SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 2054
   ---------------------------------------------------------------------------


                                   FORM 10KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934. For the fiscal year ended August 31, 1999

                       Commission File Number: 001-12509

                               MEGA HOLDING CORP.
 ----------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

             New York                                       13-2793653
--------------------------------------------------------------------------------
 (State or other Jurisdiction                       (IRS Employer Identification
 of Incorporation or Organization)                            Number)

             278A New Dorp Lane
          Staten Island, New York                             10306
--------------------------------------------------------------------------------
   (Address of principal executive Offices)                 (Zip Code)

   Issuer's telephone number: (718) 667-9117

   Securities registered pursuant to Section 12(b) of the Act: None

   Securities registered pursuant to Section 12(g) of the Act:
         Common Shares, $.01 par value per share

   Check  whether  the  issuer:  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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.
   [x] Yes         [ ] No

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

   State issuer's revenues for its most recent fiscal year $  423,334.
                                                             ----------

   State the aggregate  market value of the voting stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days.

   As of August 31, 1999,  there were  3,858,450  shares of common stock held by
non-affiliates ("Shares") outstanding having an aggregate market value of $-0-.


<PAGE>


PART I

Item 1. Description of Business

General
-----------
   Mega Holding Corp. (the "Company") has been a mortgage broker since 1987, has
provided  business and financial  consulting  services  since 1970 and retains a
royalty interest in a coal mine that it acquired in 1973 and sold in 1980.

Mortgage Brokerage
------------------
   Since  1987,  the Company  has been  licensed  by the New York State  Banking
Department  as a mortgage  broker.  The Company  deals in both  residential  and
commercial  mortgages.  The Company also conducts  commercial mortgage brokerage
activities throughout the United States on a co-brokerage basis with brokers who
are licensed to do business in states other than New York.  The  Company's  fees
for its service as a mortgage broker vary with each transaction.  These fees are
computed as a percentage (each percentage point referred to as a "point") of the
amount  of  the  mortgage.  The  number  of  points  charged  varies  with  each
transaction  depending on a variety of factors,  including,  but not limited to,
the  applicant's  credit,  value of property and term and type of mortgage loan.
Points range from 1% to 3% of the principal amount of the mortgage.

   The Company  places its  mortgages  with a number of banks and other  lending
institutions,  including  Greenpoint  Bank,  Ford Consumer  Finance and Republic
National Bank.  Mortgages placed by the Company  generally carry a fixed rate of
interest and are  self-amortizing.  The Company does not  advertise its mortgage
brokering  services,  but rather receives most of its business through referrals
from professionals such as attorneys and accountants.

Business and Financial Consulting Services
------------------------------------------
   The Company provides  business and consulting  services,  including advice on
the  structure  and  conduct of private  offerings  of  securities,  mergers and
acquisitions and other strategic  business areas.  Most of the Company's clients
use a  combination  of these  services and pay fees to the Company for rendering
such  services.  From time to time,  the Company's fees are taken in the capital
stock of the client company or a combination of cash and stock. In addition, the
Company may begin a relationship with a client on an business advisory basis and
subsequently proceed to provide acquisition or financing services to the client.

   In the process of  providing  financial  consulting  activities,  the Company
performs  due  diligence  and assists the client in  preparing a business  plan,
which typically includes an analysis of the client's business,  its history, the
market  for its  products,  the  competitive  environment  in which  the  client
operates  and a  breakdown  of how  funds  from  a  potential  placement  of its
securities will be used. The Company does not raise funds for clients;  however,
the Company may refer clients to financial  institutions such as banks and other
lenders and/or investment banks.

Rule 504 Offerings
------------------

   In prior years, the Company provided consulting services to companies seeking
to raise up to  $1,000,000  by offering  stock  pursuant to the  exemption  from
registration  provided  by Rule 504  ("Rule  504")  of  Regulation  D under  the
Securities Act of 1933 (the "Securities  Act").  Since last year, the Securities
and  Exchange  Commission  (the  "Commission")  modified  Rule  504  is  a  less
attractive financing  alternative than prior to the modifications.  As a result,
the Company did not consult on any Rule 504  offerings  and does not  anticipate
doing so in the future.


                                      (1)
<PAGE>

Rule 506 Offering
---------------------
   In February 1999, the Company announced that it was offering pursuant to Rule
506,  pursuant to  Regulation D under the  Securities  Act of 1933,  as amended,
200,000  units at $2.50  per  unit.  Each  unit  consisted  of one  share of the
Company's  common  shares  and one  redeemable  common  share  purchase  warrant
exercisable at $5.00 per share. The company had raised $180,500 pursuant to this
offering. Reverse Acquisitions

   The  Company  has also been  involved in  purchasing,  selling and  brokering
"shell"  companies  for reverse  acquisitions.  A shell company is a corporation
that, for one reason or another, no longer has substantive  business operations,
but has many  shareholders  and issued  and  outstanding  shares,  many of which
shares are free  trading or  eligible to be free  trading  under Rule 144 of the
Securities Act of 1933, as amended. In a reverse  acquisition,  the shareholders
of a private Corporation with an existing or proposed business,  exchange all of
the shares of that  private  company or its  business  assets for a  significant
number  (generally  between 85% and 95%) of the shell company's  stock. In form,
the shell  company  acquires  100% of the stock or the  business  of the private
company but, in substance, the shareholders of the private company have acquired
control of the shell company.  Reverse  acquisitions are attractive to a private
company that is seeking a trading  market for its  securities  without having to
undergo the time-consuming and costly process of filing a registration statement
with the  Securities  and Exchange  Commission  (the  "Commission")  and without
having to find an  underwriter  willing and capable of selling its shares to the
public.  The trading market  enhances the ability of the private  company (now a
subsidiary of the shell company) to raise funds.

   Where the  Company  acquires  control  of a shell  company,  it  purchases  a
majority  block of stock of the  shell  company  from  some or all of the  shell
company's  principal  stockholders.  The  Company  then  "cleans  up" the  shell
company;  it reviews and  updates the  company's  corporate  books,  revives the
company's  corporate  charter (if voided) and, where  necessary,  files back tax
returns and pays any back taxes. Once the shell company has been cleaned up, the
Company seeks private companies for potential reverse acquisitions.

   The Company  finds shell  companies and private  companies  seeking to effect
reverse acquisitions through the business contacts of its executive officers and
from other professionals, primarily accountants.


Spin - Off Transactions
-----------------------
   One of the potential  problems  dealing with shell companies is the inability
to be completely  certain that there are no undisclosed  problems or liabilities
that may be inherited by the new shareholders of a private company that acquires
control of a shell company in a reverse acquisition. To alleviate this potential
problem and still provide a trading  market for corporate  clients,  the Company
does spin-off transactions. In a spin-off transaction, one company ("Company A")
acquires  stock of another  company  ("Company B").  Company A then  distributes
shares of  Company  B to  Company  A's  shareholders.  Assuming  Company A has a
significant number of shareholders,  Company B will have a significant number of
shareholders following the spin-off transaction,.







                                       (2)
<PAGE>


   The Company's  spin-off  transactions have generally been and are intended to
be structured in a standard pattern. For each transaction. the Company creates a
new  wholly-owned   subsidiary  (the   "Subsidiary").   Pursuant  to  a  reverse
acquisition, the private company either becomes a wholly-owned subsidiary of the
Subsidiary  or is  merged  into the  Subsidiary.  As a result  of this  "reverse
acquisition,"  the former  shareholders of the private company would own between
91% and 95% of the  Subsidiary's  issued and outstanding  shares of common stock
and the  Company  would own  between  5% and 9% of the  Subsidiary's  issued and
outstanding  common  stock.  Thereafter,  the  Company  would  spin-off  to  its
shareholders  approximately  25-50% of its holdings of the  Subsidiary's  common
stock. In essence,  the Company anticipates  retaining between  approximately 4%
and 7% of the  common  stock of the  Subsidiary  after  the  Company  makes  its
distribution to its shareholders.

   Spin-off   transactions   require  registration  under  the  Securities  Act.
Accordingly,  before the shares of the  Subsidiary  distributed to the Company's
shareholders may trade, the Company must file a registration  statement with the
Commission;  and the  registration  statement must be declared  effective by the
Commission.

   Before agreeing to conduct a spin-off  transaction,  the Company will conduct
standard due diligence on the private  corporation,  including the review of the
private  company's  corporate  and tax  records,  material  agreements,  audited
financial   statements  and  background  of  the  private  company's   executive
management.   The  Company   anticipates  that  it  will  not  conduct  spin-off
transactions with start-up  companies unless they have substantial gross assets,
experienced management and a well-developed business plan.

