted in order to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to the Company's employees and to promote the success of
the Company's business.  The Company has reserved 1,115,000 shares of its common

                                      28
<PAGE>

stock under the stock option plan.  As of September 22, 2000, no options have
been granted under the stock option plan.

Agreements with Management.
--------------------------


     The Company had employment agreements with Messrs. Cappaze and Matusek that
provided for annual salaries of $75,000 each through April 30, 1998 and $100,000
each, thereafter.  Mr. Cappaze signed a new employment agreement in January
2000.  Mr. Colasanti signed a new employment agreement in February 2000, and Mr.
Matusek's agreement ended March 31, 1999.


     The term of Mr. Cappaze's employment agreement dated  January 2000 is for a
period of three years through December 31, 2002.  The term of Mr. Colasanti's
employment agreement dated February 1, 2000 is for a period of thirty-five
months through December 31, 2002.  Mr. Cappaze's base salary under his
employment agreement is $150,000 per year and Mr. Colasanti's base salary under
his employment agreement is $120,000 per year.  Mr. Cappaze and Colasanti are
individually referred to from time to time as "Employee" or collectively as
"Employees" in this section.  In addition to the base salaries, the Employees
are entitled to merit increases in salaries during the term of the agreements in
amounts and at such times as determined by the Board of Directors of the
Company.  The employment agreements provide that the employment of each Employee
may be terminated in the event of the death of the Employee, in which case the
Company shall pay to the estate or other legal representative of the Employee
his base salary (at the annual rate then in effect) accrued to that date which
is six months after the Employee's date of death and not theretofore paid. The
employment agreements provide that the employment of each Employee may also be
terminated if the Employee becomes incapacitated and is unable to perform his
normal duties under the agreements for ninety (90) consecutive days.  Promptly
after such termination, the Company shall pay to the Employee his base salary
(at the annual rate then in effect) accrued to the date of termination and not
theretofore paid.  The employment of the Employees may also be terminated at any
time for due cause (as that term is defined in the agreements) and in such
event, the Company shall pay to the Employee his base salary at the annual rate
then in effect  accrued to the date of such termination and not theretofore paid
to Employee.  The Company may also terminate the employment of the Employees for
any reason other than the above for whatever reason it deems appropriate and in
that event, the Company shall (i) pay to the Employee a lump sum one and one
half times his annual base salary at the annual rate then in effect and (ii)
give employee warrants granting Employee the right to purchase 150,000 shares of
the Company's common stock at $1.00 per share over a period of five (5) years
from the date of termination.  The Employees may also resign from employment
with the Company upon 30 days prior written notice to the Company.

     Mr. Cappaze's employment agreement dated January 2000 provides that he
receive warrants for the purchase of 100,000 shares of common stock at $1.00 per
share for each of three years and options, which expire on 1/1/07, to acquire
200,000 shares of common stock at $1.00 per share, of which options for 100,000
shares are not exercisable until 1/1/02, and the remainder are exercisable
beginning 1/1/03.  Mr. Colasanti's employment agreement dated January 2000
provides that he receive warrants for the purchase of 100,000 shares of common
stock at $1.00 per share for each of three years and options, which expire on
1/1/07, for 100,000 shares of common stock at $1.00 per share, of which 50% are
exercisable commencing 1/1/02, and the remainder are exercisable beginning
1/1/03.  Mr. Cappaze and Mr. Matusek have deferred a significant portion of
their

                                      29
<PAGE>

compensation under these agreements. This deferred compensation carries an
interest rate of 4% per annum. As of December 31, 1999, the total deferred
compensation, including interest due, was $198,870.

     The Company entered into an employment agreement with John Ferreira on
April 30, 2000. For the period from May 1, 2000 to December 31, 2000, Mr.
Ferreira will receive a salary at the rate of $100,000 per annum. Beginning
January 1, 2001, Mr. Ferreira's salary will be $125,000 per year.

Option/Stock Appreciation Rights ("SAR") Grants during the most recently
------------------------------------------------------------------------
completed Fiscal Year.
---------------------

     The following table sets out the stock options and stock warrants granted
as bonuses which were granted by the Company during the previous fiscal year to
the Named Executive Officers of the Company.  The following amounts include
options that were granted prior to the previous fiscal year but were repriced
during that year.

<TABLE>
<CAPTION>
                                                    OPTION/SAR GRANTS IN PREVIOUS YEAR
                                                            INDIVIDUAL GAINS

                         Number of           % of Total
                         Securities         Options/SARs
                         Underlying          Granted to
                        Options/SARs        Employees in        Exercise or Base       Market Price on
Name                    Granted (#)          Fiscal Year          Price ($/Sh)          Date of Grant       Expiration Date
----                    ------------        ------------        ----------------       ----------------     ---------------
<S>                     <C>                 <C>                 <C>                    <C>                  <C>
Anthony Cappaze            200,000               32%                 $1.75                  $1.75               06/11/02
                           100,000               16%                 $1.25                  $1.25               10/27/01

Anthony Colasanti          100,000               16%                 $1.50                  $1.50               12/20/01
                           100,000               16%                 $ 125                  $1.25               10/27/01
</TABLE>

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

Aggregated Option/SAR Exercised in Last Financial Year and Fiscal Year-End
--------------------------------------------------------------------------
Option/SAR Values.
-----------------

     The following table sets out all option/SARs and warrants granted as
bonuses which were exercised by the Named Executive Officers during the most
recently completed fiscal year and the values of options/SARs and warrants for
such persons as of the end of the most recently completed fiscal year.

                                      30
<PAGE>

Aggregated Option/SAR Exercised in Last Fiscal Year and FY-End Option/SAR Values

<TABLE>
<CAPTION>
                                                                          Number of Securities           Value of
                                                                         Underlying Unexercised         Unexercised
                                                                         Options/SARs at FY-End       Options/SARs at
                                                                                  (#)                   FY-End ($)

                         Shares Acquired on                                   Exercisable/             Exercisable/
Name                        Exercise (#)          Value Realized ($)         Unexercisable             Unexercisable
----                     ------------------       ------------------         -------------             -------------
<S>                      <C>                      <C>                    <C>                           <C>
Anthony Cappaze                 -0-                      -0-             200,000 all exercisable            N/A
                                                                         100,000 all exercisable          $16,000

Anthony Colasanti               -0-                      -0-             100,000 all exercisable            N/A
                                                                         100,000 all exercisable          $16,000
</TABLE>

Compensation of Directors.
-------------------------

     Directors of the Company are paid $500 per meeting for their services as
such. Furthermore, the directors are reimbursed for all expenses incurred by
them in attending board meetings.

Benefit Plans.
-------------

     The Company currently has no retirement, pension, profit-sharing or
insurance or medical reimbursement plans covering its officers and directors,
but does contemplate implementing group health, term life insurance and 401(k)
plans once additional full-time management employees are hired. The NY Fast
Ferry group has a group medical health plan and a 401(k) plan for its employees.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth, as of December 6, 2000, the number of
shares of the Company's outstanding $0.01 par value common stock beneficially
owned by each of the Company's current directors and the Company's executive
officers, the number of shares beneficially owned by all of the Company's
current directors and named executive officers as a group, and the number of
shares owned by each person who owned of record, or was known to own
beneficially, more than 5% of the Company's outstanding shares of common stock:

                                      31
<PAGE>

<TABLE>
<CAPTION>

Name and Address                            Amount and Nature of          Percent of
Of Beneficial Owner                         Beneficial Ownership         Common Stock
-------------------                         --------------------         ------------
<S>                                         <C>                          <C>
Anthony Cappaze                                  1,509,850(1)                21.4%
195 Fairfield Avenue, Suite 3C
West Caldwell, NJ  07006

Anthony Colasanti                                  390,000(2)                 5.6%
195 Fairfield Avenue, Suite 3C
West Caldwell, NJ  07006

Francis P. Matusek                               1,050,400(3)                15.8%
186 Highway 34
Matawan, New Jersey 07747

Ray Wright                                         150,000(4)                 2.2%
One Springfield Avenue
Summit NJ  07901

John Ferreira, Jr.                                       0                    *
195 Fairfield Avenue, Suite 3C
West Caldwell, NJ  07006

Gregory J. Hauke                                    29,250                    *
195 Fairfield Avenue, Suite 3C
West Caldwell, NJ  07006

All current directors and executive officers     2,979,500(5)                39.8%
as a group (five persons)
</TABLE>

------------
*Less than one percent.

(1)  Includes 718,700 shares owned by Cappaze Associates, L.P., of which Mr.
Cappaze is the General Partner; 78,000 shares owned by Elchanan Dulitz FBO
Ashley North Ave. Inc., to which Mr. Cappaze pledged stock to secure a loan to
the Company; 15,000 shares owned by Mr. Cappaze's spouse; options to acquire
200,000 shares at $1.75 per share until 6/11/2002; warrants to purchase 100,000
shares at $1.25 per share until 10/27/2001; and warrants to purchase 100,000
shares at $1.00 per share until January 2003.  Does not include options to
acquire 200,000 shares at $1.00 per share until 1/1/07, which are not
exercisable before 1/1/02.

(2)  Includes options to acquire 100,000 shares at $1.50 per share until
12/20/2001; warrants to purchase 100,000 shares at $1.25 per share until
10/27/2001; warrants to purchase 100,000 shares at $1.00 per share until January
2003, and warrants to purchase 50,000 shares at $1.00 per share until January
2002.  Does not include options to acquire 100,000 shares at $1.00 per share
until 1/1/07, which are not exercisable before 1/1/02.

(3)  Includes 2,250 shares owned by Mr. Matusek's spouse.

(4)  Includes options to acquire 100,000 shares at $1.00 per share until 12/04.
Raymond F. Wright tendered his resignation as Treasurer, effective 03/15/00.

(5)  Includes footnotes 1 through 3.

                                      32
<PAGE>

Other Owners.
------------

     To the knowledge of the Directors and Senior Officers of the Company, as of
December 6, 2000, there are no persons and/or companies who or which
beneficially own, directly or indirectly, shares carrying more than 5% of the
voting rights attached to all outstanding shares of the Company, other than the
following:

<TABLE>
<CAPTION>

Name and Address                                    Amount and Nature of                Percent of
of Beneficial Owner                                 Beneficial Ownership               Common Stock
-------------------                                 --------------------               ------------
<S>                                                 <C>                                <C>
Capital Research Ltd.                                     556,873(1)                        7.8%
27241 Paseo Peregrino
San Juan Capistrano, CA  92675

Joseph Giamanco                                         1,228,917(2)                       16.1%
c/o Henry Kramer
GHM, Inc.
74 Trinity Place
New York, NY  10006

Michael Lauer                                           4,436,467(3)                       46.3%
c/o The Lancer Group
375 Park Avenue
New York, NY  10152
</TABLE>

------------
(1)  Includes 126,500 shares to be issued pursuant to an amendment to senior
promissory notes executed in December 2000; warrants to purchase 75,000 shares
at $1.25 per share until October 2004; approximately 144,623 shares underlying
currently convertible promissory notes, such notes being convertible into shares
of common stock at the rate of one share for each $1.00 of indebtedness then due
and owing (number reflects indebtedness under the notes as of November 30,
2000); approximately 100,000 shares underlying a currently convertible
promissory note, such note being convertible into shares of common stock at the
rate of one share for each $1.00 of indebtedness then due and owing to be issued
in consideration for the negotiation and execution of the amendment to senior
promissory notes; and 50,000 shares to be issued in consideration of the
negotiation and execution of the amendment to senior promissory notes.

