UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                               Amendment No. 1 to

                                   FORM 10-K/A
    (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, 1997 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
of incorporation or organization)               Identification No.)


         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



         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 [X] No [ ]

         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 [ ] No [X]

         State issuer's revenues for its most recent fiscal year.  $47,993,287

         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
$7,500,000 As of March 20, 1998.

         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,  Barnes & Noble,  Office  Max  (BizMart),
Petstuff, Just for Feet, Organized Living, Copy Max and Petsmart.

         In July of 1996,  the  Company  sold the  assets  of 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,  and  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.  Because of operating  losses,  the Company sold
the  facility in 1996.  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 1997,  approximately 35% of the Company's revenues were derived
from  "ground up" work and 65% 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 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 1997, approximately
77% 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 1997, the Company was engaged in over 115 projects for approximately
35 different clients.  Four clients,  Office Max (20%),  Oshmans (12%), and Just
for Feet (15%), accounted for approximately 47% of the Company's revenues during
1997. 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 85% 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  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, 1998,  the field  operations of the Company were conducted
by 22 superintendents  and 60 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  20  persons,  including  7 project  managers,  6 project
assistants, 3 project accountants,  3 accounting clerks 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, 1998,  the Company owned 10 trucks and 5 trailers.  The
Company also owned one tractor,  one fork lift and six 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,  none of
which, in the opinion of management, is material.



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 12, 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 1997 and 1996 commencing January 12, 1996. as reported by NASDAQ:

<TABLE>
<CAPTION>

1997                                               Ask                            Bid

                                            High          Low              High          Low

<S>                                        <C>          <C>              <C>           <C>  
First Quarter                              1.875        1.1875           1.25          0.875
Second Quarter                             1.15625      0.59375          1.00          0.3125
Third Quarter                              1.5625       1.0625           1.34375       0.90625
Fourth Quarter                             1.6875       1.5              1.5           1.25



1996                                               Ask                            Bid

                                            High          Low              High          Low

First Quarter                              3.625        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            1.000         0.6875
</TABLE>



         As of March 15, 1998, 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>

                                    1997             1996              1995(1)          1994

<S>                              <C>             <C>                <C>           <C>        
Net sales                        $47,993,287     $47,438,930        $33,336,120   $21,010,296
Income (loss)
  from continuing operation          584,900         546,383          1,592,835        74,101
Income (loss) per share
  from continuing operation            $0.14           $0.14             $ 0.53         $0.02
Total Assets                     $12,617,916     $12,733,026        $11,291,394    $4,516,816
Long-term obligations                210,232         563,254            945,057       100,492
  Cash Dividends                           -               -                  -             -
</TABLE>

         (1) Prior to October 1, 1995,  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 1997 the Company returned to its core business,  commercial building
construction  for  national  retail  chains.  In 1996 the Company  had  incurred
substantial  losses in connection with its operation of the Bronco Bowl, a large
entertainment  complex  which the Company sold in 1996.  See "Item 7. Business -
General." In 1997 the Company's net profit from operations was $584,900.

Results of Operations - 1997 Compared with 1996

         Revenues  from  continuing   operations  between  1997  and  1996  were
essentially  flat,  $47,993,287 in 1997 compared to $47,438,930 in 1996. In 1996
the Company added a substantial  number of new clients of which one did not have
projects that provided the Company with an adequate  margin.  Early in 1997, the
Company stopped bidding on this client's projects. Throughout 1997, new business
development  replaced the revenues derived from this client but revenues did not
grow in 1997.

         Similarly,  gross profits for 1997 and 1996 were  essentially the same,
$2,439,086  or 5.1% of revenue in 1997 compared to $2,490,249 or 5.2% of revenue
in 1996. While gross profits were unchanged compared to the previous year, gross
profit margins improved in the latter half of 1997 as the Company ceased work on
the projects undertaken for the client described above.

         Operating income from continuing  operations increased by approximately
17% to $1,070,089 in 1997  compared to $915,833 in 1996.  The increase  resulted
from the reduction in General and Administrative  expenses to $1,368,957 in 1997
from $1,574,416 in 1996. General and  Administrative  Expenses were more in 1996
as the  Company  dealt  with its first  year  being  public  and  administrative
expenses associated with the sale of the Bronco Bowl.

