SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]      Annual  Report  Pursuant to Section 13 or 15(d) of the  Securities  and
         Exchange Act of 1934 For the fiscal year ended December 31, 1999

                                       OR

[   ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities and
         Exchange Act of 1934
         For the transition period from ______________ to ______________

                         Commission file number 1-15303

                                  ENTRADE INC.
             (Exact name of registrant as specified in its charter)


    Commonwealth of Pennsylvania                         52-2153008
-------------------------------------       ------------------------------------
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
   incorporation or organization)


     500 Central Avenue, Northfield, IL                             60093
---------------------------------------------                   -------------
  (Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code:    (847) 441-6650
                                                      ---------------

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

                                                      Name of Each Exchange on
         Title of Each Class                              Which Registered
--------------------------------------              ----------------------------
   Common stock, without par value                    New York Stock Exchange
                                                       Pacific Stock Exchange

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

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  the  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

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 [ ]

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the registrant at March 1, 2000: $539,028,000

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

               Class                             Outstanding at March 1, 2000
-------------------------------------          --------------------------------
  Common stock, without par value                           16,427,022


                      Documents Incorporated by Reference:

Portions  of  Registrant's  Proxy  Statement  for the  2000  Annual  Meeting  of
Shareholders  to be filed  with  the  Commission  within  120 days of the end of
Registrant's last fiscal year is incorporated by reference into Part III.


<PAGE>






                                     PART I

Item 1.  Business

General

Entrade Inc., incorporated in Pennsylvania in February 1999, is a creator of and
investor  in  business to business  (B2B)  e-commerce  marketplaces  in targeted
industries.  To date,  Entrade  has  created  or  invested  in seven  e-commerce
marketplaces with an eighth pending shareholder  approval.  Entrade supports the
formation of its e-commerce marketplaces by providing B2B e-commerce technology,
business infrastructure,  management talent and a competency in asset management
and fulfillment. Entrade's technology is designed to enable online transactions,
auctions, procurement, inventory management and asset management and recovery.

Entrade currently  targets  industries that it believes are either fragmented or
have  an   inefficient   supply   chain.   In   industries   with  supply  chain
inefficiencies,   Entrade's  e-commerce  marketplaces  are  designed  to  reduce
transaction  costs to both buyers and sellers by, among other  things,  reducing
cycle times associated with the disposition of assets,  increasing the number of
potential buyers and sellers,  and promoting dynamic pricing. In these ventures,
Entrade  attempts to establish  alliances  with industry  leaders to promote the
growth of these marketplaces.  Entrade will typically take an equity position in
these  businesses in exchange for its  contribution  of technology,  capital and
management resources.

In fragmented  industries,  Entrade's  e-commerce  marketplaces  are designed to
utilize  scale  and the  Internet  to  increase  the  efficiencies  of  small to
mid-sized  companies by, among other things,  increasing the purchasing power of
those companies. Entrade attempts to negotiate rebates and volume discounts from
key  industry   suppliers  and  otherwise   assist  the  participants  of  these
marketplaces.  Once  again,  Entrade  will  typically  obtain  equity  in  these
marketplaces in exchange for its technology, capital and management resources.

As part of Entrade's strategy, Entrade also promotes the creation of "clicks and
mortar"  marketplaces  and has  invested  in  building  traditional  fulfillment
capabilities.  Entrade is also seeking to identify partners to enter into master
license   relationships  in  various  regions  of  the  world  to  expedite  the
international  roll-out  of  its  business  model.  In  addition,   through  its
wholly-owned  subsidiary  entrade.com,  Inc., Entrade licenses its technology to
traditional off-line companies that seek to develop B2B e-commerce capability.

Entrade expects to receive revenue from several  sources,  including  returns on
its equity  positions in e-commerce  marketplaces,  licensing fees,  transaction
fees,  advertising fees and its fulfillment  capabilities.  The vast majority of
Entrade's  revenues  to date have been  generated  by its  subsidiaries,  Public
Liquidation  Systems,  Inc., and Asset Liquidation  Group, Inc., which engage in
the  public  auction  business  under  the  name  Nationwide   Auction  Systems.
Consequently,  Entrade reports revenue in two business segments, its transaction
services business  conducted  principally by Nationwide  Auction Systems and its
development-stage  business services conducted  primarily through its e-commerce
marketplaces.  See Note 15 to the financial statements. Due to their early stage
of  development,  Entrade's  e-commerce  marketplaces  have  transacted  minimal
commerce.

Entrade   currently  owns  all   outstanding   shares  of   entrade.com,   Inc.,
TruckCenter.com,  Inc., the Nationwide Auction Systems companies and Artra Group
Incorporated.  Entrade has a majority interest in utiliparts.com,  Inc., with an
80%  equity  interest,  and in  printeralliance.com,  Inc.,  with  a 64%  equity
interest. Entrade also has a 38% equity interest in AssetControl.com, LLC, and a
25% equity interest in TradeTextile.com,  Inc. In addition,  Entrade holds a 15%
equity  interest in  Pricecontainer.com,  Inc. and a 25% equity  interest in the
Class A common stock of asseTrade.com  (approximately 14.65% computed on a fully
diluted basis, principally  after conversion of preferred stock and the exercise
of stock options),  which ownership figures are current as of March 20, 2000. We
have also reached  separate  agreements,  which are both subject to  shareholder
approval,  to double the number of shares  that we own of  asseTrade.com  and to
acquire a 15% equity  interest in ATM Service,  Ltd.,  d/b/a  ATMCenter.com.  We
expect to continue to evaluate additional ventures and acquisition opportunities
in pursuit of our growth strategy.

For  financial  information  about  our  industry  segments,  see Note 15 to our
consolidated financial statements for the year ended December 31, 1999.



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Recent Events

In February 1999, Entrade acquired entrade.com and a 25% interest in the Class A
common stock of asseTrade.com from WorldWide Web NetworX Corporation in exchange
for 1,800,000  shares of Entrade,  $1,400,000 in cash, and a $4,000,000  working
capital commitment.

On September 23, 1999, a  wholly-owned  subsidiary of Entrade  merged into Artra
Group  Incorporated.  As a result of the  merger,  Artra  became a  wholly-owned
subsidiary of Entrade,  and  Entrade's  common stock became listed and commenced
trading on The New York Stock Exchange.  Upon consummation of the merger, former
Artra  shareholders  became the holders of approximately  83% of the outstanding
shares of Entrade's common stock. At the time of the merger, Artra held cash and
approximately  9% of the  outstanding  common stock of Comforce  Corporation,  a
telecommunications  and  computer  technical  staffing and  consulting  services
business. Artra has no ongoing business operations.

In September 1999,  asseTrade.com  entered into an agreement to sell to Internet
Capital  Group,  Inc.,  12,669,520  shares of its Series A  preferred  stock for
$11,500,000,  representing  a 25.25%  interest on a  fully-diluted  basis.  This
investment was fully funded in January 2000.

In October 1999, Entrade acquired a 61% equity interest in  printeralliance.com,
an e-commerce marketplace designed to, among other things, reduce purchase costs
for member  companies by  aggregating  volume  purchases.  Entrade also recently
invested $1,000,000 to acquire an additional 3% of printerallinace.com,  raising
its total equity interest to 64%.

In October 1999,  entrade.com licensed its technology to  Pricecontainer.com  in
return  for  a  15%  ownership  interest.   Pricecontainer.com   is  an  on-line
reservation  system  designed  to  facilitate  a variety  of ocean and  maritime
logistic services.

Also in October 1999, Entrade acquired its Nationwide subsidiaries, which engage
in the public auction business under the name Nationwide Auction Systems, for an
aggregate of 1,570,000  shares of Entrade  common  stock,  unsecured  promissory
notes in the  aggregate  principal  amount of  $18,800,000,  and an aggregate of
$6,000,000  in  cash.  In  January  2000,  notes  with a  principal  balance  of
approximately  $4,800,000  plus accrued  interest  were  converted  into 278,985
shares of Entrade  common  stock.  Entrade has entered into certain  agreements,
subject  to  shareholder  approval,  pursuant  to which it has paid the  initial
principal  installments on the remaining notes,  $3,500,000,  plus interest, and
proposes  to issue  265,621  shares  of  Entrade  common  stock to  satisfy  all
outstanding note obligations.

During  December  1999  and  January  2000,  Entrade  completed  the  sale of an
aggregate of 422,243 shares of its common stock, no par value,  for an aggregate
consideration  of  $13,960,000  to  unaffiliated  institutional  and  individual
accredited investors. Net proceeds were $13,412,000.  These securities were sold
pursuant to an exemption from registration  under the Securities Act of 1933, as
amended, pursuant to Regulation D promulgated thereunder.