(2)  Includes warrants to purchase 200,000 shares at $1.00 per share until July
2002; 200,000 shares underlying a convertible promissory note, such note being
convertible into shares of common stock at the rate of one share for each $1.00
of indebtedness then due and owing; warrants to purchase 150,000 shares at $0.50
per share until March 2002; approximately 303,917 shares underlying a
convertible promissory note, such note being convertible into shares of common
stock at the rate of one share for each $1.00 of indebtedness then due and
owing; and 150,000 shares to be issued pursuant to an amendment to senior
promissory notes executed in December 2000.

(3)  Mr. Lauer is Managing Director of Lancer Offshore, Inc., The Viator Fund
Ltd. and The Orbiter Fund, and managing partner of Lancer Partners, L.P.  This
total includes 1,733,754 shares beneficially owned by Lancer Offshore, Inc.;
1,625,000 shares and warrants beneficially owned by The Viator Fund, Ltd.;
375,000 shares beneficially owned by The Orbitor Fund; 452,713 shares
beneficially owned by Lancer Partners, L.P.; and 250,000 shares owned directly
by Mr. Lauer.

                                      33
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In June 1999 Anthony Cappaze, an officer and director of the Company, was
granted options to purchase 200,000 shares of common stock exercisable at $1.75
per share for three years.  In October 1999, Mr. Cappaze was granted warrants to
purchase 100,000 shares of common stock at $1.00 per share for two years.  Mr.
Cappaze signed a new Employment Agreement as of January 2000, which provides
that he receives warrants for the purchase of 100,000 shares of common stock at
$1.00 per share for three years, and options, which expire on 1/1/07, to acquire
200,000 shares of common stock at $1.00 per share, of which options for 100,000
shares are not exercisable until 1/1/02 and the remainder are exercisable
beginning 1/1/03.  In January 2000, the Board of Directors voted to issue
120,000 shares to Mr. Cappaze in lieu of outstanding salary for 1996 and 1997 of
$102,000.

     Anthony Colasanti, an officer and director of the Company, also serves as
general legal counsel for the Company.  Mr. Colasanti's law firm, Colasanti &
Scott, LLP, was paid approximately $5,000 in 1997, approximately $10,000 in 1998
and approximately $30,000 in 1999 by the Company for legal services rendered by
his firm to the Company.

     Mr. Colasanti also received as an annual retainer for consulting services,
10,000 shares of common stock in May 1997 and 10,000 shares in May 1998.  He
received 25,000 shares in May 1999 for legal services in negotiating and closing
a loan for the Company.  In December 1999, Mr. Colasanti was granted an option
to purchase 100,000 shares of common stock at $1.50 per share for two years.  In
October 1999, Mr. Colasanti was granted warrants to purchase 100,000 shares of
common stock at $1.25 per share for two years.  Mr. Colasanti signed an
employment agreement as of January 2000, which provides that he receives
warrants for the purchase of 100,000 shares of common stock at $1.00 for each of
three years, and options, which expire on 1/1/07, for 100,000 shares of common
stock at $1.00 per share, of which 50% are exercisable commencing 1/1/02, and
the remainder beginning 1/1/03.  In January 2000, Mr. Colasanti was also granted
warrants for the purchase of 100,000 shares of common stock at $1.00 per share
for each of two years.  These warrants were granted to Mr. Colasanti for
services rendered in raising capital for the Company.

     In January 2000, the Board of Directors voted to issue 12,500 shares to Mr.
Colasanti in lieu of outstanding salary of $10,625.  Mr. Colasanti directed the
Company to issue the 12,500 shares to several individuals as gifts from Mr.
Colasanti.  Of the 12,500 shares, Mr. Colasanti gave a total of 5,000 shares to
his two adult sons (2,500 shares each).  Neither of these sons live in Mr.
Colasanti's household, and none of the other individuals are related to Mr.
Colasanti or reside in his household. Thus, Mr. Colasanti is not the beneficial
owner of these shares.

     In January 2000, the Board of Directors voted to issue 120,000 shares to
Francis Matusek, a director and officer of the Company, in lieu of outstanding
compensation of $102,000.

     In October 1999, the Company issued an aggregate of 1,250,000 shares to
Michael Lauer and two companies controlled by that investor (Lancer Offshore,
Inc. and the Viator Fund Ltd.), all of them accredited investors, for gross
proceeds of $1,250,000 or $1.00 per share.  The Viator Fund also received
warrants to purchase an aggregate of 750,000 shares of common stock exercisable
at

                                      34
<PAGE>

$1.25 per share until December 31, 2002. A finder's fee was paid to Capital
Research on this portion of the offering in the amount of $125,000 and warrants
to acquire 75,000 shares of common stock exercisable at $1.25 per share for five
years.

     In March 2000, the Company issued 125,000 shares to the Viator Fund and
125,000 shares to another entity in consideration of a $1,000,000 bridge loan to
the Company.

     In July 2000, the Company issued 125,000 shares, having a fair market value
on the date of issuance of $2.00 per share, to Lancer Offshore, Inc. in
connection with its purchaser of a senior convertible promissory note of the
Company in the amount of $500,000.

     In October 2000, the Company issued 75,000 shares, having a fair market
value on the date of issuance of $1.50 per share, to Lancer Offshore, Inc. in
connection with its purchaser of a senior convertible promissory note of the
Company in the amount of $200,000.

     In December 2000, the Company entered into an Amendment to Senior
Promissory Note Agreement whereby the Company agreed to issue 350,000 shares to
Lancer Offshore, Inc.; 250,000 shares to The Orbiter Fund, Ltd.; 250,000 shares
to The Viator Fund, Ltd.; 150,000 shares to Lancer Partners, L.P.; 150,000
shares to Joseph Giamanco; and 176,650 shares to Capital Research Ltd. in
consideration of the extension of the maturity dates of certain Senior
Convertible Promissory Notes and the reduction of the conversion prices.

     Other than the transactions stated herein, none of the directors or
executive officers of the Company, nor any 5% owner of the Company, has been
involved in any transaction with the Company exceeding $60,000 that has occurred
in the last two years.


                                    PART IV
                                    -------

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K


(a)      Exhibits
         --------

3.1.a    Certificate of Incorporation, as amended.  (1)

3.1.b    Certificate of Amendment effective September 19, 2000. (1)

3.2      Bylaws. (1)

10.1     Stock Purchase Agreement dated 9/9/98 for acquisition of Fast Ferry
         Holding Corp. (1)

10.2     Lease Agreement dated 3/30/98 for Aragon Marina. (1)

10.3     Lease Agreement dated October 1999 for Stamford Property Marina. (1)

10.4     Letter of Intent for vessel construction. (2)

                                      35
<PAGE>

<TABLE>
<C>      <S>
10.5.1   Employment Agreement with John Ferreira. (1)

10.5.2   Employment Agreement with Anthony Cappaze. (1)

10.5.3   Employment Agreement with Anthony Colasanti. (1)

10.6     Agreement with Robert E. Derecktor, Inc. for vessel construction. (1)

10.7     Lease Agreement for Clam Hut site dated 12/15/00. (1)

10.8     Form of 10% Senior Promissory Notes.  Filed herewith.

10.9     Form of 10.5% Convertible Promissory Notes.  Filed herewith.

10.10    Amendment to Senior Promissory Notes. (1)

10.11    Form of Note Modification Agreement with 10% Senior Promissory Note
         holders. Filed herewith.

21.1     Subsidiaries of the Registrant. (1)

27.1     Financial Data Schedule. (2)
</TABLE>

-------------
(1)  Incorporated by reference from the Company's Registration Statement on Form
     10-SB, as amended.

(2)  Incorporated by reference from the Company's Form 10-KSB/A No. 4 for the
     fiscal year ended December 31, 1999, File No. 0-29205.


(b)  Reports on Form 8-K  No reports on Form 8-K were filed during the last
     -------------------
     quarter of the fiscal year covered by this report.

                                      36
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

                        FINANCIAL STATEMENTS - RESTATED

                               DECEMBER 31, 1999
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES
                   INDEX TO FINANCIAL STATEMENTS - RESTATED

<TABLE>
<CAPTION>
                                                                                                  Page No.
                                                                                                 -----------
<S>                                                                                              <C>
Lighthouse Landings, Inc. and Subsidiaries

     Independent Accountants' Report                                                                     F-1

     Consolidated Balance Sheets As at December 31, 1999 and 1998..............................          F-2

     Consolidated Statements of Operations For the Years Ended December 31, 1999 and 1998......          F-3

     Consolidated Statements of Changes in Stockholders' Equity
        For the Years Ended December 31, 1999 and 1998.........................................          F-4

     Consolidated Statements of Cash Flows
        For the Years Ended December 31, 1999 and 1998.........................................    F-5 - F-6

     Notes to Consolidated Financial Statements................................................   F-7 - F-23

Lighthouse Landings, Inc. and Subsidiaries Pro Forma Financial Statements (Unaudited)

     Pro Forma Financial Statement Headnote (Unaudited)........................................         F-24

     Pro Forma Statement of Operations
        For the Year Ended December 31, 1998 (Unaudited).......................................         F-25

     Notes To Pro Forma Financial Statements (Unaudited).......................................         F-26

     Pro Forma Adjustments (Unaudited).........................................................         F-27

Fast Ferry Holding Corp. and Subsidiaries

     Independent Accountants' Report...........................................................         F-28

     Consolidated Balance Sheets As at October 6, 1998 December 31, 1997
        And December 31, 1996..................................................................         F-29

     Consolidated Statements of Operations and Deficit
        For The Period January 1, 1998 to October 6, 1998 And For The
        Years Ended December 31, 1997 and 1996.................................................         F-30

     Consolidated Statements of Cash Flows
        For The Period January 1, 1998 to October 6, 1998 And For The
        Years Ended December 31, 1997 and 1996.................................................         F-31

     Notes to Consolidated Financial Statements................................................  F-32 - F-35
</TABLE>
<PAGE>

                  [LETTERHEAD OF WEINICK SANDERS LEVENTHAL & CO., LLP]


                        INDEPENDENT ACCOUNTANTS' REPORT
                        -------------------------------

To the Board of Directors and Stockholders
Lighthouse Landings, Inc.

We have audited the accompanying consolidated balance sheets of Lighthouse
Landings, Inc. and Subsidiaries as at December 31, 1999 and 1998, and the
related consolidated statements of operations, cash flows and changes in
stockholder's equity for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lighthouse Landings,
Inc. and Subsidiaries as at December 31, 1999 and 1998, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has sustained substantial losses
for the years ended December 31, 1999 and 1998. In addition at December 31, 1999
the Company has negative working capital of $3,172,194. These conditions raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters are also described in Note 1. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

As discussed in Note 12, the accompanying consolidated financial statements have
been restated to give effect to certain comments by the Securities and Exchange
Commission.