         The increase in operating  profits were  partially  offset by increased
interest  expense  in 1997 and  approximately  $52,000  in losses  in  temporary
investments.  Interest  expense  increased  due  to  interest  on  a  sales  tax
obligation the Company owes to the State of Texas.

         The effect of these  increases  in other  expenses  was to reduce  1997
income before taxes to approximately that of 1996,  $891,100 in 1997 compared to
$839,383  in 1996,  and net income in 1997 to  $584,900  compared to $546,383 in
1996.

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  succeeded 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
management'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  significant  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 related 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 benefited from a $446,596 gain on temporary investments.

Liquidity and Capital Resources

         The Company  moved to increase  its working  capital in 1997 to recover
from the losses arising from the Bronco Bowl's  operations and sale,  increasing
at December 31, 1997,  its current  ratio to 1.0 from 0.94 at December 31, 1996.
In 1997,  the Company also reduced its aggregate  indebtedness,  other than that
owed to its  officers,  to  $741,001 at December  31,  1997 from  $1,087,697  at
December  31,  1996.  The Company  plans to  continue  to improve its  operating
capital position through operations during 1998.

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                                   41           President, Director
Tony Gibbs                                    37        Vice-President, Director
Dennis T. Mitchell                            48               Director
Phyllis Gibbs Wright                          46               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.

         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.

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, 1997, 1996, and 1995.

                           Summary Compensation Table
<TABLE>
<CAPTION>

Name and                                               Annual Compensation (1)            All Other
Principal Position                    Fiscal Year         Salary     Bonus (2)          Compensation
----------------------------------------------------------------------------------------------------
<S>                                       <C>             <C>          <C>                          <C>
Danny Gibbs                               1997          $133,000                                    -
 Chief Executive Officer                  1996           150,000                                    -
                                          1995            49,220       136,423                      -

Tony Gibbs                                1997          $123,000             -                      -
 Vice President                           1996           150,000                                    -
                                          1995            49,220       200,246

Phyllis Gibbs Wright                      1997           100,000
</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.

(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 it  subchapter  S
     status. As of December 31, 1997, $422,000 remained to be paid.

Executive Director Compensation

         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
are entitled to receive a fee for each Board meeting attended of $500. In

<PAGE>


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 two "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 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, 1998 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 $749,255 to be distributed to
Danny  Gibbs and Tony Gibbs for payment of income  taxes owed for the  Company's
operations. At December 31, 1997, $422,245 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.



<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 Consolidated 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

27.1     Financial Data Schedule



<PAGE>
                            GIBBS CONSTRUCTION, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997

                                      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, 1996 and 1997, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three year period ended December 31, 1997.
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, 1996 and 1997, and the results of its
operations and cash flows for each of the years in the three year period ended
December 31, 1997, in conformity with generally accepted accounting principles.




KILLMAN, MURRELL & COMPANY, P.C.
Dallas, Texas
February 27, 1998















                                       F-1


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1996 AND 1997


                                     ASSETS

<TABLE>
<CAPTION>

                                                                                            1996              1997
                                                                                      ---------------   ----------------

CURRENT ASSETS
<S>                                                                                     <C>               <C>         
    Cash                                                                                $    124,565      $    438,445
    Temporary Investments - Note 9                                                             1,503           142,533
    Accounts Receivable
        Trade                                                                              8,596,282         7,662,445
        Costs and Estimated Earnings in Excess of
            Billings on Uncompleted Contracts - Note 2                                       976,681         1,834,063
    Prepaid Expenses                                                                          19,376            82,309
    Deferred Tax Asset - Note 12                                                             510,000           350,000
                                                                                        ------------      ------------

            TOTAL CURRENT ASSETS                                                          10,228,407        10,509,795
                                                                                         -----------       -----------

LAND, BUILDINGS AND EQUIPMENT - Note 3                                                     1,084,380         1,105,556
        Less Accumulated Depreciation                                                       (387,744)         (542,015)
                                                                                        -------------     ------------

