SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                Amendment No. 2
                                   FORM 10-K/A
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (Fee Required) for the fiscal year ended June 30, 1996 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No Fee Required) for the transition period from to .

                                        Commission file number:   333-3613

                        AMERTRANZ WORLDWIDE HOLDING CORP.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                          11-3309110
---------------------------------                        --------------------
(State or other jurisdiction                             (I.R.S. Employer
of incorporation or organization)                        Identification No.)

2001 Marcus Avenue, Lake Success, New York                        11042
------------------------------------------                        -----
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code           (516) 326-9000
                                                             --------------
                            
           Securities registered pursuant to Section 12(b) of the Act:

    Title of Class                    Name of Each Exchange on Which Registered
         None                                           None
         ----                                           ----

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

                                 Title of Class
                                 --------------
                          Common Stock, $.01 par value
                    Redeemable Common Stock Purchase Warrants

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive  proxy or information  statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of September 17, 1996 was $16,776,095.

The number of shares of common stock  outstanding  as of September  17, 1996 was
5,926,504.

                       DOCUMENTS INCORPORATED BY REFERENCE
<PAGE>

To the extent specified,  Part III of this Form 10-K incorporates information by
reference to the  Registrant's  definitive  proxy  statement for its 1996 Annual
Meeting of Shareholders (to be filed).


The  Registrant  hereby  amends  the  following  items,   financial  statements,
exhibits,  or other  portions  of its Annual  Report on Form 10-K for the fiscal
year ended June 30, 1996,  which was filed with the  Commission on September 27,
1996, as amended by Amendment No. 1, filed January 2, 1997:

     Part  II,  Item 7 of the  Annual  Report  on Form  10-K is  amended  in its
     entirety as attached hereto.

     Part IV,  Item 14  (a)(1)  and (2) of the  Annual  Report  on Form  10-K is
     amended in its entirety as attached hereto.


                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  Amendment  to be signed on its behalf by the
undersigned, thereto duly authorized.


                                            AMERTRANZ WORLDWIDE HOLDING CORP.





Date:  August 12, 1997                 By:      /s/Stuart Hettleman
                                            ---------------------------------
                                            Stuart Hettleman
                                            President

<PAGE>

       


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         ---------------------------------------------------------------
         RESULTS OF OPERATIONS
         ---------------------

Overview
--------

         The Company was  incorporated  in January  1996 to continue the freight
forwarding business of TIA and CFS and acquire Amertranz.  The Company generated
operating  revenues  of $27.4  million and had net losses  before  taxes of $6.4
million for the period  January 1, 1996 through June 30, 1996. The loss included
a one time charge of $3.3 million for debt placement  expense in connection with
financings  prior to the Company's  initial public offering which closed on July
3, 1996.  The freight  forwarding  business of TIA and CFS  generated  operating
revenues of $38.6  million and $38.2  million and had net income before taxes of
$2.7  million and $2.4  million for the years ended  December 31, 1994 and 1995,
respectively.

         Historically,  the  CAS  business  has  derived  substantial  operating
revenues  from  companies  engaging  in  business in Puerto Rico who were taking
advantage of  significant  United States  income tax benefits  available to such
companies.  In 1993,  Congress  reduced the tax benefits  available to companies
doing business in Puerto Rico, and  legislation  enacted into law in August 1996
contains a 10-year phaseout of these tax benefits.  This legislation,  or in the
event that there is any further  modification to these tax benefits available to
United States  companies  doing  business in Puerto Rico,  could result in these
companies  reducing  the level of the  business  they have been  doing in Puerto
Rico,  which could have a material  adverse  effect on the  Company's  operating
results.

         While  the  freight  forwarding  business  of  TIA  and  CFS  has  been
historically  profitable,  Amertranz has incurred  losses in the last two years.
Since the  formation of the Company in February,  1996,  in the  combination  of
Amertranz and the freight  forwarding  business of TIA and CFS,  management  has
attracted  and hired  additional  experienced  sales  personnel for the domestic
freight  forwarding  operation and thereby increased its sales team by more than
30%. In addition,  management has begun maximizing the synergies  created by the
combination of its Amertranz and CAS businesses by (i) exploiting  cross-selling
opportunities,   and  (ii)  taking   advantage   of   underutilized   operations
infrastructure and purchased freight space.

Results of Operations
---------------------

   
Six Months Ended June 30, 1995 and 1996

         The Company began its existence as the holding company for the combined
operations  of Amertranz and the freight  forwarding  business of TIA and CFS on
February  8, 1996.  From and after  February  8, 1996,  the  freight  forwarding
business of TIA and CFS was operated through the Company's CAS subsidiary. Prior
to such date, the operations of Amertranz and the freight forwarding business of
TIA and CFS were independent of each other. The following  discussion relates to
the combined results of the Company for the period February 8, 1996 through June
30, 1996 and only the operations of the freight  forwarding  business of TIA and
CFS for the period January 1, 1996 through  February 7, 1996, and the results of
the freight  forwarding  business of TIA and CFS for the period  January 1, 1995
through June 30, 1995.

                                           Six Months Ended
                                           ----------------
                                     June 30, 1996      June 30, 1995
                                     -------------      -------------
                                                    (Pro forma/Unaudited)



Operating revenue                    $27,445,583        $17,733,971
Cost of transportation                20,961,019         14,432,953
Gross profit                           6,484,564          3,301,018
Selling, general and
  adminstrative expenses               8,772,226          2,260,057
                                       ---------          ---------
Net income (loss) before taxes       ($6,396,524)        $  287,450
                                     ===========         ==========


                                       2
<PAGE>

         Operating  Revenue.  Operating  revenue  increased by $9.7 million,  or
54.8%,  from $17.7 million for the period January 1, 1995 through June 30, 1995,
to $27.4  million for the period  January 1, 1996 through  June 30,  1996.  This
increase resuled almost entirely from the Company's acquisition of its Amertranz
subsidiary on February 8, 1996.

         Cost of  Transportation.  Cost of transportation  decreased to 76.4% of
operating  revenues for the period  January 1, 1996 through June 30, 1996,  from
81.4% of  operating  revenues  for the period  January 1, 1995  through June 30,
1995. Of this 5.0% change in cost of transportation as a percentage of operating
revenues  between the periods,  approximately 1% resulted from an improvement in
the operations of the Company's CAS  subsidiary.  The balance of the improvement
resulted from the Company's  Amertranz  subsidiary's  historically lower cost of
transportation  as a percentage  of sales which were included in the 1996 period
but not in the 1995 period.

         Gross Profit.  As a result of the factors described in the two previous
paragraphs,  gross profit for the period  January 1, 1996 through June 30, 1996,
increased to 23.6% of operating revenues from 18.6% of operating revenue for the
period January 1, 1995 through June 30, 1995.

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses increased to 32.0% of operating revenues for the period
January 1, 1996 through June 30, 1996, from 12.7% of operating  revenues for the
period January 1, 1995 through June 30, 1995.  This increase is almost  entirely
attributable  to the  Company's  acquisition  of  its  Amertranz  subsidiary  on
February 8, 1996 and that subsidiary's  historically higher selling, general and
administrative expenses as a percentage of its sales.
    

Years Ended December 31, 1994 and 1995

         Operating Revenue. Operating revenue decreased 1.0% to $38.2 million in
1995 from $38.6 million in 1994. While TIA and CFS experienced  volume increases
from  most  major  customers,   there  were  several  major  accounts  that  had
significant decreases in revenue in 1995 compared to 1994 revenue.  Sales to two
major customers  decreased by an aggregate of approximately $2.0 million in 1995
compared  to  1994,  which  offset  the  gain  in  revenue  by  other  accounts.
Furthermore,  several major  accounts had large volume  increases in 1994 due to
unusual  situations  which  did  not  recur  in  1995.  As an  example,  a major
pharmaceutical   firm  instituted  a  recall  which   necessitated   substantial
additional  air freight  needs over normal  business  operations.  Also,  due to
market  conditions,  several  major retail  suppliers  had to use air freight in
substantially  greater  volume  than  those  used in normal  market  conditions.
Operating  revenue in 1995 show an annual  compounded growth rate of 8% per year
for the two years of 1994 and 1995.

         Cost of  Transportation.  Cost of transportation  increased to 79.3% of
1995 operating revenue from 78.4% of 1994 operating revenue.

         Gross  Profit.  As a result of the factors  described in the  preceding
paragraphs, gross profit for the year ended December 31, 1995 decreased to 20.7%
from 21.6% of operating revenue in the comparable period of 1994.

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses decreased slightly to 11.8% of operating revenue in the
year ended  December 31, 1995 from 12.0% of operating  revenue in the comparable
period in 1994.

Years Ended December 31, 1993 and 1994

         Operating  Revenue.  Operating revenue increased 18.1% to $38.6 million
in 1994 from $32.7 million in 1993. Most major customers had volume increases in
1994, including several major accounts that had unusually large volume increases
in 1994 due to non-recurring situations.

                                       3

<PAGE>


         Cost of  Transportation.  Cost of transportation  increased to 78.4% of
1994  operating  revenue from 74.2% of 1993  operating  revenue.  This  increase
occurred because TIA and CFS chartered a fully-staffed  and maintained  aircraft
during the last ten months of 1994,  while TIA operated a leased aircraft during
1993.  This  increase  is more than  offset  by the  corresponding  decrease  in
selling, general and administrative expense.

         Gross  Profit.  As a result of the factors  described in the  preceding
paragraphs, gross profit for the year ended December 31, 1994 decreased to 21.6%
from 25.8% of operating revenue for the comparable period in 1993.

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses  decreased  to 12.0% of  operating  revenue in the year
ended December 31, 1994 from 19.9% of operating revenue in the comparable period
in 1993.  This decrease  resulted  from the cessation of TIA's  operation of its
leased aircraft and the elimination of the expenses associated therewith.