                                        /s/ WEINICK SANDERS LEVENTHAL & CO., LLP


New York, N. Y.
February 23, 2000 (Except as to Note 11
 as to which the date is March 31, 2000)

                                      F-1
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS - RESTATED

                                    ASSETS
                                    ------
                                                          December 31,
                                                  -----------------------------
                                                      1999             1998
                                                  ------------     ------------
Current assets:
  Cash                                            $     97,957     $     62,606
  Inventories                                           40,948            1,057
  Net assets of discontinued operations                 32,582                -
  Prepaid expenses and other current assets            127,994           72,308
                                                  ------------     ------------
        Total current assets                           299,481          135,971

Net assets of discontinued operations                        -          727,506

Property and equipment - at cost,
  less accumulated depreciation                     12,288,880       13,103,525

Goodwill net of accumulated amortization             1,112,935        1,193,880

Other assets                                            51,764           19,091
                                                  ------------     ------------

                                                  $ 13,753,060     $ 15,179,973
                                                  ============     ============

                     LIABILITIES AND STOCKHOLDERS' EQUITY
                     ------------------------------------

Current liabilities:
  Current maturities of long-term debt            $  1,879,764     $  1,332,601
  Notes payable - stockholders                         125,000                -
  Accounts payable and accrued expenses                948,606          683,952
  Deferred revenues                                     68,765           46,566
  Due to officers/stockholders                         449,540          484,142
                                                  ------------     ------------
        Total current liabilities                    3,471,675        2,547,261

Long-term debt - net of current maturities          10,064,110       11,301,455
                                                  ------------     ------------
        Total liabilities                           13,535,785       13,848,716
                                                  ------------     ------------

Minority interest                                            -           11,071
                                                  ------------     ------------

Redeemable common stock                                      -          350,000
                                                  ------------     ------------

Stockholders' equity:
  Common stock - $.01 par value
    Authorized - 10,000,000 shares
    Issued and outstanding - 4,905,795 shares
      in 1999 and 3,250,795 in 1998                     49,058           32,508
  Additional paid-in capital                         5,312,588        3,809,138
  Accumulated deficit                               (5,144,371)      (2,621,460)
                                                  ------------     ------------
                                                       217,275        1,220,186
  Less:  Stock subscription receivable                       -         (250,000)
                                                  ------------     ------------
        Total stockholders' equity                     217,275          970,186
                                                  ------------     ------------

                                                  $ 13,753,060     $ 15,179,973
                                                  ============     ============

         See accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS - RESTATED

                                                       For the Years Ended
                                                           December 31,
                                                    --------------------------
                                                        1999          1998
                                                    ------------  ------------

Revenues                                            $  3,285,978  $    681,167
                                                    ------------  ------------

Costs of services:
  Ferry operations                                     1,597,574       287,116
  Depreciation                                           896,008       222,626
                                                    ------------  ------------
Total costs of services                                2,493,582       509,742
                                                    ------------  ------------
Gross margin                                             792,396       171,425
                                                    ------------  ------------

Marketing and administrative expenses                  1,223,374       514,036
Amortization of goodwill                                  80,945        20,204
                                                    ------------  ------------
                                                       1,304,319       534,240
                                                    ------------  ------------

Net loss from operations                                (511,923)     (362,815)
                                                    ------------  ------------

Other expenses:
  Interest (net)                                       1,473,735       348,249
  Provision for state and local income taxes               1,323         1,014
                                                    ------------  ------------
Total other expenses                                   1,475,058       349,263
                                                    ------------  ------------

Loss from continuing operations before
  minority share in loss of subsidiary                (1,986,981)     (712,078)

Minority share in loss of subsidiary                      11,071        42,534
                                                    ------------  ------------

Loss from continuing operations                       (1,975,910)     (669,544)
                                                    ------------  ------------

Discontinued operations:
  Loss from discontinued operations                     (155,347)     (113,392)
  Estimated loss on disposal                            (391,654)            -
  Impairment loss                                              -      (331,161)
                                                    ------------  ------------
Loss from discontinued operations                       (547,001)     (444,553)
                                                    ------------  ------------

Net loss                                             ($2,522,911)  ($1,114,097)
                                                    ============  ============


Per share data:
  Basic and diluted:
    Loss from continuing operations                       ($0.55)       ($0.23)
    Loss from discontinued operations                      (0.15)        (0.16)
                                                    ------------  ------------
    Net loss                                              ($0.70)       ($0.39)
                                                    ============  ============

    Weighted average number of shares outstanding:
      Basic and diluted                                3,591,138     2,850,100
                                                    ============  ============

         See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - RESTATED

                FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                   Additional                      Stock          Total
                                               Common Stock          Paid-In     (Accumulated   Subscriptions   Stockholders'
                                            --------------------
                                             Number      Amount      Capital       Deficit)       Receivable       Equity
                                            ---------   --------   -----------   ------------   -------------   -------------
<S>                                         <C>         <C>        <C>           <C>            <C>             <C>
Balance at January 1, 1998                  2,736,250   $ 27,363   $ 2,473,883    ($1,507,273)  $           -   $     993,973
Issuance of shares upon
  the acquisition of
  Fast Ferries Holding Corp.                  384,545      3,845       969,055              -               -         972,900
Increase of shares for cash                    30,000        300        97,200              -               -          97,500
Stock subscription                            100,000      1,000       249,000              -        (250,000)              -
Value of 200,000 warrants issued
  pursuant to noteholder for
  refinancing Corp.                                 -          -        20,000              -               -          20,000
Net loss for 1998                                   -          -             -     (1,114,187)              -      (1,114,187)
                                            ---------   --------   -----------   ------------   -------------   -------------

Balance at December 31, 1998                3,250,795     32,508     3,809,138     (2,621,460)       (250,000)        970,186
Payments for shares subscribed for                  -          -             -              -         250,000         250,000
Increase of shares for cash                 1,550,000     15,500     1,304,500              -               -       1,320,000
Shares issued to noteholder as interest        50,000        500        99,500              -               -         100,000
Shares issued for services rendered            55,000        550        99,450              -               -         100,000
Net loss for 1999                                   -          -             -     (2,522,911)              -      (2,522,911)
                                            ---------   --------   -----------   ------------   -------------   -------------

Balance at December 31, 1999                4,905,795   $ 49,058   $ 5,312,588    ($5,144,371)  $           -   $     217,275
                                            =========   ========   ===========   ============   =============   =============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS - RESTATED

<TABLE>
<CAPTION>
                                                                         For the Years Ended
                                                                             December 31,
                                                                      ---------------------------
                                                                          1999           1998
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
Cash flows from operating activities:
  Net loss continuing operations                                       ($1,975,910)     ($669,634)
                                                                      ------------   ------------
  Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
    Minority interests                                                     (11,071)       (42,534)
    Depreciation                                                           904,837        253,489
    Amortization of goodwill                                                80,945        331,161
    Impairment loss                                                              -         78,007
    Amortization of deferred finance cost                                    4,000            909
    Imputed interest                                                       156,909         42,440
    Stock issued for services rendered and interest                        200,000              -
    Deferred revenues                                                       22,199        (49,746)
    Increase (decrease) in cash flows as a result of
        changes in assets and liabilities net of assets
        and liabilities acquired in an acquisition:
      Accounts receivable                                                        -          9,826
      Inventories                                                          (39,891)        (1,057)
      Prepaid expenses and other current assets                            (55,686)       (35,995)
      Accounts payable                                                     264,654        506,738
      Accrued officers compensation                                        (34,602)       137,236
      Other taxes                                                          (36,673)             -
                                                                      ------------   ------------
                                                                         1,455,621      1,230,474
                                                                      ------------   ------------
Net cash provided by (used in) operating
  activities of continuing operations                                     (520,289)       560,840

Net cash provided by discontinued operations                               147,923              -
                                                                      ------------   ------------
Net cash flows provided by (used in) operating activities                 (372,366)       560,840
                                                                      ------------   ------------

Cash flows from investing activities:
  Acquisition of property and equipment                                    (90,192)             -
  Cash paid for acquisition                                                      -       (141,257)
                                                                      ------------   ------------
Net cash used in investing activities                                      (90,192)      (141,257)
                                                                      ------------   ------------

Cash flows from financing activities:
  Proceeds from loans                                                      400,000         49,779
  Repayments of redeemable stock obligations                              (225,000)             -
  Proceeds from stock subscription                                         250,000              -
  Repayments of long-term debt                                          (1,247,091)      (642,001)
  Proceeds from issuance of common stock                                 1,320,000         97,500
                                                                      ------------   ------------
Net cash provided by (used in) financing
  activities of continuing operations                                      497,909       (494,722)
                                                                      ------------   ------------

Net increase (decrease) in cash                                             35,351        (75,139)

Cash at beginning of year                                                   62,606            479

Cash acquired from acquisition                                                   -        137,266
                                                                      ------------   ------------

Cash at end of year                                                   $     97,957   $     62,606
                                                                      ============   ============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

         CONSOLIDATED STATEMENTS OF CASH FLOWS - RESTATED (Continued)

<TABLE>
<CAPTION>
                                                           For the Years Ended
                                                               December 31,
                                                       ----------------------------
                                                           1999           1998
                                                       -------------  -------------
<S>                                                    <C>            <C>
Supplemental Disclosures of Cash Flow Information:

Cash paid during the year:
    Interest                                           $   1,072,251  $     166,591
                                                       =============  =============
    Income taxes                                       $       1,323  $       1,014
                                                       =============  =============

Supplemental Schedules of Noncash Activities:

  Stock issued for business acquisition:
    Common stock                                       $           -  $     972,900
                                                       =============  =============
    Redeemable common stock                            $           -  $     350,000
                                                       =============  =============
    Warrants issued as inducement to note holder       $           -  $      20,000
                                                       =============  =============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - RESTATED

                               DECEMBER 31, 1999


NOTE 1 -  REALIZATION OF ASSETS - GOING CONCERN.

               The accompanying consolidated financial statements have been
          prepared in conformity with generally accepted accounting principles,
          which contemplate continuation of the Company as a going concern.
          Lighthouse Landings, Inc. (the "Company") has sustained substantial
          losses for the years ended December 31, 1999 and 1998. In addition,
          the accompanying consolidated balance sheet as at December 31, 1999
          reflects negative working ca pital of $3,172,194 net tangible capital
          deficiency of $910,751.

               Future viability of the Company is dependent upon the Company's
          obtaining additional funding. During 1999, the Company arranged
          private placements of its common stock for net cash proceeds of
          $1,530,000 and obtained short term loans in the amount of $700,000 for
          both its continuing and discontinued segments. The funds were used to
          provide funds for certain obligations and ongoing operations.
          Commencing in January 2000 through March 17, 2000, the Company
          received $1,385,000 before offering costs from the sale of its
          securities and bridge loans.

               The Company currently operates a commuter ferry service from
          Highlands, NJ to and from Manhattan, and is pursuing the establishment
          of other routes in the Greater New York City area. In November 1999,
          the Company completed negotiations and executed a lease for a property
          in Stamford, CT as a base for fast ferry service to and from Manhattan
          and LaGuardia Airport. The site requires improvements and governmental
          approvals. The Company is proceeding with preparations for
          establishing ferry service, and expects to be able to commence service
          in the spring of 2001. Initially, it is expected that service on these
          new routes will be provided by a vessel on a short-term charter. The
          Company is proceeding with plans for construction and financing of two
          vessels specifically to meet the needs of the new service.

               During the latter half of 1998 and during 1999, the Company
          assessed its strategic direction and concluded that focusing on the
          commuter ferry business would provide the greatest return on assets
          and discontinued the marina\restaurant property and the retail cigar
          operations in 1999. Accordingly, the Company is pursuing the
          divestiture of the discontinued segments assets. The carrying value of
          the related net assets have been reclassified as "Net assets of
          discontinued operations" in the accompanying consolidated balance
          sheet.

                                      F-7
<PAGE>

NOTE 1 -  REALIZATION OF ASSETS - GOING CONCERN.

               It is management's opinion that the funds to be raised by the
          sales of its securities and borrowings through March 17, 2000 plus the
          funds anticipated to be raised through the sale of net assets of the
          discontinued segments will be sufficient to meet the Company's
          obligations as they become due.

               The conditions previously mentioned raise substantial doubt about
          the Company's ability to continue as a going concern. The financial
          statements do not include any adjustments that might result from the
          outcome of this uncertainty.


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

          (a) Description of Business:

               The Company was incorporated in New Jersey in 1993 and is in the
          commuter ferry business. The Company currently operates a commuter
          ferry service from Highlands, New Jersey to and from Manhattan, and is
          pursuing the establishment of other routes in the Greater New York
          City metropolitan area.