On January 3, 2000,  Entrade's  Board of Directors  approved a merger  agreement
between  a  newly-formed  merger  subsidiary  of  Entrade  with  Positive  Asset
Remarketing,  Inc. As a result of the merger,  Positive Asset  Remarketing  will
become a wholly-owned  subsidiary of Entrade,  and the  shareholders of Positive
Asset Remarketing will receive 900,000 shares of Entrade's common stock (subject
to an increase to  1,000,000  shares in certain  circumstances)  in exchange for
their shares in Positive Asset Remarketing.  Entrade will acquire Positive Asset
Remarketing's   only  asset,  an  interest  in  the  Class  A  common  stock  of
asseTrade.com,  which will double our current interest in asseTrade.com  Class A
common  stock.  After the merger,  and assuming  the full  dilution of Entrade's
interest  (principally  after  conversion of preferred stock and the exercise of
stock  options),  Entrade will hold a 29.3% interest in the Class A common stock
of asseTrade.com. The owners of Positive Asset Remarketing include a director of
Entrade who is also an officer of both entrade.com and asseTrade.com, as well as
two other officers of entrade.com. The transaction is subject to the approval of
Entrade's shareholders.

On January 26, 2000,  Entrade agreed with certain  stockholders of ATM Services,
Ltd.,  to acquire  from  those  stockholders  15% of the issued and  outstanding
shares of ATM Services, Ltd., in exchange for the greater of (i)





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352,941  shares of Entrade  common  stock or (ii) that number of shares equal to
$6,000,000  divided by the average  closing share price for Entrade common stock
for the five  business  days  preceding  the  closing  of the  transaction.  ATM
Services,  Ltd.,  which does  business  as  ATMCenter.com  and is a licensee  of
Entrade's  technology,  assists  businesses in the  disposition of inventory and
other assets that need to be removed from their  facilities.  The transaction is
subject to the approval of Entrade's shareholders.

On February 10, 2000,  Entrade agreed with Associates First Capital  Corporation
to  organize  a new entity to be known as  TruckCenter.com,  Inc.,  designed  to
create a business-to-business  e-commerce marketplace for the sale of trucks and
related services, including financing,  certification,  warranty and third-party
inspection.  Entrade has agreed to invest  $3,000,000 and will be the sole owner
of  TruckCenter.com,  but  Associates has an option to purchase up to 50% of the
equity.  TruckCenter.com  expects  that its  recently  launched  website will be
capable of transacting commerce during the second quarter of 2000.

On February 18, 2000, entrade.com, a wholly owned subsidiary of Entrade, entered
into  an  agreement  to  acquire  1,011,667   convertible  preferred  shares  of
TradeTextile.com,  a warrant to acquire 288,778 convertible preferred shares and
a warrant  to acquire  333,609  convertible  preferred  shares in  exchange  for
$3,500,000, a warrant to acquire up to 75,000 shares of Entrade common stock and
a license to TradeTextile.com of entrade.com's software technology.  Pursuant to
the terms of the agreement,  entrade.com owns 25% of  TradeTextile.com  and will
own 35% of TradeTextile.com on a fully diluted basis, assuming the full exercise
of its warrants in TradeTextile.com. TradeTextile.com is designed to provide B2B
e-commerce for the trading of yarns, fabrics, garments, raw materials, chemicals
and textile quotas, initially targeting the Chinese textile industry.

On March 10,  2000,  Entrade  agreed with  Textron  Financial  Corporation,  ATM
Services  Ltd. and  Safeguard  Scientifics,  Inc. to organize a new entity to be
known as AssetControl.com,  designed to create a B2B e-commerce  marketplace for
the management and disposition of surplus industrial equipment, excess inventory
and commercial real estate.  Entrade has agreed to provide the venture a license
to use the Entrade  technology,  e-Business  consulting  and service  resources.
Textron  Financial has agreed to provide the management  support of its existing
asset management  business,  the Asset Control Services division,  and financial
expertise,  as well as accounting,  tax and legal services for AssetControl.com.
Entrade  owns 38% of the new entity,  Textron  Financial  owns 47%, ATM Services
owns 9.5% and Safeguard Scientifics owns 5%.

On March 27, 2000, Entrade closed a private placement financing transaction with
several  institutional  accredited  investors.  Under the  terms of the  private
placement, Entrade issued $30,000,000 of redeemable convertible preferred stock,
resulting  in  net  proceeds  to  Entrade  of  approximately  $28,500,000.   The
non-voting  preferred  stock bears a 6% dividend,  which Entrade can pay, at its
election,  in either cash or common stock.  For the first  fifteen  months after
issuance  of  the  preferred   stock,   and  subject  to  certain   registration
requirements  and other  restrictions,  Entrade has the right to elect to redeem
all or part of the preferred  stock at the lesser of $78.73 or 91% of the lowest
closing sale price of Entrade's common stock during the two consecutive  trading
days ending on the date of such  election.  In addition,  Entrade has the right,
during such period,  to redeem the preferred stock at 115% of par.  Entrade must
redeem or convert all of the preferred stock within two years of the date of its
issuance,  and,  until the  preferred  stock is redeemed or  converted,  Entrade
cannot pay  dividends on its common stock  without the approval of the preferred
stockholders. In conjunction with the agreement, Entrade also issued warrants to
the  investors  to purchase  400,000  shares of its common  stock at $41.375 per
share.


Industry Overview

Entrade  believes that significant  growth in the Internet  creates  substantial
market  opportunities  for companies that can assist businesses in becoming more
competitive  through the development of online marketplaces and applications for
e-commerce. The development of Internet marketplaces and e-commerce applications
has the potential to provide  substantial cost and operating  efficiencies for a
company's asset and inventory  management,  operations,  marketing,  sales,  and
distribution  functions.  By providing  broad access to a global network through
e-commerce  marketplaces  that are intended to increase the number of buyers and
sellers for any given product, Entrade expects the Internet to assist businesses
by lowering the cost of creating new  marketing  channels and buying and selling
products and services.  As use of the Internet  becomes more functional and more
widely  accepted,  and as  businesses  become  more  comfortable  with  Internet
security measures, Entrade expects the potential market for B2B






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e-commerce to grow rapidly.  The growth of the B2B e-commerce  industry could be
slower  then  expected,  however,  and  is  subject  to  many  risks,  including
restrictive  laws  and  regulation,   security   breaches  and  lack  of  market
acceptance.


Entrade's Software and Services

The  Entrade   software,   developed  by  Entrade's  wholly  owned   subsidiary,
entrade.com,  is designed to allow the creation of online Internet marketplaces.
During  1999,   entrade.com  completed  the  development  of  a  new  e-commerce
transactional   software  system  that  operates   independently  of  its  prior
technologies and integrates a suite of complementary  features.  The software is
designed  to  enable  the  cataloging,   transfer,  trading,  selling,  auction,
purchase,  and  tracking of  products,  inventories  and  corporate  assets in a
secure, 24-hour, Internet environment.  Using the technology, Entrade expects to
create  websites that allow multiple  buyers and sellers the ability to transact
commerce  over the Internet for the purchase and sale of products and  services,
including inventory, machinery, equipment and corporate services.

The Entrade transactional  software currently supports four different purchasing
methods: fixed price, bulk purchase,  open bid and multiple auction formats. The
technology is designed to allow  sellers the ability to combine these  different
purchasing  methods.  The fixed price method allows the seller to sell a product
at a fixed price without allowing for any negotiation.  The bulk purchase method
allows the seller to liquidate  an entire lot of product at a discounted  price.
The open bid method  allows the seller to  negotiate a price of a product with a
buyer. This is a one-on-one  negotiation  between the buyer and the seller, i.e.
the buyer  makes an offer and the  seller  has the  option to accept  the offer,
counteroffer or reject the offer. If a counteroffer is sent, the buyer will then
have the same three  options.  Finally,  a product  can be placed  for  auction.
Entrade  software is designed to allow proxy bidding on multiple auction formats
and to allow listed  inventory to be moved from or combined with the fixed price
methods to open bids to auction with the click of a button.

The Entrade  transaction  software  includes  several  search  engines  that are
designed  to enable  potential  buyers to search  for  products  using a keyword
search engine,  and an advanced or category  structure search. The technology is
also  designed  to support a  user-driven  request-for-proposal  submission  and
management  system for purchasing  agents to search,  consolidate  and negotiate
purchasing contracts,  as well as a credit module. The credit module is designed
to be used either as an internal currency on the site or as internal credits for
transfer of products from one company to the other.

To  enhance  the  community  experience  that  Entrade  seeks to  create  in its
marketplaces,  the Entrade technology is designed to offer users a sophisticated
messaging system that is comparable to existing  web-email sites. The technology
also  contains  administration  tools that are  designed  to allow a  designated
individual  to  administer,  among other  things,  transactions,  inventory  and
auctions.  Furthermore, the technology is designed to allow the administrator to
generate several types of reports, to add categories and sub-categories,  and to
assign different description fields under each category or sub-category.

Entrade  licenses  its   transactional   software  to  each  of  its  e-commerce
marketplaces.  Customization,  development,  site design, site hosting and other
related services are administered at offices in Canada and New Jersey.


Websites Utilizing Entrade's Technology

Entrade's  technology  is currently  being used by or is in the process of being
installed  by  Entrade's   eight   e-commerce   marketplaces,   TruckCenter.com,
utiliparts.com,     printeralliance.com,     AssetControl.com,    asseTrade.com,
TradeTextile.com, Pricecontainer.com and ATMcenter.com.