            NET LAND, BUILDINGS AND EQUIPMENT                                                696,636           563,541
                                                                                        ------------      ------------

OTHER ASSETS
    Other Assets                                                                               2,454                 -
    Deferred Registration Costs                                                                    -                 -
    Receivables From Affiliates and Employees                                                232,789           118,040
    Deferred Tax Asset - Note 12                                                           1,572,740         1,426,540
                                                                                        ------------      ------------

            TOTAL OTHER ASSETS                                                             1,807,983         1,544,580
                                                                                        ------------      ------------

            TOTAL ASSETS                                                                 $12,733,026       $12,617,916
                                                                                         ===========       ===========
</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, 1996 AND 1997


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                            1996             1997
                                                                                      ---------------   --------------

CURRENT LIABILITIES
<S>                                                                                     <C>               <C>         
    Notes Payable - Note 4                                                              $    150,000      $    150,000
    Current Installments of Long-Term Debt - Note 5                                          374,443           380,769
    Current Capital Lease Obligations - Note 10                                                    -                 -
    Accounts Payable                                                                       8,047,940         7,482,475
    Accrued Expenses - Note 11                                                               719,749           685,722
    Billings in Excess of Costs and Estimated Earnings on
        Uncompleted Contracts - Note 2                                                     1,142,164         1,372,152
    Payable to Stockholders                                                                  406,055           422,245
                                                                                        ------------      ------------

            TOTAL CURRENT LIABILITIES                                                     10,840,351        10,493,363

LONG-TERM DEBT - Excluding
    Current Installments - Note 5                                                            563,254           210,232

CAPITAL LEASE OBLIGATIONS Excluding Current
    Obligations - Note 10                                                                          -                 -
                                                                                     ---------------   ---------------

            TOTAL LIABILITIES                                                             11,403,605        10,703,595
                                                                                         -----------       -----------

CONTINGENCIES - Notes 6, 7, 8 and 10                                                               -                 -

STOCKHOLDERS' EQUITY  - Note 14
    Common Stock of $.01 Par Value.  Authorized 15,000,000
        Shares; Issued and Outstanding 4,000,000 Shares                                       40,000            40,000
    Additional Paid-In-Capital                                                             4,907,272         4,907,272
    Retained Earnings                                                                     (3,617,851)       (3,032,951)
                                                                                        ------------      ------------

            TOTAL STOCKHOLDERS' EQUITY                                                     1,329,421         1,914,321
                                                                                        ------------      ------------

            TOTAL LIABILITIES AND
                STOCKHOLDERS' EQUITY                                                     $12,733,026       $12,617,916
                                                                                         ===========       ===========
</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, 1996 AND 1997
<TABLE>
<CAPTION>

                                                                           1995            1996                1997
                                                                      -------------  ----------------     -------------

<S>                                                                    <C>               <C>               <C>        
CONSTRUCTION REVENUE                                                   $33,336,120       $47,438,930       $47,993,287

COST OF CONSTRUCTION                                                    29,877,494        44,948,681        45,554,241
                                                                       -----------       -----------       -----------

    NET CONSTRUCTION REVENUE                                             3,458,626         2,490,249         2,439,046
                                                                       -----------      ------------      ------------

BRONCO BOWL OPERATING EXPENSES                                            (584,173)                -                 -
                                                                      ------------   ---------------   ---------------

            GROSS PROFIT                                                 2,874,453         2,490,249         2,439,046

GENERAL AND ADMINISTRATIVE EXPENSES                                       (903,294)       (1,574,416)       (1,368,957)
                                                                      ------------      ------------      ------------

            INCOME BEFORE OTHER INCOME (EXPENSE)                         1,971,159           915,833         1,070,089

OTHER INCOME (EXPENSE)
    Gain (Loss) on Disposal of Equipment                                    (7,959)           (1,623)            9,140
    Gain (Loss) on Temporary Investments Transactions                      446,596           (22,906)          (62,157)
    Interest Income                                                          5,042            22,215            23,566
    Interest Expense                                                        (1,895)          (86,628)         (155,347)
    Other                                                                      392            12,492             5,809
                                                                     -------------     -------------     -------------

