UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 10-K
    (Mark One)


         |X|  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
              ACT OF 1934 [Fee Required]

              For the fiscal year ended December 31, 1996 or

         |_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934 [No Fee Required]



                             For the transition period from ________ to _______



                             Commission file number            1-14088
                                                     ---------------------------



                            Gibbs Construction, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



            Texas                                       75-2095676
---------------------------------          ------------------------------------
(State or other jurisdiction               (I.R.S. Employer Identification No.)
of incorporation or organization)




    1855 Wall Street, Garland, TX                                75041
----------------------------------------             ---------------------------
(Address of principal executive offices)                      (Zip Code)


Issuer's telephone number: (972) 278-3433

Securities registered under Section 12(b) of the Exchange Act:


         Title of each class           Name of each exchange on which registered

    Common Stock                                  Boston Stock Exchange
----------------------------------------       ---------------------------------
    Warrants to purchase Common Stock             Boston Stock Exchange
----------------------------------------       ---------------------------------


    Securities registered under Section 12(g) of the Exchange Act;


                                (Title of class)
--------------------------------------------------------------------------------

                                  Common Stock
--------------------------------------------------------------------------------
                        Warrants to purchase Common Stock
--------------------------------------------------------------------------------
<PAGE>



         Indicate by check and mark whether registrant (1) has 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. Yes

         Indicate by check mark if there is no disclosure  of delinquent  filers
in pursuant to Item 405 of  Regulation  S-K is not  contained in this form,  and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of Form
10- K or any amendment to this Form 10-K. Yes |X| No |_|

         State issuer's revenues for its most recent fiscal year.  $47,438,930

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  of the registrant.  The aggregate market value shall be computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked price,  as of a specified  date within 60 days prior to the date of filing
$2,250,000 As of March 27, 1997.

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 4,000,000

<PAGE>



Item 1.   Business

General

         Danny and Tony Gibbs,  the Company's  two  executives,  acquired  Gibbs
Construction,  Inc.  (Gibbs  Construction,  Inc.  is  referred  to herein as the
"Company" unless the context  indicates  otherwise) in 1985 and began to conduct
their  construction  business  from that entity.  The Company  headquarters  are
located in Garland,  Texas,  a suburb of Dallas.  The Company is a full service,
national, commercial construction company. The Company's clients are principally
national retail chains that are engaged in aggressive expansion programs.  These
programs  usually  call for the  erection of  stand-alone  facilities  or "power
centers,"  which  typically have stores that range in size from 10,000 to 75,000
square feet. Some of the Company's  clients include Best Buy,  Eckerds,  Oshmans
Super Sports,  BizMart, Lil Things, Petco, Barnes & Noble, Office Max (BizMart),
Petstuff, Just for Feet, Organized Living, Copy Max and Petsmart.

         In July of 1996, the Company sold its wholly owned  subsidiary,  Bronco
Bowl Holding,  Inc.  which  operated a 136,000  square foot complex,  the Bronco
Bowl, on approximately  twenty acres near downtown Dallas.  The Company acquired
the  property  in 1994 for  $1,150,000.  Although  the  complex  had  previously
operated for many years,  it was closed  prior to the time the Company  acquired
it. The Company performed extensive  renovations on the complex and opened it in
January of 1996 as a large, high volume, entertainment,  recreation,  restaurant
and meeting complex.  The Company incurred  operating losses of $1,802,114 prior
to the sale and  incurred  an  additional  loss of  $5,277,103  upon the sale of
Bronco Bowl Holding,  Inc. See "Item 7. Management's  Discussion and Analysis of
Financial Condition and Results of Operation."

Construction Operations

         The  Company  acts as a general  contractor  for both  "ground  up" and
interior  "finish  out"  construction.  "Ground up"  construction  involves  the
construction  of a building's  shell,  that is,  construction  of the building's
floor, wall, and ceiling.  "Finish out" comprises  electrical work,  erection of
walls, painting,  demolition, air conditioning and heating systems and plumbing,
among other  activities.  The Company  focuses on the higher  margin  activities
involved  in  "finish  out"  work,  subcontracting  lower  margin  work to other
contractors.  In 1996,  approximately 40% of the Company's  revenues are derived
from  "ground up" work and 60% from  "finish  out" work.  The  Company  plans to
allocate its resources to increase  significantly its "finish-out"  business due
to its high gross margins.

         The Company  utilizes  its own  personnel  throughout  a project  while
trying to minimize any subcontract  labor.  Personnel are sometimes flown to the
city where the  construction  occurs,  but normally  personnel and equipment are
transported by trucks and trailers to the  construction  site. The Company rents
corporate  apartment  housing when necessary,  housing three or four persons per
apartment.

         The Company  transports  Company owned small tools and equipment to the
construction  site  via  Company  owned  trucks.  The  Company  leases  or rents
particularly  heavy  equipment such as hoists,  cranes and personnel  lifts from
local equipment  suppliers when necessary for use on particular  projects.  Most
jobs,  including  out of state jobs,  can be organized  within seven to ten days
after award of the contract.

         Management  believes  that  using  its  own  personnel  offers  several
advantages: a consistent labor force that is familiar with the operational needs
of the customer as well as familiarity with the customer's type of construction;
close control over the work and construction schedule; increased focus on higher
margin activities such as demolition,  drywall,  painting,  electrical,  and air
conditioning  and heating systems by having a skilled work force in those areas;
and more efficient use of personnel.

Marketing of the Construction Business

         The Company's  construction business focuses on a clientele of publicly
held companies or companies  anticipating to become publicly held which have the
necessary funds  appropriated for construction  programs on a nation-wide basis.
The  specifically  targeted  companies  are national  retail chains that conduct
operations in stand-alone  facilities or "power-centers".  These national retail
companies are frequently engaged in aggressive  expansion programs,  which often
require the  construction of ten to fifty units of 10,000 to 100,000 square feet
per

                                        3

<PAGE>



year on a nation-wide  basis.  In addition,  these retail chains often remodel a
large number of existing  outlets,  providing a greater  opportunity to generate
revenues for the Company.

         The  Company  believes  that  concentrating  on  this  targeted  market
provides for longer term growth and financial  stability.  Concentration on this
type of client  base also  allows  the  Company to  mitigate  the  cyclical  and
seasonal revenues which are often typical of the construction industry. Although
economic  contraction  often  reduces  retail  store's  expansion,  management's
experience  has been that most such  retail  chains  continue  to expand  during
recessions,  particularly  in areas of the  country  that are not  affected by a
recession or in which an economic slowdown is not as severe as in other parts of
the country.

         The Company usually experiences some work slowdown in the first quarter
of each  calendar  year due, in the opinion of  management,  to a slowing of the
bidding process during the holiday season.

         The Company does not engage in a formal  marketing  or selling  program
for the construction business.  Most work comes by referral or reputation with a
large amount of repeat business from existing customers. Management believes its
service and product will promote itself after the completion of a single project
for  a  national  chain,   providing  additional   construction  and  remodeling
opportunities after completion of the first contract. During 1996, approximately
76% of the Company business was repeat business from existing clients.

         Most clients which have stores under  construction  have revenues which
are directly  affected by the opening date of the store.  It is critical for the
Company to further  establish  and maintain a dependable  reputation  within the
industry to meet  completion  schedules.  To date,  the Company has never had to
delay the expected  completion date of a project.  After completion of the first
project  for a  new  client,  the  Company  is  able  to  develop  a  continuing
relationship  with its clients by  demonstrating  the Company's other advantages
such as: the ability to work  throughout  the United  States  regardless  of the
client's targeted area of expansion;  more consistent service and product due to
familiarity with the client construction and operational needs; more centralized
communication  since  numerous  projects  could be  discussed  at one time;  and
greater control over the  construction  schedule due to the use of the Company's
own crews.

         The Company does not engage in heavy  construction and provides neither
engineering  nor  architectural  services.  Only a small portion of its business
comes from  construction  in shopping  malls or finish out of commercial  office
buildings.  None of its business is derived from work  provided to  governmental
agencies.

     In 1996, the Company was engaged in over 120 projects for approximately 40
different clients. Four clients, Office Max (25%), Oshmans (13%), Just for Feet
(5%), and Lil Things (6%) accounted for approximately 49% of the Company's
revenues during 1996. There can be no assurances that these clients will
continue at the present level or at all and the loss if any one of them would
have a material adverse effect on the Company.

Contracting Process

         Almost all of the Company's  projects are  competitively bid on a fixed
price basis. The Company presently obtains  approximately 70% of all of its work
on a competitive bid basis. The Company  utilizes an estimating  process whereby
the project  manager  reviews every division and line item of the project.  Unit
costs are then  applied to each line item.  This  approach  not only  allows the
project manager to become extremely familiar with the details of the project but
also gives a good indication as to whether  subcontractor  prices are consistent
with market conditions.

         On site  inspections  are always made by the project  manager/estimator
prior to bid date. This allows the project manager to observe any  peculiarities
with the  project  and to make note of any  discrepancies  in the  architectural
documents.

Competition

         The Company believes that its construction business competes on price,
reputation for quality, timeliness, familiarity with retail construction, the
availability of aggregate materials and financial strength. Management believes
the Company competes favorably on the basis of the foregoing factors.