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

   
         The  Company  used  approximately  $6.6  million  of cash in  operating
activities for the period  January 1, 1996 through June 30, 1996.  This cash was
provided primarily by cash on hand of approximately $4.9 million and an increase
in accounts payable and accrued expenses of approximately $1.1 million. The cash
used in operating  activities  was  primarily  attributable  to increases in the
Company's  accounts  receivable  of  approximately  $3.6  million,  the net loss
incurred by the Company of approximately $6.4 million during such period, and an
increase in other assets of $1.2 million. The increase in accounts receivable is
due  principally  to an increase in the trade  receivables of the CAS operations
from a zero balance at the beginning of the period to approximately $4.5 million
at the  end of the  period.  Cash  used in  investing  activities  was  $400,000
primarily  attributable to a cash advance  evidenced by a note  receiable.  Cash
provided by financing activities was $2.5 million consisting principally of $5.2
million  proceeds from  short-term  borrowings and $4.0 million from a revolving
loan from an  affilitate,  offset by $4.0 million in  repayments  of  short-term
borrowings and $2.6 million distributed to TIA.
    

         Prior to the combination  with the freight  forwarding  business of TIA
and CFS on  February 7, 1996 and the initial  public  offering of the  Company's
securities on June 28, 1996 ("IPO"),  Amertranz'  internally generated cash flow
was not  sufficient to finance trade  receivables  and business  expansion or to
support  operations.  Amertranz met its capital  requirements prior to that time
primarily  through:  (i) the  private  sales  of  $350,000  of  equity  and debt
securities between November, 1995 and January, 1996 ("Interim Financings"); (ii)
the private  sales of $3.975  million of equity and debt  securities in February
and May, 1996 ("Bridge Financings");  (iii) borrowings of $800,000 from TIA (see
below);  (iv) borrowings under an accounts  receivable  financing  facility (see
below);  and (v) other private  financings  which were  converted into equity as
part of the February 7, 1996 combination.  In addition CAS has a credit facility
of up to $4 million from TIA and CFS under a revolving credit loan (see below).

         Of the  $12,414,000  net proceeds to the Company on its initial  public
offering on June 28, 1996 (which  closed on July 3, 1996),  the Company  applied
$4,137,000 to repay the outstanding principal and interest balance on the Bridge
Financings,  $373,000 to repay the outstanding principal and interest balance on
the Interim  Financing,  and $2 million as partial  payment on the Exchange Note
(see below). The $5,904,000 balance of proceeds from the IPO was retained by the
Company for working capital and general corporate purposes.

         Fidelity  Facility.  In March 1995,  Amertranz entered into an accounts
receivable  Purchase and Sale  Agreement  ("Fidelity  Facility")  with  Fidelity
Funding of California,  Inc. ("Fidelity"),  as amended July 5, 1995, October 25,
1995, and February 7, 1996. The Fidelity  Facility  expires in March 1997. Under
the agreement,  as amended,  the Company can borrow the lesser of $3.125 million
or 75%  of  eligible  accounts  receivable.  Amertranz's  borrowings  under  the
Fidelity  Facility are secured by a first lien on all of Amertranz's  assets and
are  guaranteed by the Company.  At June 30, 1996,  the Company had  outstanding
borrowings  of  approximately  $1,641,347  under  the  Fidelity  Facility  which
represented the full amount available thereunder.

                                       4

<PAGE>

         TIA Loan. In October 1995,  Amertranz obtained a $500,000  subordinated
secured  loan from TIA,  which was  increased  to $800,000 in January 1996 ("TIA
Loan").  The TIA  Loan  bears  interest  at the  rate of 12%  per  annum  and is
repayable in 12 equal,  consecutive  monthly  payments of principal and interest
commencing August 2, 1996. However, TIA has agreed to defer repayment of the TIA
Loan as described  below. The TIA Loan is secured by a lien on all of the assets
of Amertranz  subordinated  only to the lien  granted to Fidelity in  connection
with the Fidelity Facility.

         Revolver Note. As part of the  combination of Amertranz and the freight
forwarding  business of TIA and CFS,  TIA and CFS agreed to advance to CAS, on a
revolving loan basis, the net collections of the accounts  receivable of TIA and
CFS as of February 7, 1996 and  additional  amounts in the discretion of TIA and
CFS, up to an aggregate maximum of $4,000,000  outstanding at any time, pursuant
to the terms of a Revolving  Credit  Promissory  Note ("Revolver  Note").  Funds
advanced  under the  Revolver  Note  with  respect  to the TIA and CFS  accounts
receivable do not bear interest prior to maturity.  Discretionary advances under
the Revolver  Note bear  interest at the greater of (i) 1% per month,  or (ii) a
fluctuating  rate equal to the prime rate of interest as  published  in The Wall
Street  Journal,  plus 4%. Advances under the Revolver Note may be used only for
ordinary,  current  operating  expenses  of CAS  unless  TIA and CFS  consent to
another use of such funds.  The Revolver Note matured on July 6, 1996;  however,
TIA and CFS have  agreed to defer  payment  of the  Revolver  Note as  described
below. All obligations under the Revolver Note are guaranteed by the Company and
Amertranz.  All obligations  under the Revolver Note and the guarantees  thereof
are secured by a first priority lien on all of the issued and outstanding shares
of CAS, a first priority lien on all of the assets of the Company and CAS, and a
lien on the accounts  receivable  of  Amertranz,  subordinate  only to the first
priority lien granted to Fidelity in connection  with the Fidelity  Facility and
the second  position lien granted to TIA in connection  with the TIA Loan. As of
June  30,  1996,  the  Company  had  outstanding   borrowings  of  approximately
$3,954,989 under the Revolver Note.

         Exchange Note. As part of the  combination of Amertranz and the freight
forwarding  business  of TIA  and  CFS,  the  Company  issued  to TIA  and CFS a
promissory note in the original  principal  amount of  $10,000,000,  which bears
interest at the rate of 8% per annum  ("Exchange  Note").  The Exchange  Note is
payable in five  consecutive  monthly  payments of principal and interest in the
amount of $80,000  each,  commencing  March 1, 1996,  and,  thereafter,  monthly
payments of  principal  and  interest  in the amount of $166,667  each until the
Exchange  Note has been paid in full.  Prior to the IPO,  TIA and CFS  exchanged
$2,000,000  principal  amount of the  Exchange  Note for  200,000  shares of the
Company's Class A Preferred  Stock,  and of the proceeds of the IPO,  $2,000,000
was used to repay a portion  of the  Exchange  Note.  As of June 30,  1996,  the
outstanding  principal  balance under the Exchange Note was $8 million.  TIA and
CFS have  agreed  to defer the  balance  of  payments  on the  Exchange  Note as
described below.

         Forbearance  by  TIA  and  CFS.  Under  the  terms  of  the  respective
obligations  described  above,  payments on the TIA Loan would have commenced on
July 28, 1996,  payments on the  Exchange  Note were due monthly  commencing  on
March 1, 1996, and the full outstanding  balance of the Revolver Note was due on
July 6, 1996.  TIA and CFS have agreed to defer each payment on the TIA Loan and
the Exchange Note to the extent the  aggregate of the payments  thereon then due
exceeds 80% of the Company's earnings before interest,  taxes,  depreciation and
amortization  ('EBITDA')  for the  month  in  respect  of which  such  aggregate
payments are due. During any deferral  period,  interest will continue to accrue
on these  obligations in accordance with their respective  terms.  Such deferral
will continue until the earlier of (i) the date after which the Company's EBITDA
exceeds  the sum of  $600,000  for any  consecutive  two-month  period,  or (ii)
November  1, 1996.  Furthermore,  TIA and CFS have  agreed  that they will defer
collection  of amounts  due under the  Revolver  Note  until the  earlier of (i)
refinancing  of  Amertranz's  and  CAS's  accounts  receivable  working  capital
facilities, or (ii) December 31, 1996. TIA and CFS have further agreed that they
will not take any action to foreclose on their security  interests in the assets
of the Company,  Amertranz  or CAS until June 27, 1997 unless any other  secured
creditor of the  Company,  Amertranz  or CAS takes  action to  foreclose  on its
security interest or any creditor obtains a final judgement against the Company,
Amertranz or CAS in an amount of $50,000 or more which judgment is not stayed.


                                       5

<PAGE>

         Working Capital Requirements. The Company believes that funds raised in
the IPO, cash flows  generated  from  operations  and available  funds under its
existing  loan  facilities  will be  sufficient  to finance its  operations  and
obligations for the foreseeable future.

Inflation
---------

         The Company  does not believe  that the  relatively  moderate  rates of
inflation in the United States in recent years have had a significant  effect on
its operations.



                                        6
<PAGE>

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8 - K
          -----------------------------------------------------------------


(a)  1.  Financial Statements
         --------------------

<TABLE>
<CAPTION>
AMERTRANZ WORLDWIDE HOLDING CORP.                                                                         PAGE
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                                                                          ----
Report of Independent Public Accountants                                                                  F-1
Consolidated Balance Sheet as of June 30, 1996                                                            F-2
Consolidated Statement of Operations for the Six Months Ended June 30, 1996                               F-3
Consolidated Statement of Stockholders' Deficit for the Six Month Period Ended June 30, 1996              F-4
Consolidated Statement of Cash Flows for the Six Months Ended June 30, 1996                               F-5
Notes to Consolidated Financial Statements                                                                F-6

AMERTRANZ WORLDWIDE HOLDING CORP. (FORMERLY THE FREIGHT FORWARDING
BUSINESS OF TIA AND CFS)
Independent Auditors' Report                                                                              F-12
Balance Sheets as of December 31, 1994 and 1995                                                           F-13
Statements of Operations and Changes in Accumulated Deficit for the Years
   December 31, 1993, 1994 and 1995                                                                       F-14
Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and 1995                             F-15
Notes to Financial Statements                                                                             F-16

(a)  2.  Financial Statement Schedules
         -----------------------------

Report of Independent Public Accountants on Schedule                                                      S-1
Schedule II - Schedule of Valuation and Qualifying Accounts                                               S-2
</TABLE>

All  other  schedules  are  omitted  because  they are not  applicable,  are not
required,  or because the required  information is included in the  consolidated
financial statements or notes thereto.