            INCOME BEFORE INCOME TAXES                                   2,413,335           839,383           891,100

INCOME TAX (EXPENSE) - Note 1 and Note 12                                        -          (293,000)         (306,200)
                                                                    --------------      ------------      ------------

INCOME FROM CONTINUING OPERATIONS                                        2,413,335           546,383           584,900

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)     $    584,900
                                                                       ===========      ============      ============

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

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                                                                     3,846,154         4,000,000
                                                                                        ============      ============

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, 1996, AND 1997


<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

    1997 Net Income                                     -            -                -          584,900          584,900
                                            -------------   ----------   --------------     ------------      -----------

BALANCE, DECEMBER 31, 1997                      4,000,000      $40,000       $4,907,272      $(3,032,951)      $1,914,321
                                                =========      =======       ==========      ============      ==========
</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, 1996, AND 1997
<TABLE>
<CAPTION>

                                                                           1995                1996              1997
                                                                      ------------       ----------------  ---------------

CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                    <C>                   <C>                <C>     
    Net Income (Loss)                                                  $2,413,335            $(4,122,834)       $584,900
    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         159,400
            Loss (Gain) on Disposal of Equipment                            7,959                  1,623          (9,140)
            Loss on Temporary Investments Transactions                   (446,596)                22,906          62,157
            Deferred Taxes                                                      -               (323,000)        306,200
    Changes in Current Assets and Liabilities
            (Increase) Decrease in Accounts Receivable                 (1,373,557)            (5,156,893)        933,837
            (Increase) in Inventories                                           -                 (8,259)              -
            (Increase) Decrease in Billings Related to Cost
                and Earnings on Uncompleted Contracts                    (350,342)                45,334        (627,394)
            (Increase) in Prepaid Expenses                                 (1,624)               (72,909)        (62,933)
            Increase (Decrease) in Accounts Payable                     3,147,314              2,787,248        (565,465)
            Increase (Decrease) in Accrued Expenses                       833,376               (246,900)        (34,027)
    Purchase of Temporary Investments                                  (3,682,996)               (20,177)       (302,327)
    Proceeds From Sale of Temporary Investments                         4,105,409                 19,951          99,140
                                                                       ----------          -------------       ---------

                NET CASH FLOW (USED) PROVIDED
                   BY OPERATING ACTIVITIES                              4,766,068             (3,070,051)        544,348
                                                                       ----------           ------------        --------

CASH FLOW FROM INVESTING ACTIVITIES
    Purchase of Equipment                                                (303,244)              (219,425)        (48,101)
    Bronco Bowl Renovations                                            (4,039,808)            (1,983,864)              -
    Proceeds from Sale of Equipment                                        67,183                  3,500          30,936
    (Increase) Decrease in Other Assets                                  (129,899)               (43,461)        117,203
    Cash Proceeds from Sale of Discontinued Operations                          -                712,456               -
                                                                    -------------          -------------     -----------

                NET CASH FLOW (USED) PROVIDED BY
                   INVESTING ACTIVITIES                                (4,405,768)            (1,530,794)        100,038
                                                                       ----------           ------------        --------

CASH FLOW FROM FINANCING ACTIVITIES
    Deferred Registration Costs                                          (292,627)              (107,358)              -
    Proceeds from Note Borrowings                                         418,128              1,444,334         212,277
    Repayments of Note Borrowings                                        (208,557)              (284,827)       (558,973)
    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)         16,190
                                                                   --------------           ------------       ---------

                NET CASH FLOW PROVIDED (USED)
                    BY FINANCING ACTIVITIES                              (414,409)             4,661,227        (330,506)
                                                                      -----------           ------------        --------
</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, 1996, AND 1997

<TABLE>
<CAPTION>

                                                                         1995                   1996             1997
                                                                    --------------         --------------   --------------

<S>                                                                   <C>                    <C>                <C>     
NET INCREASE (DECREASE) CASH                                          $   (54,109)           $    60,382        $313,880

CASH AT THE BEGINNING OF THE PERIOD                                       118,292                 64,183         124,565
                                                                      -----------            -----------        --------

CASH AT THE END OF THE PERIOD                                         $    64,183             $  124,565        $438,445
                                                                      ===========             ==========        ========

SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION
        Cash Paid During  the Year For:
            Interest Expense                                          $    48,096            $    63,425        $155,347
                                                                      ===========            ===========        ========
            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, 1996, AND 1997


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 inactive 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.