TruckCenter.com

Entrade  currently  owns  100%  of  TruckCenter.com,   Inc.,  a  B2B  e-commerce
marketplace for the sale of trucks and related  services,  including  financing,
certification, warranty and third-party inspections. TruckCenter.com is a



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collaborative effort between Entrade and Associates First Capital Corporation, a
financial services company managing $95 billion in assets and a leading provider
of financing to the  transportation  industry.  The Associates has the option to
purchase a 50% equity interest in TruckCenter.com.

TruckCenter.com  will  initially  focus on  selling  used  trucks  and  trailers
including those that have come off lease by using the potential  efficiencies of
the Internet to bring together  fragmented  buyers and sellers.  TruckCenter.com
expects to enter other segments of the trucking  industry in the near future. In
addition,  TruckCenter.com expects to provide value-added content, community and
commerce-related  services  on its website  through  partnerships  with  leading
companies in the industry.

TruckCenter.com  expects to  generate  revenue  from seller  sales  commissions,
commissions  on third  party-services,  listing fees, and  advertising.  Entrade
expects  the website to be capable of  handling  transactions  during the second
quarter of 2000.

utiliparts.com

Entrade owns an 80% equity interest in  utiliparts.com,  Inc., which is intended
to be a global  market  maker  for  unused  and used  electric  utility  assets.
asseTrade.com,  Inc., is the only other shareholder of  utiliparts.com,  Inc. As
the pace of deregulation  accelerates,  utiliparts.com desires to bring together
energy companies  seeking to create effective asset recovery and asset inventory
programs.  The majority of  utiliparts.com's  available  listings originate from
overstocked,  never-used  inventories  held by utilities  in the United  States.
utiliparts.com  also  expects to make  available  refurbished,  serviceable  and
repairable parts, as well as assets made available from foreign  utilities.  The
website is designed to enable these assets to be catalogued,  sold, bid, traded,
purchased,  auctioned  or  exchanged.  utiliparts.com  expects  to  improve  the
competitiveness of energy companies through the transfer and  rationalization of
parts  inventories  and  by  providing  other  services,   including  investment
recovery,  internal inventory  optimization,  and asset disposition  consulting.
This  website  is  currently  capable  of  handling  transactions,  although  no
transactions have been processed to date.

printeralliance.com

Entrade  acquired a 61% interest in  printeralliance.com,  Inc., in October 1999
and recently acquired an additional 3% interest, bringing Entrade's total equity
interest   in    printeralliance.com    to   64%.    Started   in   July   1999,
printeralliance.com  began  operating  as a reverse  aggregator  and  e-commerce
enabler of the printer supply market, targeting U.S. sheet fed printers.  Member
companies may purchase materials and supplies from participating paper mills and
other vendors who have entered into rebate  agreements with  printeralliance.com
and  printeralliance.com  then  shares  those  rebates  with  its  participating
members.  printeralliance.com  plans to expand its scope of  services to include
equipment purchases,  consulting services, employee benefits and other products.
printeralliance.com   currently  has  agreements  with  several  large  industry
suppliers, including International Paper, Mead and Braden Sutphin & Company, has
agreements with over 95 independent  small to medium size printers,  and expects
to list over $50,000,000 in used printing equipment. Entrade expects the website
to be capable of handling transactions in the second quarter of 2000.


AssetControl.com

On March 10,  2000,  Entrade  agreed with  Textron  Financial  Corporation,  ATM
Services  Ltd. and  Safeguard  Scientifics,  Inc. to organize a new entity to be
known as  AssetControl.com,  LLC,  to create a  business-to-business  e-commerce
marketplace for the management and disposition of surplus industrial  equipment,
excess  inventory and commercial real estate.  The new entity intends to utilize
the  expertise of the equity  participants,  as well as a network of  e-commerce
marketplaces,  including  Entrade's  e-commerce  marketplaces,  to optimize  its
customers' asset  disposition  process.  Textron Financial has agreed to provide
the management  support of its existing  asset  management  business,  the Asset
Control Services division, and financial expertise,  as well as accounting,  tax
and legal  services  for  AssetControl.com.  Entrade  has agreed to provide  the
venture a license  to use the  Entrade  technology,  e-business  consulting  and
service resources. ATM Services Ltd. has agreed to provide know-how and services
in asset and excess inventory  disposition.  Safeguard Scientifics has agreed to
act as an advisor and






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consultant  on further  opportunities  to maximize  the growth of the  business.
Entrade  owns 38% of the new entity,  with  Textron  Financial  owning 47%,  ATM
Services owning 9.5%, and Safeguard  Scientifics  owning 5%. Entrade expects the
website to be capable of handling transactions in the second or third quarter of
2000.

asseTrade.com

Entrade  currently  owns  a  25%  interest  in  the  Class  A  common  stock  of
asseTrade.com  and  has  entered  into  an  agreement,  subject  to  shareholder
approval,  to double its current  ownership  interest in  asseTrade.com  Class A
common  stock.  On a  fully  diluted  basis  (principally  after  conversion  of
preferred  stock and the exercise of stock options),  our ownership  interest in
asseTrade.com  would be reduced to 29.3%.  asseTrade.com is a venture  initially
formed with Henry Butcher  International  (London) and Michael Fox International
(Baltimore), two leading corporate asset management,  disposition and land-based
auction  companies  with more than 30 worldwide  locations and over 150 years of
combined business experience.

asseTrade.com is designed to provide  business-to-business  online services that
facilitate the remarketing of industrial  machinery,  equipment and parts. These
services  should  enhance  the current  operation  of asset  recovery  teams and
procurement groups of industrial  companies.  The Entrade  transaction  software
licensed to  asseTrade.com  and used by its website is customized to provide for
real time online sales and internal transfers of plant, equipment and inventory.
asseTrade.com  is  initially  focused on the client  base of Butcher and Fox, as
well as other Fortune 500/Global 2000 companies, and expects to include services
such as valuation and listing of corporate/investment  assets, electronic online
registration of assets,  and the development of corporate  Intranet programs for
the global  redistribution  of a company's assets on an internal basis.  Entrade
expects the website to be capable of handling transactions in the second quarter
of 2000.

TradeTextile.com

On February 18, 2000,  entrade.com  contributed to TradeTextile.com,  Inc. cash,
and a warrant to acquire  75,000 shares of Entrade common stock and a license to
the Entrade  technology in exchange for a 25% ownership interest and warrants to
acquire an additional  10% of the company at a later date.  TradeTextile.com  is
designed  to  provide a B2B  e-commerce  marketplace  for the  trading of yarns,
fabrics,  garments, raw materials,  household textiles and other textile-related
products,  initially  targeting  the  Chinese  textile  industry,  a market that
contributes   significantly  to  the  global  textile  industry.   According  to
management  of  TradeTextile.com,  more than six hundred  Chinese  import/export
corporations and manufacturers have agreed to participate in the marketplace and
six suppliers have given TradeTextile.com  exclusive agency rights to handle all
of  their  on-line   trading.   Targeted   customers   include  Chinese  textile
manufacturers,  Hong Kong textile manufacturers and exporters and global textile
importers.  Through its  management  team,  TradeTextile.com  has a  significant
relationship  with Dai Dai  Development,  Ltd.,  a  leader  in  Chinese  textile
trading.  TradeTextile.com  has offices in Hong Kong, Chicago and Shanghai.  The
Entrade  technology has been enhanced to encompass  multi-language  capabilities
that  will  include  traditional  Chinese  and  simplified  Chinese,  as well as
English. This website is currently capable of handling transactions, although no
transactions have been processed to date.

Pricecontainer.com

In October 1999,  entrade.com  licensed its  technology  to  Pricecontainer.com,
Inc., in return for a 15% ownership interest.  Pricecontainer.com  is an on-line
reservation  system  designed  for  oceanic  and  maritime  logistics  services,
including  containers,  break bulk and charters,  with plans to add dry bulk and
oil capabilities. Pricecontainer.com will offer a web-based marketplace in which
shippers  and carriers  can  exchange  and arrange  logistics  services for core
products,  supplies and  equipment.  To foster the  development of its business,
Pricecontainer.com  is attempting to establish alliances with one or more global
trading companies.

Pricecontainer.com expects to utilize the Entrade technology to allow registered
shippers and carriers to conduct all their shipping  business,  including excess
capacity  auctions  and  exchanges,  via a secure  e-commerce  environment.  The
technology  is  also  designed  to  provide  communication  capabilities,  claim
handling  and  documentation  data for buyers and sellers.  Entrade  expects the
website to be capable of handling transactions in the second quarter of 2000.




                                       7
<PAGE>


ATMcenter.com

Entrade has entered  into an  agreement,  subject to  shareholder  approval,  to
acquire a 15% equity  interest  in ATM  Service  Ltd.,  which does  business  as
ATMcenter.com, from three officers of ATM. ATM assists retailers,  manufacturers
and financial institutions in the disposition of inventory and other assets that
need to be eliminated  from their  stores,  warehouses or portfolios in exchange
for cash or other solution services.