          (b) Principles of Consolidation:

               The consolidated financial statements include the accounts of
          Lighthouse Landings, Inc. and its subsidiaries. Inclusion of the
          results of subsidiary companies' operations is on the "Purchase"
          method, from the dates of their respective acquisition. All
          significant intercompany balances and transactions have been
          eliminated in consolidation. Recognition of the interest of minority
          stockholders is provided for in the accounts. As discussed more
          thoroughly in Note 3, the retail and marina segments are presented as
          discontinued operations.

          (c) Change of Accounting Period:

               The Company has changed its April 30 fiscal year end to December
          31st. Accordingly, the accompanying consolidated financial statements
          reflect balance sheets as of December 31, 1999 and 1998 and the
          results of operations cash flows and stockholders equity for the years
          then ended.

          (d) Inventories:

               Inventories which consist entirely of supplies and cafeteria
          products are stated at the lower of cost or market on the first-in,
          first-out method.

                                      F-8
<PAGE>

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)

          (e) Property and Equipment:

               Property and equipment is recorded at cost. The cost of the
          ferries obtained through the Fast Ferries Holding Corp. acquisition in
          December 1998 has been determined as an allocation of the purchase
          price of the business acquired based upon an appraisal. Depreciation
          is computed using the straight-line method. Depreciation on equipment,
          including the ferries, is calculated principally over their estimated
          useful lives of fifteen years.

               Expenditures which substantially increase estimated useful lives
          are capitalized. Maintenance, repairs and minor renewals are expensed
          as incurred. When assets are sold or otherwise disposed of, their
          costs and accumulated depreciation are removed from the accounts and
          any resulting gain or loss is recorded in operations.

          (f) Goodwill:

               Goodwill arising from acquisitions initially represents the
          excess of the purchase cost over the fair value of identifiable assets
          less identifiable liabilities. Goodwill is reviewed on an ongoing
          basis to determine that the value has not been impaired; in 1999 it
          was determined that the value of the goodwill arising from the
          purchase of The Cigar Box, Inc. has been impaired and accordingly the
          remaining unamortized goodwill of $198,654 has been written off to
          discontinued operations during 1999. The goodwill arising from the
          acquisition of Fast Ferry Holding Corp. and its wholly owned
          subsidiaries aggregating $1,214,174 is being amortized over 15 years.
          Amortization of goodwill charged to operations was $80,945 in 1999 and
          $20,294 in 1998.

          (g) Revenue Recognition:

               Revenue is recognized when earned. The Company's ferry business
          sells the majority of commuter tickets in advance of use. The tickets
          which are dated expire ninety (90) days after issuance and are
          nonrefundable and nonextendable. Accordingly, the Company determines
          the unused portion of ticket sales and defers that value to future
          periods. Deferred income aggregated $68,765 and $46,566 at December
          31, 1999 and 1998, respectively.

               The other revenues generated by the Company, for example the sale
          of food through the ferries' concession stands, are recognized when
          the services have been rendered. To date, other revenues have not been
          significant.

                                      F-9
<PAGE>

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)

          (h) Income Taxes:

               The Company complies with Statement of Financial Accounting
          Standards No. ("SFAS 109"), "Accounting for Income Taxes", which
          requires an asset and liability approach to financial accounting and
          reporting for income taxes. Deferred income tax assets are computed
          for differences between financial statement and tax basis of assets
          and liabilities that will result in future taxable or deductible
          amounts, based on the enacted tax laws and rates in the periods in
          which differences are expected to affect taxable income. The principal
          asset and liability differences are deferred revenues, valuation
          allowances for long-term assets, the estimated loss on the disposal of
          discontinued operations, and utilization of the Company's tax loss
          carryforwards. Management has fully reserved the net deferred tax
          assets as it is not more likely than not that the deferred tax asset
          will be utilized in the future.

          (i) Impairment of Long-lived Asset:

               The Company accounts for impairment of long-lived assets
          accordance with Statement of Financial Accounting Standards (SFAS) No.
          121, "Accounting for the Impairments of Long-Lived Assets and for
          Long-Lived Assets to be Disposed of" SFAS No. 121 requires that long-
          lived assets be reviewed for impairment whenever events or changes in
          circumstances indicate that the book value of the asset may not be
          recoverable. Due to significant loss incurred during 1999, the Company
          evaluated its long-term assets of its continuing operations which as
          at December 31, 1999 were comprised of property and equipment
          (principally two (2) ferries) with an undepreciated cost of
          $12,288,880 and goodwill on the acquisition of the Fast Ferry Holding
          Corp. with a unamortized cost of $1,112,935. Based upon an estimate of
          the future undiscounted net cash flows of the related asset or asset
          grouping over the remaining life, it was determined that there was no
          impairment in either the net book value of the ferries or the
          goodwill.

          (j) Use of Estimates:

               The preparation of financial statements in conformity with
          generally accepted accounting principles requires management to make
          estimates and assumptions that affect certain reported amounts and
          disclosures. Accordingly, actual results could differ from those
          estimates.

          (k) Concentrations of Credit Risk:

               Financial instruments which potentially subject the Company to
          concentrations of credit risk consist primarily of cash. The Company
          places its cash with high credit quality financial institutions which
          at times may be in excess of the FDIC insurance limit.

                                      F-10
<PAGE>

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)

          (l) Loss Per Common Share:

               Loss per common share is based on the weighted average number of
          common shares outstanding. In March 1997, the Financial Accounting
          Standards Broad issued Statement No. 128 ("SFAS 128"), "Earnings Per
          Share," which requires dual presentation of basic and diluted earnings
          per share on the face of the statements of operations which the
          Company has adopted. Basic loss per share excludes dilution and is
          computed by dividing income available to common stockholders by the
          weighted-average common shares outstanding for the period. Diluted
          loss per share reflects the potential dilution that could occur if
          convertible debentures, options and warrants were to be exercised or
          converted or otherwise resulted in the issuance of common stock that
          then shared in the earnings of the entity.

          Since the effect of outstanding options, warrant and convertible
          debenture conversions are antidilutive in all periods presented, it
          has been excluded from the computation of loss per common share.

          (m) Stock Based Compensation:

               The Company accounts for employee stock options in accordance
          with Accounting Principles Board Opinion No. 25 (APB25),"Accounting
          for stock issued to employees." Under APB 25, the Company recognizes
          no compensation expenses related to employee stock options, as no
          options are granted at price below the market price on the day of
          grant.

          (n) Stock Issued to Nonemployees for Services:

               The Company accounts for stock issued to nonemployees for
          services in accordance with Statement of Financial Accounting
          Standards (SFAS) No. 123. "Accounting for stock-based compensation".
          SFAS No. 123 requires that all transactions in which goods or services
          are the consideration received for the issuance of equity instruments
          shall be accounted for based on the fair value of the consideration
          received or the fair value of the equity instruments issued, which
          ever is more reliably measurable.

                                      F-11
<PAGE>

NOTE 3 -  DISCONTINUED OPERATIONS.

               On October 28, 1999, the Company adopted a plan to sell its real
          estate and retail/wholesale segments. Accordingly both segments have
          been accounted for as discontinued operations in the accompanying
          consolidated financial statements for both 1999 and 1998. The net
          assets to be disposed of as of December 31, 1999 aggregating $32,582
          consists principally of real estate and are recorded as current assets
          in the accompanying consolidated balance sheet under the caption
          "Assets held for resale". Management expects the real estate to be
          sold in late 2000. The estimated loss on disposal of the discontinued
          operations in 1999 of $391,654 represents: a write-off of the goodwill
          on The Cigar Box, Inc. of $198,654; and a provision of $193,000 for
          expected losses during the phase out period. Net sales of the retail
          segment for 1999 and 1998 were $75,994 and $184,840, respectively.
          There were no revenues from the real estate segment during 1999 and
          1998.

               The net assets of discontinued operations, which have been
          segregated in the accompanying balance sheets are summarized as
          follows:

                                                          December 31,
                                                    ----------------------
                                                       1999         1998
                                                    ----------  ----------
          Assets:
            Cash                                    $    3,129  $    1,189
            Inventory                                   27,401      42,187
            Prepaid expenses                               100         100
            Property assets, net (See Note 4)          974,359     968,108
            Goodwill                                         -     194,913
                                                    ----------  ----------
                                                     1,004,989   1,206,497
                                                    ----------  ----------
          Liabilities:
            Accounts payable                           186,334      48,943
            Secured mortgage payable                   443,485     157,288
            Accrued real estate taxes                  342,588     272,760
                                                    ----------  ----------
                                                       972,407     478,991
                                                    ----------  ----------

          Net assets of discontinued operations     $   32,582  $  727,506
                                                    ==========  ==========

                                      F-12
<PAGE>

NOTE 3 -  DISCONTINUED OPERATIONS. (Continued)

          (a) The mortgage notes payable are summarized as follows:

                                                            December 31,
                                                        --------------------
                                                          1999       1998
                                                        ---------  ---------

       20% demand mortgage on real property
         subject to the tax lien referred to below       $ 58,267   $157,288

       Second mortgage on real property payable in
         monthly installments (applied firstly to
         interest) of $15,000 from January 10, 2000
         through May 10, 2000, and three equal monthly
         payments equal to one-third of the balance
         outstanding on June 10, 2000, commencing
         June 10, 2000. The loan carries interest at
         18%plus as added inducement to enter into the
         loan, the lender received 50,000 shares of
         common stock valued at $100,000.                 180,023          -

       6% second demand mortgage on real property         205,195          -
                                                         --------  ---------

                                                         $443,485   $157,288
                                                         ========  =========

          (b) Real estate taxes liens have been recorded by local governmental
              authorities because of non-payment of said property taxes arising
              from a dispute over property tax valuations. The Company is
              currently attempting to resolve the dispute.


NOTE 4 -  PROPERTY AND EQUIPMENT.

               Property and equipment is summarized as follows:

                                                          December 31,
                                                   --------------------------
                                                      1999           1998
                                                   -----------    -----------

          Continuing operations:
            Ferries                                $13,300,000    $13,300,000
            Computers and office equipment              38,887         29,502
            Furniture and fixtures                     106,244         25,437
                                                   -----------    -----------
                                                    13,445,131     13,354,939
            Less:  Accumulated depreciation          1,156,251        251,414
                                                   -----------    -----------

                                                   $12,288,880    $13,103,525
                                                   ===========    ===========

          Discontinued operations:
            Land and buildings                     $   931,181    $   918,680
            Furniture and fixtures                      62,260         62,260
                                                   -----------    -----------
                                                       993,441        980,940
            Less:  Accumulated depreciation             19,082         12,832
                                                   -----------    -----------

                                                   $   974,359    $   968,108
                                                   ===========    ===========

                                      F-13
<PAGE>

NOTE 5 -  ACQUISITIONS.

               On October 6, 1998, the Company acquired 80% of the outstanding
          stock of Fast Ferry Holding Corp. and its wholly owned subsidiaries,
          New York Fast Ferry Services, Inc. Fast Ferry I, Inc. and Fast Ferry
          II, Inc. (the NYFF Group). The NYFF Group owns two vessels the M/V
          "Finest", and the M/V "Bravest" and is in the business of operating
          high speed commuter ferry services in the greater New York City harbor
          area.

               The NYFF Group was acquired by the issuance of 454,545 shares of
          the Company's stock at a value of $2.53 per share. Of the 454,545
          shares issued, 70,000 shares were subject to a put option. Such
          agreement allowed 2 of the 3 selling shareholders to sell back to the
          Company an aggregate of 70,000 shares at a price of $5.00 per share.