    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.






                                       F-8


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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, 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.

    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,
    1996, or 1997.

    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.

                                       F-9



<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Cash Flows

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

    New Accounting Standards

    Effective January 1, 1996, the Company adopted the provisions of the
    Financial Accounting Standards Board's Statement of Financial Accounting
    Standards No. 121, "Accounting for the Impairment of Long- Lived Assets and
    for Long-Lived Assets to Be Disposed Of" (Statement No. 121). Statement No.
    121 requires long-lived assets and certain identifiable intangibles to be
    reviewed for impairment whenever events or changes in circumstances indicate
    that the carrying amount of an asset may not be recoverable. When it is
    determined that an asset's estimated future net cash flows will not be
    sufficient to recover its carrying amount, an impairment loss must be
    recorded to reduce the carrying amount to its estimated fair value. The
    adoption of Statement No. 121 did not have a material effect on the
    Company's consolidated financial position or results of operations.

    In February 1997, the Financial Accounting Standards Board (FASB) issued
    Statement of Financial Accounting Standards No. 128, "Earnings per Share"
    (Statement No. 128), which is required to be adopted for financial
    statements issued for annual or interim periods after December 15, 1997. The
    adoption of Statement No. 128 requires a change in the presentation of
    earnings per share (EPS) to replace primary and fully diluted EPS with a
    presentation of basic and diluted EPS and to restate EPS for all periods
    presented. The adoption of Statement No. 128 did not have a material impact
    on the Company's consolidated financial statements.


















                                   (Continued)
                                      F-10



<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


NOTE 1:         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    In February 1997, the FASB also issued Statement of Financial Accounting
    Standards No. 129, "Disclosure of Information about Capital Structure"
    (Statement No. 129). Statement No. 129 establishes standards for disclosing
    information about entity's capital structure and applies to all entities.
    Statement No. 129 continues the previous requirements to disclose certain
    information about an entity's capital structure found in APB Opinions No.
    10, "Omnibus Opinion -- 1996", and 15, "Earnings per Share", and FASB
    Statement of Financial Accounting Standards No. 27, "Disclosure of Long-Term
    Obligations", for entities that were subject to the requirements of APB
    Opinions 10 and 15 and Statement No. 47 and consolidates them for ease of
    retrieval and for greater visibility to non-public entities. Statement No.
    129 is effective for financial statements for periods ending after December
    15, 1997. The adoption of Statement No. 129 did not have a material impact
    on the Company's consolidated financial statements.

    In June 1997, the FASB issued Statement of Financial Accounting Standards
    No. 130, "Reporting Comprehensive Income" (Statement No. 130). Statement No.
    130 establishes standards for reporting and display of comprehensive income
    and its components (revenues, expenses, gains and losses) in a full set of
    general purpose financial statements. Statement No. 130 requires that all
    items that are required to be recognized under accounting standards as
    components of comprehensive income be reported in a financial statement that
    is displayed with the same prominence as other financial statements. It does
    not require a specific format for that financial statement but requires that
    an entity display an amount representing total comprehensive income for the
    period in that financial statement. Statement No. 130 is effective for
    fiscal years beginning after December 15, 1997. Reclassification of
    financial statements for earlier periods provided for comparative purposes
    is required. Statement No. 130 will have no impact on the financial
    condition or results of operations of the Company, but will require changes
    in the Company's disclosure and presentation requirements.