   As a result of the foregoing  activities,  especially  the proposed  spin-off
transactions, the Company could be deemed to be an "underwriter" as that term is
defined  under the Act.  Under  federal  securities  laws,  other laws and court
decisions  with respect to  underwriters'  liabilities  and  limitations  on the
indemnification  of  underwriters,  an  underwriter  is subject  to  substantial
potential  liability  for  misstatements  or  omissions  of  material  facts  in
prospectuses and other  communications  with respect to offerings in which it is
deemed to have acted as an underwriter.

On October 30, 1998, a Mega subsidiary,  Parkway Technology Corporation,  merged
with  Eurocash  Funding,  a  Jersey,   Channel  Islands,   Ltd.  Company.   Mega
shareholders  of  record  as of  October  30,1998,  will be  receiving  pro-rata
distribution of shares in Eurocash, Inc..

On May 7, 1999, a Mega subsidiary,  Galaxy Financial Services Corp., merged with
American  EcoBoard,  Inc. to form AEB Acquisition  Corp. Your Board of Directors
had authorized a pro-rata distribution of shares in Ecoboard Holdings,  Inc., to
Mega shareholders of record as of June 26, 1997.

On  September  22,  1999,   another  Mega   subsidiary,   Advanced   Lubrication
Technologies,   Inc.   merged  with  a  French  based  company  named   Advanced
Communication Research, SA. To form Advanced Communication Research, Inc..

Consulting / Marketing Services
--------------------------------
   Securus Corp. a wholly owned  subsidiary of Mega Holding Corp., was formed in
November 1998 as a consulting and  sales/marketing  organization.  In June 1999,
Securus Corp.  entered into an agreement  with Olympic  Capital,  Inc. to act as
marketing agent of its services to hospitals and health institutions.


   The Company has a consulting  agreement  with Eagle  Wireless  International,
Inc., wherein the Company is providing certain consulting  activities related to
financing, mergers and acquisitions.


                                       (3)
<PAGE>

Colorado Coal Mine Royalties
----------------------------
   In 1973, the Company purchased a coal mine located in Palisade,  Colorado. In
1980,  the  Company   disposed  of  its  interest  in  the  mine  to  Powderhorn
International, Inc. ("Powderhorn"), a professional mine operator, but retained a
royalty interest. Powderhorn was acquired by Quaker Holding Co., Inc. in January
1998. Pursuant to the settlement of a dispute relating to the royalties,  Quaker
is required to pay the Company  additional  royalties  totaling  $624,044 at the
rate  of  $12,750  per  annum,  payable  on  January  1st  of  each  year  as  a
non-production  royalty through the year 2043. As of August 31, 1999, the unpaid
balance of the additional royalties totaled $554,744.  In addition,  the Company
is to receive a royalty  ("Production  Royalties") of four and one-quarter cents
($.0425) per ton of coal for each ton over 300,000 tons produced per year, which
royalty is due and payable in January of each year. Coal production for 1999 has
decreased approximately 49% over the 1998 level.

Competition
-----------
   The Company encounters significant competition in all aspects of its business
and competes  directly with many other  mortgage  brokers,  mortgage  companies,
banks and investment banking and financial  consulting firms, most of which have
significantly  greater  financial and personnel  resources  than the Company and
most of which are more widely known than the Company.  Such other  companies may
offer  their  clients  a  more  extensive  range  of  financial  services,  have
substantially  greater  financial  resources  and  may  have  greater  operating
efficiency than the Company.  In addition,  many of the companies with which the
Company  competes are able to dedicate  significant  resources  to  advertising,
active solicitation of potential clients and distribution of investment research
publications.  The Company  also  competes  with a number of small and  regional
mortgage brokers, mortgage companies, banks and investment firms which may offer
a wider range of services than the Company.



Marketing
---------
     Generally,  the Company conducts no advertising.  However, during 1999, the
Company has  completely  revamped  its web site.  It is expected  that this will
present a clearer  description of its business and further  enhance its business
opportunities.


Government Regulation
---------------------
     Mortgage brokers are regulated by the state in which they do business. As a
mortgage  broker in the State of New York,  the  Company is  licensed by the New
York State  Banking  Department.  The Company is  required  to provide  specific
disclosure  and  follow  specified  procedures  with  regard to all  residential
mortgage  applicants.  The Company is also required to keep and maintain records
of all mortgage transactions.  The Company is subject to periodic examination by
the  New  York  State  Banking   Department  to  assure   compliance   with  its
requirements.

     On  residential  loans in states  where the Company is not licensed and the
loan is effected  through a third  party  lender,  the Company  signs a referral
co-broker agreement with the borrower. This agreement must be fully disclosed to
all parties. Commercial loans do not require licensing.

     The Company has not registered as a  broker-dealer  under either federal or
state  securities  laws with respect to its business  and  financial  consulting
activities because its management does not believe that the Company comes within
the  definition of either a "broker" or a "dealer" as those terms are defined in
the rules and regulations under the Exchange Act. The Company's most significant
activities  are  acting  as  advisor  for  acquisitions,   particularly  reverse
acquisitions,  and  arranging for  clients' financing,  as opposed  to  actually

                                       (4)
<PAGE>

raising  money  for its  clients.  The  Company  does not have a client  base of
investors  to whom it  presents a customer  as a  possible  investment  vehicle;
rather,  the Company  may refer the client to a  broker-dealer  or other  entity
which  may  decide to raise the  money  for that  customer.  For both  services,
advising on reverse  acquisitions  and  referring  customers to  capital-raising
entities,  the Company may receive fees  consisting  of cash and/or  stock.  The
Company is not a "broker" because it does not effect securities transactions for
the account of others in any fashion.  The Company is not a "dealer" because the
Company's activities consist of acting only as an advisor, and do not consist of
buying  and  selling  securities  in the  traditional  sense  as any  securities
received by the Company are received as a fee for  services  rendered as opposed
to being acquired from the issuer.

   If the Company  were deemed to be a broker or a dealer it would be subject to
extensive  regulation  under federal and state laws.  The  principal  purpose of
regulation and discipline of  broker-dealers  is the protection of customers and
the securities  markets rather than protection of creditors and  stockholders of
broker-dealers. The Securities and Exchange Commission (the "Commission") is the
federal agency charged with  administration of the federal securities laws. Much
of  the   regulation  of   broker-dealers,   however,   has  been  delegated  to
self-regulatory  organizations,  such as the National  Association of Securities
Dealers, Inc. (the "NASD") and national securities exchanges.

   The  NASD  most  likely  would  be  the  Company's  primary   self-regulatory
organization  if the  Company  were  deemed to be a broker  or a  dealer.  These
self-regulatory  organizations adopt rules (which are subject to approval by the
Commission)  which  govern the  industry and conduct  periodic  examinations  of
member  broker-dealers.  Broker-dealers  are also subject to regulation by state
securities  commissions  in  the  states  in  which  they  are  registered.  The
regulations  to which  broker-dealers  are  subject  cover  all  aspects  of the
securities business, including net capital requirements,  sales methods, trading
practices among  broker-dealers,  capital structure of securities firms,  record
keeping and the conduct of directors, officers and employees. The Commission and
the  self-regulatory  bodies may conduct  administrative  proceedings  which can
result in censure,  fine,  suspension  or expulsion of a  broker-dealer  and its
officers or  employees.  If the Company  were deemed to be a broker or dealer by
the Commission or any state securities  commission,  the Company would not be in
compliance  with  requisite  federal  or  state  laws  and  regulations  or  the
regulations  of  self-regulatory  bodies  and the  Company's  business  would be
materially and adversely affected.


Employees
---------
     As of August 31, 1999, the Company had seven full-time employees consisting
of five executives and two staff members at its office located in Staten Island,
New York.

Seasonality
-----------
     The  Company's  business and revenues are  determined  by  consummation  of
contemplated transactions and, thus, are not seasonal.


Item 2. Description of Property

     The Company  maintains  its  principal  executive  offices at 278A New Dorp
Lane,  Staten  Island,  New York in an  approximately  1,300  square foot office
facility  pursuant to a lease  originally  entered  into in January,  1984,  and
thereafter renewed periodically. The current renewal term expires on January 31,
2001. The annual rental is $12,300 per annum  ($1,025.  per month) plus tenant's
proportionate  share  of real  estate  taxes  and  escalations  for the  subject
premises  in the  amount  of  $288.72  per month  for a total  annual  rental of
$15,764.64.