               As at December 31, 1998, the 70,000 shares subject to the put
          option were not treated as equity, but rather as a liability under the
          caption "Redeemable Common Stock" in the amount of $350,000 (70,000 @
          $5.00). During March 1999 the puts were exercised and the Company
          redeemed and retired the 70,000 shares. At December 31, 1999, the
          Company is still indebted to the selling stockholders in the amount of
          $125,000. Such amount is due in 2000 and bears interest at 12% per
          annum. The selling shareholders are holding the remaining 25,000
          unpaid shares as security for the obligation.

               The acquisition has been accounted for as a purchase.

               The assets acquired and the liabilities assumed in connection
          with the aforementioned acquisition of the NY Fast Ferry group is as
          follows:

        Fair value of identifiable assets acquired                 $13,475,702
        Fair value of liabilities assumed                           13,207,673
                                                                   -----------
                                                                       268,029
        Monority interest                                               53,607
                                                                   -----------
        Net fair value of  80% interest in
          Fast Ferry Holding Corp.                                     214,422

        Purchase cost:
          Issuance 454,545 common shares
            at fair market of $2.53 per share        $1,150,000
          Legal and accounting fees                     105,696
          Excess price over fair market
            value of 70,000 shares subject to put       172,900
                                                     ----------

                                                                     1,428,596
                                                                   -----------
        Excess of cost over net indentifiable
          assets purchased (goodwill)                              $ 1,214,174
                                                                   ===========

                                      F-14
<PAGE>

NOTE 5 -  ACQUISITIONS. (Continued)

               The unaudited consolidated results of operations on a pro forma
          basis, as if the NYFF Group had been acquired at the beginning of the
          year ended December 31, 1998 is as follows:

                 Net sales                             $  1,488,750
                 Costs and expenses - net                 3,549,402
                                                       ------------

                 Loss from continuing operations
                   before minority interest              (2,060,652)
                 Minority interest                          109,149
                                                       ------------

                 Loss from continuing operations        ($1,951,503)
                                                       ============

                 Per Share Data:
                  Loss from continuing operations            ($0.60)
                                                       ------------

                  Weighted average number
                      of shares outstanding               3,244,417
                                                       ============


NOTE 6 -  INCOME TAXES.

               The components of the provision (benefit) for income taxes are as
          follows:

                                             1999      1999
                                            ------    ------

                 Currently payable:
                   Federal                  $    -    $    -
                   State and local           1,323     1,323
                                            ------    ------
                                             1,323     1,323
                                            ------    ------

                 Deferred:
                   Federal                       -         -
                   State and local               -         -
                                            ------    ------
                                                 -         -
                                            ------    ------

                 Total provision            $1,323    $1,323
                                            ======    ======


               The deferred tax benefit results from differences in recognition
          of expense for tax and financial statement purposes and for minimum
          tax provision for the various state and local taxing authorities where
          the Company and its subsidiaries are subject to tax. The Company has
          deferred tax assets consisting of the following temporary differences:

            Net operating loss carryforward              $  3,686,000
            Differences between assigned values
              and tax bases of the assets                   4,190,648
            Provision for discontinued operations             193,000
            Goodwill                                          202,305
                                                         ------------
                                                            8,271,953
            Valuation allowance                            (8,271,953)
                                                         ------------

                                                         $          -
                                                         ============

                                      F-15
<PAGE>

NOTE 6 -  INCOME TAXES (Continued).

               The components of the provision (benefit) for income taxes are as
          follows:

<TABLE>
<CAPTION>
                                               For the Year Ended December 31,
                                        ---------------------------------------------
                                             1999        %            1998       %
                                        ------------  -------   ----------   --------
<S>                                     <C>           <C>       <C>          <C>
Loss from continuing operations
  before income taxes                    ($1,974,587)            ($668,530)
                                        ------------            ----------

Computed tax benefit
  at statutory rate                         (671,100)   (34.0)    (227,300)     (34.0)

State income tax                               1,323        -        1,014          -

Non-deductible portion of
  Amortization of goodwill
    and finance costs                         28,900      1.5        7,200        1.1
  Depreciation of property assets             95,000      4.8       23,700        3.5

Compensatory element of
  stock issuance                              68,000      3.4            -          -

  Other                                       10,000      0.5       10,000        1.5

Reserve for operating loss
  carryforward tax asset                     469,200     23.8      186,400       27.9
                                        ------------  -------   ----------   --------

Income tax                              $      1,323        -   $    1,014          -
                                        ============  =======   ==========   ========
</TABLE>

          The net operating loss carryforwards at December 31, 1999 expire as
          follows:

                              2009            $   62,000
                              2010               107,000
                              2011                93,000
                              2012             1,228,000
                              2013             1,531,000
                              2014               665,000
                                              ----------

                                              $3,686,000
                                              ==========


               The Tax Reform Act of 1986 enacted a complex set of rules
          limiting the utilization of net operating loss carryforwards to offset
          future taxable income following a corporate ownership change. Among
          other things, the Company's ability to utilize the net operating loss
          carryforward of Fast Ferry Holding Corp. is limited following the
          change in ownership in excess of fifty percentage points in any three-
          year period which accrued at acquisition. The effects, if any, of the
          change in ownership are not reflected in the foregoing tables.

                                      F-16
<PAGE>

NOTE 7 -  LONG-TERM DEBT.

               Long-term debt is as follows:

<TABLE>
<CAPTION>
                                                                December 31,
                                                         --------------------------
                                                            1999           1998
                                                         -----------    -----------
<S>                                                      <C>            <C>
Mortgage note payable, secured by the
  vessel "Finest" due in monthly installments
  of $61,875 through March 10, 1999, and $56,719
  through September 10, 2005, including interest
  at 9.25% per annum, with a final payment of
  $3,626,691 due October 10, 2005.                (a)    $ 5,156,274    $ 5,308,158

Mortgage note payable, secured by the vessel
  "Bravest" due in monthly installments of
  $59,063 through March 10, 1999 and
  $56,719 through September 10, 2005, including
  interest at 9.25% per annum, with a final
  payment of $3,572,971 due October 10, 2005.     (a)      5,127,461      5,276,094

Note payable, secured by the vessel "Finest"
  and "Bravest", payable in fifteen monthly
  installments of $15,000 commencing in
  February 1999, payment of $343,333 on
  March 31, 2000 and a final payment of
  $934,319 on December 10, 2000
  including imputed interest of 9.25%.            (a)      1,254,913      1,994,670

10% interest bearing obligation payable in two
  installments of $100,000 each on March 15,
  2000 and July 15, 2000 and as final payment
  of $200,000 January 15, 2001.                              400,000              -
Other                                                          5,226         55,134
                                                         -----------    -----------
                                                          11,943,874     12,634,056
Portion due within one year                                1,879,764      1,332,601
                                                         -----------    -----------

Long-term debt - less current maturities                 $10,064,110    $11,301,455
                                                         ===========    ===========
</TABLE>

          (a) The two first mortgages on the ships and note payable are secured
              through (i) cross collateralization agreements; (ii) assignments
              of charter agreements and other personal property, (iii) a pledge
              of a potential receivable arising from a lawsuit against the City
              of New York and (iv) cross corporate guarantees.

              Reference is made to Note 9(c)(i) regarding warrants issued to the
              noteholder. The secured debt obligations mature as follows:

                         2000                   $ 1,879,764
                         2001                       668,352
                         2002                       513,559
                         2003                       563,130
                         2004                       617,485
                      Thereafter                  7,701,584
                                                -----------
                                                $11,943,874
                                                ===========

                                      F-17
<PAGE>

NOTE 8 -  CAPITAL STOCK.

          (a) Stock Issued for Consideration Other Than Cash:

               On October 5, 1998, the Company issued 454,545 common shares
          valued at $2.53 per share (the market value at time of sale) for 80%
          of the outstanding stock of Fast Ferry Holding Corp. (see Note 5).

               Pursuant to the provisions of a note payable obligation entered
          into in June 1999, the Company issued 50,000 shares of its common
          stock as additional interest whose fair value at the time of issuance
          was $100,000.

               During 1999, the Company issued 55,000 shares of its common stock
          to an officer as payment for services rendered by him in 1999
          aggregating $55,000. The fair market value of the shares on the date
          of issuance of $55,000 had been charged to operations.

          (b) Stock Issued for Cash:

               During 1998, the Company sold 30,000 shares of its common stock
          for $97,500. During 1999, the Company sold 1,550,000 shares of its
          common stock for $1,320,000. Of the shares sold in 1999 a consultant
          to the Company purchased 50,000 shares of common stock for $5,000 in
          cash. The variance between the fair value of the shares issued and the
          cash proceeds aggregating $45,000 was charged to operations as
          compensation in fiscal 1999.

          (c) Stock Subscriptions Receivable:

               During 1998, 100,000 common shares were subscribed for at a price
          of $2.50 per share. The aggregate amount of the subscription of
          $250,000 is treated as a reduction of stockholders' equity in the
          accompanying 1998 consolidated balance sheet. The subscription was
          paid in full in October 1999.


NOTE 9 -  STOCK OPTIONS AND WARRANTS.

               A summary of activity related to non-qualifying stock options and
          warrants granted by the Company is as follows:

                                                               Exercise Price
                                           Options  Warrants     Per Share
                                           -------  --------   --------------

       Outstanding at December 31, 1997     47,500          -      $4.00
       Granted during 1998                  10,000    200,000  $2.53 to $2.60
       Expired in 1998                     (47,500)         -      $4.00
                                           -------  ---------
       Outstanding at December 31, 1998     10,000    200,000  $2.53 to $2.60
       Cancelled                           (10,000)         -      $2.53
       Granted during 1999                 420,000  1,380,000  $1.00 to $1.75
                                           -------  ---------

       Outstanding at December 31, 1999    420,000  1,580,000  $1.00 to $2.60
                                           =======  =========

                                      F-18
<PAGE>

NOTE 9 -  STOCK OPTIONS AND WARRANTS (Continued).

          (a) Stock Options:

               (i)  Stock Options granted in 1998:

               Pursuant to a consulting agreement entered into on September 1,
          1997, the Company agreed to issue options to purchase up to an
          aggregate of 56,250 shares of its common stock at $4.00 per share. In
          1997, 8,750 options were exercised at $4.00 and the remaining 47,500
          expired in 1998.

               The Company granted an option to an employee/stockholder pursuant
          to an employment contract to purchase 10,000 shares at a price of
          $2.53 per share which was the fair value at date of grant. Such option
          was cancelled.

               (ii) Stock Options Granted in 1999:

               The Company granted an option to a employee to purchase 20,000
          shares at a price of $1.50 per share which was the fair value at date
          of grant. Such option is exercisable through October 6, 2001.

               In June 1999, the Company's President was granted options to
          purchase 200,000 shares exercisable through October 6, 2002 at a $1.75
          per share which was the fair value on the date of grant. Such options
          were granted for his guaranteeing and securitising an obligation of
          the Company. Also, in October 1999, an officer and a director each
          received options to purchase 100,000 common shares exercisable at
          $1.50 per share which was the fair value at the date of grant. The
          officer's option expires on December 20, 2001 and the other expires on
          December 20, 2004.