NOTE 2:         COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

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

                                                                                               Years Ended December 31,
                                                                                    1996              1997
                                                                                ------------     ------------

<S>                                                                              <C>              <C>        
        Costs Incurred on Uncompleted Contracts                                  $17,451,069      $26,167,883
        Estimated Earnings                                                         1,612,101        2,245,274
                                                                                ------------     ------------

                                                                                  19,063,170       28,413,157

        Less Billings to Date                                                     19,228,653       27,951,246
                                                                                 -----------      -----------

                                                                                $   (165,483)    $    461,911
                                                                                ============     ============
</TABLE>



                                   (Continued)

                                      F-11


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


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

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

                                                                                              Years Ended December 31,
                                                                                    1996              1997
                                                                                 -----------       ----------
<S>                                                                              <C>               <C>       
    Costs and Estimated Earnings in Excess of Billings
        on Uncompleted Contracts                                                 $   976,681       $1,834,063

    Billings in Excess of Costs and Estimated Earnings
        on Uncompleted Contracts                                                  (1,142,164)      (1,372,152)
                                                                                 -----------       ----------

                                                                                 $  (165,483)      $  461,911
                                                                                 ===========       ==========
</TABLE>


NOTE 3:         LAND, BUILDINGS AND EQUIPMENT

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

                                                                                                     December 31,
                                                                                    1996             1997
                                                                                   ---------        ---------

<S>                                                                               <C>              <C>       
        Land                                                                      $   48,255       $   48,255
        Buildings and Improvements                                                   227,214          227,214
        Vehicles and Trailers                                                        464,866          503,499
        Construction Equipment                                                       235,978          213,489
        Office Equipment and Furniture                                               108,067          113,099
                                                                                   ---------        ---------

                                                                                   1,084,380        1,105,556

                Less Accumulated Depreciation                                       (387,744)        (542,015)
                                                                                   ---------        ---------

                   NET LAND, BUILDINGS AND
                       EQUIPMENT                                                   $ 696,636        $ 563,541
                                                                                   =========        =========
</TABLE>











                                      F-12


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


NOTE 4:         NOTES PAYABLE

    A summary of notes payable at December 31, 1996 and 1997, follows:

<TABLE>
<CAPTION>

                                                                                     1996             1997
                                                                                 ------------   --------------
<S>                                                                                 <C>               <C>     
        10% note payable to an individual, unsecured,
            due January 17, 1998                                                    $ 150,000         $150,000
                                                                                    =========         ========
</TABLE>


NOTE 5:         LONG-TERM DEBT

    A summary of long-term debt at December 31, 1996 and 1997, follows:
<TABLE>
<CAPTION>

                                                                                     1996             1997
                                                                                -------------   ---------------
<S>                                                                                  <C>                <C>   
        4.9% note payable to a credit corporation, payable in
            monthly installments of $546 including
            interest, due June 1, 1999, secured by equipment                         $ 14,898           $8,942

        9.5%note   payable   to  a  credit   corporation,   payable  in  monthly
            installments of $653 including interest, due August 4, 2001,
            secured by vehicle                                                         28,615           23,265

        9.65% note payable to a bank, payable in
            monthly installments of $807 including
            interest, due July 8, 1999, secured by vehicle                             22,057           14,164

        9.9% note payable to a credit corporation, payable
            in installments of $469 including interest, due
            January 2, 2001, secured by vehicle                                        18,579           14,712

        10.0%  note  payable  to  a  credit  corporation,   payable  in  monthly
            installments of $533 including interest, due August 30, 1999,
            secured by equipment                                                       15,709           10,817
</TABLE>









                                   (Continued)
                                      F-13


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


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

                                                                                     1996             1997
                                                                                   -----------     ---------
<S>                                                                                  <C>              <C>     
        9.5% note payable to a credit corporation, payable in
            monthly installments of $628 including
            interest, due August 4, 1999, secured by vehicle                         $ 31,632         $ 26,898

        9.5%note   payable   to  a  credit   corporation,   payable  in  monthly
            installments of $339 including interest, due April 16, 2002,
            secured by vehicle                                                              -           14,191

        6.9%note   payable   to  a  credit   corporation,   payable  in  monthly
            installments of $617 including interest, due March 15, 1997,
            secured by equipment                                                        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                                                     26,155            5,195

        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                       119,596          102,696

        9.5% note payable to a credit corporation, payable
            in monthly installments of $339 including interest,
            due April 16, 2002, secured by vehicle                                          -           14,162

        9.5% note payable to a credit corporation, payable
            in monthly installments of $633 including interest,
            due June 26, 2000, secured by vehicle                                      22,038           16,485