         The market for construction services, particularly services to national
retail chains, is highly  competitive.  While the vast majority of the Company's
competitors  are  smaller  and may not be as well  capitalized,  several  of the
Company's  competitors are larger,  better known and have substantially  greater
marketing, financial, personnel


                                        4

<PAGE>



and   other   resources,   including   established   reputations   and   working
relationships,  than the Company.  There can be no assurance  that the Company's
services will continue to be competitive in the market place.

Government Regulation

         The  Company's  business  is  subject  to a variety  of state and local
governmental  regulations  and licensing  requirements  relating to construction
activities.  Prior to commencing work on a construction  project, the Company is
required to obtain building permits and, in some jurisdictions,  state and local
authorities   require  the  Company  to  obtain   demonstrating   knowledge   of
construction,  building,  fire and safety codes.  In order to complete a project
and obtain a  certificate  of  occupancy,  the Company is required to obtain the
approval of local authorities confirming compliance with these requirements.

         The Company has general  contractor  licenses in numerous  large states
and major metropolitan areas.

Insurance and Bonding

         The Company maintains general liability and excess liability  insurance
covering  its  construction   equipment  in  amounts  consistent  with  industry
practices.  Management  believes its insurance  programs are adequate.  Worker's
compensation  insurance  covering the leased  employees is provided  through the
employee leasing company from which the Company leases employees.

         Although  not  required by most  clients,  occasionally  the Company is
required to provide various types of surety bonds  guaranteeing  its performance
under certain  contracts.  The Company's  ability to obtain surety bonds depends
upon its capitalization, working capital, past performance, management expertise
and other factors. Surety companies consider such factors in light of the amount
of surety bonds then outstanding for the Company and their current  underwriting
standards,  which may  change  from time to time.  The  Company  has never  been
refused a surety bond.

Construction Employees

         The  Company  leases all of its field  employees  through  an  employee
leasing company.  The Company has utilized the same employee leasing company for
more than five years.  By doing so, the  Company is able to relieve  itself from
administration  surrounding  employment  practices.  In particular,  the Company
believes  that the  employee  leasing  company  is able to find  more  favorable
workers' compensation  insurance than it would otherwise be able to find as well
as develop and administer Company safety programs.

         At March 15, 1997,  the field  operations of the Company were conducted
by 22 superintendents and 100 tradesmen.  A field  superintendent is assigned to
each project with the  responsibility  to oversee the day to day progress on the
project. The field superintendent reports directly to the project manager.

         In  addition  to Danny  and Tony  Gibbs,  the  Company  employs  in the
construction business 16 persons,  including four project managers, four project
assistants,  three project accountants and a receptionist.  The project managers
typically  run  three to four  projects  at a time and are  responsible  for the
overall  coordination  and scheduling of each project as well as  communications
with the client.

Item 2. Properties.

         The Company owns a 10,000 square foot office and warehouse  facility in
Garland,  Texas.  Offices presently occupy  approximately  6,000 square feet. Of
that  space,  the Company  completed  in March of 1996 and an  additional  2,500
square  feet that  enabled  the  Company  to have space for  additional  project
managers and four staff members capable of supporting operations.

         As of March 15, 1997,  the Company owned six trucks and four  trailers.
The Company also owned one tractor, two fork lifts and eight scissor lifts. This
type of equipment is used on almost all jobs,  and any  additional  equipment or
machinery  required for a job is rented on an as needed  basis.  The Company has
very little inventory.  That which does exist primarily consists of left over or
unused material which can be used on the next project.

Item 3. Legal Proceedings

         The Company is involved in a number of legal proceedings that occur in
the ordinary course of business, none of which, in the opinion of management,
is material.



                                        5

<PAGE>



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

         None

                                     PART II

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

         The Company's common stock is listed on the NASDAQ Small Cap Market and
is traded  under the symbol  GBSE.  The stock is also  listed for trading on the
Boston Stock Exchange.

         The Company  completed its initial  public  offering in January of 1996
and trading  commenced on January 15, 1996.  The  following  table set forth the
high and low bid and cash prices of the Company's Common Stock for each calendar
quarter in 1996 commencing January 15, 1996. as reported by NASDAQ:

                                    Ask                            Bid

                             High          Low              High          Low

First Quarter                2.125        1.81250          1.8125        1.5625

Second Quarter               1.75         1.5              1.3125        0.65625

Third Quarter                1.375        1.25             0.875         0.50

Fourth Quarter               1.9375       1.375            1.00          0.6875



         As of March 15, 1997, there were approximately 800 holders of record of
the Company's  common stock,  according to the records  provided by the transfer
agent.

Item 6. Selected Financial Data.

         The  following  table  summarizes  certain  selected  financial  of the
Company for each of the years in the five year period  ended  December 31, 1996.
The selected financial data should be read in conjunction with (i) The Company's
Consolidated  Financial  Statements  and Notes  thereto  as set forth in Item 14
below, and (ii) "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Item 7 below.


<TABLE>
<CAPTION>

                                    1996             1995(1)           1994(1)

<S>                              <C>             <C>                <C>
Net sales                        $47,438,930     $33,336,120        $21,010,296
Income (loss)
  from continuing operation          546,383       1,592,835             74,101
Income (loss) per share
  from continuing operation            $0.14          $ 0.53              $0.02
Total Assets                     $12,733,026     $11,291,394         $4,516,816
Long-term obligations                563,254         945,057            100,492
  Cash Dividends                           -               -                  -
</TABLE>

         (1) Prior to January 12, 1996,  the Company was taxed as a subchapter S
corporation under the Internal Revenue Code of 1986. Income,  Income, per share
and Total  Assets  reflect  amounts that would have been accrued had the Company
taxed other than as a subchapter S corporation.



Item 7. Management's Discussion And Analysis Of Financial Condition And Results
        Of Operations.

Overview

         In 1996 the Company  incurred a loss of  $4,122,834 or $1.07 per share.
The loss is attributable to loss from the discontinued  operations of the Bronco
Bowl and its sale in the second quarter in 1996. The loss from


                                        6

<PAGE>



operations of the Bronco Bowl was $1,186,114,  and the loss from the disposal of
the Bronco Bowl was $3,4483,103.  In 1996, income from continuing operations was
$546,383.

Results of Operations - 1996 Compared with 1995

         Revenues  increased  approximately  42% from  $33,336,120  for the year
ended December 31,1995,  to $47,438,930 for the year ended December 31, 1996. In
1994 the  Company  had begun a program to add  additional  clients,  and by late
1995, the Company had succeded in adding several new clients. The effect of this
program is reflected in the revenue growth enjoyed in 1996.  However,  there can
be no assurance that the recent rate of growth can be sustained in the future.

         Gross profit margins decreased from 10.4% in 1995 to 5.25% in 1996. The
decline in gross margins  resulted in a decline in gross profit from  $3,458,626
in 1995 to  $2,490,249  in 1996.  Although the third quarter of 1996 had a gross
profit margin of almost 10.0%, the other three quarter's gross profit margin was
significantly  lower. In the earlier quarters of 1996, margins were lower due to
managment's  involvement  with the  Bronco  Bowl as well as a charge  off of one
entire  project  where the client did not pay for work.  The fourth  quarter was
adversely  affected  by one  project  that had a  significnat  number of weather
related problems.

         General and administrative  costs also increased  significantly in 1996
from 1995. In 1996 general and administrative costs were $1,574.416,  or 3.3% of
revenues,  compared  in  $903,294,  or 2.7% of  revenues,  in 1995.  Most of the
increase  is  attributable  to the costs of being  publicly  held as well as the
administrative costs releated to closing and selling the Bronco Bowl.

         Because of lower  margins  and  increased  general  and  administrative
costs, net income in 1996 from continuing  operations  declined to $546,383 from
proforma net income in 1995 from continuing  operations of $1,592,835.  The 1995
year benefitted from a $446,596 gain on temporary investments.

Results of Operations - 1995 Compared with 1994

         Revenues  increased  approximately  59% from $21,010,296 for the fiscal
year ended December 31, 1994, to $33,336,120  for fiscal year ended December 31,
1995.  This  increase in  construction  revenue is  attributable  to bidding for
contracts for a larger number of clients,  a program begun in 1994. In both 1993
and 1994,  management  believed that by adding clients,  the Company's  revenues
would be less subject to  interruptions in the building plans of a given client.
The full effect on revenues of this  commitment to adding  clients did not occur
until 1995.  The first quarter of 1995 did not  experience a decline in revenues
from the previous  quarters as did the first  quarters of 1993 and 1994,  and in
late 1995 the Company added several new clients that are national retail chains.

         The  Company  had  gross   profits   from   construction   revenues  of
approximately  $845,000 in 1994  compared to a gross  profits from  construction
revenues of approximately $3,458,626 in 1995. The greater gross profitability in
the later year,  approximately 4.0% of construction revenues in 1994 compared to
approximately  10.3% of  construction  revenues in 1995, is  attributable to the
programs  begun in 1994 to bid contracts more  effectively  and control costs of
those contracts actually entered.