               Assuming the fair market value of the stock at the date of grant
          to be equal to option exercise price, the life of the options to be
          from 1.3 years to 5 years the expected volatility at 200%, expected
          dividends are none, and the risk-free interest rate of 10%, the
          Company would have recorded compensation expense of $61,816 and $2,013
          for the years ended December 31, 1999 and 1998, respectively, as
          calculated by the Black-Scholes option pricing model. As such,
          proforma net loss and loss per share would be as follows:

                                                  For the Years Ended
                                                      December 31,
                                              ---------------------------
                                                 1999            1998
                                              -----------     -----------

             Net loss as reported             ($2,522,911)    ($1,114,187)

             Additional compensation               61,816           2,013
                                              -----------     -----------

             Adjusted net loss                ($2,584,727)    ($1,116,200)
                                              ===========     ===========

             Loss per share as reported             ($.70)          ($.39)
                                              ===========     ===========

             Adjusted loss per share                ($.72)          ($.39)
                                              ===========     ===========

                                      F-19
<PAGE>

NOTE 9 -  STOCK OPTIONS AND WARRANTS. (Continued)

          (a) Warrants:

               (i)  Warrants Granted in 1998:

                    In connection with the Company's refinancing the debt of
               Fast Ferry Holding Corp., on October 5, 1998, the Company granted
               the noteholder warrants to purchase 200,000 shares of its common
               stock at $2.60 per share, the market value at time of grant. Such
               warrants were granted pursuant to the refinancing of the two
               ferries owned by the NYFF Group. The warrants are exercisable
               through March 16, 2004. Management has put a $.10 value on the
               warrants. Accordingly, deferred interest expense of $20,000 was
               recorded at the time of issuance and amortization of $4,000 and
               $909 has been charged to operations 1999 and 1998, respectively.

               (ii) Warrants Granted in 1999:

                    In July 1999, as a part of a financing agreement, a lender
               was issued a warrant to acquire 200,000 common shares for three
               years at $1.00 per share.

                    As an inducement to purchase shares of the Company's common
               stock, warrants to purchase 900,000 shares were granted to
               individuals who purchased stock in 1999 and 75,000 warrants were
               issued to a financial consultant as a finder's fee relating to
               the sale. These warrants are exercisable at various times through
               December 31, 2002 at prices ranging from $1.00 to $1.25.

                    On October 27, 1999 warrants to purchase 100,000 common
               shares were granted to both of the Company's President and
               Secretary. The warrants are exercisable through October 27, 2001
               at $1.25 per share which was in excess of the fair market value
               of the Company's common stock at date of issuance. An employee
               received a warrant to acquire 5,000 common shares at $1.00 per
               share, the fair market value at issuance, exercisable for one
               year.

                    Management and the recipients believe that the value of the
               warrants issued in 1999 was nominal and accordingly did not
               reflect any value to these issuances.

                                      F-20
<PAGE>

NOTE 10 - COMMITMENTS AND CONTINGENCIES.

          (a) Leases:

          (i)       The Company and its subsidiaries have a number of operating
                 lease agreements involving office and retail store space, and
                 office equipment. These leases are non-cancelable and expire on
                 various dates through December 2, 2001. Annual payments under
                 these lease agreements amount to approximately $25,000.

          (ii)      The NYFF Group operates from leased property in Highlands,
                 NJ (the Aragon site). The lease is for five years, and
                 commenced May 1998. Lease payments are dependent on daily
                 passenger volume using the leased property, and averaged
                 approximately $24,250 per month during 1999. As the passenger
                 volume using the Aragon site increases, the lease payments will
                 increase proportionately. In addition, the NYFF Group rents
                 other facilities on short-term leases. Rents under the short-
                 term leases aggregate approximately $2,500 per month.

          (iii)     In November 1999, the Company completed negotiations to
                 lease a property in Stamford, CT as a base for ferry service to
                 and from Manhattan and LaGuardia Airport. Subject to the
                 approval process outlined in Note 1, the lease will have an
                 initial term of five years, with payments commencing in March
                 2000 at $8,333 per month.

          (b) Employment Contracts:

                 The Company has entered into new employment agreements with its
          executive officer Anthony Cappaze and its Secretary, Anthony Colasanti
          in 2000. The agreements provide for a base salary of $150,000 and
          $120,000 per year, respectively, for three years. Under these
          agreements Mr. Cappaze received 100,000 warrants and Mr. Colasanti
          50,000 warrants to purchase a like number of the Company's common
          shares exercisable through January 2000 at the fair market value of
          the common stock on the date of grant of $1.00 per share. Messrs.
          Cappaze and Colasanti also received as a condition of their contract
          options to purchase 200,000 and 100,000, respectively, share of common
          stock at $1.00 per share through January 2007. Half of these options
          are exercisable in January 2002 and the officers are first able to
          exercise the other 50% in January 2003. Mr. Colasanti also received a
          warrant to acquire 100,000 common shares for two years at $1.00 per
          share.

                 The NYFF Group has entered into an employment contract with its
          President which provides for a salary of $90,000 each year through
          October 4, 2003. Pursuant to the contract, the President is to be
          granted an option to purchase 10,000 shares of the Company's common
          stock each year at the fair market value on the grant date.

          (c) Litigation:

                 The NY Fast Ferry Group had initiated a suit alleging breach of
          contract against the City of New York. Fifty percent (50%) of the
          proceeds, if any, is pledged to the original stockholders of The NY
          Fast Ferry Group and the remaining (50%) to the first mortgage holder
          as a pledge of collateral against amounts owing to them pursuant to
          notes payable referred to in Note 7.

                                      F-21
<PAGE>

NOTE 11 - SUBSEQUENT EVENTS.

          (a) Sales and Issuances of Securities:

               During the period from January 17, 2000 through March 1, 2000,
          the Company sold, at a price of $1.00 each, 147,500 units comprised of
          147,500 shares of its common stock and warrants to acquire an
          additional 147,500 shares of its common stock at a price of $1.00 per
          unit. The warrants are exercisable for one year at $1.25 per share.

               During the period from March 10, 2000 through March 17,2000, the
          Company sold, at a price of $0.50 each, 475,000 units comprised of
          475,000 shares of common stock warrants to acquire an additional
          475,000 common shares. The warrants are exercisable for two years from
          issuance at $1.25 per share. Additionally, the Company sold an
          aggregate of 12,000 common shares and warrants to acquire 12,000
          common shares at 1.00 per share to two individuals for $12,000.

               In December an officer and a former director each received
          options to purchase 100,000 common shares exercisable at $1.50 per
          share which was the fair value at the date of grant. The officer's
          option expires on December 20, 2001 and the other expires on December
          20, 2004.

               In January, 2000, two officer/directors and a third director were
          issued an aggregate of 252,500 shares of the Company's common stock in
          lieu of payment of $214,650 of the unpaid compensation and interest
          thereon owed to them which aggregated $460,166 at December 31, 1999.

          (b) Bridge Loan:

               On March 11, 2000, the Company received proceeds of two bridge
          loans aggregating $1,000,000 from two private investment funds, both
          of which are controlled by an individual stockholder of the Company.
          The loans, which bear interest at 10% per annum payable quarterly, are
          payable nine months from issuance. To obtain the loans, the Company
          issued to each loan holder 125,000 shares of unregistered common stock
          with on-demand registration and unlimited piggyback rights. The fair
          value of the shares at issuance aggregating $125,000 will be charged
          to operations as additional interest over the life of the loans.

               The loans may be repaid anytime within nine months of issuance,
          however, the loans must be repaid out of the proceeds of a financing
          greater than $2,000,000. Initially the loans are convertible into
          common stock at $1.50 per share. In the event the loans are not
          redeemed in full within nine months from issuance, the loans are in
          default, and become convertible at $1.00 per share for the first 90
          days of the default period and are further reduced to $.50 thereafter.
          In addition, in the event of default, the Company must issue to each
          of the loan holders 50,000 warrants exercisable at $.25 per share for
          each 30 days period until repaid.

               The Company employed the services of a financial consultant to
          arrange for the above financing. The consultant received as payment
          for this service (i) a 10% interest bearing note payable on December
          10, 2000 in the amount of $100,000, (ii) 27,500 shares of the
          Company's common stock whose fair market value at date of issuance was
          $13,750.

                                      F-22
<PAGE>

NOTE 12 - RESTATEMENT.

          The consolidated financial statements have been restated to give
          effect to certain comments by the Securities and Exchange Commission
          regarding the Company's filing of amended Form 10-SB as follows:

<TABLE>
<CAPTION>
                                             December 31, 1999            December 31, 1998
                                        --------------------------    -------------------------
                                                           As                           As
                                                        Previously                  Previously
                                         As Restated      Filed       As Restated      Filed
                                         -----------   -----------    -----------   -----------
<S>                                      <C>           <C>            <C>           <C>
Consolidated balance sheets:
  Inventories - reclassifications
  of inventorable items to and
  from prepaid expenses                  $    40,948   $     6,715    $         -   $     1,057
                                         -----------   -----------    -----------   -----------
  Prepaid expenses and other
  current assets - reclass                   127,994       165,214         72,308        68,757
                                         -----------   -----------    -----------  ------------
  Goodwill net of accumulated
  amortization - change in
  computation                              1,112,935     1,127,433      1,193,830     1,201,174
                                         -----------   -----------    -----------  ------------

  Other assets - reclass                      51,764        34,279         19,091        19,091
                                         -----------   -----------    -----------  ------------
  Current maturities of long-term
  debt - reclassification of
  interest to accrued expenses and
  change in current maturities             1,879,764     1,981,100      1,332,601     1,282,822
                                         -----------   -----------    -----------   -----------
  Notes payable - combined with
  current maturities of debt                       -             -              -        49,779
                                         -----------   -----------    -----------   -----------
  Current maturities of accounts
  payable and accrued expenses -
  reclassification of deferred
  revenues and long-term debt                948,066     1,006,273        683,952       730,520
                                         -----------   -----------    -----------   -----------

  Deferred revenues - segregated              68,765             -         46,566             -
                                         -----------   -----------    -----------   -----------
  Long-term debt - change in
  current maturities                      10,064,110     9,973,872     11,301,455    11,301,455
                                         -----------   -----------    -----------   -----------
  Common stock - transfer from
  additional paid-in capital                  49,058        48,358         32,508        32,508
                                         -----------   -----------    -----------   -----------
  Additional paid-in capital -
  transfer to common stock                 5,312,588     5,313,288      3,809,138     3,809,138
                                         -----------   -----------    -----------   -----------

Per Share Data - Basic and Diluted:
  Loss form continuing operations             ($0.55)       ($0.55)        ($0.23)       ($0.23)
  Loss from discontinued operations           ($0.15)       ($0.15)        ($0.16)       ($0.16)
                                         -----------   -----------    -----------   -----------
  Net loss                                    ($0.70)       ($0.70)        ($0.39)       ($0.39)
                                         -----------   -----------    -----------   -----------
</TABLE>

                                      F-23
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES
                     FORMA FINANCIAL STATEMENTS - HEADNOTE
                                  (Unaudited)

       The accompanying pro forma financial statements assume the purchase of
80% of the capital stock of Fast Ferry Holding Corp. (FFHC) on October 6, 1998
had occurred at the beginning of the period presented, January 1, 1998.

       Per share data for the year ended December 31, 1998 is based upon the
weighted average number of shares outstanding during the period retroactively
reflecting the issuance of the common shares for FFHC as if they had been issued
at the beginning of the periods presented.

       The pro forma consolidated statement of operations for the year ended
December 31, 1998 include all material adjustment necessary to adjust the
historical results to reflect the assumptions. The pro forma information does
not purport to be indicative of the consolidated statements of operations, which
would have actually been obtained if the purchase of FFHC had been consummated
on the date indicated. In addition, the pro forma financial information does not
purport to be indicative of the results of operations, which may be obtained in
the future.

       The pro forma information has been prepared by the Company's management
and all calculations and estimates have been made by management based upon
adjustments deemed appropriate. These adjustments are set forth under the
section "Pro Forma Adjustments" contained in the notes to pro forma financial
statements.