Utilizing  Entrade's  licensed  technology,  ATM  expects to access the  growing
markets for sellers of excess  inventory  and assets,  quickly and  economically
connecting  pre-qualified  buyers  over the  Internet.  ATM intends to develop a
global   database   and  network  of  B2B  buyers  and   sellers  by   utilizing
country-specific ATM portals. This website is capable of handling  transactions,
although no transactions have been processed to date.

Revenue Model

The  transaction  fees charged by the Entrade  marketplaces  will vary depending
upon the  specific  marketplace  and the  service  that it offers and  performs.
License fees for software are subject to negotiation. Entrade is also developing
a strategy to expand Entrade's business model internationally to establish joint
ventures  with  partners in foreign  countries.  Entrade  intends to license its
technology to prospective joint venture partners,  with the foreign participants
being  responsible for all in-country  marketing and sales  operations.  Entrade
expects each foreign  participant to pay substantial  fees per joint venture for
the right to market  the  Entrade  technology  in the  participant's  country or
region and, depending on the amount of the initial fee and other considerations,
to share all transaction and/or sublicensing fees earned.

Entrade  may also  charge  fees for other  services  it may provide to a client,
including  consulting,  web-site hosting,  development  services,  customization
services, and maintenance and support, which fees may be based upon a percentage
of the license, hourly rates, or both.

Nationwide Auction Systems

Entrade  has two wholly  owned  subsidiaries  that do business  collectively  as
Nationwide  Auction  Systems.  Nationwide  operates six permanent,  full service
public auction  facilities  engaged in the liquidation of assets by auction on a
consignment  basis.  Nationwide  specializes in the disposition of municipality,
law enforcement  agency and utility  company surplus  property and has permanent
locations in California, Missouri, Georgia, New Mexico and Delaware.

Nationwide  believes that it currently  represents a majority of the  government
agencies and utility  companies in California  and that it is one of the largest
auctioneers of law enforcement,  drug-seized and forfeited  vehicles,  aircraft,
water  vessels,  jewelry  and real  estate in the west  coast.  Nationwide  also
provides auction services to a growing number of financial institutions,  rental
companies and large  corporations  and is able to conduct  auctions in locations
where it does not have permanent facilities.

Typically,  Nationwide acts as a consignee in the sales process,  receiving fees
from both  buyers and  sellers,  while not taking  title to  properties  sold at
auction.  All  items  sold at  auction  are sold "AS IS WHERE  IS"  without  any
warranty from Nationwide.  Consignor  commissions and buyer's premiums represent
Nationwide's  primary  sources of revenue.  Nationwide  also  collects  fees for
providing a wide range of services,  such as merchandise  transportation  to the
auction site, storage, security and preparation of merchandise for auction.

Part of our  strategy  is to  establish  NationwideAuction.com  as an  e-enabled
website  for  Nationwide  to  complement  our  network  of  other  online  asset
disposition marketplaces.  NationwideAuction.com  will focus on the online, real
time  disposition  of  assets,  including  municipality,  law  enforcement,  and
corporate  and utility  company  surplus  property.  In addition to vehicles and
equipment, we intend for NationwideAuction.com to expand its online offerings to
include additional  materials currently auctioned at Nationwide Auction System's
land based  facilities,  such as real  property,  idle  inventory  and  jewelry.
Entrade expects the website to be capable of transacting  business in the second
quarter of 2000.





                                       8
<PAGE>


Proprietary Rights

entrade.com holds common law rights in trademarks and service marks that it uses
in  connection  with  its  e-commerce  services.   Entrade  is  seeking  federal
registration of the  "utiliparts.com"  and "entrade.com" marks as service marks.
entrade.com  does not own any  patents  or  patent  applications,  but is in the
process of identifying business  methodologies for potential patent filings. One
of the  Nationwide  companies also holds a federal  registered  trademark in the
Nationwide  Auction Systems name and a related design.  Nationwide has developed
certain  proprietary  computer  software for  maintaining  sales  inventory  and
databases  of  consignors  and  buyers.  However,  Entrade  does not expect this
software to have immediate application outside of the Nationwide Auction Systems
companies.


Competition

Entrade  currently faces  competition from several  different sources due to the
breadth of services Entrade offers,  and the  competition,  in each case, can be
intense.  Entrade competes with incubator and venture capital firms, transaction
software licensors and industry and  cross-industry  market makers that may have
greater  resources and brand  recognition,  more  sophisticated  technology  and
better  market  acceptance.  Entrade  believes,  however,  that it is  favorably
positioned  in the  industry  because  of the  functionality  of its  e-commerce
technology,   its   development  and  management   talent,   and  the  strategic
partnerships that it has formed.

Entrade competes  directly with  business-to-business  e-commerce  incubator and
venture   capital  firms  in  creating,   developing  and  investing  in  online
marketplaces.  There are several large publicly traded and private  companies in
this market with significant resources. Increased competition in this market may
also increase the price Entrade must pay for future  acquisitions.  In addition,
traditional  corporations who have not yet developed e-commerce capabilities may
develop those capabilities in house and without the assistance of companies such
as Entrade.

Entrade also competes with companies who license transaction  software solutions
to companies who operate online marketplaces. Several large, established players
have grown  rapidly over the last year and control  large market  shares in this
segment.  These companies have significantly  greater resources then Entrade and
may develop more sophisticated technology and be quicker to market then Entrade.
Each of Entrade's  e-commerce  marketplaces  also faces  competition  from other
industry  and  cross-industry  market  makers that have  significant  resources,
including traditional  corporations that may enter the market without assistance
from companies such as Entrade. In addition,  Entrade's e-commerce  marketplaces
may face competition amongst themselves. See "Risk Factors -- We may not be able
to compete effectively with other providers of e-commerce services."

In the auction  industry,  several large  international  auction  companies with
significant  resources  compete  in  the  land  based  auction  industry.  These
companies  compete  for the  liquidation  of large  plants and large  volumes of
machinery.  The  remainder  of the auction  industry is  fragmented  and largely
composed of  independently  owned auction  houses.  Nationwide  believes that it
currently competes favorably with existing  competitors,  primarily on the basis
of quality of services.


Employees

As of  December  31,  1999,  we  and  our  wholly  owned  subsidiaries  employed
approximately  130 persons,  including a total of 45 employees at both corporate
headquarters  and at our technology  subsidiary  entrade.com.  There are also 85
employees at our traditional land-based auction subsidiary Nationwide. Given the
size of both Entrade Inc. and entrade.com  and the nature of our business,  many
of these  employees  perform  multiple  functions.  We expect  to  substantially
increase  the number of our  employees  during  the course of the next  calendar
year.

We consider our  relationships  with our employees to be good. Our employees are
not covered by collective bargaining agreements.






                                       9
<PAGE>


Cautionary Statements - Risk Factors

In the interest of providing Entrade's shareholders and potential investors with
certain  Entrade  information,  including  management's  assessment of Entrade's
future  potential,  certain  statements set forth herein contain or are based on
projections of revenue,  income, earnings per share and other financial items or
relate to  management's  future  plans and  objectives  or to  Entrade's  future
economic  performance.  Such statements are "forward-looking  statements" within
the meaning of Section 27A(I) of the Securities Act of 1933, as amended,  and in
Section 21E(I) of the Securities Act of 1934, as amended.

Although any forward-looking  statements contained herein or otherwise expressed
by or on behalf of Entrade  are,  to the  knowledge  and in the  judgment of the
officers and  directors of Entrade,  expected to prove true and to come to pass,
management  is  not  able  to  predict  the  future  with  absolute   certainty.
Accordingly,  shareholders  and potential  investors are hereby  cautioned  that
certain events or circumstances  could cause actual results to differ materially
from those projected or predicted. In addition,  forward-looking  statements are
based on management's  knowledge and judgment as of the date hereof, and Entrade
does not  intend to update  any  forward-looking  statement  to  reflect  events
occurring or circumstances existing hereafter.

In particular, Entrade believes the following facts could impact forward-looking
statements  made herein or in future  written or oral releases and by hindsight,
prove such statements to be overly optimistic and unachievable.


Risk Factors

Our business and results of operations  could be seriously  harmed by any of the
following risks.

         Risks Related to Entrade

         We have  limited  operating  history  upon which you may  evaluate  our
         operations.

We formed Entrade in February  1999, at which time we acquired the  intellectual
property of entrade.com and 25% of the voting common stock of asseTrade.com.  We
have  virtually  no  operating  history  prior to that time.  In  addition,  our
e-commerce marketplaces are in the early stages of their development and have no
or little operating history. Accordingly, we have limited operating history upon
which you may evaluate our business and prospects.  Because our management  team
as a unit is relatively  new, it also has a very limited track record upon which
you can make an  evaluation.  In  addition,  our revenue  model is evolving  and
because of our lack of operating  history,  period-to-period  comparisons of our
results of operations will not be meaningful in the short term and should not be
relied upon as indicators of future performance. Our business and prospects must
be  considered  in  light  of the  risk,  expense  and  difficulties  frequently
encountered by companies in early states of development,  particularly companies
in new and  rapidly  evolving  markets  such as B2B  e-commerce.  Our failure to
address these risks  successfully  could  materially  and  adversely  affect our
business and operations.