         The Company's profit in the 1995 fiscal year was favorably  affected by
approximately  $480,000 in gains on temporary investments which was mitigated by
approximately  $584,000 of operating  expenses incurred by the Bronco Bowl which
opened in January of 1996.

         General and administrative expense were $557,930 for the earlier period
compared to $903,294 in 1995. The Company's General and Administrative  Expenses
increased in the later period because of additional  hiring in  anticipation  of
growth.

Liquidity and Capital Resources

         The  Company's  working  capital  ratio at December  31, 1996 was 0.94,
current liabilities exceeding current assets by approximately $612,000.

         The Company's negative working capital at December 31, 1996, that is,
the amount by which current liabilities exceed current assets, is largely
attributable to losses related to the Bronco Bowl. The Bronco Bowl




                                        7

<PAGE>



opened in January of 1996 and incurred losses from  operations of  approximately
$1,200,000 in 1996. In addition,  the Company  sustained a loss of approximately
$3,483,103 on the disposition of the Bronco Bowl.

         The  effect of this loss was to  consume a  significant  portion of the
Company's  liquid resources and cash flow for the Bronco Bowl. Since the sale of
the Bronco Bowl, however, the Company's liquidity has steadily improved. At June
30, 1996, the working  capital ratio was 0.66.  This ratio  increased to 0.88 at
the end of the third  quarter  of 1996 and to 0.94 at the end of the  year.  The
average number of days that payables and receiveables  have been outstanding has
been level since June 30, 1996.

Plan of Operation

         The Company plans to continue its aggressive growth throughout the 1997
fiscal year.  The Company  plans to expand again the number of clients for which
it works,  a plan which the Company  began to  implement in the third and fourth
quarters of 1995. The Company plans to return to the margins experiencedin 1995,
although there can be no assurance that these margins will be attained.

Item 8. Financial Statements and Supplementary Data.

         The response to this item is  submitted  as a separate  section of this
Form 10-K. See "Item 14. Exhibits, Financial Statements and Reports on Form 8-K.

Item 9. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure.

         None

                                    PART III

Item 10.Directors, Executive Officers, Promoters and Control Persons; Compliance
        With section 16(a) of the Exchange Act.

Executive Officers and Directors

         The  directors  and  executive  officers  of  the  Company,  and  their
respective ages and positions held with the Company, are as follows:

Name                             Age                            Position
----                             ---                            --------
Danny Gibbs                       39                      President, Director
Tony Gibbs                        35                   Vice-President, Director
Dennis T. Mitchell                47                            Director
Elliot R. Simon                   42                            Director
Phyllis Gibbs Wright              45                           Secretary

         Danny Gibbs has served as president, general manager and a director of
the Company since the Company's inception in 1984. Mr. Gibbs has acted as the
Company's Chief Financial Officer throughout the Company's existence. Mr. Gibbs
received a Bachelor of Arts degree in History with a minor in Architecture from
Texas Tech University.

         Tony Gibbs has served as vice  president  and a director of the Company
since the  Company's  inception in 1984.  From 1983 to 1984,  Mr. Gibbs formed a
construction  company which provided  construction  services to the  residential
industry and the commercial  industry.  Mr. Gibbs received a Bachelor of Science
degree in Accounting with a minor in Architecture from Texas Tech University

         Dennis T. Mitchell, a licensed professional  architect, is president of
AIG, Inc., an architectural  firm Mr. Mitchell formed in 1969 which is primarily
engaged in the design,  documentation and execution of commercial  construction.
AIG, Inc. provides architectural service to a variety of retail,  industrial and
governmental  entities,  including Barnes & Noble, Lil' Things, and Eckerds. Mr.
Mitchell is a member of several  national and local  architectural  professional
organizations and a graduate of the University of Texas at Arlington.

         Elliot R. Simon is a President  and chairman of the board of The Colfax
Group Realty Advisors,  Inc., a real estate consulting firm providing  brokerage
and consulting services to tenants. The principal clients of the




                                        8

<PAGE>



Colfax  Group,  including one of the Company's  clients,  Lil Things,  are large
retailers  expanding  on a national  basis.  Prior to joining  The Colfax  Group
Realty  Advisors,  Inc. in October of 1992, Mr. Simon was vice president of real
estate  and  construction  for  BizMart,  Inc.,  a national  retailer  of office
products, where he was responsible for managing the real estate acquisitions and
construction  for Biz Mart,  Inc. Mr.  Simon joined  Bizmart in February of 1988
until he joined The Colfax Group  Realty  Advisors,  Inc.  Mr. Simon  received a
Bachelors  degree from the State  University  of New York at Cortland and an MBA
degree from the University of Houston.

         Phyllis  Gibbs  Wright  has been  Secretary  of the  Company  since its
formation  and  during  the  Company's   operations  has  been  responsible  for
management's administration.

         Danny Gibbs and Tony Gibbs are brothers. Phyllis Gibbs Wright is their
sister.

         Each  director  will hold  office  until  the next  Annual  Meeting  of
Shareholders  and until such time as his  successor  is elected  and  qualified,
subject to prior removal by the  shareholders  of the Company in accordance with
the Bylaws of the Company.  The officers of the Company serve at the  discretion
of the Board of Directors of the Company.

         Danny Gibbs and Tony Gibbs have  committed to supporting for reelection
the existing outside directors at the Company's next annual meeting.

Committees of the Board of Directors

         The Company's  Board of Directors will establish an Audit Committee and
a Compensation  Committee,  each  consisting of at least two directors,  none of
whom will be an  officer or  employee  of the  Company.  The duties of the Audit
Committee will be to recommend to the entire Board of Directors the selection of
independent  certified  public  accountants to perform an audit of the financial
statements  of  the  Company,  to  review  the  activities  and  report  of  the
independent  certified  public  accountants,  and to report the  results of such
review to the entire Board of Directors.  The Audit  Committee will also monitor
the internal controls of the Company.  The duties of the Compensation  Committee
will be to provide a general  review of the Company's  compensation  and benefit
plans to ensure that they meet corporate objectives and to administer or oversee
the  Company's  1995  Incentive  Stock Option Plan and other benefit  plans.  In
addition, the Compensation Committee will review the compensation of officers of
the  Company  and the  recommendations  of the Chief  Executive  Officer  on (i)
compensation  of all  employees  of the Company and (ii)  adopting  and changing
major Company  compensation  policies and practices.  Except with respect to the
administration  of the  1995  Incentive  stock  option  plan,  the  Compensation
Committee will report its  recommendations  to the entire Board of Directors for
approval.

         On January 12, 1996, the Company  became a reporting  company under the
Securities  Exchange  Act  of  1944  and  its  officers,   directors,   and  10%
stockholders   were  required,   on  that  date,  to  file  initial  reports  of
stockholdings  in the Company on Form 3. These were not filed until  February of
1996 by the directors and 10% stockholders.

Item 11. Executive Compensation.

         The  following  table sets forth  certain  information  concerning  the
compensation  of the  chief  executive  officer  of the  Company  and the  other
executive  officers of the Company whose total annual salary and bonus  exceeded
$100,000, for the fiscal years ended December 31, 1994, 1993, and 1992.
<TABLE>
<CAPTION>

                                          Summary Compensation Table

Name and                                               Annual Compensation (1)            All Other
Principal Position                    Fiscal Year         Salary     Bonus (2)          Compensation
------------------                    -----------         ------     ---------          ------------
<S>                                       <C>             <C>          <C>                          <C>
Danny Gibbs                               1996          $150,000                                    -
 Chief Executive Officer                  1995            49,220       136,423                      -
                                          1994            47,220       140,349                      -

Tony Gibbs                                1996          $150,000                                    -
 Vice President                           1995            49,220       200,246                      -
__________                                1994            47,220       140,349                      -
</TABLE>

 (1) The Company provides certain perquisites and personal benefits to its
     executive officers, the aggregate amount of which does not exceed $50,000
     or 10% of such officer's total annual salary and bonus.




                                        9

<PAGE>



(2)  These amounts  represent  distributions to Messrs.  Danny and Tony Gibbs in
     connection with the Company's status as a subchapter S corporation pursuant
     to the United States tax codes.  They exclude amounts accrued in 1995 but
     paid in 1996 as part of the Company's termination of its status as a
     subchapter S corporation.  As of December 31, 1996, $406,000 remained to
     be paid.

Executive Director Compensation

         Upon the  completion of this Offering the Company plans to pay $150,000
per year to each of Messrs. Danny Gibbs and Tony Gibbs. Directors of the Company
are entitled to receive from the Company fees and  reimbursement of expenses for
their  services as  directors.  Under the  Company's  standard  arrangement  for
compensation of directors,  outside  directors are entitled to receive a fee for
each Board meeting  attended of $500. In addition,  directors will be reimbursed
for their ordinary and necessary  expenses incurred in attending meetings of the
Board of Directors or a committee thereof.  Directors of the Company, whether or
not  employees  of the  Company,  will also be  entitled  to receive  options to
acquire shares of Common Stock under the Company's Stock Option Plans.