                                       (5)
<PAGE>


Item 3. Legal Proceedings

   None

Item 4. Submission of Matters to a Vote of Security Holders

   None


                                     PART II

   Item 5. Market For Common Equity and Related Stockholder Matters

     As of August 31,  1999,  there  were  approximately  300  holders of Common
Shares.  The Common Shares have not and do not trade.  On that date,  there were
outstanding  approximately  3,858,450 Shares of Common and -0- Preferred Shares.
On October 25,1999.  Public  Securities,  Inc. of Spokane,  Washington has filed
15c2-11 with the NASD on behalf of the company.

     The Company has not declared any cash  dividends  and does not expect to do
so in the foreseeable future. The Company has distributed stock dividends of the
stock of certain corporations of which it is a shareholder as follows:

Ecoboard Holdings, Inc.              178,681 shares of common stock
Eurocash, Inc.                       275,000 shares of common stock

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

The matters discussed in this Management's  Discussion and Analysis of Financial
Condition  and Results of Operations  contain  forward-looking  statements  that
involve  risks and  uncertainties.  The  Company's  actual  results could differ
materially from those discussed here.  Factors that could cause or contribute to
such  differences  included,  but are not limited  to,  those  discussed  in the
sections  entitled  "Business"  and "Risk  Factors," as well as those  discussed
elsewhere in this Annual Report on Form 10-KSB. The Company disclaims any intent
or obligation to update these forward-looking statements.

Fiscal Year Ended August 31, 1999 Compared to the
Fiscal Year Ended August 31, 1998

Revenues for the fiscal year ended August 31, 1999 decreased $1,128,786 or 72.7%
when  compared to the fiscal year ended August 31, 1998.  During the fiscal year
ended August 31, 1998, the Company generated  $405,847 (95.9%) from business and
financial consulting services,  $16,959 (4.0%) from its mining royalty interest,
and $528 (0.1%) from its mortgage brokering  activities.  During the fiscal year
ended August 31, 1997, the Company  generated  $1,505,950  (97.0%) from business
consulting  services,  $15,650  (1.0%)  from its mining  royalty  interest,  and
$30,520 (2.0%) from its mortgage brokering activities.

Revenues from business and financial  consulting  services and mortgage services
decreased $1,100,104 (73.1%),  and $29,992 (98.3%),  respectively whereas mining
royalties  increased $1,309 (8.4%).  Business and financial  consulting  service
revenues and mortgage  revenues  decreased due to decreased  activities in their
respective areas whereas mining royalties increased between these periods due to
the extraction of coal in excess of the agreed upon 300,000 tons.

Cost of sales  decreased  by $198,975  (80.8%)  and  general and  administrative
expenses  increased by $381,278  (124.6%) when compared to the fiscal year ended
August  31,  1998.  The  decrease  in cost of  sales  is  attributable  to lower
revenues.  Additionally,  bad debt expense,  consulting fees, and office expense
increased whereas executive compensation decreased by $21,310 (100.0%); $390,000
(100.0%); $19,459 (86.4%); and $73,815 (83.3%), respectively. The aforementioned
expenses changed as a result of continuing operations.  Executive  compensation,
however,  decreased as a result of the Company issuing property dividends in the
form of investment  stocks to its shareholders  rather than only to its officers
and directors.

As a percentage of sales,  cost of sales  decreased from 16.1% in fiscal 1998 to
11.7% in fiscal 1999 whereas general and administrative  expenses increased from
20.0% in fiscal  1998 to  169.7%  in fiscal  1999.  These  percent  changes  are
attributable to the Company showing lower revenues for the year ended August 31,
1999 when compared to the year ended August 31, 1998.

Marketable  securities at August 31, 1999  decreased when compared to August 31,
1998 due to the sale of various securities during the fiscal year.  Accordingly,
the fiscal years ended August 31, 1999 and August 31, 1998 show realized  losses
on the sale of marketable securities as well as unrealized holding losses (below
earnings and included in earnings), respectively.

The Company has gained interest in other  companies by acquiring  shares of such
companies'  stocks.  The Company acquires these securities as compensation under
its business and consulting activities.  The Company's marketable securities for
the year ended  August 31, 1999  decreased  $519,176  from the prior year.  This
decrease is  attributable  to the Company  selling a number of shares within its
portfolio.   Prior  to  September  1,  1997,  management  had  classified  these
marketable  securities  as trading  securities  because the Company had acquired
them with the intent of reselling them in the near future.  The securities  were
therefore reported on the balance sheet at fair market value with any unrealized
holding gains and losses included in current earnings. For the fiscal year ended
August 31, 1997, this resulted in a $41,127  unrealized holding loss. During the
fiscal year ended August 31, 1998, management has changed its position on how to
carry  these  marketable  securities;  rather than  classifying  them as trading
securities,    management   has   elected   to   treat   these   securities   as
available-for-sale  which requires a separate  valuation  account on the balance
sheet to bring these securities to their fair market value with the offset being
shown as an unrealized  holding gain or loss below net earnings of the statement
of  operations.  For the year  ended  August 31,  1999,  the  Company  showed an
unrealized holding loss of $61,691 (net of tax).

As a result of the foregoing,  the Company realized a net loss of $371,476 and a
net  comprehensive  loss of $433,167  for the fiscal year ended  August 31, 1999
compared to net income of $448,735 for the fiscal year ended August 31, 1998.

Liquidity and Capital Resources

As of August 31,  1999,  the  Company's  current  assets  exceeded  its  current
liabilities by $242,996 with $252,500 being comprised of cash.

Historically,  the Company has  financed its  operations  through cash flow from
operations.  Due to the current  operating cash flow, the Company has no need to
maintain any external funding sources.

At August  31,  1999,  the  Company  had no  material  commitments  for  capital
expenditures.

For the fiscal years ended August 31, 1999,  1998,  and 1997,  the value of fees
received by the Company in the form of securities was $377,222,  $1,416,090, and
$113,216, respectively. Due to the unrestricted nature of these securities, this
method of  compensation  has no material  effect on the Company's  liquidity and
overall  financial  position.  In the  future,  the  Company  plans to  continue
distributing to its shareholders the majority of the securities that it receives
in other  entities.  If the fees  received are more so in the form of securities
than cash,  and continue to be distributed  to the Company's  shareholders,  the
Company's liquidity may be adversely affected.  However, management anticipates,
but cannot assure,  that the cash portion of fees received and the proceeds from
the sale of securities  not  distributed to the Company's  shareholders  will be
sufficient to meet the Company's  anticipated cash flow needs.  When the Company
receives shares with  restrictions on transfer,  the Company will be required to
hold such shares  indefinitely  and will only be able to sell such shares if and
when the shares are registered on an exemption from  registration and it becomes
available,  and if and when a market for such securities develops.  Accordingly,
such shares will not be able to be used to meet cash flow needs.

At August 31,  1999 and August  31,  1998,  royalties  due from  Quaker  Holding
Company, Inc., formerly known as Powderhorn Incorporated,  represented 16.7% and
6.5% of the Company's  total  assets,  respectively.  Based upon Quaker's  prior
history in  payment  of like kind  transactions,  management  believes  that all
royalties will be collected on a timely basis.

Item 7.  Financial Statements


Item 8.  Changes in and Disagreements With Accountants

     Not applicable.


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons:
        Compliance with Section 16(a) of the Exchange Act

Directors and Officers
------------------------
     The following sets forth the names of the Company's directors and officers.
Directors  of the  Company  are elected  annually  by the  shareholders  and the
officers are appointed annually by the Board of Directors.

Name                  Age    Position                                     Since
--------------        ---    --------                                     -----
Thomas M. Abate       62     President and a Director                     1986

James D. Paulsen      63     Executive Vice President,                    1991
                             Secretary and a Director

John M. Seroor        70     Treasurer and a Director                     1994

Silvio Codispoti      56     Senior Vice President                        1991

Lorraine Zarzana      39     Assistant Secretary                          1997

                                       (6)
<PAGE>


   THOMAS M. ABATE has been  President  and  Director  of the  Company  from its
inception  and served as Chairman of the Board of Directors of Megatron  Holding
Corp.  (OTC) from 1983 to 1987.  He was the  Manhattan  Area Manager of the U.S.
Treasury  Department,  SB Division from 1974 to 1984. Mr. Abate received a BS in
Finance from Wagner College.


   JAMES D. PAULSEN has been Executive Vice President, Secretary and Director of
the  Company  since 1991,  and has been  associated  with the  Company  from its
inception.  He was an officer of AIG Risk  Management,  Inc. and  American  Home
Assurance Co. from 1977 to 1991. He is a graduate of The City  University of New
York and The College of Insurance.


   SILVIO  CODISPOTI  has been Senior Vice  President of the Company since 1991.
From,  1961 to 1991, he was a Vice President,  Commercial  Lending with National
Westminster  Bank, USA. Mr. Codispoti is a graduate of Bernard M. Baruch College
of the City  University of New York where he earned an A.A.S.  in Accounting and
B.B.A. in Finance.