                                        7

<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Amertranz Worldwide Holding Corp.:

         We  have  audited  the  accompanying   consolidated  balance  sheet  of
Amertranz Worldwide Holding Corp., a Delaware  corporation,  as of June 30, 1996
and the related consolidated statement of operations,  shareholders' deficit and
cash flows for the six month period then ended.  These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects,  the financial position of Amertranz Worldwide
Holding  Corp.  as of June 30, 1996 and the results of its  operations  and cash
flows for the six month period then ended in conformity with generally  accepted
accounting principles.


                                                  ARTHUR ANDERSEN LLP



New York, New York
August 28, 1996



                                       F-1

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>

                                                                                         June 30, 1996       June 30, 1996
                                                                                         -------------       -------------
                                                                                                               PROFORMA
                                         ASSETS                                                               (Unaudited)
<S>     <C>    <C>    <C>    <C>    <C>    <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                            $         377,490   $      6,280,562
  Accounts receivable, net of allowance for doubtful accounts of $371,322                      7,598,390          7,598,390
  Prepaid expenses and other current assets                                                      557,192            557,192
                                                                                       -----------------   ----------------
                  Total current assets                                                         8,533,072         14,436,144


PROPERTY AND EQUIPMENT, net (Note 3)                                                             829,442            829,442
DEBT ISSUANCE COST, net of accumulated amortization of $3,264,232                                103,466              -
OTHER ASSETS                                                                                   1,373,314            304,233
GOODWILL, net of accumulated amortization of $191,460 (Notes 2 and 4)                         11,900,735         11,900,735
                                                                                       -----------------     --------------


                  Total assets                                                         $      22,740,029     $   27,470,554
                                                                                       =================     ==============

              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable                                                                     $       7,699,721     $    7,699,721
  Accrued expenses                                                                             2,028,274          1,842,229
  Note payable to affiliate                                                                    3,954,989          3,954,989
  Current portion of long-term debt (Note 5)                                                   8,766,347          3,961,347
  Lease obligation--current portion (Note 7)                                                      21,034             21,034
                                                                                       -----------------   ----------------
              Total current liabilities                                                       22,470,365         17,479,320


LONG-TERM DEBT (Note 5)                                                                        8,000,000          4,480,000

LEASE OBLIGATION--LONG-TERM (Note 7)                                                              18,315             18,315
                                                                                       -----------------   ----------------
              Total liabilities                                                               30,488,680         21,977,635
                                                                                       -----------------   ----------------


COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred Stock, $10 par value; 2,500,000 shares authorized, 200,000 shares issued
    and outstanding                                                                               -               2,000,000
  Common stock, $.01 par value; 15,000,000 shares authorized, 3,626,504 shares
    issued and outstanding                                                                        36,265             59,265
  Paid-in capital                                                                              8,567,675         19,889,712

  Accumulated deficit                                                                        (16,341,341)       (16,444,808)
  Less: Treasury stock, 106,304 shares held at cost                                              (11,250)           (11,250)
                                                                                       -----------------   ----------------
              Total stockholders' equity (deficit)                                            (7,748,651)         5,492,919
                                                                                       -----------------   ----------------
              Total liabilities and stockholders' equity (deficit)                     $      22,740,029   $     27,470,554
                                                                                       =================   ================
</TABLE>


               The accompanying notes are an integral part of this
                          consolidated balance sheet.

                                       F-2

<PAGE>




<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
                      CONSOLIDATED STATEMENT OF OPERATIONS



                                                                    Six Months
                                                                       Ended
                                                                  June 30, 1996
                                                                  -------------

OPERATING REVENUE                                                  $ 27,445,583

DIRECT COSTS                                                         20,961,019
                                                                   ------------

                  Gross profit                                        6,484,564

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                          8,772,226

                  Operating (loss)                                   (2,287,662)

OTHER INCOME (EXPENSE):

                  Interest expense                                   (4,057,864)

                  Other income (expense), net                           (50,998)
 
                  Net loss                                         $ (6,396,524)

                  Net loss per common share                        $      (1.84)
                                                                   ------------

                  Weighted average number of common shares            3,482,504
                                                                   ------------




               The accompanying notes are an integral part of this
                            consolidated statement.


                                       F-3

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                  FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996


                                                         Additional
<TABLE>
<CAPTION>
                                    Common Stock           Paid-in         Treasury Stock       Accumulated
                                 Shares       Amount       Capital      Shares       Amount      (Deficit)       Total
                                 ------       ------       -------      ------       ------      ---------       -----

<S>             <C>               <C>        <C>          <C>                      <C>        <C>             <C>         
Balance January 1, 1996           2,100,000  $21,000     $     -          -       $     -     $( 4,932,989)   $(4,911,989)

  Liabilities in excess of assets
    distributed to TIA/CFS            -          -             -          -             -        4,988,172      4,988,172

  Exchange Note issued to TIA/
    CFS in connection with asset
    exchange                          -          -             -          -             -      (10,000,000)   (10,000,000)

  Common Stock issued in
    connection with assigned
    notes                           280,888    2,809      1,376,301       -             -             -         1,379,110

  Common Stock issued in
    connection with Bridge
    and Interim financings          727,560    7,276      2,781,787       -             -             -         2,789,063

  Common Stock issued to
    former stockholders of
    Amertranz Worldwide             518,056    5,180      4,409,587       -             -             -         4,414,767
    Purchase of treasury
    stock                             -          -             -        106,304    (11,250)           -           (11,250)

  Net loss                            -          -             -           -            -      ( 6,396,524)    (6,396,524)
                                  ---------   -------    ----------     -------   ---------    ------------   ------------

Balance, June 30, 1996            3,626,504   $36,265    $8,567,675     106,304   $(11,250)   $(16,341,341)   $(7,748,651)
                                  =========   =======    ==========     =======   ========    ============    =========== 
</TABLE>




               The accompanying notes are an integral part of this
                            consolidated statement.


                                       F-4

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1996

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                                                 $(6,396,524)
  Bad debt expense                                                                                             (13,187)
  Depreciation and amortization                                                                                361,467
  Decrease in debt issuance costs                                                                            3,208,809
  Adjustments to reconcile net income to net cash used in operating activities-
     Increase in accounts receivable                                                                        (3,628,728)
     Increase in prepaid expenses and other current assets                                                     (22,301)
     Increase in other assets                                                                               (1,214,586)
     Increase in accounts payable and accrued expenses                                                       1,130,878
     Increase in due to affiliates                                                                               1,414
                  Net cash used in operating activities                                                     (6,572,758)
                                                                                                           -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                                                         (123,068)
  Cash advances under notes receivable                                                                        (300,000)
                  Net cash used in investing activities                                                       (423,068)
                                                                                                           -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings from loan payable                                                                             (56,515)
  Proceeds from short-term debt                                                                              5,190,064
  Repayment of long-term debt                                                                               (3,990,064)
  Proceeds from revolving loan due to affiliate                                                              3,954,989
  Payment of lease obligations                                                                                  (8,139)
  Purchase of treasury stock                                                                                   (11,250)
  Cash portion of assets distributed to TIA                                                                 (2,590,031)
                                                                                                           -----------
                  Net cash provided by financing activities                                                  2,489,054
                                                                                                           -----------

                  Net decrease in cash and cash equivalents                                                 (4,506,772)
                                                                                                           -----------

CASH AND CASH EQUIVALENTS, beginning of the year                                                             4,884,262
                                                                                                           -----------
CASH AND CASH EQUIVALENTS, end of the year                                                                 $   377,490
                                                                                                           ===========

CASH PAYMENTS FOR:
  Interest                                                                                                 $   825,563
  Income taxes                                                                                                 434,199

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTMENT & FINANCING ACTIVITIES
          On February 7, 1996 Holdings  purchased the capital stock of Amertranz
for shares  valued at  $4,415,000.  In  conjunction  with the  acquisition,  the
resulting goodwill is as follows:

  Net liabilities assumed                                                                                  $ 7,685,000
  Purchase price                                                                                             4,415,000
                                                                                                           -----------
  Goodwill                                                                                                  12,100,000
  Net liabilities retained by TIA/CFS                                                                        4,988,172
  Cash portion of assets distributed to TIA                                                                 (2,590,031)
                                                                                                           -----------
                  Net liabilities distributed                                                              $ 2,398,141
                                                                                                           ===========
</TABLE>


               The accompanying notes are an integral part of this
                            consolidated statement.


                                       F-5

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. BACKGROUND

         In January 1996,  Amertranz  Worldwide Holding Corp.  ("Holding" or the
"Company")  was  incorporated  in the state of Delaware.  Effective  February 7,
1996,  Holding concluded an Asset Exchange Agreement (the "Agreement") with TIA,
Inc. ("TIA"),  Caribbean Freight System, Inc. ("CFS"), Amertranz Worldwide, Inc.
("Amertranz") and the stockholders and convertible note holders of Amertranz. As
part of this transaction, Holding received (i) all of the issued and outstanding
stock of Amertranz, (ii) $1,379,110 in convertible notes of Amertranz, and (iii)
the air freight forwarding business of TIA and CFS. Holding then contributed the
air freight forwarding  business of TIA and CFS to Caribbean Air Services,  Inc.
("CAS") in return for all of the issued and  outstanding  shares of CAS. TIA and
CFS received  2,100,000  shares of common stock of the Company and a $10,000,000
promissory note, as discussed in Note 4, in addition to stock in the Company.