         We  anticipate  we will  incur  continued  losses  for the  foreseeable
         future.

We expect to incur significant  losses for the foreseeable  future. We expect to
incur  significant costs associated with building the  infrastructure  necessary
for our business.  Our revenue may not be sufficient to fund these expenses.  We
may never be profitable or, if we become profitable, we may be unable to sustain
profitability.

The  anticipated  losses  may result  from our plan to  increase  our  operating
expenses to:

o        launch additional B2B marketplaces;

o        increase our technical and customer support operations;

o        enhance our  technological capabilities;







                                       10
<PAGE>


o        pursue strategic marketing and distribution alliances; and

o        attract and retain qualified personnel.

Some of our expenses are or will be fixed,  and other  expenses will increase as
we hire more executives and other  personnel to grow our business.  Our earnings
may also be  adversely  affected  by the impact of goodwill  and other  non-cash
charges from  acquisitions and otherwise.  Our expenses may increase faster then
we  expect,  and,  if our  revenue  does  not  increase,  we may  not be able to
compensate by reducing expenses in a timely manner.


         We may have difficulty obtaining future funding sources, if needed, and
         we might have to accept terms that would adversely affect shareholders.

Expenses  are  expected  to exceed  revenue  in 2000.  Although  we have  raised
significant  funds  during  December  1999 and the  first  quarter  of 2000,  we
anticipate  that we will need to raise funds from  additional  financings in the
future. Any financings may result in dilution to our existing shareholders.

We may have difficulty  obtaining  additional funding, and we may have to accept
terms that would adversely affect our  shareholders.  For example,  the terms of
any future financings may impose  restrictions on the manner in which we conduct
our  business,  such as  controlling  future  decisions  by us to  make  capital
expenditures,  acquisitions  or  significant  asset sales.  Those  financing may
impose  restrictions  on our  ability to pay  dividends  on our common  stock in
addition to the restrictions  imposed by our recently completed  preferred stock
offering.  See "Information  about Entrade - Recent Events".  If we cannot raise
funds on acceptable  terms, if and when needed, we may not be able to develop or
enhance our services to customers,  take advantage of future  opportunities  for
strategic  alliances,  grow  our  business,  support  our  increasing  operating
expenses or respond to  competitive  pressures  or  unanticipated  requirements,
which would materially and adversely affect our business and operations.


         Our success is  dependent on retaining  our current key  personnel  and
         attracting  additional  key and other  personnel,  particularly  in the
         areas of management, technical services and customer support.

We believe that our success will depend on  continued  employment  of our senior
management  team and key technical  personnel for the development of our on-line
services. Their experience in e-commerce asset management, sales and procurement
is important to the establishment of our on-line websites in various industries.
The loss of any one of our key personnel could disrupt and negatively affect our
business  and  operations.  Our success also  depends on having  highly  trained
technical and customer support personnel.

We have  had and  may  continue  to have  difficulty  attracting  and  employing
additional  members to our senior  management team and sufficient  technical and
customer support personnel to keep up with our growth needs. This shortage could
limit our  ability  to  increase  sales and to sell  services.  Competition  for
personnel is intense.  If we cannot hire and retain  suitable  personnel to meet
our growth needs,  our business and operations will be negatively  affected.  We
believe that these risks also apply to each of our e-commerce marketplaces.


         We are  growing  rapidly  and  effectively  managing  our growth may be
         difficult.

We have rapidly and significantly expanded our operations and expect to continue
to do so by adding new  marketplaces,  hiring new  employees  and  acquiring new
businesses.  This  growth has placed,  and is  expected to continue to place,  a
significant strain on our resources and systems.  To manage our growth, we must,
among other things,  develop internal  systems,  train and manage our employees,
maintain adequate levels of liquidity and upgrade our infrastructure. If we fail
to  manage  our  growth  successfully,  our  business  and  operations  could be
materially  and  adversely  affected.  We believe that these risks also apply to
each of our e-commerce marketplaces.



                                       11
<PAGE>


         Fluctuations  in our quarterly  results may adversely  affect our stock
         price.

Our quarterly  operating  results will likely vary  significantly in the future.
Our  operating  results will likely fall below the  expectations  of  securities
analysts or  investors in some future  quarter or quarters.  Our failure to meet
these  expectations would likely adversely affect the market price of our common
stock.

Our  quarterly  operating  results  may vary  depending  on a number of factors,
including:

o        demand  of buyers  and  sellers  to use and  transact  business  on our
         websites;

o        actions taken by our competitors,  including new product introductions,
         fee schedules,  pricing policies and enhancements;

o        size and timing of sales of our services;

o        future acquisitions and our ability to control costs; and

o        general economic factors.

Furthermore,  the majority of our current revenue comes from traditional auction
fees and  related  revenue  from  Nationwide  Auction  Systems.  These  revenues
fluctuate   from  quarter  to  quarter   because  of  the  timing  of  auctions,
acquisitions  and  development  of auction  sites.  Nationwide  Auction  Systems
generally incurs substantial costs in entering new markets and the profitability
of operations at a new location is uncertain. In addition, the timing of related
costs and the  effectiveness of integrating new auction sites,  acquired auction
businesses and e-commerce  capabilities might produce fluctuating  results. As a
result, our quarterly operating results may fluctuate significantly.


         We may  not be able  to  protect  our  proprietary  rights,  and we may
         infringe on the proprietary rights of others.


         Copyright and patent risks; software license risks.

While we seek to protect our technology, it is not possible for us to detect all
possible  infringements  of our  software,  text,  designs  and  other  works of
authorship. Also, copyright protection does not extend to functional features of
software and will not be effective to prevent third parties from duplicating our
software's  capabilities  through  engineering  research  and  development.   In
addition,  our technology and  intellectual  property may receive  limited or no
protection in some  countries,  and the global  nature of the Internet  makes it
impossible to control the ultimate destination of our work.

We have not conducted  searches to determine if our  software,  which powers all
eight of our current e-commerce marketplaces,  infringes on any patents of third
parties.  If our software is found to infringe on the copyrights or patents of a
third  party,  the third  party or a court or other  administrative  body  could
require us to pay royalties for past use and for continued  use, or to modify or
replace the software to avoid  infringement.  We cannot assure you that we would
be able to modify or replace the software.

Any of  these  claims,  with  or  without  merit,  could  subject  us to  costly
litigation,  divert our technical and  management  personnel and  materially and
adversely affect our business and operations.


         Trademarks and service marks risks.

Proprietary rights are important to our success and our competitive position. We
have applied for federal  registration of "utiliparts.com"  and "entrade.com" as
service marks for use in connection with our electronic  commerce services,  and
we are preparing an application for  registration of entrade.com with a new logo
for use in connection with those






                                       12
<PAGE>


services.  Although we seek to protect our proprietary rights both in the United
States and abroad,  our actions may be inadequate to protect any  trademarks and
other proprietary rights or to prevent others from claiming  violations of their
trademarks  and other  proprietary  rights.  We may not be able to  protect  our
domain  names for our  websites  as  trademarks  because  those names may be too
generic or perceived as describing a product or service or its attributes rather
than serving a trademark function.

If we are unable to protect our proprietary rights in trademarks,  service marks
and other  indications  of origin,  including  our  "Powered by  Entrade"  mark,
competitors  will be able to use names and marks that are  identical  to ours or
sufficiently similar to ours to cause confusion among potential customers.  This
confusion may result in the diversion of business to our  competitors,  the loss
of customers and the degradation of our reputation. Litigation against those who
infringe upon our service marks, trademarks and similar rights may be expensive.
Because of the difficulty in proving damages in trademark litigation,  it may be
very difficult to recover damages.

Except for a search for the name  Entrade  Inc.  and a limited  search as to the
availability  of the new  entrade.com  logo, we have not  conducted  searches to
determine  whether our service marks,  trademarks and similar items may infringe
on the rights of third parties.  Despite having searched a mark,  there may be a
successful  assertion of claims of trademark or service mark infringement.  If a
third party  successfully  asserts  claims of  trademark,  service mark or other
infringement,  the  third  party  or a court or  other  administrative  body may
require us to change our service marks, trademarks, company names, the design of
our sites and materials and our Internet domain names (web  addresses),  as well
as to pay damages for any infringement.  A change in service marks,  trademarks,
company names,  the design of our sites and materials and Internet  domain names
may cause difficulties for our customers in locating us or cause them to fail to
connect  our new names and marks with our prior  names and marks,  resulting  in
loss of business.


         We may  not be  able  to make  future  acquisitions  and new  strategic
         alliances,  and,  even if we do, such  acquisitions  and  alliances may
         disrupt or otherwise negatively affect our business.