   JOHN M. SEROOR has been  Treasurer  & Director of the Company  since 1994 and
has been  associated  with the Company from its inception.  From 1963 to 1968 he
was a  chemist  for the Food and Drug  Administration  in  Cincinnati,  Ohio and
Brooklyn,  New York, and from 1968 to 1994 he was a quality  control  supervisor
for Carter-Wallace, Inc. Mr. Seroor graduated from the University of Connecticut
where he earned a BA in Chemistry.


   LORRAINE  ZARZANA has served as Office  Manager  for the Company  since April
1997. Prior to joining the Company, Ms. Zarzana was a housewife.



Item 10. Executive Compensation

   The following  table shows all the cash  compensation  paid by the Company as
well as certain other  compensation  paid during the fiscal years indicated,  to
the  Chief  Executive  Officer  for such  period in all  capacities  in which he
served.  No other  Executive  Officer  received total annual salary and bonus in
excess of $100,000.
















                                    (7)
<PAGE>



                           SUMMARY COMPENSATION TABLE

     The following table provides  information as to annual  long-term and other
compensation paid by the Company to its Chief
Executive  Officer  and to each of the other  named  executive  officers  of the
Company who earned in excess of $100,000 per year for  services  rendered in all
capacities to the Company.
<TABLE>
<CAPTION>

                                   Long Term Compensation
-------------------------------------------------------------------------------------------------------
   (a)                 (b)     (c)      (d)      (e)        (f)              (g)               (h)                      (i)
                                             Other
                                        Annual  Restricted   Options               LTIP      All Other
Name and              Fiscal    Salary  Bonus    Compen-      Stock      SARs     Payouts  Compensation
Principal Position     Year       ($)    ($)     sation ($)   Awards      (#)       ($)        ($)
------------------     -----    ------  -----   -----------  -------     ----     -------  ------------
<S>                   <C>         <C>    <C>        <C>         <C>       <C>        <C>        <C>
Thomas M. Abate       1999        (1)    N/A        N/A         0         0          0          0
                      1998        (2)    N/A        N/A         0         0          0          0
                      1997        (3)    N/A        N/A         0         0          0          0
                      1996        (4)    N/A        N/A         0         0          0          0
                      1995        (5)    N/A        N/A         0         0          0          0
--------------------------------------------------------------------------------------
</TABLE>


(1) $4,721  consisting  of 7,000 common shares of American  Ecoboard,  Inc. at a
fair market value of $0.35 per share; 10,000 common shares of Eurocash,  Inc. at
a fair market  value of $0.23 per share.  $14,770.  Consisting  of  dividends of
41,842  common  shares of American  Ecoboard,  Inc. and 52,040  common shares of
Eurocash, Inc, with a value of $11,709.

(2) $24,375  consisting of 15,000 common shares of Clearworks.net at fair market
value of $1.625 per share;  $74,918  consisting  of dividends  of 35,000  common
shares of Southern  Security  Bank Corp.;  79,835  common  shares of  Fleetclean
Systems, Inc., for a total value of $99,293.

(3) Consists of 50,000  common  shares of ARXA at fair market value of $2.25 per
share.

(4) Consists of 75,000 shares of QCS Corp. at fair market value $.50 per shares;
46,000 shares of ARXA International  Energy,  Inc. at fair market value $.50 per
shares; 50,000 shares of Hiawatha Industries, Inc. (restricted) no market value.

(5) Consists of 20,000  shares of Capital  Communications  Corp.  at fair market
value of $.50 per share;  40,000 shares of First Nordic Equity Partners Corp. at
fair market value $.10 per share; 30,000 shares of Republic  International Corp.
at fair market value $.50 per share.

The amount of securities distributed to Mr. Abate has been, and will continue to
be, determined by the Company's Board of Directors.





                                            (8)
<PAGE>



Item 11.   Security Ownership of certain Beneficial Owners and Management

     The following table sets forth information as of August 31,1999, the number
percentage  of  shares  of the  common  stock of the  Company,  owned of  record
beneficially,  by each  officer  and  directors  of the Company and by any other
person  owning more than 5% of the  Company's  Outstanding  Common  Stock and by
officers and directors as a group.

                                                 Shares
Name & Address                             Beneficially Owned          Percent
--------------                             ------------------          -------
Thomas M. Abate                              1,158,405 (1)             30.007%
231 Clarke Avenue
Staten Island, NY 10306

James D. Paulsen                               367,000 (2)              9.508%
511 East 80th Street
New York, NY 10021

T.G.J. & Associates                            496,664 (3)             12.865%
618 74th Street
Brooklyn, NY 11209

Emco Enterprises                                230,000 (4)             5.958%
45 Park Place South
P.O. Box 174
Morris Town, NJ 07950


Silvio Codispoti                                127,000 (5)             3.289%
115 Sylvia Street
Staten Island, NY 10312


John M. Seroor                                  102,500                 2.655%
11 Emerson Road
Somerset, NJ 08873

Lorraine Zarzana                                 10,000                  .255%
23 Stare Court
Staten Island, NY 10312

All Officers and Directors                    2,491,569                64.541%
As a Group
(6 persons)
---------------------------
1. Includes 100,000 shares as joint tenant with Renee Abate and 35,000 shares in
the name of Renee Abate; 15,000 shares as custodian for Amanda Alexander; 15,000
shares as custodian  for Megan Abate;  15,000  shares as custodian  for Samantha
Alexander; and 15,000 shares as custodian for for James Abate, and 15,000 shares
as custodian for Emily Ann Abate.  Mr. Abate has sole investment  power and sole
voting power over these shares.
                                            (9)
<PAGE>


2.       Includes 25,000 shares as joint tenant with Judith Paulsen and 2,000 in
         the name of Judith Paulsen. Mr.  Paulsen has sole investment  power and
         sole voting power over these shares.

3.       Of the Common Shares owned by TGJ & Associates ("TGJ"),  248,332 shares
         are  beneficially  owned by Thomas  M.  Abate and  248,332  shares  are
         beneficially owned by James D. Paulsen.  Messrs. Abate and Paulsen have
         shared investment power and shared voting power of these shares. All of
         the shares of TGJ beneficially  owned by Messrs.  Abate and Paulsen are
         included in the shares owned by all officers and directors as a group.

4.       Emco Enterprises is owned by Greg Marinelli.

5.       Includes 500 shares as joint tenants with Dina Codispoti; 4,000 shares
         in the name of Dina Codispoti; 500 shares as joint tenant with Dennis
         Codispoti;  4,000 shares in the name of Dennis  Codispoti;  and 4,000
         shares as joint tenant with Florence Codispoti. Mr.  Codispoti has sole
         investment  power and sole voting power over these shares.


Item 11. Certain Relationships and Related Transactions
-------------------------------------------------------
     During the fiscal  years  ended  August  31,  1999 and 1998,  there were no
transactions, and there are no proposed transactions to which the Company was or
is to be a party in which any of its directors,  executive  officers,  principal
shareholders or any member of the immediate  family of any such person has or is
to have direct or indirect material interest.



















                                            (10)
<PAGE>



                                   SIGNATURES

Pursuant to the  requirements  of Section 12 of the  Securities  Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, "hereunto duly authorized.

                                            MEGA HOLDING CORP.

Dated: November 24, 1999                    By: /s/ Thomas M. Abate
       -----------------                        ------------------------
                                                Thomas M. Abate
                                                President and Principal
                                                Executive Officer

                                            By: /s/John M. Seroor
                                                -------------------------
                                                John M. Seroor
                                                Treasurer and Principal
                                                Financial Officer


























                                            (11)
<PAGE>
--------------------------------------------------------------------------------

                       MEGA HOLDING CORP. and SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                            AUGUST 31, 1999 AND 1998

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




                                Table of Contents




                                                                            Page
                                                                            ----

Independent  Accountant's  Report . . . . . . . . . . . . . . . . . . . .. . .1

Consolidated  Balance  Sheets . . . . . . . . . . . . . . . . . . . . . .. . .2

Consolidated  Statements  of  Operations . . . . . . . . . . . . . . . .  . . 3

Consolidated  Statements  of  Changes  in  Shareholders'  Equity . . . .  . . 4

Consolidated  Statements  of  Cash  Flows . . . . . . . . . . . . . . . .. . .5

Notes  to  the  Consolidated  Financial  Statements . . . . . . . . . .  6 - 16


<PAGE>

                         Independent Accountant's Report




To the Board of Directors and Stockholders
of Mega Holding Corp.:

We have  audited the  accompanying  balance  sheets of Mega  Holding  Corp.  and
Subsidiaries  as of August 31,  1999 and 1998,  and the  related  statements  of
operations,  stockholders' equity, and cash flows for the years ended August 31,
1999, 1998 and 1997. These financial  statements are the  responsibility of Mega
Holding Corp.'s management. Our responsibility is to express an opinion on these
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,  based on our audit, the financial  statements referred to above
present fairly, in all material respects, the financial position of Mega Holding
Corp.  as of August 31,  1999 and 1998,  and the  results  of their  operations,
stockholders'  equity, and their cash flows for the years ended August 31, 1999,
1998 and 1997 in conformity with generally accepted accounting principles.