         The  transactions   described  above  have  been  accounted  for  as  a
recapitalization  of TIA and CFS,  whereby the historical data for their freight
forwarding  operations  are being  presented as that of Holdings for all periods
presented. The issuance of the $10,000,000 Promissory Note has been reflected as
a charge to retained  earnings and the distribution of assets and liabilities to
TIA and CFS has been  reflected  as a net  adjustment  to equity,  at book value
(which  approximates  fair  value).  The  transaction  with  Amertranz  has been
accounted for as an acquisition under purchase accounting.

         On July 3, 1996,  the  Company  completed  an initial  public  offering
("IPO") of 2,300,000 shares of common stock and redeemable common stock purchase
warrants  at an initial  offering  price of $6.10 per  share.  Prior to the IPO,
there was no public market for the Company's  capital stock. The net proceeds to
the Company of $12,414,117 were used to pay down existing debt of $6,503,000 and
the balance is available for working capital purposes. Additionally, the Company
issued 200,000 shares of Class A, non-voting,  cumulative, convertible preferred
stock with a par value of $10.00 in exchange  for payment of  $2,000,000  of its
promissory note with TIA and CFS.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Significant  accounting  policies of the Company,  as summarized below,
are in conformity with generally accepted accounting principles. The preparation
of  financial  statements  in  conformity  with  generally  accepted  accounting
principles requires management to make estimates and assumptions that affect the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses  during the  reporting  period.  Actual  results  could
differ from those estimates.

  Principles of Consolidation

         The consolidated  financial statements include the accounts of Holding,
CAS  and  Amertranz  since  February  7,  1996.  The  accompanying  consolidated
statements of operations and changes in retained earnings  (deficit) include the
accounts of the former air freight business of TIA (a wholly-owned subsidiary of
Wrexham  Aviation  Corporation)  and  CFS,  which  was not a  separate  legal or
historical  reporting  entity for the period January 1, 1996 through February 7,
1996.  All  significant   intercompany   accounts  and  transactions  have  been
eliminated.

  Property and Equipment

         Property and  equipment  are stated at cost.  Depreciation  is computed
under the  straight-line  method over estimated useful lives ranging from 3 to 8
years.  Assets  under  capital  leases are  depreciated  over the shorter of the
estimated  useful  life of the asset or the lease term.  The Company  utilizes a
half-year convention for assets in the year of acquisition and disposal.

  Goodwill

   
         Goodwill represents the excess of cost over the net assets acquired and
is amortized on a  straight-line  basis over 25 years.  Management  periodically
assesses  whether  there has been an  impairment  in the  carrying  value of the
excess of cost over the net assets acquired,  by comparing current and projected
annual  undiscounted  cash flows with the carrying amount. In the event there is
an  impairment  of goodwill,  management  would reduce the carrying  value to an
amount equal to the projected discounted cash flow of the underlying assets.
    


                                       F-6

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)




  Stock Options

         The  Company  grants  stock  options to certain  officers  and  related
parties.  Compensation expense is recognized based upon the aggregate difference
between the fair market  value of the  Company's  stock at date of grant and the
option  price.  Compensation  expense is  recognized  equally  over the  vesting
period.

  Proforma Data

         The unaudited  proforma balance sheet gives effect to the IPO discussed
in Note 1 as if it had closed on June 30, 1996.

  Revenue Recognition

         Revenue from freight  forwarding is  recognized  upon delivery of goods
and direct  expenses  associated  with the cost of  transportation  are  accrued
concurrently.  Monthly  provision is made for doubtful  receivables,  discounts,
returns and allowances.

  Cash and Cash Equivalents

         Cash at  June  30,  1996  includes  $297,000  of  overnight  repurchase
agreements.

  Per Share Data

   
         Earnings  per share is computed  using the weighted  average  number of
common shares  outstanding  and,  where  applicable,  common  equivalent  shares
issuable  upon  exercise of stock  options  and  warrants  redeemable  under the
treasury stock method to the extent that they are dilutive.

Fair Value of Financial Instruments

         Cash  equivalents  are reflected at cost which  approximate  their fair
values.  The carrying  amounts of the accounts  receivable and debt  approximate
their fair value.
    

3. PROPERTY AND EQUIPMENT, NET

         Property and Equipment consists of the following:

    Furniture and fixtures                                         $   303,502
    Computer equipment                                                 421,946
    Computer software                                                  219,701
    Leasehold improvements                                              63,658
    Logos and trademarks                                                22,349
    Vehicle                                                              8,499
                                                                --------------
                                                                     1,039,655
    Less:  Accumulated depreciation and amortization                   210,213
                                                                --------------
                                                                   $   829,442
                                                                ==============

4. ACQUISITION

         Holding  acquired all of the issued and outstanding  stock of Amertranz
and the former  stockholders of Amertranz received 870,254 shares (which consist
of the investment in Amertranz  Worldwide of 518,056  shares,  assigned notes of
280,888  shares and 71,310  shares  associated  with the Interim  Financing)  of
Holding's  common  stock and options to  purchase  224,399  shares of  Holding's
common stock valued at $4,415,000 or  approximately  $4.25 per share and option.
The Amertranz  transaction  has been accounted for as a purchase and resulted in
goodwill of approximately  $12.1 million which represents the excess of the cost
over the fair value of the assets acquired.




                                       F-7

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)



5. DEBT

         As of June 30, 1996,  long-term and  short-term  debt  consisted of the
following:

                  Promissory note to TIA and CFS (a)           $  10,000,000
                  Revolving loan to TIA and CFS (b)                3,954,989
                  February Bridge notes (c)                        2,775,000
                  May bridge notes (d)                             1,200,000
                  Asset-based financing (e)                        1,641,347
                  Notes payable to TIA (f)                           800,000
                  Interim financing (g)                              350,000
                                                              --------------

                  Total debt                                      20,721,336
                  Less: Current portion                          (12,721,336)
                                                              --------------
                  Long-term debt                                $  8,000,000
                                                              ==============

         (a) On February 7, 1996, as part of the  Agreement,  Holding  issued to
TIA and CFS a $10,000,000  promissory  note which bears  interest at the rate of
8.0% per annum.  The note is payable in five  consecutive  monthly  payments  of
principal and interest in the amount of $80,000 each,  commencing March 1, 1996,
and  thereafter  monthly  payments of  principal  and  interest in the amount of
$166,667  each until the note is paid in full. On July 3, 1996,  Holding  repaid
$2,000,000 of this debt from the proceeds of the IPO and converted $2,000,000 of
the note into Class A, non-voting, cumulative, convertible preferred stock.

         (b) As part of the Agreement, TIA and CFS have agreed to lend to CAS on
a revolving  loan  basis,  an amount up to the net cash  collections  of TIA and
CFS's accounts  receivable as of February 7, 1996 and additional  amounts at the
discretion of TIA and CFS, up to an aggregate maximum of $4,000,000  outstanding
at any time,  pursuant to the terms of a Revolving Credit  Promissory Note. Only
funds advanced at the discretion of TIA and CFS bear interest, at the greater of
(i) 1% per  month  or (ii) at a rate of 4% over  prime.  The note is due July 6,
1996.  The note is  secured  by all of the  assets of CAS and is  guaranteed  by
Holding and Amertranz.  As of June 30, 1996,  $3,954,989 was  outstanding  under
this facility.

         (c) On February 7, 1996, Holding consummated a private placement with a
group of investors  whereby Holding  borrowed  $2,775,000 and issued  promissory
notes.  The notes are due at the earlier of (i) the  consummation  of the IPO by
Holding or (ii)  February  7, 1998 or (iii) the sale or merger of  Holding.  The
investors also received  416,250  shares of common stock of Holding,  as well as
832,500 warrants to purchase shares of common stock of Holding for five years at
$5.00 per share. These warrants convert into warrants upon the completion of the
IPO by  Holding  and will be  exercisable  at the IPO  price.  The notes  accrue
interest at 10% per annum until April 30, 1996 and  thereafter at 15% per annum.
The notes are secured by a junior lien on all of the assets of the Company.  The
Company  has  recorded  debt  issuance  costs  of  approximately  $2,143,000  in
connection with such bridge financing and will amortize the amount over the life
of the debt. Upon repayment of the debt, the related  unamortized  debt issuance
cost would be expensed. The effective annual rate of interest on the notes after
giving effect to the debt issuance cost of $2,143,000 is 200%. The fair value of
the shares of common  stock at the time of  issuance  was $4.25 per share.  This
debt was repaid on July 3, 1996 with the proceeds of the IPO.

         (d) On May 10, 1996,  Holding  consummated a private  placement  with a
group of investors  whereby Holding  borrowed  $1,200,000 and issued  promissory
notes. The notes are due at the earlier of (i) the closing of the IPO by Holding
or (ii)  February 7, 1998 or (iii) the sale or merger of Holding.  The investors
also  received  240,000  shares of common  stock of Holding,  as well as 480,000
warrants to purchase  shares of common  stock of Holding for five years at $5.00
per share.  These warrants  convert into IPO warrants upon the completion of the
IPO by  Holding  and will be  exercisable  at the IPO  price.  The notes  accrue
interest at 15% per annum.  The notes are secured by a lien on all of the assets
of the Company.  The Company has recorded debt issuance  costs of  approximately
$1,020,000 in connection with such bridge financing and will amortize the amount
over the life of the debt.  Upon repayment of the debt, the related  unamortized
debt issuance cost would be expensed.  The effective  annual rate of interest on
the notes after giving  effect to the debt  issuance cost of $1,020,000 is 525%.
The fair


                                       F-8

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)



value of the shares of common stock at the time of issuance was $4.25 per share.
This debt was repaid on July 3, 1996 with the proceeds of the IPO.