Benefit Plans

         1995 Incentive Stock Option Plan

         The  Company's  1995  Incentive  Stock  Option Plan was approved by the
Board of Directors and shareholders of the Company on August 15, 1995 to provide
for the grant of incentive  stock  options  within the meaning of Section 422 of
the Internal  Revenue  Code of 1986 as amended to officers and  employees of the
Company and  subsidiaries  of the Company.  A total of 200,000  shares of Common
Stock has been  authorized  and reserved for issuance  under the 1995  Incentive
Stock Option Plan,  subject to  adjustment  to reflect  changes in the Company's
capitalization  in the case of a stock split,  stock  dividend or similar event.
The  1995  Incentive  Stock  Option  Plan is  administered  by the  Compensation
Committee,  which consists of the Company's three "Outside  Directors."  Outside
Directors  shall mean only those directors of the Company or a subsidiary of the
Company  who are not  regular  salaried  employees  of either  the  Company or a
subsidiary as of the date the option is granted. The Compensation  Committee has
the sole  authority  to interpret  the 1995  Incentive  Stock  Option  Plan,  to
determine  the persons to whom options will be granted,  to determine  the basis
upon which the options  will be granted,  and to determine  the exercise  price,
duration and other terms of options to be granted under the 1995 Incentive Stock
Option Plan;  provided that, (i) the exercise price of each option granted under
the 1995 Incentive  Stock Option Plan may not be less than the fair market value
of the Common  Stock on the day of the grant of the  option,  (ii) the  exercise
price must be paid in cash and or stock upon  exercise of the  option,  (iii) no
option may be  exercisable  for more than 10 years after the date of grant,  and
(iv) no option is  transferable  other than by will or the laws of  descent  and
distribution.  No option is exercisable  after an optionee ceases to be employed
by the  Company  or a  subsidiary  of the  Company,  subject to the right of the
Compensation  Committee to extend the exercise  period for not more than 90 days
following the date of termination of an optionee's  employment.  An optionee who
was a director  or advisor  may  exercise  his option at any time within 90 days
after such optionee's  status as a director or advisor  terminates to the extent
he was  entitled  to  exercise  such  option at the date of  termination  of his
status. If an optionee's  employment is terminated by reason of disability,  the
Compensation  Committee has the authority to extend the exercise  period for not
more  than  one  year  following  the  date  of  termination  of the  optionee's
employment  or service as an advisor or director.  If an optionee dies and shall
hold options not fully  exercised,  such options may be exercised in whole or in
part within one year of the optionee's death by the executors or  administrators
of the optionee's estate or by the optionee's heirs. The vesting period, if any,
specified for each option will be accelerated upon the occurrence of a change of
control or threatened change of control of the Company.

         Outside Directors Stock Option Plan

         The Outside  Directors  Stock  Option Plan was approved by the Board of
Directors and  shareholders of the Company on August 15, 1995. A total of 50,000
shares of Common Stock has been  authorized  and reserved for issuance under the
Outside Directors Stock Option Plan, subject to adjustment to reflect changes in
the Company's  capitalization  in the case of a stock split,  stock  dividend or
similar event.  The Outside  Directors  Stock Option Plan is administered by the
Stock Option  Committee which consists of Danny Gibbs and Tony Gibbs.  The Stock
Option Committee has the sole authority to interpret the Outside Directors Stock
Option  Plan,  to  determine  the persons to whom  options  will be granted,  to
determine the basis upon which the options will be granted, and to determine the
exercise  price,  duration  and other  terms of options to be granted  under the
Outside Directors Stock




                                       10

<PAGE>



Option Plan;  provided that, (i) the exercise price of each option granted under
the Plan may not be less than the fair market  value of the Common  Stock on the
day of the grant of the option, (ii) the exercise price must be paid in cash and
or stock upon  exercise of the option,  (iii) no option may be  exercisable  for
more than 10 years after the date of grant,  and (iv) no option is  transferable
other than by will or the laws of descent  and  distribution.  If an  optionee's
status as an Outside Director is terminated for any reason other than death, the
optionee  may  exercise  his  option  at any  time  within  90 days  after  such
termination to the extent it was then exercisable.  If an optionee dies while an
Outside  Director and shall not have fully  exercised  options granted under the
Outside  Directors  Stock Option Plan, such options may be exercised in whole or
in  part  within  six  months  of  the  optionee's  death  by the  executors  or
administrators  of the optionee's estate or by the optionee's heirs. The vesting
period,  if any,  specified  for  each  option  will  be  accelerated  upon  the
occurrence  of a change  of  control  or  threatened  change of  control  of the
Company.

         Options under the Outside  Directors Stock Option Plan are granted only
to Outside  Directors  selected by the Committee.  Outside  Directors shall mean
only those  directors of the Company or a subsidiary  of the Company who are not
regular salaried  employees of either the Company or a subsidiary as of the date
the option is  granted.  As of the date of this  Prospectus,  none of the Common
Stock  reserved for issuance in either the Outside  Directors  Stock Plan or the
1995 Incentive Stock Option Plan had been issued.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

         The  following  table  sets forth  certain  information  regarding  the
beneficial  ownership of the Common Stock of the Company as of March 15, 1996 by
(i) each person known by the Company to be a beneficial owner of more than 5% of
the outstanding  shares of Common Stock, (ii) each director of the Company,  and
(iii) all  directors and  executive  officers of the Company as a group.  Unless
otherwise  noted,  each  beneficial  owner named below has sole  investment  and
voting power with respect to the Common Stock shown below as beneficially  owned
by him.

                                                            Shares Owned
Name and Address of                                   Number of         Percent
Beneficial Owner                                     Shares Owned       Owned
----------------                                     ------------       -----
Danny Gibbs                                              1,000,000       25.0%
Tony Gibbs                                               1,000,000       25.0%
All directors and officers
as a group (6 persons)                                   2,000,000       50.0%
-----------------

     (1) The  address  for  Danny  Gibbs  and Tony  Gibbs is 1855  Wall  Street,
Garland, TX 75041.

Item 13. Certain Relationships And Related Transactions

         As part of the  termination of the Company's  election to be taxed as a
Subchapter S Corporation,  the Company has accrued $815,000 to be distributed to
Danny  Gibbs and Tony Gibbs for payment of income  taxes owed for the  Company's
operations.  As of December 31, 1996, $406,000 remained to be paid.

         All  future   transactions   between  the  Company  and  its  officers,
directors,  and/or 5% shareholders will be on terms no less favorable than could
be obtained from  independent,  third parties and will be approved by a majority
of the independent disinterested directors of the Company.






                                       11

<PAGE>



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

(a) Financial Statements

         The following financial statements are included herewith:

                                                                         Page
                                                                         ----
    Report of Independent Certified Public Accountants                   F-1
    Consolidated Balance Sheets                                          F-2
    Consolidated Statements of Operations                                F-4
    Consolidated Statements of Stockholders' Equity                      F-5
    Consolidated Statements of Cash Flows                                F-6
    Notes to Copnsolidated Financial Statements                          F-8

(b) Reports on Form 8-K

         None

(c) Exhibits

3.1      Restated Articles of Incorporation, as amended (incorporated by
         reference from a similarly numbered exhibit filed with the Company's
         Registration Statement No. 33-97308-D)

3.2      Bylaws (incorporated by reference from a similarly numbered exhibit
         filed with the Company's Registration Statement No. 33-97308-D)

4.1      Form of Warrant Agreement Covering Redeemable Common Stock Purchase
         Warrants (incorporated by reference from a similarly numbered exhibit
         filed with the Company's Registration Statement No. 33- 97308-D)

10.1     Revised form of Representative's Warrant and Registration Rights
         Agreement (incorporated by reference from a similarly numbered exhibit
         filed with the Company's Registration Statement No. 33-97308-D)

10.2     Copy of 1995 Incentive Stock Option Plan (incorporated by reference
         from a similarly numbered exhibit filed with the Company's Registration
         Statement No. 33-97308-D)

10.3     Copy of Outside Director Stock Option Plan (incorporated by reference
         from a similarly numbered exhibit filed with the Company's Registration
         Statement No. 33-97308-D)

10.4     Copy of Warrant Agreement between the Company and Can Am Capital
         (incorporated by reference from a similarly numbered exhibit filed with
         the Company's Registration Statement No. 33-97308-D)

10.5     Copy of Note and Security Agreement between the Company and Bronco Bowl
         Holding, Inc. (incorporated by reference from a similarly numbered
         exhibit filed with the Company's Registration Statement No. 33-97308-D)

10.6     diversified Employee Leasing, Inc. Client Service Agreement
         (incorporated by reference from a similarly numbered exhibit filed with
         the Company's Registration Statement No. 33-97308-D)

23.1     Consent of Killman, Murrell & Company, P.C. (filed herewith)

24.1     Power of Attorney (filed herewith)

27.1     Financial Data Schedule










                                       12

<PAGE>
                            GIBBS CONSTRUCTION, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996

                                      WITH

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

                                                              Page
                                                              ----
Report of Independent Certified Public Accountants            F-1

Consolidated Balance Sheets                                   F-2

Consolidated Statements of Operations                         F-4

Consolidated Statements of Stockholders' Equity               F-5

Consolidated Statements of Cash Flows                         F-6

Notes to Consolidated Financial Statements                    F-8



<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors and Stockholders
Gibbs Construction, Inc. and Subsidiary
Garland, Texas

We  have  audited  the  accompanying   consolidated   balance  sheets  of  Gibbs
Construction,  Inc. and  Subsidiary  as of December  31, 1995 and 1996,  and the
related  consolidated  statements of operations,  stockholders'  equity and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Gibbs Construction,
Inc. and  Subsidiary  as of December  31, 1995 and 1996,  and the results of its
operations and cash flows for the years then ended, in conformity with generally
accepted accounting principles.