Our business plan  contemplates  that we will make  investments in complementary
companies,  technologies  and  assets.  Future  acquisitions  are subject to the
following risks:

o        we may not be able  to  agree  on  the  terms  of  the  acquisition  or
         alliance, such as the amount or price of our acquired interest;

o        acquisitions  and  alliances  may  cause a  disruption  in our  ongoing
         business,  distract  our  relatively  new  management  team and make it
         difficult  to   implement   or  maintain  our  systems,   controls  and
         procedures;

o        we may acquire  companies  or make  strategic  alliances  in markets in
         which we have little experience;

o        we may not be able successfully to integrate the services, products and
         personnel of any acquisition or new alliance into our operations;

o        we may be required to incur debt or issue equity  securities to pay for
         acquisitions, which may be dilutive to existing shareholders, or we may
         not be able to finance the acquisitions at all; and

o        our acquisitions and strategic alliances may not be successful,  and we
         may lose our entire investment.

In addition, we face competition from other parties,  including large public and
private companies, venture capital firms, and other B2B e-commerce companies, in
our search for suitable  acquisitions and alliances.  As we attempt to develop a
network of e-commerce  marketplaces  facilitating the disposition of assets,  we
may also be competing for acquisitions in the land-based  auction  industry,  as
well. Many of the companies we compete with for acquisitions have  substantially
greater name  recognition and financial  resources than we have, which may limit
our opportunity to acquire  interests in new companies,  technologies and assets
or create strategic alliances.  Even if we are able to find suitable acquisition
candidates or develop acceptable strategic alliances,  doing so may require more
time and expense than we expect








                                       13
<PAGE>


because of intense  competition.  If we cannot  acquire  interests in attractive
companies,  technologies and assets on reasonable terms, our growth strategy may
not succeed,  and our business and operations  could be materially and adversely
affected.


         We must develop and maintain positive brand name awareness.

We believe that  establishing and maintaining our brand name and the brand names
of  our  e-commerce   marketplaces  are  essential  to  expanding  our  Internet
e-commerce  business.  We  also  believe  that  the  importance  of  brand  name
recognition  will  increase  in the  future  because  of the  growing  number of
Internet  companies that will need to  differentiate  themselves.  Promotion and
enhancement  of our brand  names will  depend  largely on our ability to provide
consistently high quality e-commerce marketplaces and related technology.  If we
are  unable  to  provide  e-commerce  marketplaces  and  related  technology  of
comparable  or superior  quality to those of our  competition,  the value of our
brand names may suffer.


         Our international expansion adds additional complexity and risks to our
         business

In February 2000, we announced  that Entrade is taking an ownership  interest in
TradeTextile.com,  a new  electronic  marketplace  for the  trading  of  textile
products initially focusing on China. We hope to expand further in international
markets.  While  we  expect  our  foreign  e-commerce  marketplaces  to  operate
independently  from us, this  expansion  could  require  significant  management
attention and financial resources. As we attempt to expand  internationally,  we
may not be able to identify suitable alliances,  negotiate the terms of ventures
successfully,  finance  the  ventures  or  integrate  the  ventures  management,
business or operations with our existing management, business and operations.

In addition,  our  international  business may be subject to a variety of risks,
including:

o        governmental regulation and political instability;

o        collecting international accounts receivable and income;

o        the imposition of barriers to trade and taxes; and

o        difficulties  associated  with enforcing  contractual  obligations  and
         intellectual property rights.

These factors may have a negative effect on any future international  operations
and may adversely affect our business and operations.


         The  interests of our  significant  shareholders  may conflict with our
         interests and the interests of our other shareholders.

Directors,  officers  and holders of more than 5% of the  outstanding  shares of
Entrade  common stock  collectively  own  approximately  40% of the  outstanding
common stock and this percentage would increase if our shareholders  approve one
or more of the proposals being submitted for their  approval.  See  "Information
about Entrade - Recent  Events".  As a result of their stock  ownership,  one or
more of these  shareholders  may be in a position  to affect  significantly  our
corporate actions,  including,  for example,  mergers or takeover attempts, in a
manner that could conflict with the interests of our public shareholders.


         Anti-takeover  provisions and our right to issue  preferred stock could
         make a third party acquisition of us difficult.

Entrade is a Pennsylvania corporation.  Anti-takeover provisions of Pennsylvania
law may make it difficult for a third party to acquire  control of us, even if a
change in control would be beneficial to our shareholders. In addition, our




                                       14
<PAGE>


board of directors may issue  preferred  stock with voting or conversion  rights
that may have the  effect  of  delaying,  deferring  or  preventing  a change of
control.  Preventing a change of control could adversely affect the market price
of Entrade  common  stock and the voting and other  rights of holders of Entrade
common stock.


         Shares  eligible  for  future  sales by our  current  shareholders  may
         adversely affect our stock price.

If our existing  shareholders sell in the public market  substantial  amounts of
Entrade  common stock,  including  shares issued on the exercise of  outstanding
options and  warrants,  then the market price of our common stock could fall. In
addition, on February 10, 2000, we filed an S-1 registration statement on behalf
of existing  shareholders to register  5,629,584  shares of Entrade common stock
for resale.  Upon  effectiveness of that  registration  statement,  we cannot be
certain  whether  these  existing  shareholders  will  sell some or all of their
holdings in our common stock or what the timing of any such sales would be.

WorldWide Web NetworX  Corporation  ("WWWX"),  which holds  1,800,000  shares of
Entrade common stock, is subject to a lockup agreement for sales or transfers of
its Entrade  common stock until  September 23, 2000,  subject to exceptions  for
pledges or the distribution of up to 25% of such shares to WWWX's  shareholders.
WWWX  shareholders  that receive any such  distribution  may utilize Rule 144 to
sell the Entrade common stock. In addition,  holders of approximately  1,848,985
shares of Entrade  common stock that were issued in the  Nationwide  acquisition
are prohibited from selling more than 978,985 shares until May 31, 2000, subject
to adjustment in certain circumstances.


         Our common stock price is likely to be highly volatile.

The market  price of our common  stock is likely to be highly  volatile,  as the
stock  market in general,  and the market for  Internet-related  and  technology
companies in particular,  has been highly volatile.  Our shareholders may not be
able to resell their shares of our common stock following  periods of volatility
because of the market's adverse reaction to this volatility.  The trading prices
of  many  technology  and   Internet-related   companies'  stocks  have  reached
historical highs within the past twenty-four  months and have reflected relative
valuations  substantially above historical levels. During the same period, these
companies'  stocks have also been highly  volatile and have  recorded  lows well
below those historical highs. Any negative change in the public's  perception of
the prospects for Internet or B2B e-commerce  companies  could depress our stock
price regardless of our results.

Factors that could cause this volatility may include, among other things:

o        announcements of technological innovations and the creation and failure
         of B2B marketplaces;

o        actual or anticipated variations in quarterly operating results;

o        new sales formats or new products or services;

o        changes in financial estimates by securities analysts;

o        conditions or trends in the Internet, B2B and other industries;

o        changes in the market valuations of other Internet companies;

o        announcements  by us or our  competitors of  significant  acquisitions,
         strategic partnerships or joint ventures;

o        changes in capital commitments;

o        additions or departures of key personnel;

o        sales of our common stock; and





                                     15
<PAGE>


o        general market conditions.

Many of these factors are beyond our control.


         We may have to buy, sell or retain  assets when we would  otherwise not
         wish to in order to avoid regulation  under the Investment  Company Act
         of 1940.

We believe that we are actively engaged in the business of providing  electronic
commerce  services  through  our  network  of  majority-owned  subsidiaries  and
companies that we are considered to "control."  Consequently,  we do not believe
that we are  subject  to the  Investment  Company  Act of 1940.  We also plan to
structure  our  business  and  operations  to  avoid  becoming  subject  to  the
Investment Company Act of 1940. We are aware, however, that if we do not, or are
unable to, structure our business and operations in accordance with our existing
plans, we could become subject to the Investment Company Act of 1940.

Under the  Investment  Company Act, a company is considered  to control  another
company if it owns more than 25% of that company's voting securities, subject to
certain other conditions. A company may be required to register as an investment
company if more that 45% of its total  assets  consist  of, and more than 45% of
its  income/loss  and revenue  attributable to it over the last four quarters is
derived from, ownership interests in companies that it does not control.

It is not feasible  for us to maintain  our business as a registered  investment
company.  Because many of our  e-commerce  marketplaces  are not  majority-owned
subsidiaries,  and  because  we own 25% or less of the  voting  securities  of a
number of our e-commerce marketplaces,  changes in the value of our interests in
our e-commerce  marketplaces and the income/loss and revenue attributable to our
e-commerce  marketplaces  could  subject us to regulation  under the  Investment
Company Act. We may need to take specific actions that would not otherwise be in
our best interests to avoid such regulation. For example, to maintain compliance
with  applicable  rules, we may be unable to sell assets that we would otherwise
want to sell and may need to sell assets that we would otherwise want to retain.
In addition we may have to acquire  additional  income or loss generating assets
that we might not otherwise  have acquired and may need to forego  opportunities
to acquire  interests  in  attractive  companies  that might be important to our
business strategy.

If we fall under the definition of an investment company, and are unable to rely
on an SEC rule that would allow us to avoid  investment  company  regulation  so
long as at least 55% of our total assets are represented by, and at least 55% of
our income is derived from,  assets that meet the  requirement  of that rule, we
can rely on another  SEC rule that  would  exempt us for up to one year from the
requirement of registering as an investment company. After that one-year period,
we  must  either   register  under  the  Investment   Company  Act  or  seek  an
administrative exemption from regulation.