         (e) Amertranz  entered into a Purchase and Sale Agreement with a lender
whereby  it  receives  advances  of up to 75% of the  net  amounts  of  eligible
accounts receivable  outstanding to a maximum amount of $3,125,000.  The loan is
subject to  interest  at a rate of 4% per annum over the  prevailing  prime rate
(8.25% as of June 30, 1996).  At June 30, 1996, the  outstanding  balance on the
credit  line  was  $1,641,347,  which  represented  the  full  amount  available
thereunder.  The  lender  has a  security  interest  in all  present  and future
accounts  receivable,  machinery and equipment and other assets of Amertranz and
the loan is guaranteed by Holding.

         (f) In October 1995, Amertranz obtained a $500,000 subordinated secured
loan from TIA, which was increased to $800,000 in January 1996 ("TIA Loan"). The
original  TIA Loan bears  interest at the rate of 12% per annum and is repayable
in 12 equal,  consecutive  monthly payments of principal and interest commencing
30 days after the closing of the IPO.

         (g)  Between  November  1995  and  January  1996,   Amertranz  obtained
financing of $350,000  ("Interim  Financing")  and issued  $350,000 in aggregate
principal  amount of promissory  notes.  Repayment of the  principal  amount due
under these notes,  together  with  interest at the rate of 12% per annum is due
upon the  earlier of (i) the  closing of the IPO by Holding or (ii)  February 7,
1998 or (iii) the sale or merger of  Holding.  The  holders of these  notes also
received shares of Amertranz common stock that were converted into 71,310 shares
of Holding  common  stock.  The Company  has  recorded a debt  issuance  cost of
$150,000 in  connection  with the  issuance of the stock and will  amortize  the
amount  over the life of the  debt.  Upon  repayment  of the debt,  the  related
unamortized  debt issuance cost would be expensed.  The effective annual rate of
interest on the notes after giving  effect to the debt issuance cost of $150,000
is 98%. The fair value of the shares of common stock at the time of issuance was
$2.22 per share.  This debt was repaid on July 3, 1996 with the  proceeds of the
IPO.

         Between June 1995 and November 1995,  Amertranz borrowed  $1,379,110 in
aggregate  principal  amount from persons  affiliated  with  Amertranz and other
non-affiliated lenders and issued convertible notes therefor. All of these notes
were assigned by the holders  thereof to Holding as part of the  Combination and
are included in additional paid-in capital.

         TIA and CFS have agreed that,  upon  consummation of the IPO, they will
defer  each  payment  on the TIA Loan and the  Exchange  Note to the  extent the
aggregate of the payments thereon then due exceeds 80% of the Company's earnings
before interest,  taxes,  depreciation and amortization ("EBITDA") for the month
in respect of which such aggregate payments are due. During any deferral period,
interest will continue to accrue on these  obligations in accordance  with their
respective  terms. Such deferral will continue until the earlier of (i) the date
after which the Company's EBITDA exceeds the sum of $600,000 for any consecutive
two-month period, or (ii) November 1, 1996. Furthermore, TIA and CFS have agreed
that, upon  consummation  of the IPO, they will defer  collection of amounts due
under the Revolver Note until the earlier of (i)  refinancing of Amertranz's and
CAS's accounts receivable working capital facilities, or (ii) December 31, 1996.

6. STOCKHOLDERS' EQUITY (DEFICIT)

  Stock Options and Warrants

         As of June 30, 1996, the Company had options  outstanding to purchase a
total of 523,399 shares of common stock at exercise  prices ranging from $.16 to
$6.00, of which 237,673 options are exercisable. No options were exercised as of
June 30,  1996.  224,399  of  these  options  replaced  outstanding  options  of
Amertranz and were included in the computation of the consideration  received by
the former Amertranz stockholders.  The Company also had warrants outstanding to
purchase  1,386,783  shares of common  stock at an  exercise  price equal to the
exercise price of the warrants issued in connection with the Company's  February
and May bridge financings.

         In  connection  with the IPO, the Company  issued  2,300,000  shares of
common stock and 2,300,000 warrants. Each warrant entitles the holder thereof to
purchase  one  share of  common  stock for $6.00  during  the  four-year  period
commencing one year from the date of this Prospectus. The Company may redeem the
warrants at a price of $.01 per warrant at any time


                                      F-9

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)



after they become  exercisable  upon not less than 30 days' prior written notice
if the last sale price of the common  stock has been at least $10.00 for each of
the 20  consecutive  trading  days  ending on the third day prior to the date on
which the notice of redemption is given.

  Preferred Stock

         As of June 30,  1996,  the Company  does not have any  preferred  stock
authorized  or issued.  However,  the Board of Directors is  authorized  without
further action by the stockholders,  to issue series of preferred stock. On July
3, 1996, the Company issued 200,000 shares of Class A,  non-voting,  cumulative,
convertible preferred stock with a par value of $10.00 in exchange for a paydown
of $2,000,000 on the $10,000,000 promissory note.

         The Preferred  Stock will pay  cumulative  cash  dividends at an annual
rate of $1.00 per share.  The Company is prohibited from paying any dividends on
common stock unless all required preferred  dividends have been paid. Each share
of  Preferred  Stock may be  converted  at the option of the holder  into common
stock at a  conversion  price of the  lower of (i) the IPO  price  per  share of
common stock or (ii) 80% of the average of the closing price per share of common
stock on the day prior to the  conversion  date.  Preferred  Stock  holders  are
entitled to a  liquidation  preference  of $10.00 per share plus all accrued and
unpaid dividends.

7. COMMITMENTS AND CONTINGENCIES

  Leases

         Future minimum lease  payments for capital leases and operating  leases
relating to equipment and rental premises are as follows:

   YEAR ENDING                          CAPITAL LEASES          OPERATING LEASES
   -----------                          --------------          ----------------

    1997                                    $24,053                $  803,097
    1998                                     13,234                   537,365
    1999                                      6,456                   193,626
    2000                                       --                     129,084
    2001                                       --                        --
                                            -------                ----------


    Total minimum lease payments             43,743                $1,663,172
                                                                   ==========
    Less--Amount representing interest       (4,394)
                                            -------
                                            $39,349
                                            =======


  Employment Agreements

         Amertranz has employment  agreements with certain employees expiring at
various  times through July 2000.  Such  agreements  provide for minimum  salary
levels and for incentive bonuses which are payable if specified management goals
are attained.  The aggregate  commitment  for future  salaries at June 30, 1996,
excluding bonuses, was approximately $1,534,000.

  Litigation

         Amertranz  is a  defendant  in a lawsuit  initiated  by the  trustee in
bankruptcy of Aeronautics  Express,  Inc. ("AEI"), a company with whom Amertranz
engaged in discussions  concerning a prospective business combination during the
early spring of 1994.  The complaint  was filed in the United States  Bankruptcy
Court for the Southern  District of New York in December  1995, and alleges that
Amertranz improperly obtained control over the assets of AEI, committed fraud in
connection  with the business  discussion,  breached an agreement not to solicit
the business or customers  of AEI,  induced AEI to convey  property to Amertranz
for less  than fair  value  and  failed  to pay AEI  compensation  for  services
rendered by AEI to Amertranz. The


                                      F-10

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)



complaint  seeks  damages in excess of $11  million.  The Company has reached an
agreement  with the trustee in bankruptcy to settle the  litigation for $50,000.
This settlement is conditioned upon the approval of the United States Bankruptcy
Court.

8. INCOME TAXES

         At  February  7,  1996,  the  Company  had a  tax  net  operating  loss
carryforward of approximately $7,757,000,  available within statutory limits, to
offset  future  regular  federal  taxable  income.  In  accordance  with certain
provisions of the Tax Reform Act of 1986, a change in ownership of a corporation
of greater than 50 percentage points within a three-year period places an annual
limitation  on the  corporation's  ability to utilize its existing net operating
loss  carryforwards.  Such a change in ownership  was deemed to have occurred in
connection with the Asset Exchange  Agreement in which Amertranz  became part of
Holding,  at which time the Company's net operating loss carryforwards  amounted
to approximately  $7,757,000.  The annual  limitation of the utilization of such
tax  attributes  over the fifteen  year  carryforward  amounts to  approximately
$206,000. To the extent the annual limitation is not utilized, it may be carried
forward for  utilization  in future  years.  This  limitation  could  affect the
Company's  future  provisions  for or payment  of federal  income tax should the
Company's operations produce increased amounts of taxable income in the future.

         Deferred  tax  benefits at June 30,  1996,  which are fully offset by a
valuation  allowance,  primarily  represent the estimated  future tax effects of
federal net operating losses aggregating approximately $3,548,022.

9. RELATED PARTY TRANSACTIONS

         Under the terms of a cargo aircraft  charter  agreement with Tradewinds
Airlines,  Inc.  ("Tradewinds  Air"),  a subsidiary  of  Tradewinds  Acquisition
Corporation,  of which  TIA owns  approximately  30% of the  outstanding  common
stock,  CAS has  exclusive  rights  until  June 30,  1998 to the use of a leased
L-1011  freighter  aircraft.  While  CAS is  guaranteed  the  use of the  L-1011
aircraft as needed, it pays only for actual use of the aircraft at market rates.

         CAS had sales to  Amertranz  of  approximately  $242,000,  and  related
accounts receivable of approximately $213,000 as of and for the six month period
ended June 30, 1996.

         At June 30, 1996, Amertranz owes approximately  $213,000 to TIA for air
freight forwarding services.

10. SIGNIFICANT CUSTOMERS

         During the six month  period  ended June  30,1996,  no single  customer
accounted for sales of 10% or more of the Company's revenue.