KILLMAN, MURRELL & COMPANY, P.C.
Dallas, Texas
March 14, 1997
















                                       F-1


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1995 AND 1996


                                     ASSETS

<TABLE>
<CAPTION>

                                                                             1995               1996
                                                                         ------------       -----------

CURRENT ASSETS
<S>                                                                      <C>              <C>
    Cash                                                                 $     64,183     $    124,565
    Temporary Investments - Note 9                                             24,183            1,503
    Accounts Receivable
        Trade                                                               3,439,389        8,596,282
        Costs and Estimated Earnings in Excess of
            Billings on Uncompleted Contracts - Note 2                        294,472          976,681
    Prepaid Expenses                                                           33,942           19,376
    Deferred Tax Asset - Note 12                                                    -          510,000
                                                                          -----------       -----------

            TOTAL CURRENT ASSETS                                            3,856,169       10,228,407
                                                                          -----------       -----------

LAND, BUILDINGS AND EQUIPMENT - Note 3                                      7,229,232        1,084,380
        Less Accumulated Depreciation                                        (279,630)        (387,744)
                                                                          -----------       -----------

            NET LAND, BUILDINGS AND EQUIPMENT                                6,949,602         696,636
                                                                          ------------      -----------

OTHER ASSETS
    Other Assets                                                               49,689            2,454
    Deferred Registration Costs                                               366,810                -
    Receivables From Affiliates and Employees                                 193,839          232,789
    Deferred Tax Asset - Note 12                                                    -        1,572,740
                                                                          ------------       -----------

            TOTAL OTHER ASSETS                                                610,338        1,807,983
                                                                         ------------        -----------

            TOTAL ASSETS                                                  $11,416,109        $12,733,026
                                                                          ===========        ===========
</TABLE>













                          The accompanying notes are an
            integral part of these consolidated financial statements
                                   (Continued)
                                                            F-2


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                     CONSOLIDATED BALANCE SHEETS (Continued)

                           DECEMBER 31, 1995 AND 1996


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                              1995               1996
                                                                          ------------     --------------

CURRENT LIABILITIES
<S>                                                                      <C>                <C>
    Notes Payable - Note 4                                               $    150,000       $    150,000
    Current Installments of Long-Term Debt - Note 5                           122,081            374,443
    Current Capital Lease Obligations - Note 10                               138,616                  -
    Accounts Payable                                                        5,260,692          8,047,940
    Accrued Expenses - Note 11                                              1,630,723            719,749
    Billings in Excess of Costs and Estimated Earnings on
        Uncompleted Contracts - Note 2                                        414,621          1,142,164
    Payable to Stockholders                                                         -            406,055
                                                                      ---------------       ------------

            TOTAL CURRENT LIABILITIES                                       7,716,733         10,840,351

LONG-TERM DEBT - Excluding Current Installments - Note 5                      351,935            563,254

CAPITAL LEASE OBLIGATIONS Excluding Current
    Obligations - Note 10                                                     593,122                  -
                                                                        -------------       ------------

            TOTAL LIABILITIES                                               8,661,790         11,403,605
                                                                         ------------       ------------

CONTINGENCIES - Notes 6, 7, and 8                                                   -                  -

STOCKHOLDERS' EQUITY  - Note 14
    Common Stock of $.01 Par Value.  Authorized 7,500,000
        Shares; Issued and Outstanding 3,000,000 and
        4,000,000 Shares, respectively                                         30,000             40,000
    Additional Paid-In-Capital                                                      -          4,907,272
    Retained Earnings                                                       2,724,319         (3,617,851)
                                                                         ------------       ------------

            TOTAL STOCKHOLDERS' EQUITY                                      2,754,319          1,329,421
                                                                         ------------       ------------

            TOTAL LIABILITIES AND
                STOCKHOLDERS' EQUITY                                      $11,416,109        $12,733,026
                                                                          ===========        ===========
</TABLE>








                          The accompanying notes are an
            integral part of these consolidated financial statements
                                       F-3


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>

                                                                         1995                       1996
                                                                   ----------------           ---------------

<S>                                                                  <C>                        <C>
CONSTRUCTION REVENUE                                                 $33,336,120                $47,438,930

COST OF CONSTRUCTION                                                 (29,877,494)                44,948,681
                                                                     -----------              --------------
    NET CONSTRUCTION REVENUE                                           3,458,626                  2,490,249
                                                                     -----------              --------------

BRONCO BOWL OPERATING EXPENSES                                          (584,173)                         -
                                                                     -----------              --------------
            GROSS PROFIT                                               2,874,453                  2,490,249

GENERAL AND ADMINISTRATIVE EXPENSES                                     (903,294)                (1,574,416)
                                                                     -----------              --------------
            INCOME BEFORE OTHER INCOME (EXPENSE)                       1,971,159                    915,833

OTHER INCOME (EXPENSE)
    (Loss) on Disposal of Equipment                                       (7,959)                    (1,623)
    Gain (Loss) on Temporary Investments Transactions                    446,596                    (22,906)
    Interest Income                                                        5,042                     22,215
    Interest Expense, net of capitalized interest of
        $128,332 at December 31, 1995                                     (1,895)                   (86,628)
    Other                                                                    392                     12,492
                                                                     -----------              --------------
            INCOME BEFORE INCOME TAXES                                 2,413,335                    839,383

INCOME TAX (BENEFIT) - Note 1 and Note 12                                      -                   (293,000)
                                                                     -----------               -------------

INCOME FROM CONTINUING OPERATIONS                                      2,413,335                    546,383

DISCONTINUED OPERATIONS
    (Loss) From Discontinued Operations                                        -                 (1,186,114)
    (Loss) on Disposal of Subsidiary                                           -                 (3,483,103)
                                                                     -----------               ------------
            NET INCOME (LOSS)                                        $ 2,413,335               $ (4,122,834)
                                                                     ===========               ============

INCOME (LOSS) PER SHARE
    Continuing Operations                                                                      $       0.14
    Discontinued Operations                                                                           (1.21)
                                                                                               ------------
                                                                                               $      (1.07)

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                                                                            3,846,154
                                                                                               ============
PRO FORMA DATA
    Historical Income Before Income Taxes                             $2,413,335
    Pro Forma Provision for Income Taxes                                 820,500
                                                                      ----------
    Pro Forma Net Income                                              $1,592,835
                                                                      ==========
    Pro Forma Net Income Per Common Share                                   $.53
                                                                            ====
    Weighted Average Number of Common Shares Outstanding               3,000,000
                                                                       =========
</TABLE>

                          The accompanying notes are an
            integral part of these consolidated financial statements
                                       F-4


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1995 AND 1996


<TABLE>
<CAPTION>

                                                    Common Stock
                                                -------------------
                                                Number                        Paid-In        Retained
                                              of Shares        Amount         Capital        Earnings       Total
                                              ---------       --------        -------        --------       -----
<S>                                           <C>             <C>          <C>             <C>            <C>
BALANCE, DECEMBER 31, 1994                    3,000,000       $30,000      $         -     $   639,156    $   669,156

    1995 Net Income                                   -             -                -       2,413,335      2,413,335

    Distributions                                     -             -                -        (328,172)     (328,172)
                                              ---------       --------     ------------    ------------    ----------

BALANCE, DECEMBER 31, 1995                    3,000,000        30,000                -       2,724,319     2,754,319

    Sale of Common Shares
        January 1996                          1,000,000        10,000        3,712,500               -     3,722,500

    Registration Costs, net of
        applicable tax effect                         -             -         (358,948)              -      (358,948)

    "S" Corporation Status Termination                -             -        1,553,720      (2,219,336)     (665,616)

    1996 Net Loss                                     -             -                -      (4,122,834)   (4,122,834)
                                              ---------       -------       ----------    ------------    ----------

BALANCE DECEMBER 31, 1996                     4,000,000       $40,000       $4,907,272     $(3,617,851)   $1,329,421
                                              =========       =======       ==========     ===========    ==========
</TABLE>




















                          The accompanying notes are an
            integral part of these consolidated financial statements
                                       F-5



<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>

                                                                                      1995                      1996
                                                                                ----------------          -----------------

CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                                  <C>                      <C>
    Net Income (Loss)                                                                $2,413,335               $(4,122,834)
    Adjustments to Reconcile Net Income (Loss) to Net Cash
        From Operating Activities
            Loss on Sale of Discontinued Operations                                           -                 3,483,103
            Depreciation                                                                113,790                   520,756
            Loss on Disposal of Equipment                                                 7,959                     1,623
            (Gain) Loss on Temporary Investments Transactions                          (446,596)                   22,906
            Deferred Taxes                                                                    -                  (323,000)
    Changes in Current Assets and Liabilities
            (Increase) in Accounts Receivable                                        (1,373,557)               (5,156,893)
            (Increase) in Inventories                                                         -                    (8,259)
            (Increase) Decrease in Billings Related to Cost
                and Earnings on Uncompleted Contracts                                  (350,342)                   45,334
            (Increase) in Prepaid Expenses                                               (1,624)                  (72,909)
            Increase in Accounts Payable                                              3,147,314                 2,787,248
            Increase (Decrease) in Accrued Expenses                                     833,376                  (246,900)
    Purchase of Temporary Investments                                                (3,682,996)                  (20,177)
    Proceeds From Sale of Temporary Investments                                       4,105,409                    19,951
                                                                                     ----------             -------------
                NET CASH FLOW PROVIDED (USED)
                BY OPERATING ACTIVITIES                                               4,766,068                (3,070,051)
                                                                                     ----------              ------------

CASH FLOW FROM INVESTING ACTIVITIES
    Purchase of Equipment                                                              (303,244)                 (219,425)
    Bronco Bowl Renovations                                                          (4,039,808)               (1,983,864)
    Proceeds from Sale of Equipment                                                      67,183                     3,500
    (Increase) Decrease in Other Assets                                                (129,899)                  (43,461)
    Cash Proceeds from Sale of Discontinued Operations                                        -                   712,456
                                                                                 --------------             -------------

                NET CASH FLOW (USED) IN INVESTING
                   ACTIVITIES                                                        (4,405,768)               (1,530,794)
                                                                                     ----------              ------------

CASH FLOW FROM FINANCING ACTIVITIES
    Deferred Registration Costs                                                        (292,627)                 (107,358)
    Proceeds from Note Borrowings                                                       418,128                 1,444,334
    Repayments of Note Borrowings                                                      (208,557)                 (284,827)
    Repayments of Capital Lease Obligations                                              (3,181)                   (3,341)
    Distributions to Stockholders                                                      (328,172)                        -
    Sale of Common Stock                                                                      -                 3,722,500
    Changes in Stockholder Receivables                                                        -                  (110,081)
                                                                                 --------------              ------------

                NET CASH FLOW (USED) PROVIDED
                    BY FINANCING ACTIVITIES                                            (414,409)                4,661,227
                                                                                    -----------              ------------
</TABLE>

                          The accompanying notes are an
            integral part of these consolidated financial statements
                                       F-6


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)

                     YEARS ENDED DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>

                                                                      1995                      1996
                                                                  ------------            ----------------
<S>                                                              <C>                        <C>
NET (DECREASE) INCREASE IN CASH                                      (54,109)                   60,382

CASH AT THE BEGINNING OF THE PERIOD                                  118,292                    64,183
                                                                  ------------               -----------

CASH AT THE END OF THE PERIOD                                    $    64,183                $  124,565
                                                                  ============               ===========

SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION
        Cash Paid During  the Year For:
            Interest Expense                                     $    48,096                $   63,425
                                                                  ============              ===========
            Income Taxes                                         $         -                $   50,057
                                                                  ============              ===========

SUPPLEMENTAL SCHEDULE OF NONCASH
    INVESTING AND FINANCING ACTIVITIES:

        Termination of "S" Corporation Status
            Increase in Payable to Stockholders and Affiliates   $         -                $  665,616
            Transfer of Retained Earnings to Paid-in-Capital               -                 1,553,720
            Reduction in Retained Earnings                                 -                (2,219,336)
        Reduction in Deferred Registration Costs                           -                   358,948
        Registration Costs Offset against Paid-in-Capital                  -                  (358,948)
        Increase in Capital Lease Obligations                        734,919                   634,625
        Assets Purchased through Capital Lease                      (734,919)                 (634,625)
                                                                  ------------              ----------
                                                                 $         -                $        -
                                                                  ============              ==========
</TABLE>


















                          The accompanying notes are an
            integral part of these consolidated financial statements
                                       F-7


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1995 AND 1996


NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    General

    Gibbs  Construction,  Inc.  (the  "Company"),  is a full  service,  national
    commercial  construction  company  located in  Garland,  Texas.  The Company
    operates  throughout  the United  States,  providing  construction  services
    principally to national retail store chains.

    Subsidiary and Principles of Consolidation

    The  consolidated   financial  statements  include  the  accounts  of  Gibbs
    Construction,  Inc. and its wholly owned  subsidiary,  Bronco Bowl  Holding,
    Inc.  All  significant  intercompany  balances  and  transactions  have been
    eliminated in consolidation.

    Temporary Investments

    The Company has entered into numerous account  agreements with  stockbrokers
    and participates in an active trading program in equity  securities,  listed
    on  nationally  recognized  stock  exchanges.  The fair value for  temporary
    investment securities are based on quoted market prices.

    Revenue Recognition

    Revenues   from    construction    contracts    are    recognized   on   the
    percentage-of-completion  method, measured by the percentage of total direct
    job costs  incurred  to date to  estimated  total  direct job costs for each
    contract.  This method is used because management  considers expended direct
    job costs to be the best available measure of progress on contracts.

    Contract costs include all direct material, labor and sub-contract costs and
    those  indirect  costs  related to  contract  performance,  such as indirect
    labor,  supplies,  tools and repair costs.  General and administrative costs
    are  charged to expense as  incurred.  Provisions  for  estimated  losses on
    uncompleted  contracts  are made in the  period  in which  such  losses  are
    determined.  Changes  in  job  performance,  job  conditions  and  estimated
    profitability,  including those arising from contract penalty provisions and
    final contract settlements,  may result in revisions to costs and income and
    are  recognized  in the period in which the  revisions  are  determined.  An
    amount  equal to  contract  costs  attributable  to  claims is  included  in
    revenues  when  realization  is  probable  and the  amount  can be  reliably
    estimated.












                                       F-8


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Revenue Recognition (Continued)

    The asset "costs and estimated earnings in excess of billings on uncompleted
    contracts,"  represents revenues recognized in excess of amounts billed. The
    liability "billings in excess of costs and estimated earnings on uncompleted
    contracts," represents billings in excess of revenues recognized.

    Deferred Registration Costs

    The costs incurred by the Company  associated with its public stock offering
    were deferred until the  completion of the public  offering in January 1996.
    The costs were offset against the proceeds from the public offering.

    Buildings and Equipment

    Depreciation  of  buildings  and  equipment is provided  principally  on the
    straight-line  method  using  estimated  useful  lives  ranging from five to
    twenty-five years.

    Major renewals and betterments are added to the property  accounts while the
    cost of repairs  and  maintenance  is charged to  operating  expenses in the
    period  incurred.  Cost of assets  retired or otherwise  disposed of and the
    applicable  accumulated  depreciation are removed from the accounts, and the
    resultant gain or loss, if any, is reflected in operations.

    Federal Income Taxes

    From May 31, 1992 to December 31, 1995,  the Company  elected to be taxed as
    an "S"  corporation  under the Internal  Revenue Code;  therefore,  for that
    period the Company's stockholders were required to include in their personal
    tax  returns the income and  expenses of the Company and pay any  applicable
    federal income taxes.  As of May 31, 1992, the Company  reflected a retained
    earnings  balance of $212,975,  which was subjected to federal  income taxes
    when earned.  The Company returned to the "C" Corporation status on December
    31, 1995.

    The Company  accounts for income taxes for the year ended December 31, 1996,
    pursuant to the  provisions of Statement of Financial  Accounting  Standards
    No. 109,  "Accounting  for Income  Taxes"  (SFAS No.  109),  which  requires
    recognition of deferred tax  liabilities  and assets for the expected future
    tax  consequences  of  events  that  have  been  included  in the  financial
    statements or tax returns.  Under this method,  deferred tax liabilities and
    assets  are  determined  based  on  the  difference  between  the  financial
    statement and tax basis of assets and liabilities using enacted tax rates in
    effect for the year in which the differences are expected to reverse.






                                       F-9


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Pension and Employee Benefit Plans

    The Company has established a flexible benefits plan for its employees.  The
    purpose of this plan is to provide eligible  employees a choice between cash
    and specified welfare benefits.

    The Company has  established  a deferred  contribution  profit  sharing plan
    (401(k) Plan), covering  substantially all employees.  This plan allows both
    the Company and eligible employees to contribute to the plan.

    No significant  contributions  were made to the plans by the Company in 1995
or 1996.

    Use of Estimates

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

    Cash Flows

    The Company  considers cash to be cash equivalents for purposes of preparing
    the statements of cash flows.