        9.5% note payable to a credit corporation, payable
            in monthly installments of $648 including interest,
            due October 20, 2000, secured by vehicle                                   24,175           18,453

        9.55% note payable to a bank,  payable in monthly  installments  of $428
            including interest, due August 25, 1999, secured
            by vehicle                                                                 11,365            8,236
</TABLE>


                                   (Continued)
                                      F-14


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997

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

                                                                                     1996             1997
                                                                                    ---------        ---------
<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                                 $ 14,768        $   9,318

        9.95% note payable to a credit corporation, payable
            in monthly installments of $643 including interest,
            due December 1, 2000, secured by vehicle                                   24,504           18,981

        12% note payable to the Texas State Treasurer, payable
            in monthly installments of $25,000 including
            interest, due December 24, 1998                                           527,196          276,996

        10.0% note payable to a credit corporation, payable in
            monthly installments of $1,010 including interest,
            due July 15, 1998, secured by equipment                                    17,609            3,451

        10.0% note payable to a credit corporation, payable
            in monthly installments of $762 including interest,
            due September 1, 1998, secured by equipment                                15,157            4,039
                                                                                    ---------        ---------

                                                                                      937,697          591,001

                Less Current Installments                                             374,443          380,769
                                                                                     --------         --------

                                                                                     $563,254         $210,232
</TABLE>

    Aggregate  maturities of long-term  debt for the five years ending  December
31, 2002, are as follows:

                           1998                              $380,769
                           1999                                90,170
                           2000                                50,343
                           2001                                27,184
                           2002                                17,840
                         Thereafter                            24,695
                                                             $591,001









                                      F-15


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


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,
    1997:

                           1998                        $11,184
                           1999                          8,364
                           2000                            289
                                                      --------
                                                       $19,837

    For the years ended December 31, 1995, 1996, and 1997, the lease payments
    aggregated $23,592, $13,326, and 14,984, respectively.

NOTE 7:         MAJOR CUSTOMERS AND RISK CONCENTRATION

    In 1997, the Company derived approximately 59% of its revenue from six (6)
    customers, in 1996, the Company derived approximately 63% of its revenue
    from five (5) customers; and 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, 1996 and 1997, the Company had deposits aggregating $595,335
    and $1,275,602, respectively with a bank. Such deposits exceed the Federal
    Deposit Insurance Corporation's insurance coverage.

    The carrying amounts of accounts receivable, accounts payable, notes
    payable, and long term debt 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, 1996, and
    1997, were $20,143, $14,343, and $31,304, 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-16


<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


NOTE 9:         TEMPORARY INVESTMENTS

    The Company participates in trading publicly traded equity securities. At
    December 31, 1996 and 1997, 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, 1996                              $21,217          $      -           $19,713             $ 1,504

        December 31, 1997                             $214,322            $1,415           $73,204            $142,533
</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, 1996 and
    1997:
<TABLE>
<CAPTION>

                                                                                1996                 1997
                                                                            ------------          -----------

<S>                                                                             <C>                 <C>     
        Sales Tax                                                               $583,504            $609,675
        Salaries                                                                  68,299              33,451
        State Taxes                                                               49,244              40,000
        Other                                                                     18,702               2,596
                                                                                --------           ---------

                                                                                $719,749            $685,722
                                                                                ========            ========
</TABLE>






                                      F-17



<PAGE>



                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


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:

<TABLE>
<CAPTION>

                                                             1995                1996                 1997
                                                         ------------        -----------           -------
                                   (Pro forma)
<S>                                                         <C>               <C>                 <C>       
            Tax (Expense) at Statutory Rates (34%)          $820,500          $(285,390)          $(302,974)
            Differences Resulting From Nondeductible
                Expenses and Other                                 -             (7,610)             (3,226)
                                                         -----------         ----------          ----------

                TOTAL INCOME TAX (EXPENSE)                  $820,500          $(293,000)          $(306,200)
                                                            ========          =========           =========
</TABLE>

    The Company's total deferred tax assets, deferred tax liabilities, and
    deferred tax asset valuation allowances at December 31, 1997, are as
    follows:
<TABLE>
<CAPTION>