If, despite our efforts,  we are required to register as an investment  company,
we would  have to comply  with  substantive  requirements  under the  Investment
Company Act applicable to registered  investment  companies.  These requirements
include:

o        limitations on our ability to borrow;

o        limitations on our capital structure;

o        restrictions on acquisitions of interests in companies;

o        prohibitions on transactions with affiliates;

o        restrictions on specific investments; and

o        compliance with reporting, record keeping, voting, proxy disclosure and
         other rules and regulations.






                                       16
<PAGE>


These  rules and  regulations  would  significantly  change our  operations  and
prevent us from executing our business model.


         Risks Relating to Our E-Commerce Marketplaces


         Our success  depends on the  development of the B2B e-commerce  market,
which is uncertain.

We rely on the Internet for the success of our businesses,  as do our e-commerce
marketplaces.  The development of the e-commerce  market is in its early stages.
If  widespread  commercial  use of the  Internet  does  not  develop,  or if the
Internet  does not develop as an  effective  medium for  providing  products and
services, our e-commerce marketplaces are not likely to succeed, nor are we. Our
long-term success depends on widespread  market acceptance of B2B e-commerce.  A
number of factors could prevent such acceptance, including the following:

o        the  unwillingness of business to shift from  traditional  processes to
         B2B e-commerce processes;

o        the necessary network infrastructure for substantial growth in usage of
         B2B e-commerce may not be adequately developed;

o        increased governmental  regulation or taxation may adversely affect the
         viability of B2B e-commerce;

o        insufficient  availability of telecommunication  services or changes in
         telecommunication services could result in slower response time for the
         users of B2B e-commerce; and

o        concern and adverse publicity with respect to, and failure of, security
         of B2B e-commerce.


         We may not be able to develop significant revenues from e-commerce.


Our  e-commerce  marketplaces  businesses  rely on  revenues  that we  expect to
generate from  technology  license fees,  transaction  fees and  maintenance and
service  fees.  While  we plan  to  generate  revenues  through  our  e-commerce
marketplaces,  in part by creating relationships with strategic partners for the
sale of assets and services to particular industries, buyers and sellers may not
accept our e-commerce  marketplaces.  We cannot be certain that we will generate
sufficient revenues to support our costs of operations.


         We may not be able to  compete  effectively  with  other  providers  of
         e-commerce services.

Competition  for  Internet  products and  services  and  e-commerce  business is
intense. If the market for B2B e-commerce grows, we expect that competition will
intensify,  and Entrade will continue to compete with other technology companies
and  traditional  service  providers  that seek to  integrate  on-line  business
technologies with their traditional  service mix. Barriers to entry into the B2B
e-commerce  environment  are minimal,  and  competitors  can launch websites and
offer  products and services at relatively  low costs.  The companies with which
Entrade  competes  often  have   significantly   greater  name  recognition  and
financial,  marketing  and  other  resources  than  Entrade  which may place our
e-commerce  marketplaces at a disadvantage in responding to competitors' pricing
strategies,    technological   advances,    advertising   campaigns,   strategic
partnerships and other initiatives.

In  addition,  our  e-commerce  marketplaces  compete  to  attract  and retain a
critical mass of buyers and sellers.  We expect that  additional  companies will
offer  competing  Internet  solutions  for these buyers and  sellers,  and these
competing  solutions may be superior to ours. Internet users can freely navigate
and instantly  switch among a large number of websites.  Many of these  websites
offer original  content,  products or services,  which may make it difficult for
our  marketplaces  to  distinguish  their content and services  sufficiently  to
attract a loyal base of users. If







                                       17
<PAGE>


any of our  e-commerce  marketplaces  fails to  differentiate  itself from other
Internet industry  participants,  the value of its brand name could decline,  it
may be unable  to  attract  a  critical  mass of  buyers  and  sellers,  and its
prospects for future growth would diminish, which could materially and adversely
affect our business and operations.


         Concerns   regarding   security  of   transactions   and   transmitting
         confidential  information  over the Internet may  adversely  affect our
         e-commerce business.

We believe  that concern  regarding  the  security of  confidential  information
transmitted  over the  Internet,  including,  for  example,  business and supply
requirements,  credit card numbers and other forms of payment methods,  prevents
many potential customers from engaging in online transactions.  If we do not add
sufficient  security features to future product  releases,  our services may not
gain market acceptance or we may face additional legal exposure.

Despite the  measures we have taken in the areas of  encryption  and password or
other  authentication  software  devices,  our  infrastructure,  like others, is
potentially  vulnerable to physical or electronic  break-ins,  computer viruses,
hackers or similar  problems  caused by employees,  customers or other  Internet
users.  If a  person  circumvents  our  security  measures,  that  person  could
misappropriate proprietary information or cause interruptions in our operations.
Security breaches that result in access to confidential information could damage
our  reputation  and expose us to a risk of loss or  liability.  These risks may
require us to make  significant  investments  and efforts to protect  against or
remedy  security  breaches,  which would increase the costs of  maintaining  our
websites.

         Our  e-commerce   capability  depends  on  real-time  accurate  product
         information.

We may be responsible for loading supplier product information into our database
and  categorizing  the information for search  purposes.  This process entails a
number of risks,  including  dependence on our suppliers both to provide us in a
timely  manner  with  accurate,  complete  and current  information  about their
products and to update this  information  promptly when it changes.  We will not
derive significant  revenue from these products until this data is loaded in our
system. Timely loading of data in our database depends upon a number of factors,
including the file formats of the data provided to us by suppliers,  the ability
to link to legacy systems and our ability to automate our operations further.

While we intend to automate further the loading and updating of supplier data on
our  system,  we may not be able to do so in a timely  manner,  in part  because
achieving  the highest  level of  automation  is  dependent  upon our  suppliers
automating their delivery of product data to us. If our suppliers do not provide
us in a timely manner with accurate,  complete and current information about the
products we offer,  our database may be less useful to our  customers  and users
and may expose us to liability. We cannot guarantee that the product information
available  in our  database  will always be  accurate,  complete  and current or
comply with  governmental  regulations.  This could  expose us to  liability  or
result in decreased acceptance of our e-commerce marketplaces,  which could have
a material and adverse affect on our business and operations.


         Our e-commerce  marketplaces could make business decisions that are not
         in our best interests or that we do not agree with,  which could impair
         the value of our interests.

We may not be able to  control  significant  business  decisions  of some of our
e-commerce  marketplaces.  We currently have no control or limited  control over
several  of our  e-commerce  marketplaces  and,  therefore,  may  not be able to
influence  their  decisions.   The  management  of  certain  of  our  e-commerce
marketplaces may have different economic,  business and strategic interests than
ours and may not take our advice. The decisions they make,  including  decisions
to compete with each other,  may not be in our best interest and may  negatively
affect our  business  and  operations.  We expect to continue to acquire  voting
interests in B2B companies that may not be majority interests.  In addition,  we
may  not  maintain  our  current  ownership  or  control  levels  in  any of our
e-commerce marketplaces.






                                       18
<PAGE>


         If we are unable or  unwilling to provide our  e-commerce  marketplaces
         with the significant additional financing they will need, our interests
         in them may be diluted or they may fail.

Our e-commerce marketplaces are in the early stages of their development.  These
companies  will require  significant  amounts of  additional  capital to compete
successfully,  meet their business  objectives and produce revenues and profits.
We are  currently  unable to predict  all of the future  capital  needs of these
companies,  and we may decide not to provide the  additional  capital  that they
require or may not be given the  opportunity  to provide  it. If our  e-commerce
marketplaces  receive capital from other sources, our ownership interest in them
may be diluted,  and, if they are unable to obtain additional capital,  they may
fail.


         Our market is characterized by rapid  technological  change, and we may
         not be able to keep up with such change in a cost-effective way.

The B2B e-commerce  market is  characterized by rapid  technological  change and
frequent new product  announcements.  Significant  technological  changes  could
render  our  existing  technology   obsolete.   If  we  are  unable  to  respond
successfully to these  developments or do not respond in a  cost-effective  way,
our business and operations will suffer. To be successful,  we must adapt to our
rapidly changing market by continually  improving the  responsiveness,  services
and features of our  e-commerce  marketplaces,  by  developing  or acquiring new
features to meet customer needs and by  successfully  developing and introducing
new  versions of our  Internet-based  e-commerce  business  software on a timely
basis.  The life cycles of the software used to support our e-commerce  services
are  difficult  to predict  because the market for our  e-commerce  websites for
sales and procurement of equipment, inventory and assets is new and emerging and
is  characterized  by  changing  customer  needs  and  industry  standards.  The
introduction  of  on-line  products  employing  new  technologies  and  industry
standards could render our existing system obsolete and  unmarketable.  If a new
software  language  becomes the  industry  standard,  we may need to rewrite our
software to remain  competitive,  which we may not successfully  accomplish in a
timely and cost-effective manner.