                                      F-11

<PAGE>



                          INDEPENDENT AUDITORS' REPORT


The Board of Directors
TIA, Inc.:

         We have audited the accompanying  balance sheets of Amertranz Worldwide
Holding Corp. (formerly The Freight Forwarding Business of TIA and CFS) (note 1)
as of December 31, 1994 and 1995 and the related  statements of  operations  and
changes  in  accumulated  deficit  and cash  flows  for each of the years in the
three-year   period  ended   December  31,  1995.   These   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these statements based on our audits.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects,  the financial position of Amertranz Worldwide
Holding Corp.  (formerly The Freight  Forwarding  Business of TIA and CFS) as of
December 31, 1994 and 1995, and the results of its operations and its cash flows
for each of the  years in the  three-year  period  ended  December  31,  1995 in
conformity with generally accepted accounting principles.


                                                       KPMG PEAT MARWICK LLP

Greensboro,  North  Carolina
March 8, 1996, except with respect to 
the last paragraph in Note 2 for which 
the date is May 1, 1996


                                      F-12

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

<TABLE>
<CAPTION>
                                 BALANCE SHEETS

                           December 31, 1994 AND 1995
                                                                                        1994              1995
                                                                                        ----              ----
                                        ASSETS
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Current assets:
   Cash and cash equivalents                                                        $ 2,141,047        $ 2,463,336
   Accounts receivable, net of allowance for doubtful accounts
      of $131,229 in 1995 and $228,424 in 1994 (Note 7)                               5,196,113          5,379,903
   Income taxes receivable                                                                   --             65,000
   Prepaid expenses and deposits                                                        111,878             84,917
                                                                                    -----------        -----------

          Total current assets                                                        7,449,038          7,993,156
                                                                                    -----------        -----------

   Property and equipment, at cost:
      Ground support equipment                                                        1,211,507          1,259,942
      Furniture, fixtures and leasehold improvements                                    374,751            429,145
                                                                                    -----------        -----------

                                                                                      1,586,258          1,689,087
       Less accumulated depreciation and amortization                                   762,229          1,129,340
                                                                                    -----------        -----------
          Net property and equipment                                                    824,029            559,747
   Notes receivable (Note 3)                                                                 --            500,000
   Other assets                                                                          54,077             54,077
                                                                                    -----------        -----------

                                                                                    $ 8,327,144        $ 9,106,980
                                                                                    ===========        ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Note payable to affiliate (Note 4)                                               $ 3,387,808        $ 2,187,808
   Current installments of note payable (Note 4)                                         25,000             25,000
   Accounts payable (Note 7)                                                          1,614,424          1,605,257
   Accrued liabilities (Note 4)                                                       1,479,493          1,235,568
   Income taxes payable                                                                 108,201                 --
                                                                                    -----------        -----------
          Total current liabilities                                                   6,614,926          5,053,633
                                                                                    -----------        -----------

   Note payable (Note 4)                                                                 50,000             25,000
   Note payable to Parent (Note 4)                                                    8,940,336          8,940,336
                                                                                    -----------        -----------

          Total liabilities                                                          15,605,262         14,018,969
                                                                                    -----------         ----------

   Stockholders' equity (deficit):
      Common stock, $.01 par value; 15,000,000 shares
         authorized, 2,100,000 shares issued
         and outstanding                                                                 21,000             21,000
      Accumulated deficit                                                            (7,299,118)        (4,932,989)
                                                                                    -----------        -----------
   Total stockholders' equity (deficit)                                              (7,278,118)        (4,911,989)
   Commitments and contingencies (Notes 6 and 9)
                                                                                    $ 8,327,144        $ 9,106,980
                                                                                    ===========        ===========


</TABLE>

                 See accompanying notes to financial statements.


                                      F-13

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

<TABLE>
<CAPTION>
                          STATEMENTS OF OPERATIONS AND
                         CHANGES IN ACCUMULATED DEFICIT

                  Years Ended December 31, 1993, 1994 and 1995



                                                                         DECEMBER 31,
                                                     ----------------------------------------------------
                                                         1993                1994                1995
                                                         ----                ----                ----

<S>     <C>    <C>    <C>    <C>    <C>    <C>

Operating revenue                                      $32,670,727        $38,576,285         $38,211,306
Cost of transportation (Note 7)                         24,231,379         30,254,733          30,300,476
                                                     -------------       ------------        ------------

     Gross profit                                        8,439,348          8,321,552           7,910,830
Selling, general and administrative expenses             6,504,897          4,633,676           4,513,154
                                                     -------------       ------------           ---------

     Operating income                                    1,934,451          3,687,876           3,397,676
Other income (expense):
     Interest expense (Note 4)                          (1,107,520)        (1,143,787)         (1,155,215)
     Other, net                                             41,928            117,214             123,668
                                                     -------------       ------------        ------------

     Total other expense                                (1,065,592)        (1,026,573)         (1,031,547)
                                                     -------------       ------------        ------------

     Income before income taxes                            868,859          2,661,303           2,366,129
Income taxes (Note 5)                                           --            108,201                  --
                                                     -------------       ------------        ------------

Net income                                                 868,859          2,553,102           2,366,129
Accumulated deficit:
     Balance at beginning of year                      (10,721,079)        (9,852,220)         (7,299,118)
                                                     -------------       ------------        ------------

Balance at end of year                               $  (9,852,220)      $ (7,299,118)       $ (4,932,989)
                                                     =============       ============        ============

</TABLE>










               See accompanying notes to the financial statements.


                                      F-14

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)
<TABLE>
<CAPTION>

                            STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 1993, 1994 and 1995

                                                                                        DECEMBER 31,
                                                                        --------------------------------------------
                                                                           1993             1994             1995
                                                                           ----             ----             ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Cash flows from operating activities:
   Net income                                                           $ 868,859       $ 2,553,102      $ 2,366,129
   Adjustments to reconcile net income to
     net cash provided by operating activities
     Depreciation and amortization                                        416,830           377,569          367,111
     Net disposals of property and equipment                                   --            46,978               --
     Bad debt expense                                                     153,574            70,000           41,000
   Changes in assets and liabilities:
     Increase in accounts receivable                                     (771,087)         (949,027)        (224,790)
     Increase in income taxes receivable                                       --                --          (65,000)
     Increase in inventory                                                (11,309)               --               --
     (Increase) decrease in prepaid expenses                             (140,608)          581,376           26,961
     Increase (decrease) in accounts payable                              487,518          (274,010)          (9,167)
     Decrease in accrued liabilities                                     (706,398)         (165,264)        (243,925)
     Increase (decrease) in income taxes payable                               --            68,201         (108,201)
                                                                        ---------       -----------      -----------

       Total adjustments                                                 (571,480)         (244,177)        (216,011)
                                                                        ---------       -----------      -----------
       Net cash provided by operating activities                          297,379         2,308,925        2,150,118

Cash flows from investing activities:
    Cash advances under notes receivable                                       --                --         (500,000)
    Purchases of furniture, fixtures and equipment                        (95,567)          (42,280)        (102,829)
    Increase in other assets                                               (7,393)           (9,405)              --
                                                                        ---------       -----------      -----------

       Net cash used in investing activities                             (102,960)          (51,685)        (602,829)
Cash flows from financing activities:
    Proceeds from Parent cash advance                                     400,000                --               --
    Repayments on Parent cash advance                                    (161,199)         (238,801)              --
    Payments on note payable to affiliate                                      --                --       (1,200,000)
    Repayments on notes payable                                          (274,162)         (231,264)         (25,000)
                                                                        ---------       -----------      -----------

       Net cash used in financing activities                              (35,361)         (470,065)      (1,225,000)
                                                                        ---------       -----------      -----------

Net increase in cash and cash equivalents                                 159,058         1,787,175          322,289
Cash and cash equivalents at beginning of year                            194,814           353,872        2,141,047
                                                                        ---------       -----------      -----------

Cash and cash equivalents at end of year                                  353,872         2,141,047        2,463,336
                                                                        =========       ===========      ===========

Supplemental disclosure of cash flow information:
   Cash paid during the year for interest                                 586,056         1,666,950          946,155
                                                                        =========       ===========      ===========
   Cash paid during the year for income taxes                           $      --       $        --      $   173,201
                                                                        =========       ===========      ===========
</TABLE>




               See accompanying notes to the financial statements.


                                      F-15

<PAGE>



                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                          NOTES TO FINANCIAL STATEMENTS

                        December 31, 1993, 1994 and 1995


(1) Significant Accounting Policies

  Company Background

         In January 1996,  Amertranz  Worldwide  Holding Corp.  ('Holding')  was
incorporated  in the state of  Delaware.  Effective  February  7, 1996,  Holding
concluded an asset  exchange  agreement  with TIA, Inc.  ('TIA'),  its 51% owned
subsidiary,  Caribbean Freight System, Inc. ('CFS'),  Amertranz Worldwide,  Inc.
('Amertranz') and the stockholders and convertible note holders of Amertranz. As
part of this transaction, Holding received (i) all of the issued and outstanding
stock of Amertranz, (ii) $1,379,110 in convertible notes of Amertranz, and (iii)
the freight  forwarding  business of TIA and CFS.  Holding then  contributed the
freight  forwarding  business of TIA and CFS to  Caribbean  Air  Services,  Inc.
('CAS') in return for all of the issued and  outstanding  shares of CAS. TIA and
CFS received a $10,000,000  promissory  note in addition to 2,100,000  shares of
common stock in Holding, as discussed in Note 2.

  Basis of Financial Statement Presentation

         The  accompanying  balance  sheets and  statements  of  operations  and
changes in accumulated deficit and cash flows include the accounts of the former
air  freight  business of TIA (a wholly  owned  subsidiary  of Wrexham  Aviation
Corporation)  and CFS,  which have been combined for  reporting  purposes as The
Freight  Forwarding  Business  of TIA and CFS (the  'Business'),  which is not a
separate legal or historical  reporting  entity.  The Business of TIA and CFS is
treated  as the  predecessor  since  TIA  and CFS  represent  the  majority  and
controlling  shareholders  of Holding,  accordingly  the  issuance of  2,100,000
shares of stock by Holding  for the freight  forwarding  business of TIA and CFS
has been  accounted  for as a  recapitalization  of the  Business.  Although the
Business is not a separate  legal  entity,  since the Business is treated as the
predecessor  the effect of the issuance of the 2,100,000  shares of common stock
of Holding in February 1996 has been reflected in the financial statements as if
it had occurred as of the  beginning of the earliest year  presented.  Since the
Business was combined in February 1996 with Holding the  accompanying  financial
statements  include  the  accounts  of TIA and CFS  related to their air freight
businesses and exclude accounts related to the minority interest in CFS.