McManus & Co., P.C.
Certified Public Accountants
Morris Plains, New Jersey


November 19, 1999

<PAGE>

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

                        MEGA HOLDING CORP. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   AUGUST 31,

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

<TABLE>
<CAPTION>

                                     ASSETS
                                                                            1999           1998
                                                                         ------------   ------------
<S>                                                                    <C>            <C>
      Current  Assets:
           Cash                                                        $     252,500  $      19,612
           Accounts  Receivable (Note 2)                                           0         12,810
           Royalties  Receivable (Note 3)                                        407            376
           Notes  Receivable (Note 4)                                         16,700         28,200
           Inventory (Note 1)                                                 10,710              0
           Employee Advance                                                      500              0
           Prepaid Expenses                                                    1,250              0
                                                                         ------------   ------------
                Total  Current  Assets                                       282,067         60,998

      Property  and  Equipment:
           Office  Equipment  at  Cost (Note 1)                               92,737         69,793
           Less:  Accumulated  Depreciation                                  (62,447)       (51,692)
                                                                         ------------   ------------
                Net  Property  and  Equipment                                 30,290         18,101

      Investments  and  Other  Assets:
           Deferred  Tax  Asset (Note 12)                                    220,078         96,740
           Marketable  Securities (Notes 1 & 5)                              235,259        754,435
           Marketable  Securities - Valuation  Allowance  to  FMV           (107,978)      (194,401)
           Restricted  Marketable  Securities (Note 6)                       109,124        109,124
           Royalties  Receivable (Note 3)                                    153,660        154,116
                                                                         ------------   ------------
                Total  Investments  &  Other  Assets                         610,143        920,014

                                                                         ============   ============
      Total  Assets                                                    $     922,500  $     999,113
                                                                         ============   ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

      Current  Liabilities:
           Accounts Payable & Accrued Expenses                         $      13,442  $      11,432
           Officer's  Loan                                                    24,500         26,500
           Payroll  Taxes  Payable                                             1,129            376
                                                                         ------------   ------------
                Total  Current  Liabilities                                   39,071         38,308

      Long - Term  Liabilities:
           Deferred  Taxes (Note 3)                                          418,227        515,345
                                                                         ------------   ------------
                Total  Long - Term  Liabilities                              418,227        515,345

      Commitments  and  Contingent  Liabilities (Note 9)

      Stockholders'  Equity:
           Common  Stock - $.01  par  value
                Authorized  20,000,000  shares
                Issued  3,858,450  and  3,630,250  shares,  respectively      38,585         36,303
           Paid  In  Capital                                               1,056,681        488,463
           Retained  Earnings / (Deficit)                                   (630,064)       (79,306)
                                                                         ------------   ------------
                Total  Stockholders'  Equity                                 465,202        445,460

                                                                         ============   ============
      Total  Liabilities  and  Stockholders'  Equity                   $     922,500  $     999,113
                                                                         ============   ============
</TABLE>

                                        2
<PAGE>
--------------------------------------------------------------------------------

                        MEGA HOLDING CORP. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         FOR THE YEARS ENDED AUGUST 31,

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

                                                                  1999            1998            1997
                                                               ------------    ------------   -------------
<S>                                                          <C>             <C>            <C>
       Net  Sales                                            $     404,971   $   1,530,610  $      200,203
                                                               ------------    ------------   -------------

       Cost  Of  Sales                                              47,394         246,369          96,794
                                                               ------------    ------------   -------------

           Gross  Profit                                           357,577       1,284,241         103,409
                                                               ------------    ------------   -------------

       General  and  Administrative  Expenses:
           Advertising                                                 557           1,982              27
           Bad Debt Expense                                         21,310               0               0
           Commissions                                              97,247         108,373          69,078
           Consulting Fees                                         390,000               0               0
           Dues  and  Subscriptions                                  2,109           2,463             275
           Education / Seminars                                          0           1,100               0
           Executive  Compensation                                  14,801          88,616         113,216
           Exposition/Shows                                          3,150               0               0
           Insurance                                                 4,612           2,667             889
           Licenses  and  Application  Fees                            725             579             671
           Miscellaneous                                             1,385           2,914           3,860
           Office  Expense                                          41,990          22,531          17,580
           Payroll  and  Related  Costs                             17,755           9,128           6,658
           Postage                                                   5,913           4,092               0
           Professional  Fees                                       23,132          10,000           6,000
           Rent                                                     15,765          15,765          14,348
           Taxes                                                       350           1,279          11,835
           Telephone  and  Utilities                                11,557           9,396           9,728
           Travel  and  Entertainment                               24,109          12,559          21,883
           Depreciation                                             10,755          12,500           7,832
                                                               ------------    ------------   -------------

           Total  Operating  Expenses                              687,222         305,944         283,880
                                                               ------------    ------------   -------------

       Earnings/(Loss) Before Gains/(Loss) on Marketable
           Securities, Other Income, Income Taxes,
           and Comprehensive Income(net of taxes)                 (329,645)        978,297        (180,471)

           Loss  on  Sale  of  Marketable  Securities             (212,542)        (37,960)              0
           Unrealized  Holding  Gain / (Loss)  on  Marketable
              Securities (Note 5)                                        0               0         (41,127)
                                                               ------------    ------------   -------------

       Other  Income/Expenses:
           Royalties  Income                                         4,585           3,275             375
           Interest  Income - Royalties                             12,374          12,375          12,375
           Interest  Income/Expense - net                             (405)          5,860              55
                                                               ------------    ------------   -------------
              Total  Other  Income                                  16,554          21,510          12,805
                                                               ------------    ------------   -------------

       Earnings / (Loss)  Before  Income  Taxes                   (525,633)        961,847        (208,793)
           Provision  For  Income  Taxes                          (154,157)        513,112         (70,990)
                                                               ------------    ------------   -------------
       Net  Earnings / (Loss)                                     (371,476)        448,735        (137,803)

       Comprehensive  Income / (Loss),  net  of  taxes:
           Unrealized  Holding / ( Loss) (Note 5)                  (61,691)        (97,661)              0
                                                               ============    ============   =============
       Comprehensive  Income / (Loss)                        $    (433,167)  $     351,074  $     (137,803)
                                                               ============    ============   =============

           Net  Earnings / (Loss)  Per  Share:
              Basic  Net  Earnings / (Loss) - net income     $       (0.10)  $        0.12  $        (0.04)
              Diluted  Net  Earnings / (Loss) - net income   $       (0.10)  $        0.12  $        (0.04)
              Net  Earnings / (Loss) - comprehensive income  $       (0.12)  $        0.10  $        (0.04)
              Weighted  Average  Number  of  Common  Shares
                 Outstanding                                     3,723,500       3,630,250       3,630,250
</TABLE>

                                        3
<PAGE>

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

                        MEGA HOLDING CORP. & SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                         FOR THE YEARS ENDED AUGUST 31,

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

<TABLE>
<CAPTION>


                                                                   Additional        Retained          Total
          September 1, 1997               Common Stock               Paid In        Earnings /      Stockholders'
          To August 31, 1999         Shares        Dollar Value      Capital          Deficit          Equity
       -------------------------   ------------    ------------    ------------    --------------   -------------


       <S>                           <C>         <C>             <C>             <C>              <C>
       September  1,  1997           3,630,250   $      36,303   $     488,463   $        18,939  $      543,705

       Net  Loss 1997                                                                   (137,803)       (137,803)
                                   ------------    ------------    ------------    --------------   -------------

       Total  Stockholders'  Equity
       As  Of  August  31,  1997     3,630,250          36,303         488,463          (118,864)        405,902

       Dividends                                                                        (311,516)       (311,516)

       Net Earnings 1998                                                                 448,735         448,735

       Unrealized  Holding  Loss                                                         (97,661)        (97,661)
                                   ------------    ------------    ------------    --------------   -------------

       Total  Stockholders'  Equity
       As  Of  August  31,  1998     3,630,250          36,303         488,463           (79,306)        445,460

       Issuance  of  Common  Stock      72,200             722         179,778                 0         180,500