NOTE 2:         COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

    Excess costs and billings are as follows:
<TABLE>
<CAPTION>

                                                             Years Ended December 31,
                                                        1995                      1996
                                                     ------------             ------------
<S>                                                   <C>                      <C>
        Costs Incurred on Uncompleted Contracts       $7,445,586               $17,451,069
        Estimated Earnings                             1,010,755                 1,612,101
                                                      ----------              ------------
                                                       8,456,341                19,063,170

        Less Billings to Date                          8,576,490                19,228,653
                                                      ----------               -----------

                                                     $  (120,149)              $  (165,483)
                                                     ===========              ============
</TABLE>








                                      F-10


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 2:         COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
                (Continued)

    The above  amounts  are  included  in the  accompanying  balance  sheets  as
        follows:
<TABLE>

        Costs and Estimated Earnings in Excess of Billings
<S>                                                                                <C>                      <C>
            on Uncompleted Contracts                                               $   294,472              $    976,681

        Billings in Excess of Costs and Estimated Earnings
            on Uncompleted Contracts                                                  (414,621)               (1,142,164)
                                                                                   -----------              ------------

                                                                                   $  (120,149)             $   (165,483)
                                                                                   ===========              ============
</TABLE>


NOTE 3:         LAND, BUILDINGS AND EQUIPMENT

    Land, buildings and equipment are as follows:
<TABLE>
<CAPTION>

                                                                                               December 31,
                                                                                 ---------------------------------------
                                                                                      1995                      1996
                                                                                 -------------              ------------

<S>                                                                                <C>                       <C>
        Land                                                                       $    14,600               $    48,255
        Buildings and Improvements                                                     149,716                   227,214
        Vehicles and Trailers                                                          443,071                   464,866
        Construction Equipment                                                         208,043                   235,978
        Office Equipment and Furniture                                                  76,488                   108,067
        Under Renovation Facilities - Bronco Bowl
            Land                                                                       846,370                         -
            Building                                                                   303,630                         -
            Building Renovation                                                      5,187,314                         -
                                                                                    ----------             -------------

                                                                                     7,229,232                 1,084,380

                Less Accumulated Depreciation                                         (279,630)                 (387,744)
                                                                                    ----------                ----------

                   NET LAND, BUILDINGS AND EQUIPMENT                                $6,949,602                  $696,636
                                                                                    ==========                  ========

</TABLE>










                                      F-11


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 4:         NOTES PAYABLE

    A summary of notes payable at December 31, 1995 and 1996, follows:

<TABLE>
<CAPTION>

                                                                                         1995                   1996
                                                                                       --------              ---------
<S>                                                                                   <C>                    <C>
        10% note payable to an individual, unsecured,
            due January 17, 1997                                                      $ 150,000              $ 150,000
                                                                                      =========              =========
</TABLE>


NOTE 5:         LONG-TERM DEBT

    A summary of long-term debt at December 31, 1995 and 1996, follows:
<TABLE>
<CAPTION>

                                                                                        1995                   1996
                                                                                     ----------             ---------
<S>                                                                                   <C>                    <C>
        4.9% note payable to a credit corporation, payable in
            monthly installments of $546 including
            interest, due June 1, 1996, secured by equipment                          $       -                 $ 14,898

        9.9%note payable to a bank, payable in monthly
            installments of $466 including interest, due
            May 6, 1996, secured by vehicle                                               2,272                        -

        9.5%note   payable   to  a  credit   corporation,   payable  in  monthly
            installments of $653 including interest, due August 4, 1996,
            secured by vehicle                                                                -                   28,615

        9.65% note payable to a bank, payable in
            monthly installments of $807 including
            interest, due July 8, 1999, secured by vehicle                               29,789                   22,057

        9.9% note payable to a credit corporation, payable
            in installments of $469 including interest, due
            January 2, 2001, secured by vehicle                                          22,058                   18,579

        10.0%  note  payable  to  a  credit  corporation,   payable  in  monthly
            installments of $533 including interest, due August 30, 1999,
            secured by equipment                                                         19,915                   15,709
</TABLE>




                                      F-12


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 5:         LONG-TERM DEBT (Continued)
<TABLE>
<CAPTION>

                                                                                        1995                   1996
                                                                                     ----------             ---------
<S>                                                                                    <C>                    <C>
        9.5% note payable to a credit corporation, payable in
            monthly installments of $628 including
            interest, due August 4, 1996, secured by vehicle                                 -                 31,632

        7.9%note   payable   to  a  credit   corporation,   payable  in  monthly
            installments of $579 including interest, due September 30, 1998,
            secured by vehicle                                                          17,137                      -

        6.9%note   payable   to  a  credit   corporation,   payable  in  monthly
            installments of $617 including interest, due March 15, 1997,
            secured by equipment                                                        11,317                  3,644
        7.25% to 8.75% notes payable to a bank,
            payable in installments of $2,618 including
            interest, due April 23, 1998, secured by
            vehicles and equipment                                                      60,278                 26,155

        Prime  plus  1%  (10%)  note  payable  to a  bank,  payable  in  monthly
            installments of $1,300 plus
            interest, due June 25, 1998, secured by real estate                        135,196                119,596

        16% note payable to a credit corporation, payable
            in monthly installments of $451 including interest,
            due June 13, 1996, secured by equipment                                      2,490                      -

        9.5% note payable to a credit corporation, payable
            in monthly installments of $633 including interest,
            due June 26, 2000, secured by vehicle                                       27,423                 22,038

        9.5% note payable to a credit corporation, payable
            in monthly installments of $648 including interest,
            due October 20, 2000, secured by vehicle                                    29,780                 24,175

        9.55% note payable to a bank,  payable in monthly  installments  of $428
            including interest, due August 25, 1999, secured
            by vehicle                                                                  15,681                 11,365
</TABLE>




                                      F-13


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 5:         LONG-TERM DEBT (Continued)
<TABLE>
<CAPTION>

                                                                                        1995                   1996
                                                                                     ----------             ---------
<S>                                                                                    <C>                  <C>
        9.5% note payable to a credit corporation, payable
            in monthly installments of $655 including interest,
            due January 15, 1999, secured by vehicle                                     21,356               14,768

        9.95% note payable to a credit corporation, payable
            in monthly installments of $643 including interest,
            due December 1, 2000, secured by vehicle                                     29,498               24,504

        12% note payable to the Texas State Treasurer, payable
            in monthly installments of $25,000 including
            interest, due December 24, 1998                                                   -              527,196

        10.0% note payable to a credit corporation, payable in
            monthly installments of $1,010 including interest,
            due July 15, 1998, secured by equipment                                      27,444               17,609

        10.0% note payable to a credit corporation, payable
            in monthly installments of $762 including interest,
            due September 1, 1998, secured by equipment                                  22,382               15,157
                                                                                     ----------             ---------

                                                                                        474,016              937,697

                Less Current Installments                                               122,081              374,443
                                                                                      ---------             ---------

                                                                                       $351,935             $563,254
                                                                                       ========             =========
</TABLE>

    Aggregate  maturities of long-term  debt for the five years ending  December
31, 2001, are as follows:


                           1997                                 $374,443
                           1998                                  372,520
                           1999                                   83,615
                           2000                                   44,048
                           2001                                   21,476
                        Thereafter                                41,595
                                                                --------
                                                                $937,697
                                                                ========





                                      F-14


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 6:         LEASE OBLIGATIONS

    The Company leases  equipment  under  operating  leases that expire over the
    next three  years.  The  following  is a schedule by year of future  minimum
    rental  payments  required under these  operating  leases as of December 31,
    1996:

                        1997                             12,183
                        1998                             12,183
                        1999                              4,061
                                                       --------

                                                        $28,427
                                                       ========

    For the  years  ended  December  31,  1995  and  1996,  the  lease  payments
    aggregated $23,592 and $13,583, respectively.

NOTE 7:         MAJOR CUSTOMERS AND RISK CONCENTRATION

    In 1996, the Company derived  approximately 63% of its revenue from five (5)
    customers while in 1995, the Company derived  substantially all construction
    revenues from seven (7) customers.

    The Company grants credit,  generally without collateral,  to its customers,
    which are located primarily within the forty-eight contiguous United States.
    Management  believes that it's contract  acceptance,  billing and collection
    policies are adequate to minimize potential credit risks.

    At December 31, 1995 and 1996, the Company had deposits aggregating $510,096
    and $595,335,  respectively  with a bank.  Such deposits  exceed the Federal
    Deposit Insurance Corporation's insurance coverage.

    The carrying  amounts of notes  payable,  long term debt,  and capital lease
    obligations approximate their fair values.


NOTE 8:         CONTINGENCIES

    The Company has entered  into  guarantee  arrangements  on  contracts in the
    ordinary  course of business.  The  guarantee  period is generally one year.
    Cost of repairs on guarantee  arrangements  cannot be reasonably  estimated.
    Warranty costs incurred for the years ended December 31, 1995 and 1996, were
    $20,143 and $14,343, respectively.

    The  Company  is  a  defendant  in  various  legal  proceedings  arising  in
    connection with its business. In management's opinion the financial position
    of the Company will not be materially affected by the final outcome of these
    legal proceedings.



                                      F-15



<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 9:         TEMPORARY INVESTMENTS

    The Company  participates in trading publicly traded equity  securities.  At
    December 31, 1995 and 1996,  the  temporary  investment  securities  were as
    follows:
<TABLE>
<CAPTION>

                                                                        Gross             Gross
                                                                      Unrealized        Unrealized            Fair
           Balance Sheet Date                          Cost             Gains             Losses              Value
      --------------------------                    ----------      --------------     ------------          ---------
<S>                                                   <C>           <C>                   <C>                 <C>
        December 31, 1995                             $30,000       $          -          $ 5,817             $24,183

        December 31, 1996                             $21,217       $          -          $19,713             $ 1,504
</TABLE>

    The gross unrealized gains and losses,  set forth above,  have been included
    in the applicable statement of operations.