                                      F-24
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

           PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS - RESTATED

                     FOR THE YEAR ENDED  DECEMBER 31, 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                      Lighthouse         Fast Ferry
                                                    Landings, Inc.      Holding Corp.
                                                   and Subsidiaries   and Subsidiaries    Pro Forma Adjustments       Pro Forma
                                                   ----------------   ----------------  ------------------------    -------------
                                                     (Historical)       (Historical)      Debit         Credit       As Adjusted
                                                   ----------------   ----------------  ---------     ----------    -------------
<S>                                                <C>                <C>               <C>           <C>           <C>
Revenues                                           $              -   $      1,488,750  $       -     $        -    $   1,488,750
                                                   ----------------   ----------------  ---------     ----------    -------------

Cost and expenses:
  Cost of operations                                              -            407,885          -              -          407,885
  Depreciation and amortization                                   -            767,876    279,377 (A)          -        1,113,386
                                                                  -                  -     66,133 (B)          -                -
  Selling, general and administrative                             -            773,592          -              -          773,592
  Interest                                                        -          1,254,539          -              -        1,254,539
                                                   ----------------   ----------------  ---------     ----------    -------------
          Total cost and expenses                                 -          3,203,892    345,510              -        3,549,402
                                                   ----------------   ----------------  ---------     ----------    -------------

Loss from continuing operations before
  minority shares in loss of subsidiary                           -         (1,715,142)   345,510              -       (2,060,652)

Minority shares in loss of subsidiary                             -                  -          -        109,149 (C)      109,149
                                                   ----------------       ------------  ---------     ----------    -------------

Loss from continuing operations                    $              -        ($1,715,142) $ 345,510     $  109,149      ($1,951,503)
                                                   ================       ============  =========     ==========    =============

Per share data:
  Pro forma net loss per share:
    Loss from continuing operations                                                                                        ($0.60)
                                                                                                                    =============

Weighted average number of shares outstanding                                                                           3,244,417
                                                                                                                    =============
</TABLE>

                                      F-25
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES
              NOTES TO PRO FORMA FINANCIAL STATEMENTS - RESTATED
                                  (Unaudited)


Preparation of Pro Forma Financial Statements:

      In the opinion of management, the pro forma financial statements are
derived from the historical financial statements of (i) Lighthouse Landings,
Inc. and Subsidiaries and Fast Ferry Holding Corp. and Subsidiaries, which are
included elsewhere herein. These financial statements should be read in
conjunction with the accompanying pro forma financial statements. The pro forma
financial statements do not purport to be indicative of the balance sheet and
statements of operations if the purchase of Fast Ferry Holding Corp. had been
consummated on the dates indicated.


Purchase of Fast Ferry Holding Corp.:

      On October 6, 1998, the Company acquired 80% of the outstanding stock of
Fast Ferry Holding Corp. and its wholly owned subsidiaries, New York Fast Ferry
Services, Inc., Fast Ferry I, Inc. and Fast Ferry II, Inc. (the NYFF Group). The
NYFF Group owns two vessels the M\V "Finest", and the M\V "Bravest" and is in
the business of operating high speed commuter ferry services in the greater New
York City harbor area. The NYFF Group was acquired by the issuance of 454,545
shares of the Company's stock at a value of $2.53 per share. Of the 454,545
shares issued, 70,000 shares were subject to a put option. Such agreement
allowed 2 of the 3 selling shareholders to sell back to the Company an aggregate
of 70,000 shares at a price of $5.00 per share. As at October 6, 1998, the
70,000 shares subject to the put option were not treated as equity, but rather
as a liability under the caption "Redeemable Common Stock" in the amount of
$350,000 (70,000 shares @ $5.00 per share).


Minority Interest:

The accompanying pro forma consolidated statements of operations for the year
ended December 31, 1998 reflect the acquisition as if it occurred on January 1,
1998. The minority interest at January 1, 1998 assessing the acquisition
occurred at that date, would be calculated as follows:

 Fair value of identifiable assets acquired                          $13,475,702
 Fair value of liabilities assumed at January 1, 1998                 12,929,956
                                                                     -----------
                                                                         545,746
 Pro forma minority interest as at January 1, 1998                       109,149
                                                                     -----------
 Pro forma net fair value of 80% interest in
   Fast Ferry Holding Corp. as at January, 1998                          436,597
 Purchase cost:
   Issuance 454,545 common shares
     at fair market of $2.53 per share                  $1,150,000
   Legal and accounting fees                               105,696
   Excess price over fair market value
     of 70,000 shares subject to put                       172,900
                                                        ----------
                                                                       1,428,596
                                                                     -----------
 Pro forma excess of cost over net identifiable
   assets purchased (goodwill) as at January 1, 1998                 $   991,999
                                                                     ===========

      The pro forma 20% minority interest share in the loss of the ferry
subsidiary is limited to the pro forma minority interest at the assumed date of
acquisition, January 1, 1998.

                                      F-26
<PAGE>

                  LIGHTHOUSE LANDINGS, INC. AND SUBSIDIARIES

                             PRO FORMA ADJUSTMENTS
                                  (Unaudited)


                Pro Forma Consolidated Statements of Operations
                     For the Year Ended December 31, 1998
                -----------------------------------------------


     (A)  To reflect depreciation of $279,377 on the variant between the
          historical carrying value of property assets and the appraised value
          for the year ended December 31, 1998.

     (B)  To record amortization of goodwill of $66,133 which has an estimated
          life of 15 years for the year ended December 31, 1998.

     (C)  To reflect minority interest in loss of Fast Ferry Holding Corp. of
          $109,149 for the year.

                                      F-27
<PAGE>

                        INDEPENDENT ACCOUNTANTS' REPORT
                        -------------------------------


To the Board of Directors
Fast Ferry Holding Corp. and Subsidiaries


We have audited the accompanying consolidated balance sheets of Fast Ferry
Holding Corp. and Subsidiaries as at October 6, 1998, December 31, 1997 and
1996, and the related consolidated statements of operations and deficit, and
cash flows for the period January 1, 1998 to October 6, 1998 and for the years
ended December 31, 1997 and 1996. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Fast Ferry Holding
Corp. and Subsidiaries as of October 6, 1998, December 31, 1997 and 1996, and
the results of their operations and their cash flows for the period January 1,
1998 to October 6, 1998 and for the years ended December 31, 1997 and 1998, in
conformity with generally accepted accounting principles.


                                        /s/ WEINICK SANDERS LEVENTHAL & CO., LLP


New York, N. Y.
January 24, 1999

                                      F-28
<PAGE>

                   FAST FERRY HOLDING CORP. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                          ASSETS
                                          ------

                                                   October 6,      December 31,     December 31,
                                                      1998             1997             1996
                                                  ------------     ------------     ------------
<S>                                               <C>              <C>              <C>
Current assets:
  Cash                                            $    137,266     $      2,626     $     42,031
  Accounts receivable                                    9,826            6,799                -
  Other current assets                                       -           50,603            3,750
                                                  ------------     ------------     ------------
          Total current assets                         147,092           60,028           45,781

Property and equipment - at cost, less
  accumulated depreciation                           9,137,960        9,668,283        9,757,120

Deferred start-up costs, net of
  accumulated amortization                                   -          178,678          223,354
                                                  ------------     ------------     ------------

                                                  $  9,285,052     $  9,906,989     $ 10,026,255
                                                  ============     ============     ============

                     LIABILITIES AND STOCKHOLDERS' CAPITAL DEFICIENCY
                     ------------------------------------------------

Current liabilities:
  Deferred revenues                               $     96,312     $          -     $          -
  Current maturities of long-term obligations        1,091,389          141,036                -
  Accounts payable                                     218,047          280,414                -
  Accrued liabilities                                  154,030           41,103          115,538
                                                  ------------     ------------     ------------
          Total current liabilities                  1,559,778          462,553          115,538

Long-term obligations                               11,647,895       12,467,403        9,741,362
                                                  ------------     ------------     ------------

          Total liabilities                         13,207,673       12,929,956        9,856,900
                                                  ------------     ------------     ------------

Stockholders' capital deficiency:
  Common stock, no par value
    Authorized - 500 shares
    Issued and outstanding - 140 shares                205,000          205,000          205,000
  Deficit                                           (4,127,621)      (3,227,967)         (35,645)
                                                  ------------     ------------     ------------
          Total stockholders'
            capital deficiency                      (3,922,621)      (3,022,967)         169,355
                                                  ------------     ------------     ------------

                                                  $  9,285,052     $  9,906,989     $ 10,026,255
                                                  ============     ============     ============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-29
<PAGE>

                   FAST FERRY HOLDING CORP. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

<TABLE>
<CAPTION>
                                                                             For the           For the
                                                     For the Period         Year Ended        Year Ended
                                                     January 1, 1998       December 31,      December 31,
                                                   To October 6, 1998          1997              1996
                                                   ------------------     --------------    --------------
<S>                                                <C>                    <C>               <C>
Revenues                                                 $    807,583       $  1,474,616      $          -

Cost of operations                                            634,776          2,589,050                 -
                                                         ------------       ------------      ------------

Income (loss) from operations                                 172,807         (1,114,434)                -
                                                         ------------       ------------      ------------

Other deductions:
  General and administrative expenses                         269,581          1,052,268            34,844
  Interest expense                                            904,686          1,025,620             1,542
  Loss of sale of property assets                               1,604                  -                 -
                                                         ------------       ------------      ------------
Total other deductions                                      1,175,871          2,077,888            36,386
                                                         ------------       ------------      ------------

Loss before extraordinary item                             (1,003,064)        (3,192,322)          (36,386)

Extraordinary item                                            282,088                  -                 -
                                                         ------------       ------------      ------------
Loss before the effect of a
  change in accounting principle                             (720,976)        (3,192,322)          (36,386)

Cumulative effect of a change in
  accounting principle                                       (178,678)                 -                 -
                                                         ------------       ------------      ------------

Net loss                                                     (899,654)        (3,192,322)          (36,386)

Retained earnings (deficit) at
  beginning of period                                      (3,227,967)           (35,645)              741
                                                         ------------       ------------      ------------

Deficit at end of period                                  ($4,127,621)       ($3,227,967)         ($35,645)
                                                         ============       ============      ============

Per share data:
  Loss before extraordinary item
   and cumulative effect of a
   change in accounting principle                          ($7,164.74)       ($22,802.30)         ($259.90)
  Extraordinary item                                         2,014.91                  -                 -
  Cumulative effect of a change
   in accounting principal                                  (1,276.27)                 -                 -
                                                         ------------       ------------      ------------

Net loss                                                   ($6,426.10)       ($22,802.30)         ($259.90)
                                                         ============       ============      ============
Weighted average number of
  shares outstanding                                              140                140               140
                                                         ============       ============      ============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-30
<PAGE>

                   FAST FERRY HOLDING CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                 For the           For the
                                                         For the Period         Year Ended        Year Ended
                                                         January 1, 1998       December 31,      December 31,
                                                       To October 6, 1998          1997              1996
                                                       ------------------     --------------    --------------
<S>                                                    <C>                    <C>               <C>
Cash flows from operating activities:
  Net loss                                                      ($899,654)       ($3,192,322)         ($36,386)
                                                             ------------       ------------      ------------
  Adjustments to reconcile net
      loss to net cash provided by (used in)
      operating activities:
    Cumulative effect of a change in accounting
      principle                                                   178,678                  -                 -
    Loss on sale of property assets                                 1,604                  -                 -
    Deferred revenues                                              96,312                  -                 -
    Depreciation and amortization                                 525,046            718,428             1,225
    Increase in long-term obligations for interest                124,939            334,725             1,542
    Increase (decrease) in cash flows as a result
        of changes in asset and liability account
        balances:
      Account receivable                                           (3,027)            (6,799)                -
      Other current assets                                         50,603            (41,153)           (3,750)
      Accounts payable                                            (62,367)           280,414            (3,453)
      Accrued expenses                                            112,927             25,565           115,538
                                                                        -                  -          (127,247)
                                                             ------------       ------------      ------------
  Total adjustments                                             1,024,715          1,311,180           (16,145)
                                                             ------------       ------------      ------------