         At December 31, 1995, CFS has a 51% ownership interest in Caribbean Air
Services Dominicana, Inc. (CASD); however, the accompanying financial statements
do not include the accounts of CASD since CASD was not combined with Holding.

         All  significant  intrabusiness  balances  and  transactions  have been
eliminated in the financial statements.

  Description of Business

         The  Business  operates an air freight  forwarding  business  primarily
serving the eastern  half of the United  States,  Puerto Rico and the  Dominican
Republic.

  Revenue Recognition

         The  Business is involved in brokering  air cargo  services for freight
flown  between  the  United  States,  Puerto  Rico and the  Dominican  Republic.
Revenues,  and related direct costs,  are recognized when the shipments of cargo
are completed.  Monthly provision is made for doubtful  receivables,  discounts,
returns and allowances.

  Cash and Cash Equivalents

         Cash at December 31, 1995 includes  $2,290,000 of overnight  repurchase
agreements.



                                      F-16

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995



(1)  Significant Accounting Policies - (Continued)

  Property and Equipment

         Property and equipment are depreciated using the  straight-line  method
over the estimated  useful lives of the assets of five years for ground  support
equipment and 5 to 10 years for furniture, fixtures and leasehold improvements.

  Income Taxes

         The  operations  of the  Business are included in the federal and state
income tax returns of TIA and CFS.  Income  taxes  allocated to the Business are
based on the actual income taxes of TIA and CFS for the periods presented.

         Deferred tax assets and liabilities are recognized  under the asset and
liability  method for the future tax  consequences  attributable  to differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities and their respective tax bases.  Deferred tax assets and liabilities
are measured  using enacted tax rates expected to apply to taxable income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled.  The effect on deferred tax assets and  liabilities  of a change in tax
rates is recognized in income in the period that includes the enactment date.

  Financial Instruments

         The carrying amounts of accounts  receivable,  notes  receivable,  note
payable to affiliate,  accounts payable and accrued liabilities approximate fair
value because of the short maturity of these financial instruments. The carrying
amount of the note  payable to the  Parent  approximates  fair value  because it
bears interest at an adjustable rate.

  Earnings per Share

         Earnings per share  information  has not been presented  since it would
not be  representative  of  future  earnings  per share  information  due to the
combination  of the Business  with Holding and Amertranz on February 7, 1996 and
the related changes in stockholders' equity which took place at that time.

  Reclassification

         Certain  amounts in the 1993 and 1994  financial  statements  have been
reclassified to conform with the 1995 presentation.

  Use of Estimates

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




                                      F-17

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995


(2)  Asset Exchange Agreement

         In  anticipation of a public  offering of securities  ("Offering"),  in
February 1996 TIA and CFS entered into an asset exchange agreement  discussed in
note 1 in  which  the air  freight  business  of TIA and CFS was  combined  with
Holding, which contributed the business to a wholly owned subsidiary.

         The air  freight  business  is  defined  by the  agreement  to  include
customer lists and related business and marketing records;  CFS's rights under a
freight  handling  agreement  with  CASD;  the use of the names  "Caribbean  Air
Services" and "Tradewinds  International Airlines;" the operating leases for the
Puerto Rico,  Greensboro,  North Carolina,  and Hartford,  Connecticut  business
facilities;  furniture  and  fixtures  of $86,830 as of  December  31,  1995 and
$83,525  as  of  February  7,  1996;  and  all  assignable  customer  and  sales
representative  contracts  of TIA and CFS in  connection  with their air freight
businesses.  The air freight  business  does not include any other assets of TIA
and CFS,  including cash,  accounts  receivable,  notes receivable,  securities,
equipment, aircraft, parts or tools, nor any liabilities of TIA or CFS.

         In  exchange  for the  transfer  of the air  freight  operating  assets
described  above,  TIA and CFS received a  promissory  note of  $10,000,000  and
2,100,000  shares of Holding  (allocated  to TIA and CFS as notes  receivable of
$8,000,000  and  $2,000,000,  respectively,  and 1,680,000  and 420,000  shares,
respectively).  The promissory  note bears interest at 8%, and is due from March
1, 1996 through  July 1, 1996 in monthly  payments of $80,000 and from August 1,
1996 in monthly  payments of  $166,667.  In addition,  Holding  intends to apply
$2,000,000 of the net proceeds from the proposed  public  offering of securities
discussed in the first paragraph above against the promissory note.

         Pursuant to the asset exchange agreement, TIA and CFS agreed to advance
to the aforementioned  subsidiary of Holding, on a revolving loan basis, the net
collections  of TIA's and CFS's  accounts  receivable as of February 7, 1996 and
additional  amounts in the discretion of TIA and CFS, up to an aggregate maximum
of $4,000,000  outstanding at any time.  Funds advanced under the revolving loan
with respect to TIA's and CFS's  accounts  receivable  do not bear  interest and
discretionary advances bear interest at the greater of 1% per month or the prime
rate plus 4%. The revolving loan matures on July 6, 1996.

         The promissory  note and revolving loan are secured by a first priority
lien  on  all  of the  issued  and  outstanding  shares  of  the  aforementioned
subsidiary of Holding, a first priority lien on all of the assets of Holding and
the  subsidiary  of Holding,  and a second lien on the  accounts  receivable  of
another subsidiary of Holding.

         TIA and CFS have agreed that upon  consummation  of the public offering
of securities discussed above, they will defer repayment of the promissory note,
revolving loan and notes receivable  discussed in note 3 if, among other things,
Holding  does  not  meet  certain  financial  thresholds  or  obtain  additional
financing.  TIA and CFS have further  agreed that except upon the  occurrence of
certain  events  they will not take any action to  foreclose  on their  security
interests in the assets of Holding or its subsidiaries for one year.

(3) Notes Receivable

         In anticipation of entering into the asset exchange agreement discussed
in note 2,  TIA and CFS  made  advances  to a  subsidiary  of  Holding  totaling
$500,000 in 1995 and $300,000  subsequent  to December  31, 1995.  The notes are
secured by a subordinated  lien on all of the assets of a subsidiary of Holding,
bear  interest at a rate of 12%,  and are  repayable  in 12 monthly  payments of
principal  and interest  commencing  30 days after the closing of the  Offering.
However,  TIA and CFS have  agreed  that,  upon  consummation  of the  Offering,
repayment of the notes will be deferred as discussed in note 2.




                                      F-18

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995


(4) Notes Payable

         Substantially  all of TIA's and CFS's activities in 1993, 1994 and 1995
are  related  to  their  air  freight  business  and,  accordingly,  all  of the
historical interest expense related to the interest-bearing  debt of TIA and CFS
has been included in the accompanying financial statements.

         Interest expense relates primarily to two notes payable as follows:

         A note  payable  to  Harborview  Corporation  Ltd.  No.  1,  a  company
affiliated through common ownership to TIA has a balance outstanding at December
31, 1994 and 1995 of $3,387,808 and $2,187,808,  respectively, bears interest at
a rate of 10%,  is secured  by a senior  lien on all of the assets of TIA and is
due on demand. Interest expense on this note amounted to approximately $327,000,
$343,000 and $252,000 in 1993, 1994 and 1995, respectively.

         A note  payable to Wrexham  Aviation  Corporation,  Parent of TIA has a
balance  outstanding  at both  December 31, 1994 and 1995 of  $8,940,336,  bears
interest at prime plus 1% (9.5% at December  31,  1995),  is secured by a second
lien on all assets of TIA and is due on June 16, 1997.  Interest expense on this
note amounted to approximately $740,000, $783,000 and $903,000 in 1993, 1994 and
1995, respectively. Interest in the amount of approximately $11,000 and $202,000
is included in accrued liabilities at December 31, 1994 and 1995, respectively.

         In addition to the above notes, a non-interest  bearing note payable of
$50,000 is outstanding at December 31, 1995 and is due in payments of $25,000 in
1996 and 1997.




                                      F-19

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995


(5) Income Taxes

         The  operations  of the  Business are included in the federal and state
income tax returns of TIA and CFS.  Income  taxes  allocated to the Business are
based on the actual income taxes of TIA and CFS for the periods presented.