       Common  Stock  Issued
            For  Services  Rendered    156,000           1,560         388,440                 0         390,000

       Dividends                                                                        (117,591)       (117,591)

       Net  Loss  1999                                                                  (371,476)       (371,476)

       Unrealized  Holding  Loss                                                         (61,691)        (61,691)
                                   ------------    ------------    ------------    --------------   -------------

       Total  Stockholders'  Equity
       As  Of  August  31,  1999     3,858,450   $      38,585   $   1,056,681   $      (630,064) $      465,202
                                   ============    ============    ============    ==============   =============
</TABLE>

                                        4

<PAGE>

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

                        MEGA HOLDING CORP. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED AUGUST 31,

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

<TABLE>
<CAPTION>

                                                                                1999            1998            1997
                                                                             ------------    ------------    ------------
<S>                                                                        <C>             <C>             <C>

Cash  Flow  from  Operating  Activities:
    Net  Income / (Loss)                                                   $    (371,476)  $     448,735   $    (137,803)

    Adjustments  To Reconcile  Net Income /
     (Loss) To Net Cash Provided / (Used) In Operating Activities:
       Depreciation                                                               10,755          12,500           7,832
       Stock  Issued  For  Services  Rendered                                    390,000               0               0
       Unrealized  Holding  (Gain) / Loss  on  Marketable  Securities-Trad.            0               0          41,127
       Unrealized  Holding  Gain / (Loss)  on  Marketable  Securities-AFS        (61,691)        (97,661)              0
       (Increase) / Decrease  in  Marketable  Securities                         519,176        (722,670)        145,855
       (Increase) / Decrease  in  Marketable  Securities-Valuation Allow.        (86,423)        194,401               0
       (Increase) / Decrease  in  Notes  Receivable                                    0         100,000               0
       (Increase) / Decrease  in Inventory                                       (10,710)              0               0
       (Increase) / Decrease  in  Restricted  Securities                               0        (100,000)              0
       Property  Dividends                                                      (117,591)       (311,516)              0
       (Increase) / Decrease  in  Accounts  Receivable                            12,810          38,861          (8,171)
       (Increase) / Decrease in Employee Advance                                    (500)              0               0
       (Increase) / Decrease  in  Royalties  Receivable (Current)                    (31)             (1)            (32)
       (Increase) / Decrease  in  Royalties  Receivable (Long-term)                  456             377             375
       (Increase) / Decrease in Prepaid Expenses                                  (1,250)              0               0
       (Increase) / Decrease  in  Deferred  Tax  Asset                          (123,338)        (96,740)              0
       Increase / (Decrease)  in  Accounts  Payable  and  Accrued  Expenses        2,010          11,432          (6,257)
       Increase / (Decrease)  in   Payroll  Taxes  Payable                           753             188             188
       Increase / (Decrease)  in  Deferred  Tax  Liability                       (97,118)        513,112         (55,000)
                                                                            ------------    ------------    ------------

       Total  Adjustments                                                        437,308        (457,717)        125,917
                                                                            ------------    ------------    ------------

    Net  Cash  Provided / (Used)  by  Operating  Activities                       65,832          (8,982)        (11,886)

Cash  Flow  from  Investing  Activities:
       (Purchase) / Disposal  of  Property,  Plant & Equipment                   (22,944)         (3,129)        (15,249)
       (Increase) / Decrease  in  Notes  Receivable                               11,500           1,000           5,800
       (Increase) / Decrease  in  Restricted  Securities                               0          (5,837)         26,713
                                                                            ------------    ------------    ------------

    Net  Cash  Provided / (Used)  by  Investing  Activities                      (11,444)         (7,966)         17,264

Cash  Flow  from  Financing  Activities:
       Proceeds  From  Sale  of  Common  Stock                                   180,500               0               0
       Increase / (Decrease)  in  Officer's  Loan  Payable                        (2,000)         21,500           5,000
                                                                            ------------    ------------    ------------

    Net  Cash  Provided / (Used)  by  Financing  Activities                      178,500          21,500           5,000
                                                                            ------------    ------------    ------------

Net  Increase / (Decrease)  in  Cash                                             232,888           4,552          10,378

Cash  at  the  Beginning  of  the  Year                                           19,612          15,060           4,682
                                                                            ------------    ------------    ------------

Cash  at  the  End  of  the  Year                                          $     252,500   $      19,612   $      15,060
                                                                            ============    ============    ============

Additional Disclosure  of Operating  Cash Flow Cash paid during
           the years ended August 31,

          Tax  Expense                                                     $         350   $       1,279   $           0

</TABLE>

                                        5

<PAGE>

                       MEGA HOLDING CORP. AND SUBSIDIARIES
                        Notes To The Financial Statements
                                 August 31, 1999





Note 1 -  Basis of Presentation and Significant Accounting Policies:

         Mega Holding Corp. (the Company) incorporated as a New York corporation
         and  commenced  business  on March 31,  1970.  The  Company  offers its
         services  to  corporations  that are  seeking  banking  and  investment
         banking relationships. The Company charges a fee for these services and
         at times  earns an equity  interest in these  companies.  Fees are also
         earned from clients that wish to go public  and/or raise  capital.  The
         Company is  licensed  and  registered  with the New York State  Banking
         Department as a mortgage broker wherein it earns fees. In addition, the
         Company receives royalties from Quaker Holding Company,  Inc., formerly
         known as Powderhorn Incorporated, located in Prestonsburg, Kentucky.

         Additionally,   in   December   1998,  the  Company  formed  and  began
         operations of a wholly  owned subsidiary,  Securus Corp.  Securus Corp.
         operates   as   a   marketing    and   sales   organization   for   its
         security-related  products  as well as for  such  products  produced by
         other manufacturers.

A)       Consolidation

         At August 31, 1999, the Company has a wholly owned subsidiary,  Securus
         Corp.

B)       Cash and Cash Equivalents

         The Company has  $252,500  and $19,612  invested at August 31, 1999 and
         1998,  respectively of which $232,651 and $8,136,  respectively  are in
         interest bearing accounts.

C)       Inventory

         Inventories  are  valued  at the lower of cost or  market.  The cost is
         determined  by  using  the  FIFO  method.  Inventory  consists  of  the
         following:

                                                           August 31,
                                                     --------------------
                                                        1999        1998
                  Raw Materials                      $ 10,710    $  - 0 -
                                                      -------     -------
                                                     $ 10,710    $  - 0 -
                                                      =======     =======


                                       6
<PAGE>


Note 1 -  Basis of Presentation and Significant Accounting Policies: (continued)
          ---------------------------------------------------------

D)       Property and Equipment

         Property   and   equipment   are  carried  at  cost  less   accumulated
         depreciation.   Depreciation   is  calculated  by  using  the  modified
         accelerated  cost recovery  system as provided by the tax reform act of
         1986 for  property  acquired  after  December  31,  1986.  The recovery
         classifications  are five years for  furniture  and fixtures and office
         equipment.

         Expenditures  for  maintenance  and  repairs  are charged to expense as
         incurred whereas major improvements are capitalized.

E)       Impairment of Long Lived and Identifiable Intangible Assets

         The Company  evaluates  the  carrying  value of  long-lived  assets and
         intangible  assets for  potential  impairment on an ongoing  basis.  An
         impairment   loss  would  be  deemed   necessary   when  the  estimated
         non-discounted  future cash flows are less than the carrying net amount
         of the  asset.  If an asset were  deemed to be  impaired,  the  asset's
         recorded  value would be reduced to fair market value.  In  determining
         the amount of the charge to be recorded, the following methods would be
         utilized to determine fair value:

         1)       Quoted market prices in active markets.
         2)       Estimate based on prices of similar assets.
         3)       Estimate based on valuation techniques.

         As of August 31, 1999 and 1998, no impairment exists.

F)       Revenue Recognition

         The Company recognizes  revenues at the point in time when the stock in
         the newly formed company is sold.

G)       Cost of Sales

         Cost of sales consists wholly of those  expenditures  accumulated  when
         acquiring the original company.