                                                                               1996                 1997
                                                                          --------------       ---------
<S>                                                                          <C>                 <C>       
            Total Deferred Tax Assets                                        $2,410,000          $1,817,176
            Less Valuation Allowance                                                  -                   -
                                                                          -------------      --------------

                                                                              2,410,000           1,817,176
            Total Deferred Tax Liabilities                                     (327,200)             40,636
                                                                             ----------         -----------

                Net Deferred Tax Asset                                       $2,082,740          $1,776,540
                                                                             ==========          ==========
</TABLE>

    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:
<TABLE>
<CAPTION>

                                                                                 1996                              1997
                                                                  ---------------------------------  ------------------
                                                         Current         Noncurrent         Current         Noncurrent

<S>                                                      <C>             <C>                <C>             <C>       
            Deferred tax asset                           $510,000        $1,572,740         $350,000        $1,467,176
            Deferred tax liability                              -          (327,260)               -           (40,636)
                                                      -----------       -----------      -----------        ----------

                Net deferred tax asset                   $510,000        $1,245,480         $350,000        $1,426,540
                                                         ========        ==========         ========        ==========
</TABLE>


    For book and tax return purposes, the Company has approximately $4,640,000
    and $5,383,000, respectively, of net operating loss carryforwards as of
    December 31, 1997, which expire beginning 2011.






                                      F-18

<PAGE>

                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


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, 1997.

    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, 1997.

    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.

                                   (Continued)
                                      F-19

<PAGE>


                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


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:
<TABLE>
<CAPTION>

                                                                                    Year Ended
                                                                                   December 31,
                                                                   1995             1996               1997
                                                               ------------    --------------      --------

        REVENUES
<S>                                                            <C>               <C>              <C>        
            Construction                                       $33,336,120       $47,438,930      $47,993,287
            Securities Trading                                    $446,596          $(22,906)        $(62,157)

        OPERATING PROFIT (LOSS)
            Construction                                        $3,458,626        $2,490,249       $2,439,046
            Securities Trading                                    $446,596          $(22,906)        $(62,157)
            Entertainment Facility                               $(584,173)                -                -

        CAPITAL EXPENDITURES
            Construction                                          $303,244          $219,425          $48,101
            Entertainment Facility                              $4,774,727        $1,983,864                -
</TABLE>





                                   (Continued)
                                      F-20

<PAGE>
                     GIBBS CONSTRUCTION, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1996, AND 1997


NOTE 15:        BUSINESS SEGMENT REPORTING (Continued)
<TABLE>
<CAPTION>

                                                                                             Year Ended
                                                                                            December 31,
                                                                  1995              1996               1997
                                                              -------------    --------------      --------
<S>                                                               <C>               <C>              <C>     
        DEPRECIATION
            Construction                                          $113,790          $147,534         $159,400
            Entertainment Facility                                       -          $373,222                -

        IDENTIFIABLE ASSETS
            Construction                                        $4,989,837       $12,731,523      $12,475,383
            Securities Trading                                      24,183            $1,503         $142,533
            Entertainment Facility                              $6,402,089          $      -      $         -
</TABLE>


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

                                                        Income (Loss) Before            Net Income              Net Income
            1997                  Revenues                   Income Taxes                (Loss)                 Per Share
        ----------             -------------           ---------------------         -------------             ----------

<S>                             <C>                                <C>                   <C>                         <C> 
        December                $17,572,158                        $474,566              $308,366                    $.08
        September                12,353,343                         458,709               304,209                     .07
        June                      9,373,868                          95,036                63,636                     .01
        March                     8,693,918                        (137,211)              (91,311)                   (.02)

           1996

        December               $ 15,532,920                     $  (149,455)           $  (99,652)                  $(.03)
        September                16,078,943                       1,201,638               787,689                     .22
        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-21


<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:
                                            Danny R. Gibbs, President and
                                            Chief Financial Officer

                                            Date:    June 9, 1998

         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


Danny R. Gibbs            Director                           June 9, 1998


Tony G. Gibbs             Director                           June 9, 1998



Dennis T. Mitchell        Director                           June 9, 1998



L.W. Reynolds             Director                           June 9, 1998