         Income tax expense for 1993, 1994 and 1995 consists of:

                                               1993
                        -----------------------------------------------
                        CURRENT            DEFERRED              TOTAL
                        -------            --------              -----

Federal                 $      --          $      --           $     --
State                          --                 --                 --
                        -----------------------------------------------
                        $      --          $      --           $     --
                        =========          =========           ========


                                               1994
                        -----------------------------------------------
                        CURRENT            DEFERRED              TOTAL
                        -------            --------              -----
  
Federal                 $  79,494          $      --           $ 79,494
State                      28,707                 --             28,707
                        ---------          ---------           --------
                        $ 108,201          $      --           $108,201
                        =========          =========           ========


                                               1995
                        -----------------------------------------------
                        CURRENT            DEFERRED              TOTAL
                        -------            --------              -----

Federal                 $      --          $      --           $     --
State                          --                 --                 --
                        -----------------------------------------------
                        $      --          $      --           $     --
                        =========          =========           ========


         Income tax expense for 1993, 1994 and 1995 differed from the "expected"
amount for those years  (computed by applying the federal  corporate rate of 34%
to income before income taxes) for the following reasons:



<TABLE>
<CAPTION>
                                                                        1993              1994              1995
                                                                        ----              ----              ----

<S>     <C>    <C>    <C>    <C>    <C>    <C>

Computed "expected" tax expense                                      $  295,412         $ 904,843          $804,484
State income taxes, net of federal benefit                                   --            18,947                --
Change in valuation allowance for deferred tax
  assets allocated to income tax expense                               (295,412)         (861,672)         (817,928)
Other                                                                        --            46,083            13,444
                                                                     ----------         ---------         ---------

                                                                     $       --         $ 108,201         $      --
                                                                     ==========         =========         =========
</TABLE>



                                      F-20

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995


(5) Income Taxes--(Continued)

         The temporary differences that give rise to significant portions of the
deferred tax assets and deferred tax  liabilities  at December 31, 1994 and 1995
are presented below:

<TABLE>
<CAPTION>
                                                                                     1994                   1995
                                                                                     ----                   ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Deferred tax assets:
  Allowance for doubtful accounts receivable                                     $    88,172            $    50,664
  Alternative minimum tax credit carry forward                                        79,494                 79,494
  Reserves and accruals, not deductible until paid for tax
     purposes                                                                         51,606                 40,656
  Net operating loss carry forwards                                                4,034,683              3,562,667
                                                                                 -----------            -----------

          Total gross deferred tax assets                                          4,253,955              3,733,481
          Less valuation allowance                                                (2,709,088)            (1,891,160)
                                                                                 -----------             ----------

          Net deferred tax assets                                                  1,544,867              1,842,321
Deferred tax liabilities:
  Fixed assets, primarily excess tax over financial statement
     depreciation                                                                 (1,544,867)            (1,842,321)
                                                                                 -----------             ----------

          Total gross deferred tax liabilities                                    (1,544,867)            (1,842,321)
                                                                                 -----------            -----------
                                                                                 $        --            $        --
                                                                                 ===========            ===========
</TABLE>


         The changes in the valuation  allowance for 1993,  1994 and 1995 result
from the  utilization  of net  operating  loss  carryforwards  allocated  to the
Business.  Subsequently  recognized  tax  benefits  relating  to  the  valuation
allowance for deferred tax assets as of December 31, 1995 will be recorded as an
income tax benefit in the statement of operations.

         At December  31,  1995,  TIA had federal and state net  operating  loss
carryforwards  of approximately  $9,227,000.  The  carryforwards  expire in 2005
through  2008 for federal  income tax  purposes  and 1996 through 1997 for state
income tax  purposes.  Due to the statutory  limitation  on net  operating  loss
carryforwards  following an ownership change,  the availability of approximately
$2,456,000  at December 31, 1995 of these net operating  loss carry  forwards to
reduce future taxable income is substantially limited.

         The excess of  alternative  minimum  tax over  regular  tax is a credit
which can be carried  forward to reduce regular tax liabilities in future years.
At December 31,  1995,  TIA and CFS have  approximately  $79,000  available  for
carryforward.




                                      F-21

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995


(6) Leases

         The Business  leases  certain  equipment  under various  noncancellable
operating  leases  expiring at various dates through 1997.  Future minimum lease
payments are as follows:



                  1996                                  $43,332
                  1997                                  $20,865


         Rent expense for cancelable and noncancellable operating leases for the
years ended  December  31,  1993,  1994 and 1995 was  approximately  $2,012,000,
$675,000 and $330,000, respectively.

(7) Related Party Transactions

         During the years ended  December 31, 1993,  1994 and 1995, the Business
incurred purchased transportation costs of approximately $541,000,  $848,000 and
$1,622,000,   respectively,   from   companies   partially   owned  by  minority
stockholders of CASD. Included in accounts payable at December 31, 1994 and 1995
was approximately $31,000 and $8,000, respectively, due to these companies.

         During the year ended  December 31,  1995,  the Business had sales to a
subsidiary  of Holding that amounted to  approximately  $350,500 and at December
31, 1995 related accounts  receivable of $150,500,  recorded in the accompanying
balance sheet.

         Under the terms of a cargo aircraft  charter  agreement with Tradewinds
Airlines,  Inc.  ('Tradewinds  Air'),  a subsidiary  of  Tradewinds  Acquisition
Corporation,  of which  TIA owns  approximately  30% of the  outstanding  common
stock,  TIA has  exclusive  rights  until  June 30,  1998 to the use of a leased
L-1011  freighter  aircraft.  While  TIA is  guaranteed  the  use of the  L-1011
aircraft as needed, it pays only for actual use of the aircraft at market rates.

         The  investment in, and related  activities of,  Tradewinds Air are not
reflected in the accompanying  financial statements as they were not included in
the  Business   combined  with  Holding,   see  Basis  of  Financial   Statement
Presentation in note 1 and Asset Exchange Agreement in note 2.

         TIA  currently  holds the United States  Department  of  Transportation
licenses  and  certificates  required  for the  operation  of the  L-1011 and is
operating  the  L-1011  aircraft  on behalf of  Tradewinds  Air under an interim
operating   agreement.   Upon  approval  by  the  United  States  Department  of
Transportation of the transfer of the licenses and certificates,  TIA intends to
assign the aircraft lease to Tradewinds Air.

         The leased L-1011,  along with assignment of the  aforementioned  cargo
aircraft charter agreement and interim operating agreement, was acquired in late
November  1995 by Tradewinds  Air from Florida West  Airlines,  Inc.  (FWA) upon
confirmation by the Bankruptcy  Court of FWA's plan of  reorganization.  FWA had
acquired  the leased  L-1011  from and  entered  into the  aforementioned  cargo
aircraft  charter  agreement and interim  operating  agreement with TIA in March
1994.  Prior to March  1994,  TIA had  operated  the  L-1011.  Accordingly,  the
accompanying  financial  statements for the year ended December 31, 1993 and for
the first two months of 1994 include the operations of the aircraft.


                                      F-22

<PAGE>


                        AMERTRANZ WORLDWIDE HOLDING CORP.
            (FORMERLY THE FREIGHT FORWARDING BUSINESS OF TIA AND CFS)

                  NOTES TO FINANCIAL STATEMENTS -- (Continued)

                        December 31, 1993, 1994 and 1995


(7) Related Party Transactions (Continued)

         Total  transportation  costs  purchased  from  Tradewinds  Air  and FWA
related  to  these  agreements   amounted  to   approximately   $14,959,000  and
$16,691,000 in 1994 and 1995,  respectively.  At December 31, 1994 and 1995, the
Business owed $913,000 and $760,000,  respectively,  for such services which are
included in accounts payable.

         TIA  provides  accounting  services  to  Tradewinds  Air for $5,720 per
month.

(8) Supplier and Credit Concentration

         The  Business  charters  the flight  operations  of an L-1011  from one
supplier. Although there are a limited number of companies that charter or lease
L-1011 aircraft,  management believes that other suppliers could provide similar
services on  comparable  terms.  A change in suppliers,  however,  could cause a
delay in the air cargo  operations  and a possible  loss of sales,  which  would
affect operating results adversely.

         The air cargo industry is impacted by the general  economy.  Changes in
the marketplace of this industry may significantly affect management's estimates
and the Business's performance.

         Most of the Business's  customers are located  primarily in the eastern
half of the United States,  Puerto Rico, and the Dominican  Republic.  No single
customer  accounted for more than 10% of the sales of the Business in 1993, 1994
and 1995. The Business estimates an allowance for doubtful accounts based on the
credit  worthiness  of its  customers  as well as general  economic  conditions.
Consequently,  an adverse  change in those factors  could affect the  Business's
estimate of its bad debts.

(9) Contingencies

         TIA is responsible  for the clean-up of  contaminated  soil  associated
with the removal of an underground  storage tank in Greensboro,  North Carolina.
TIA  removed the waste oil tank  during  1994 and has  performed  a  substantial
portion of the  remediation  procedures on the site.  TIA, along with Tradewinds
Air, is responsible  for any remaining  soil clean-up  required and the State of
North Carolina has a trust fund  available to reimburse  companies for voluntary
remediation expenses in excess of certain deductibles.  Accordingly,  management
believes that any remaining remediation costs will not have a material effect on
the financial statements.


                                      F-23

<PAGE>



              REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE




To Amertranz Worldwide Holding Corp.:

         We  have  audited,  in  accordance  with  generally  accepted  auditing
standards,  the  financial  statements  of  Amertranz  Worldwide  Holding  Corp.
included in this annual  report on Form 10-K and have issued our report  thereon
dated  August  28,  1996.  Our  audits  were made for the  purpose of forming an
opinion on the basic  financial  statements  taken as a whole.  This schedule is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and is not part of the  basic  financial  statements.  This
schedule has been subjected to the auditing  procedures applied in our audits of
the  basic  financial  statements  and,  in our  opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.


                                               ARTHUR ANDERSEN LLP



Melville, New York
August 28, 1996


                                       S-1

<PAGE>


                                                                 SCHEDULE II


                  SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)


<TABLE>
<CAPTION>

                                                 Balance at    Charged to    Charged to
                                                  Beginning     Costs and       Other                     Balance at
                                                   of Year      Expenses      Accounts      Deductions    End of Year
                                                   -------      --------      --------      ----------    -----------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

For the fiscal year ended June 30, 1996

  Allowance for doubtful accounts                  $ 401         $    48        $   --        $(83)         $   371
                                                   =====         =======        ======        ====          =======

  Accumulated depreciation and amortization
    of property and equipment                      $ 106         $   108        $   --        $ (4)         $   210
                                                   =====         =======        ======        ====          =======

  Accumulated amortization of debt
    issuance cost                                  $  --         $ 3,264        $   --        $ --          $ 3,264
                                                   =====         =======        ======        ====          =======

  Accumulated amortization of goodwill             $  --         $  191         $   --        $ --          $   191
                                                   =====         =======        ======        ====          =======


</TABLE>

                                       S-2