                                       7
<PAGE>

Note 1 -  Basis of Presentation and Significant Accounting Policies: (continued)
          ---------------------------------------------------------

H)       Marketable Securities

         In May 1993, the Financial  Accounting Standards Board issued Statement
         of  Financial  Accounting  Standards  No.115,  "Accounting  for Certain
         Investments in Debt and Equity Securities,"  effective for fiscal years
         beginning  after  December  15, 1993.  This  statement  considers  debt
         securities that the Company has both the positive intent and ability to
         hold to maturity are carried at amortized  cost.  Debt  securities that
         the Company  does not have the  positive  intent and ability to hold to
         maturity  and  all  marketable  equity  securities  are  classified  as
         available-for-sale or trading securities and are carried at fair market
         value.  Unrealized holding gains and losses on securities classified as
         trading are reported in earnings.  Unrealized  holding gains and losses
         on securities classified as available-for-sale  were previously carried
         as a separate  component  of  stockholders'  equity.  SFAS No.  115, as
         amended by Financial  Accounting  Standards  Board issued  Statement of
         Financial Accounting  Standards No. 130, "Other Comprehensive  Income."
         Management  determines  the  appropriate  classification  of marketable
         equity and debt  securities  at the time of purchase  and  re-evaluates
         such designation as of each balance sheet date.

I)       Other Comprehensive Income

         In 1997, the Financial  Accounting  Standards Board issued Statement of
         Financial Accounting  Standards No. 130, "Other Comprehensive  Income,"
         effective  for fiscal years  beginning  after  December 15, 1997.  This
         statement  considers the  presentation of unrealized  holding gains and
         losses  attributable  to  debt  and  equity  securities  classified  as
         available-for-sale.  As stated,  any unrealized holding gains or losses
         affiliated to these  securities  are carried below net income under the
         caption "Other Comprehensive Income."

J)       Income Taxes

         The Company adopted the provisions of Statement of Financial Accounting
         Standards (SFAS) No. 109, "Accounting for Income Taxes", which requires
         a change from the deferral method to the assets and liability method of
         accounting  for income  taxes.  Timing  differences  exist between book
         income and tax income which  relate  primarily  to the  recognition  of
         income.





                                       8
<PAGE>

Note 1 -  Basis of Presentation and Significant Accounting Policies: (continued)
          ---------------------------------------------------------

K)       Use of Estimates

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

L)       Advertising

         All  advertising  costs are expensed as incurred.  The Company does not
         incur any cost for direct-response advertising.

M)       Net Earnings/(Loss) Per Common Share

         Net  earnings/(loss)  per  common  share  is shown  as both  basic  and
         diluted. Primary earnings per common share are computed by dividing net
         income  less any  preferred  stock  dividends  (if  applicable)  by the
         weighted average number of shares of common stock outstanding.  Diluted
         earnings  per common share are computed by dividing net income less any
         preferred  stock  dividends  (if  applicable)  by the weighted  average
         number of shares of common stock  outstanding  plus any dilutive common
         stock  equivalents.  The components used for the computations are shown
         as follows:

                                               August 31, 1999   August 31, 1998
                                               ---------------   ---------------
         Weighted Average Number of Common
            Shares Outstanding Including:
         Basic Common Stock Equivalents           3,723,500         3,630,250
         Diluted Common Stock Equivalents         3,723,500         3,630,250


Note 2 -  Accounts Receivable:

         Accounts receivable consist of the following:

                                               August 31, 1999   August 31, 1998
                                               ---------------   ---------------
         Accounts Receivable                     $    - 0 -         $  12,810
         Allowance for Doubtful Accounts              - 0 -               - 0 -
                                                   ------              ------
         Net Accounts Receivable                 $    - 0 -         $  12,810
                                                   ======              ======


                                       9
<PAGE>


Note 3 -  Royalties Receivable:

         On September 29, 1994, the Company  resolved a royalty  dispute whereby
         Powderhorn  Incorporated will pay the Company additional royalties with
         a future value of $624,044.  This amount will be payable at $12,750 per
         annum for non-production  royalty and an 8.5% royalty should production
         resume.
<TABLE>
<CAPTION>

                                                                       August 31
                                                             --------------------------
                                                                1999             1998
                                                             ---------        ---------
         <S>                                                 <C>              <C>
         Royalties Receivable From Court Settlement:
              Non-interest bearing receivable,
              receivable in annual installments
              of $12,750; due 2043.                          $ 560,294        $ 573,044
              Less unamortized discount based
              on imputed interest rate of 8%.                  406,227          418,552
                                                             ---------        ---------

              Royalties receivable less unamortized
              discount.                                        154,067          154,492

              Less:  Current  Portion                              407              376
                                                             ---------        ---------

              Total Long-Term Royalties Receivable           $ 153,660        $ 154,116
                                                             =========        =========
</TABLE>

         Due to the large nature of Quaker Holding  Company,  Inc. and its prior
         history in payment of like kind transactions,  management  believes all
         royalties will be collected on a timely basis.


Note 4 -  Notes Receivable:

         In 1996, the Company received notes from Bonsangue and Nocito companies
         in the  amounts of $30,000  and  $5,000,  respectively.  Both notes are
         non-interest  bearing and are considered  current.  At August 31, 1999,
         Bonsangue has repaid $13,300 and Nocito has been deemed uncollectable.

         During 1997,  the Company  received a note from the Berkshire  Group in
         the  amount  of  $20,000.  This  note is  non-interest  bearing  and is
         considered  current. At August 31, 1998, the Berkshire Group has repaid
         $13,500 and during 1999, the balance has been deemed uncollectable.

                                       10
<PAGE>

Note 5 -  Marketable Securities:

         As discussed in Note 1, the Company adopted the provisions of Statement
         of  Financial  Accounting  Standards  (SFAS) No. 115,  "Accounting  for
         Certain  Investments  in Debt and Equity  Securities"  and Statement of
         Financial  Accounting  Standards (SFAS) No. 130,  "Accounting for Other
         Comprehensive  Income."  At  August  31,  1997  all  of  the  Company's
         marketable equity securities are classified as trading securities; they
         were purchased with an intent to resell them within the next year.

         The current marketable  securities  represents an investment in various
         corporations  which the Company  considers as trading  securities.  The
         securities  had an  original  cost  of  $76,179  at  August  31,  1997;
         determined by multiplying  the number of shares being  purchased by the
         fair market value of those shares.  At the balance sheet date of August
         31, 1997 the market value was $35,052;  determined by  multiplying  the
         number of shares held by the fair market  value of those  shares at the
         respective balance sheet date. The difference between the cost and fair
         market value represents an unrealized holding gain/loss and is included
         in current earnings.

         During  the  year  ended  August  31,  1998,  however,  management  has
         reclassified    all   marketable    securities   to   be   treated   as
         available-for-sale.  During the transfer of securities  from trading to
         available-for-sale, no adjustment is necessary due to the fact that any
         gain or loss has previously been recognized in income.

         At August 31, 1999,  the  securities had an original basis of $133,651;
         determined by  multiplying  the number of shares being  acquired by the
         fair market value of those shares. At the August 31, 1999 balance sheet
         date, the fair market value of these securities was $25,673; determined
         by  multiplying  the number of shares held by the fair market  value of
         those shares at the balance sheet date. The difference between the cost
         and fair market  value  represents  an  unrealized  holding loss and is
         included below current earnings in "Other  Comprehensive  Income.  This
         unrealized holding loss of $107,978 is reported on the balance sheet as
         a marketable  security  valuation  allowance  whereas the  statement of
         operations carries this loss net of $46,287 tax.


Note 6 -  Restricted Securities:

         The  Company  owns  various  securities  that  are  restricted  by  the
         Securities  and  Exchange   Commission  from  sale.   These  restricted
         securities  are carried at par value totaling  $3,287.  The fair market
         value of the  restricted  securities  held at the balance sheet date is
         determined by the cost basis of those securities. If there were no cost
         basis, the number of shares  multiplied by the given par value would be
         used.

                                       11

<PAGE>

Note 6 -  Restricted Securities: (continued)

         Additionally,  the Company has  converted  a note  receivable  due from
         Capitol Communities Corp.  (formerly AWEC) into 55,000 shares of common
         stock.  Based  upon the lack of a readily  available  market  for these
         shares, the Company has agreed to carry these securities with a legend;
         thus making it restricted from sale.


Note 7 - Executive Compensation:

         As  president,  Mr. Abate  intermittently  receives  shares of stock as
         compensation.  This non-cash compensation approximates $4,721; $24,375;
         and  $23,000;   for  the  years  1999,  1998,  and  1997  respectively.
         Additionally,  the  Company  has  issued  a  property  dividend  to its
         shareholders. Mr. Abate's portion consisted of 41,842 and 52,040 common
         shares of American Ecoboard and Eurocash, Inc.,  respectively,  for the
         year ended August 31, 1999. For the year ended August 31, 1998,  35,000
         and 79,835  common  shares of Southern  Security  Financial  Corp.  and
         Fleetclean Systems, Inc., respectively, were issued to Mr. Abate. These
         property  dividends had an  approximate  values of $26,479 and $74,918,
         respectively  for the years ended  August 31,  1999 and 1998.  Although
         value  has been  given to these  securities,  at the  August  31,  1999
         balance  sheet  date,  a  portion  of these  securities  were not being
         traded.