Net cash provided by (used in) operating                          125,061         (1,881,142)          (52,531)
                                                             ------------       ------------      ------------
Cash from investing activities:
  Purchase of property and equipment                               (6,327)          (590,615)       (8,961,411)
  Proceeds for sales of property and equipment                     10,000                  -                 -
                                                             ------------       ------------      ------------
Net cash provided by (used in) investing activities                 3,673           (590,615)       (8,961,411)
                                                             ------------       ------------      ------------

Cash provided by financing activities:
  Increase in long-term obligations                                 5,906          2,432,352         8,942,886
                                                             ------------       ------------      ------------

Net increase (decrease) in cash                                   134,640            (39,405)          (71,056)

Cash at beginning of period                                         2,626             42,031           113,087
                                                             ------------       ------------      ------------

Cash at end of period                                        $    137,266       $      2,626      $     42,031
                                                             ============       ============      ============

Supplemental Disclosures of
  Cash Flow Information:
     Cash paid during the period:
       Interest                                              $    487,659       $    690,895      $          -
                                                             ============       ============      ============

       Income taxes                                          $          -       $      4,512      $      3,836
                                                             ============       ============      ============
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      F-31
<PAGE>

                   FAST FERRY HOLDING CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                OCTOBER 6, 1998


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

          (a) Business:

               Fast Ferry Holding Corp. (FFHC) and its subsidiaries
          (collectively the Company) were incorporated in New York and are in
          the business of operating and chartering high speed ferries. On
          October 6, 1998, FFHC's stockholders sold 80% of their capital stock
          in FFHC to Lighthouse Landings, Inc., a publicly-held New Jersey
          corporation having operations in the retail cigar and
          marine\restaurant businesses.

          (b) Use of Estimates:

               The preparation of financial statements in conformity with
          generally accepted accounting principles requires management to make
          estimates and assumptions that affect certain reported amounts and
          disclosures. Accordingly, actual results could differ from those
          estimates.

          (c) Principles of Consolidation:

               The consolidated financial statements include the accounts of the
          Company and its wholly-owned subsidiaries, New York Fast Ferry
          Services, Inc., Fast Ferry I Corp. and Fast Ferry II Corp. All
          significant intercompany accounts and transactions have been
          eliminated in consolidation.

          (d) Accounts Receivable:

               Accounts receivable have been adjusted for all known
          uncollectible accounts. Additional allowance for doubtful accounts has
          not been provided as the amount is not considered material.

          (e) Property and equipment.

               Depreciation is computed by either the straight-line or
          accelerated methods over the estimated useful lives of the respective
          assets.

               Expenditures which substantially increase estimated useful lives
          are capitalized. Maintenance, repairs and minor renewals are expensed
          as incurred. When assets are retired or otherwise disposed of, their
          costs and related accumulated depreciation or amortization are removed
          from the accounts and resulting gains or losses are included in
          operations.

                                      F-32
<PAGE>

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. (Continued)

          (f) Revenue Recognition:

               The Company commenced its passenger services in 1998 and revenue
          is recognized when earned. The Company sells the majority of commuter
          tickets in advance of use. Accordingly, the Company determines the
          unused portion of ticket sales and defers that value of future
          periods. Deferred income aggregated $96,312 at October 6, 1998.

          (g) Cumulative Effect of a Change in an Accounting Principle:

               Previously, the Company had capitalized start-up costs until the
          ferries became operational and then amortized those costs over five
          years commencing January 1, 1997. Effective January 1, 1998, the
          Company adopted Statement of Position 98-5, "Reporting on the Cost of
          Start-Up Activities" and now expenses start-up costs as they are
          incurred. While the accounting policy for capitalizing start-up costs
          previously followed by the Company was in accordance with generally
          accepted accounting principles, the changed policy is preferable and
          is in conformity with Statement of Position 98-5. The effect of
          adoption of Statement of Position 98-5 was a charge to operations in
          1998 of $178,678 ($1,276.27 per share).

               The effect of expensing start-up costs as incurred would have
          resulted in a charge to operations of $96,107 ($686.48 per share) in
          1995 and $127,247 ($908.91 per share) in 1996 and a reduction of
          amortization expense of $44,676 ($319.11 per share) in 1997.

          (h) Advertising Costs:

               The Company expenses advertising costs as incurred. Advertising
          costs amounted to $6,359, $335,076 and $2,886 for the period January
          1, 1998 to October 6, 1998 and for the years ended December 31, 1997
          and 1996, respectively.


NOTE 2 -  PROPERTY AND EQUIPMENT.

               Property and equipment, at cost consist of the following:

                     October 6, 1998   December 31, 1997   December 31, 1996
                     ---------------   -----------------   -----------------

Ferries              $    10,280,145   $      10,280,145   $       9,741,362

Office and other
  equipment                   54,938              63,115              16,983
                     ---------------   -----------------   -----------------
                          10,335,083          10,343,260           9,758,345
Less: Accumulated
       depreciation        1,197,123             674,977               1,225
                     ---------------   -----------------   -----------------

                     $     9,137,960   $       9,668,283   $       9,757,120
                     ===============   =================   =================

               Depreciation expense for the period January 1, 1998 to October 6,
          1998 and for the years ended December 31, 1997 and 1996 was $525,046,
          $673,752 and $1,225, respectively.

                                      F-33
<PAGE>

NOTE 3 -  LONG-TERM OBLIGATIONS.

   Long-term obligations consist of the following:

<TABLE>
<CAPTION>
                                   October 6, 1998   December 31, 1997  December 31, 1996
                                   ---------------   -----------------  -----------------
<S>                                <C>               <C>                <C>
Note payable, secured by
 the Fast Ferry ("Finest"),
 payable in monthly installments
 ranging from $56,719 to $61,875
 including interest at 9.25% per
 annum with a final payment of
 $3,626,691 due October 10, 2005.  $     5,410,526   $       5,269,874  $       5,102,842

Note payable, secured by the
 Fast Ferry ("Bravest"),
 payable in monthly install-
 ments ranging from $56,719
 to $59,063 including interest
 at 9.25% per annum with a final
 payment of $3,572,971 due
 October 10, 2005.                       5,370,622           5,245,299          4,638,520

Note payable, secured by the
 Fast Ferry ("Finest and
 Bravest"), payable in 15
 monthly installments of
 $15,000 plus a $45,000
 payment in January 1999
 with $343,333 payments due
 May 1, 1999, October 1, 1999
 and March 1 ,2000 and a final
 payment of $793,267 due
 December 31, 2000.
 Interest is inputed as %9.25%
 per annum.                              1,952,230           2,093,266                  -

Other                                        5,906                   -                  -
                                   ---------------   -----------------  -----------------

                                        12,739,284          12,608,439          9,741,362

Less: Portion payable in one year        1,091,389             141,036                  -
                                   ---------------   -----------------  -----------------

                                   $    11,647,895   $      12,467,403  $       9,741,362
                                   ===============   =================  =================
</TABLE>

               As of October 6, 1998, long-term obligations mature as follows:

                          Years Ending
                           October 6,
                         --------------

                              1999                $ 1,091,389
                              2000                    780,361
                              2001                  1,330,877
                              2002                    502,863
                              2003                    551,306
                           Thereafter               8,482,488
                                                  -----------

                                                  $12,739,284
                                                  ===========


                                      F-34
<PAGE>

NOTE 4 -  ACCRUED LIABILITIES.

               Accrued liabilities are comprised for the following:

                                                       December 31,
                                                --------------------------
                              October 6, 1998       1997          1996
                              ----------------  ------------  ------------

          Payroll                  $  7,474     $          -  $          -

          Payroll taxes               3,278               43             -

          Insurance                  41,061           41,061             -

          Professional fees         125,687                -             -
                              -------------     ------------  ------------

                              $     177,500     $     41,104  $    115,538
                              =============     ============  ============


NOTE 5 -  COMMITMENTS AND CONTINGENCIES.

          (a) Leases:

               The Company operates from leases property in Highlands, NJ (the
          Aragon site). The lease is for five years, and commenced May 1998.
          Lease payments are dependent on daily passenger volume using the
          leased property, and averaged approximately $24,250 per month during
          1999. As the passenger volume using the Aragon site increase, the
          lease payments will increase proportionately. In addition, the Company
          rents other facilities on short-term leases. Rents under the short-
          term leases aggregate approximately $2,500 per month.

          (b) Litigation:

               In November 1997, the Company initiated a suit alleging breach of
          contract against the City of New York. Fifty percent (50%) of the
          proceeds, if any, is pledged to the original stockholders of The NY
          Fast Ferry Group and the remaining (50%) to the first mortgage holder
          as a pledge of collateral against amounts owing to them pursuant to
          notes payable referred to in Note 3. Management and the Company's
          counsel are unable to render an opinion covering the ultimate outcome
          of this action.

                                      F-35
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-KSB/A No. 5 to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                 LIGHTHOUSE LANDINGS, INC.

<TABLE>
<S>                          <C>
Date: February 6, 2001       By: /s/ Anthony Cappaze
                                 --------------------------------------------
                                 Anthony Cappaze, President, Chief
                                 Executive Officer and Director


Date: February 6, 2001       By: /s/ John Ferreira, Jr.
                                 --------------------------------------------
                                 John Ferreira, Chief Financial Officer


Date: February 6, 2001       By: /s/ Anthony Colasanti
                                 --------------------------------------------
                                 Anthony Colasanti, Vice President, Secretary
                                 and Director


Date: February 6, 2001       By: /s/ Francis P. Matusek
                                 --------------------------------------------
                                 Francis P. Matusek, Director


Date: February 6, 2001       By: /s/ Gregory J. Hauke
                                 --------------------------------------------
                                 Gregory J. Hauke
</TABLE>
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
(a)      Exhibits
         --------
<C>      <S>
3.1.a    Certificate of Incorporation, as amended. (1)

3.1.b    Certificate of Amendment effective September 19, 2000. (1)

3.2      Bylaws. (1)

10.1     Stock Purchase Agreement dated 9/9/98 for acquisition of Fast Ferry
         Holding Corp. (1)

10.2     Lease Agreement dated 3/30/98 for Aragon Marina. (1)

10.3     Lease Agreement dated October 1999 for Stamford Property Marina. (1)

10.4     Letter of Intent for vessel construction. (2)

10.5.1   Employment Agreement with John Ferreira. (1)

10.5.2   Employment Agreement with Anthony Cappaze. (1)

10.5.3   Employment Agreement with Anthony Colasanti. (1)

10.6     Agreement with Robert E. Derecktor, Inc. for vessel construction. (1)

10.7     Lease Agreement for Clam Hut site dated 12/15/00. (1)

10.8     Form of 10% Senior Promissory Notes.  Filed herewith.

10.9     Form of 10.5% Convertible Promissory Notes.  Filed herewith.

10.10    Amendment to Senior Promissory Notes. (1)

10.11    Form of Note Modification Agreement with 10% Senior Promissory Note
         holders. Filed herewith.

21.1     Subsidiaries of the Registrant. (1)

27.1     Financial Data Schedule. (2)
</TABLE>

------------
(1)  Incorporated by reference from the Company's Registration Statement on Form
     10-SB, as amended.

(2)  Incorporated by reference from the Company's Form 10-KSB/A No. 4 for the
     fiscal year ended December 31, 1999, File No. 0-29205.