NOTE 10:        DISCONTINUED OPERATIONS

    In July 1996, Gibbs Construction,  Inc. sold substantially all of the assets
    of its subsidiary, Bronco Bowl Holding, Inc. to a third party resulting in a
    loss on sale of  discontinued  operations  of  $5,277,103  before income tax
    benefit  of  $1,794,000.  The  sale  included  assumptions  by the  buyer of
    $1,350,000 of debt and $1,300,000 of liability  relating to capital  leases.
    The major  stockholders  and the Company are the ultimate  guarantors on the
    liability related to the capital leases.  Loss from discontinued  operations
    aggregated $1,802,114 before income tax benefit of $616,000.


NOTE 11:        ACCRUED EXPENSES

    Accrued  Expenses  were  comprised of the following at December 31, 1995 and
1996:

                                                 1995                1996
                                             ----------            --------


        Sales Tax                            $1,388,878            $583,504
        Salaries                                 49,940              68,299
        State Taxes                             155,000              49,244
        Other                                    36,905              18,702
                                            -----------            --------

                                             $1,630,723            $719,749
                                            ===========            ========







                                      F-16


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 12:        INCOME TAXES

    Total  income tax  benefit  (expense)  is less than the amount  computed  by
    multiplying earnings before income taxes by the statutory Federal income tax
    rate. The reason for these differences and the related tax effects are:

                                                                   1996
                                                              -----------
            Tax (Expense) at Statutory Rates (34%)             $(285,390)
            Differences Resulting From Nondeductible
                Expenses and Other                                (7,610)
                                                              -----------
                TOTAL INCOME TAX (EXPENSE)                     $(293,000)
                                                              ===========

    The  Company's  total  deferred tax assets,  deferred tax  liabilities,  and
    deferred  tax asset  valuation  allowances  at  December  31,  1996,  are as
    follows:

            Total Deferred Tax Assets                        $ 2,410,000
            Less Valuation Allowance                                   -
                                                              ----------
                                                             $ 2,410,000
            Total Deferred Tax Liabilities                      (327,260)
                                                              ----------
                Net Deferred Tax Asset                       $ 2,082,740
                                                             ===========

    The deferred tax assets have been  recorded  based on a net  operating  loss
    carryforward from sale of discontinued operations and loss from discontinued
    operations.  Management does not deem a valuation  necessary due to expected
    profits in future years.

    Those amounts have been presented in the Company's  financial  statements as
follows:

                                                    Current         Noncurrent
                                                 -----------        -----------
            Deferred tax asset                     $510,000         $1,900,000
            Deferred tax liability                        -           (327,260)
                                                 -----------         ----------

                Net deferred tax asset             $510,000         $1,572,740
                                                   ========         ==========

    For book and tax return purposes,  the Company has approximately  $5,880,000
    and  $6,183,000,  respectively,  of net operating loss  carryforwards  as of
    December 31, 1996, which expire beginning 2011.







                                      F-17


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 13:        STOCK OPTIONS PLANS

    In September, 1995, the Company established the "1995 Incentive Stock Option
    Plan" (the "Plan") to encourage  ownership in the Company's  common stock by
    certain  officers,  directors,  employees  and  advisors.  The  Company  has
    reserved two hundred  thousand  (200,000)  authorized but unissued shares of
    common stock,  $.01 par value for issuance in connection  with its plan. The
    Plan will be administered  by the  Compensation  Committee  appointed by the
    Board of  Directors.  In making  any  determination  as to  persons  to whom
    Options  shall be  granted  and as to the  number of shares to be covered by
    such Options, the Compensation  Committee shall take into account the duties
    and responsibilities of the respective officers,  directors,  employees,  or
    advisors,  their current and potential  contributions  to the success of the
    Company  and such other  factors as the  Compensation  Committee  shall deem
    relevant  in  connection  with  accomplishing  the  purpose of the Plan.  No
    options have been granted under the Plan as of December 31, 1995.

    In September  1995, the Company  established  the "Outside  Directors  Stock
    Option  Plan" (the  "Directors  Plan")  which is to provide  incentives  for
    Directors  to promote  the  success of the  Company and to remain as Outside
    Directors.  The Company has reserved fifty thousand (50,000)  authorized but
    unissued  shares  of  common  stock,  $.01 par  value  for  purposes  of the
    Directors Plan. The Directors Plan will be administrated by the Stock Option
    Committee  ("Options  Committee")  appointed by the Board of  Directors.  In
    making any  determination  as to Outside  Directors to whom Options shall be
    granted,  and as to the number of shares to be covered by such Options,  the
    Options Committee shall take into account the duties and responsibilities of
    the respective Outside Directors,  their current and potential contributions
    to the success of the Company, the time devoted by such Outside Directors to
    matters  pertaining  to the Company,  and such other  factors as the Options
    Committee shall deem relevant in connection with  accomplishing  the purpose
    of the Plan.  No options have been granted  under the  Directors  Plan as of
    December 31, 1995.

    In September  1995,  the Company  entered into a warrant  agreement with its
    financial  consultant  which allows the purchase of 150,000  authorized  and
    unissued shares of common stock,  $.01 par value at a price equal to 120% of
    the public offering price, exercisable for a four year (4) period commencing
    one year from the effective date of the public offering.

    The Company has entered into the following financial consulting agreement:

        -   $12,000 annual fee, payable in monthly installments plus out of
            pocket expenses.

        -   Two year period from date of execution of agreement.

        -   Consulting services will include:

            a.  Shareholder relations, including preparation of annual reports
                and news releases.

            b.  Long-term financing planning.

            c.  Capital structure, acquisitions and expansion.

                                      F-18


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 13:        STOCK OPTIONS PLANS (Continued)

    The Company has  previously  issued  warrants to purchase  30,000  shares of
    common stock, exercisable prior to December 31, 2000 to Can Am Capital, LLC.
    The purchase price of these shares is $5.00.


NOTE 14:        PUBLIC OFFERING

    On January 12,  1996,  the Company  completed  its public  offering and sold
    1,000,000  shares of its common  stock.  Net  proceeds to the  Company  were
    $3,722,500.


NOTE 15:        BUSINESS SEGMENT REPORTING

    The Company has three (3) primary business segments which are:

        - Construction

        - Securities Trading

        - Entertainment Facility

    The following summarizes the operation by business segment:

                                                            Year Ended
                                                           December 31,
                                                  ------------------------------
                                                      1995              1996
                                                  ------------      ------------

        REVENUES
            Construction                          $33,336,120       $47,438,930
            Securities Trading                       $446,596          $(22,906)
            Entertainment Facility                          -                 -

        OPERATING PROFIT (LOSS)
            Construction                           $3,458,626        $2,490,249
            Securities Trading                       $446,596          $(22,906)
            Entertainment Facility                  $(584,173)                -

        CAPITAL EXPENDITURES
            Construction                             $303,244          $219,425
            Securities Trading                              -                 -
            Entertainment Facility                 $4,774,727        $1,983,864



                                      F-19


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                           DECEMBER 31, 1995 AND 1996


NOTE 15:        BUSINESS SEGMENT REPORTING (Continued)

        DEPRECIATION
            Construction                             $113,790          $147,534
            Securities Trading                              -                 -
            Entertainment Facility                          -          $373,222

        IDENTIFIABLE ASSETS
            Construction                           $4,989,837       $12,731,523
            Securities Trading                        $24,183            $1,503
            Entertainment Facility                 $6,402,089                 -


NOTE 16:        QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>

                                                        Income (Loss) Before            Net Income              Net Income
            1996                  Revenues                   Income Taxes                (Loss)                 Per Share
        ----------             -------------           ---------------------         -------------             ----------

<S>                            <C>                              <C>                    <C>                          <C>
        December               $ 15,532,920                     $  (149,455)           $  (99,652)                  $(.03)
        September                16,078,943                       1,201,638               787,689                     .23
        June                      9,022,323                         (31,052)              (19,288)                   (.01)
        March                     6,804,744                        (243,852)             (160,942)                   (.04)


            1995
        ----------

        December                $ 8,580,897                     $   407,597            $  407,597                    $.14
        September                10,002,025                       1,028,705             1,028,705                     .34
        June                      9,465,633                         846,596               846,596                     .28
        March                     5,287,565                         130,437               130,437                     .04
</TABLE>















                                      F-20


<PAGE>






                                   SIGNATURES

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

                                                   Gibbs Construction, Inc.

                                          By:      /s/ Danny R. Gibbs
                                                   -----------------------------
                                                   Danny R. Gibbs, President and
                                                   Chief Financial Officer

                                          Date:    March 31, 1997

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

Signature                                Title                 Date


/s/ Danny R. Gibbs                       Director              March  31, 1997
------------------------------------
Danny R. Gibbs


/s/ Tony G. Gibbs                        Director              March 31, 1997
------------------------------------
Tony G. Gibbs


                  *                      Director              March 31, 1997
------------------------------------
Dennis T. Mitchell


                                         Director              March 31, 1997
------------------------------------
Elliot R. Simon



* By:    Danny R. Gibbs
As Attorney-in-Fact


         /s/ Danny R. Gibbs
Danny R. Gibbs




                                       13

<PAGE>