         In  addition  to Mr.  Abate,  other  officers/directors  of the Company
         received  shares of common  stock as  compensation  for the years ended
         August  31,  1999,   1998,   and  1997.   This  non-cash   compensation
         approximates $10,080; $62,241; and $90,216.  Additionally,  the Company
         has issued a property dividend to other officer/directors consisting of
         23,890  and  12,569  common  shares  of  American  Ecoboard,  Inc.  and
         Eurocash, Inc.,  respectively,  for the year ended August 31, 1999. For
         the year ended  August 31,  1998,  21,633 and 45,578  common  shares of
         Southern  Security  Financial  Corp.  and  Fleetclean  Systems,   Inc.,
         respectively,  were issued. These property dividends had an approximate
         values of $11,261 and $44,422.


Note 8 -  Capitalization Activities:

         On  February  26,  1999,  the  Company  initiated  a stock  offering in
         accordance  with the Securities and Exchange  Commission Rule 506 under
         the  guidelines of Rule 501(a) of Regulation D under the Securities Act
         of 1933. The Company  offered units at $2.50 per unit.  During the year
         ended August 31, 1999,  the Company sold 72,200 shares of the Company's
         common stock. An additional  156,000 shares of common stock were issued
         as compensation  for services  rendered.  These services were valued at
         $390,000.

                                       12
<PAGE>

Note 9 -  Warrants:

         In  conjunction   with  the  stock  offering  in  accordance  with  the
         Securities  and Exchange  Commission  Rule 506 under the Rule 501(a) of
         Regulation D under the  Securities Act of 1933 as stated in note 8, the
         Company has issued the following warrants which have not been exercised
         as of August 31, 1999:

                  228,200 stock purchase warrants.  The warrants are to purchase
                  fully paid and non-assessable  shares of the common stock, par
                  value $.01 per share at a  purchase  price of $5.00 per share.
                  These warrants will expire in February, 2004. As of August 31,
                  1999,  the  underlying  shares of common  stock  have not been
                  registered  for resale  under the  Securities  Act of 1933 and
                  thus are not yet exercisable.

         During  January 1998, the Company  entered into a consulting  agreement
         with  Eagle  Wireless  International,   Inc.  (Eagle),  a  supplier  of
         telecommunications  equipment  and  related  software  sold by  service
         providers  in the paging  and other  wireless  personal  communications
         markets.  In  consideration  of the  services  to be  performed  by the
         Company,  the Company has received one million three  hundred  thousand
         (1,300,000) warrants.

         Each warrant  gives the Company the right to acquire one share of Eagle
         common stock.  The warrants,  currently  restricted with a legend,  are
         comprised  of seven  classes  containing  various  exercise  prices and
         periods as shown below:


                                 Shares      Exercise     Average        Stock
                  Exercise     Underlying     Period       Stock          Days
         Class     Price        Warrants      (Years)      Price         Traded
         ------   --------     ----------    --------    --------        ------
            A     $   1.50      150,000          1        $  4.00           61
            B         2.00      150,000          1           5.50           61
            C         3.00      200,000          2           7.50           61
            D         5.00      200,000          3          10.00           31
            E         7.00      200,000          3          12.00           31
            F         9.00      200,000          5          14.00           31
            G     $  11.00      200,000          5        $ 16.00           31

         In order for any  warrants to be  exercisable,  an average  stock price
         must be attained for  consecutive  days traded as noted above.  Any and
         all  warrants  not  exercised  during the  allocated  time period shall
         become null and void.





                                       13
<PAGE>

Note 10 -  Earnings Per Share:

         The  following  table sets forth the  computation  of basic and diluted
earnings per share:

<TABLE>
<CAPTION>
                                                                    For the Year Ended August 31, 1999
                                                              ---------------------------------------------
                                                                 Income            Shares         Per-Share
                                                              (Numerator)       (Denominator)       Amount
                                                              -----------       -------------     ---------
         <S>                                                  <C>                   <C>            <C>
         Net Loss                                             $ (371,476)

         Basic EPS:
           Loss available to common stockholders                (374,476)           3,723,500      $ (0.10)
                                                                                                    ======
         Effect of Dilutive Securities:
           Warrants                                                  - 0 -                - 0 -
                                                                --------            ---------
         Diluted EPS:
           Loss available to common stockholders
             and assumed conversions.                         $ (374,476)           3,723,500      $ (0.10)
                                                                =========           =========       ======
</TABLE>

<TABLE>
<CAPTION>

                                                                   For the Year Ended August 31, 1998
                                                              --------------------------------------------
                                                                 Income            Shares        Per-Share
                                                              (Numerator)       (Denominator)      Amount
                                                              -----------       -------------    ---------
         <S>                                                  <C>                  <C>            <C>
         Net Income                                           $   448,735

         Basic EPS:
           Income available to common stockholders                448,735          3,630,250      $  0.12
                                                                                                     ====

         Effect of Dilutive Securities:                               - 0 -              - 0 -
                                                                  -------          ---------

         Diluted EPS:
           Income available to common stockholders
             and assumed conversions.                          $  448,735          3,630,250      $  0.12
                                                                 ========          =========         ====
</TABLE>


         For the  years  ended  August  31,  1999  and  1998,  no  anti-dilutive
securities existed.

         For the period  September 1, 1999 to November  19, 1999,  there were no
         transactions  that would have  materially  changed the number of common
         shares or potential common shares outstanding.





                                       14
<PAGE>

Note 11 -  Commitments and Contingent Liabilities:

         The  Company is  engaged in a three year lease for its office  space in
         the amount of  $1,302.29  per month.  This  non-cancelable  lease began
         January 1, 1996 and expired January 31, 1999.  Subsequently,  the lease
         has been extended through January 31, 2001.

                  Future minimum lease payments are summarized as follows:

                           August 31,                           Amount
                           ----------                         ---------
                              2000                            $  15,627
                              2001                                6,511
                                                                -------
                              Total                           $  22,138
                                                                =======


Note 12 -  Income Taxes:

         As discussed in Note 1, the Company adopted the provisions of Statement
         of Financial  Standards  (SFAS) No. 109  "Accounting for Income Taxes".
         Implementation of SFAS 109 did not have a material cumulative effect on
         prior  periods  nor did it  result in a change  to the  current  year's
         provision.

A)       The effective tax rate for the Company is reconcilable to statutory tax
         rates as follows:

                                                                August 31,
                                                       -----------------------
                                                       1999      1998     1997
                                                         %        %        %
                                                       -----     -----   -----
         U.S. Federal Statutory Tax Rate                 34        34       34
         Valuation allowance for deferred tax
            assets allocated to income tax expense       (5)       19      (34)
                                                       ----        --     ----
         Effective Tax Rate                              29        53      - 0 -
                                                       ====        ==     ====

B)       Deferred  income taxes are provided for differences  between  financial
         statement and income tax  reporting.  The  principal  difference is the
         manner in which  income is  recognized  for  financial  and  income tax
         reporting purposes.





                                       15
<PAGE>

Note 13 - Dividends:

         During the fiscal  years ended  August 31, 1999 and 1998,  the board of
         directors   declared  and  paid   property   dividends  to  its  common
         shareholders.  These dividends were comprised of shares of common stock
         which  had  been  received  as  compensation  by the  Company  for  its
         assistance in taking various  clients public.  Thus,  allowing them the
         immediate  opportunity  to  become  tradable  on  the  NASD  Electronic
         Bulletin  Board.  For the year ended  August  31,  1999,  the  issuance
         consisted   of  one  hundred   fifty-seven   thousand   eight   hundred
         thirty-seven (157,837) common shares of American Ecoboard, Inc. and two
         hundred seventy-five thousand (275,000) common shares of Eurocash.  For
         the year ended August 31, 1998,  the issuance  consisted of one hundred
         sixty-one  thousand  five hundred  sixteen  (161,516)  common shares of
         Southern Security  Financial Corp. and three hundred thousand (300,000)
         common shares of Fleetclean  Systems,  Inc. The value of these property
         dividends  is  $117,591  and  $311,516  at  August  31,  1999 and 1998,
         respectively.


Note 14 -  Risk Factors:

         At August 31, 1999,  the majority of the  Company's  business  activity
         consists of assisting  companies to go public. In doing so, the Company
         receives  compensation in the form of stock. If the stock market should
         take a severe down-turn in small company stocks, there is the potential
         that this would have an adverse  affect on the  Company's  future  cash
         flows.  Although this risk exists,  it is management's  belief that its
         other  consulting  activities  would provide the necessary cash flow to
         continue its operating activities.





                                       16