In addition, as traffic in our e-commerce marketplaces increases, we may need to
expand and upgrade our technology,  transaction  processing  systems and network
hardware  and  software.  We may not be able to project  accurately  the rate of
increase  in our  on-line  businesses.  We also  may not be able to  expand  and
upgrade  our  systems  and  network   hardware  and  software   capabilities  to
accommodate increased use of our on-line businesses, which would have a material
and adverse affect on our business and operations.


         If the  purchasers and sellers in our  e-commerce  marketplaces  do not
         perform  their  obligations  in a timely  manner,  our business will be
         harmed.

Our  e-commerce  marketplaces  rely on  participating  purchasers and sellers to
fulfill their obligations to each other. In general, our e-commerce marketplaces
do not take title to the items sold in these  marketplaces.  If  purchasers  and
sellers  in  these  marketplaces  do  not  fulfill  their   obligations,   these
marketplaces may not meet  participants'  expectations,  thus damaging our brand
and   diminishing   the  appeal  for  other  parties  to   participate  in  such
marketplaces. In addition, dissatisfied purchasers or sellers may seek to impose
liability  on us as a result of their  disappointed  expectations.  Any of these
occurrences could have a negative effect on our business and operations.


         The hosting and other network  services  that we and others  provide to
         our e-commerce marketplaces may fail or work improperly due to physical
         damage, failure of third-party services or other unexpected problems.

We provide server and other information technology services, including software,
data warehousing and network facilities, to support our e-commerce marketplaces'
operations. Computers and telecommunications equipment, however, are housed with
a  third-party  hosting  company that  provides  connectivity  and other related
services  for our  servers  that are in one  location  outside of  Philadelphia,
Pennsylvania.  We also depend upon third  parties for software that we integrate
into our technology.






                                       19
<PAGE>


An unexpected  event,  such as a power or  telecommunications  failure,  fire or
flood,  or physical or electronic  break-in at any of our facilities or those of
any third  parties on which we rely,  could  cause a loss of  critical  data and
prevent us from offering services to our e-commerce marketplaces. If our hosting
and information technology services were interrupted,  including from failure of
other parties' software that we integrate into our technology,  our business and
the  businesses of our  e-commerce  marketplaces  using these  services would be
disrupted, which could result in decreased revenues, lost customers and impaired
business  reputation for us and them. As a result,  we could experience  greater
difficulty   attracting  new  companies  to  join  our  network.   Our  business
interruption insurance may not adequately compensate our e-commerce marketplaces
or us for losses that may occur.  A failure by us or any third  parties on which
we rely to provide  these  services  satisfactorily  would impair our ability to
support the  operations of our e-commerce  marketplaces  and could subject us to
legal claims.


         Limited Internet infrastructure may affect service.

The  accelerated  growth and  increasing  volume of  Internet  traffic may cause
performance   problems,   slowing  the  adoption  of  our  Internet-based  asset
disposition solution. The growth of Internet traffic due to very high volumes of
use over a  relatively  short  period of time has  caused  frequent  periods  of
decreased Internet performance,  delays and, in some cases, system outages. This
decreased  performance  is  caused by  limitations  inherent  in the  technology
infrastructure  supporting  the Internet  and the internal  networks of Internet
users. If Internet usage continues to grow rapidly,  the  infrastructure  of the
Internet  and its  users  may be  unable  to  support  the  demands  of  growing
e-commerce usage, and the Internet's performance and reliability may decline. If
our existing or potential customers experience frequent outages or delays on the
Internet,  the adoption or use of our Internet-based,  e-commerce business model
may grow more slowly than we expect or even decline. Our ability to increase the
speed and  reliability  of our  Internet-based  business model is limited by and
depends upon the  reliability of both the Internet and the internal  networks of
our  existing and  potential  customers.  As a result,  if  improvements  in the
infrastructure  supporting  both the Internet  and the internal  networks of our
customers and suppliers are not made in a timely fashion, we may have difficulty
obtaining new customers, or maintaining our existing customers,  either of which
could reduce our potential  revenues and have a negative  impact on our business
and operations.


         Internet  governance,  regulation and  administration are uncertain and
         may adversely affect our business.

The future  success  of our  business  is  dependent  on our  ability to use the
Internet to implement our e-commerce growth strategy.  Because the original role
of  the  Internet  was  to  link  the   government's   computers  with  academic
institutions'   computers,   the  Internet  was  historically   administered  by
organizations  that were involved in  sponsoring  research.  Over time,  private
parties have assumed  larger roles in the  enhancement  and  maintenance  of the
Internet  infrastructure.  Therefore,  it is unclear what organization,  if any,
will govern the  administration  of the  Internet in the future,  including  the
authorization of domain names.

The lack of an  appropriate  organization  to govern the  administration  of the
Internet  infrastructure and the legal  uncertainties that may follow pose risks
to the  commercial  Internet  industry and our  specific  website  business.  In
addition,  the  effective  operation  of the  Internet  and our business is also
dependent on the continued mutual  cooperation among several  organizations that
have widely  divergent  interests,  including the government,  Internet  service
providers  and  developers  of system  software  and  software  language.  These
organizations  may  find  that  achieving  a  consensus  may  become  difficult,
impossible, time-consuming and costly.

Although we are not subject to direct regulation in the United States other than
federal and state  business  regulations  generally,  changes in the  regulatory
environment  could  result in the  Federal  Communications  Commission  or other
United   States   regulatory   agencies   directly   regulating   our  business.
Additionally, as Internet use becomes more widespread internationally,  there is
an increased likelihood of international regulation.

We  cannot  predict  whether  or to what  extent  any new  regulation  affecting
e-commerce will occur. New regulation could increase our costs. For example,  we
do not  intend to  collect  sales or other  similar  taxes  with  respect to the
equipment,  inventory and other  products sold through our on-line  communities.
One or more states may seek to








                                       20
<PAGE>


impose sales tax collection obligations on out-of-state companies like ours that
engage  in or  facilitate  e-commerce.  State and  local  governments  have made
proposals that would impose  additional  taxes on the sale of goods and services
over the Internet.  A successful  assertion by one or more states or any foreign
country  that we  should  collect  sales  and  other  taxes on the  exchange  of
equipment,  inventory and other products on our system could increase costs that
we could have difficulty recovering from users of our websites.

Governmental   agencies  and  their  designees   regulate  the  acquisition  and
maintenance of web addresses  generally.  For example, in the United States, the
National  Science  Foundation  had  appointed  Network  Solutions,  Inc.  as the
exclusive  registrar  for  the  ".com,"  ".net"  and  ".org"  generic  top-level
addresses.  Although Network Solutions no longer has exclusivity, it remains the
dominant registrar.  The regulation of web addresses in the United States and in
foreign  countries  is  subject to  change.  As a result,  we may not be able to
acquire or maintain  relevant web  addresses in all  countries  where we conduct
business  that are  consistent  with our  brand  names and  marketing  strategy.
Furthermore,  the relationship  between regulations  governing website addresses
and laws protecting trademarks is unclear.


         We may be subject to legal  liability for  publishing  or  distributing
         content over the Internet.

Our  e-commerce  marketplaces  may be subject to legal  claims  relating  to the
content of our on-line websites, or the downloading and distribution of content.
Providers  of  Internet  products  and  services  have  been  sued in the  past,
sometimes successfully, based on the content of material. The representations as
to the origin and ownership of licensed content that we generally obtain may not
adequately protect us.

In  addition,  we draw some of the  content  provided  in our  on-line  business
communities  from data  compiled by other  parties and we re-key the data.  This
data  may  have  errors.  If our  content  is  improperly  used or if we  supply
incorrect  information,  it could result in unexpected liability.  Our insurance
may not cover claims of this type or may not provide sufficient coverage.  Costs
from these  claims that are not covered by our  insurance or exceed our coverage
would damage our business and limit our financial resources.


         Risk Factors Relating to Nationwide Auction Systems


         We may not  succeed  in  integrating  Nationwide  into  our  e-commerce
         strategy.

Part of our e-commerce  strategy is to integrate the land-based auction business
of Nationwide  into our  e-commerce  strategy by developing a network of on-line
and off-line  companies that facilitate the disposition of assets. We may not be
successful executing our strategy or otherwise managing a traditional land-based
auction  company  as  part of a  network  of  e-commerce  companies,  which  may
materially and adversely affect our business and operations.


         The auction industry is highly fragmented and very competitive.

The auction industry is highly fragmented and very  competitive.  In addition to
other auction companies,  Nationwide competes with indirect  competitors such as
original manufacturers,  distributors, rental companies and dealers that sell or
rent  new  or  used  products  in  the  market  in  which  Nationwide  competes.
Nationwide's  direct  competitors  are  primarily  several  large  international
auction companies and numerous independently owned auction houses. Some of these
competitors  may have  significantly  greater name  recognition  and  financial,
marketing and other  resources  than  Nationwide.  Nationwide  believes that the
auction  market will  continue to  consolidate.  Consolidation  may increase the
competitiveness  of the market in ways that could adversely  affect our business
and operations.


         Risk Factor Relating to Artra

         Artra's potential  product liability and environmental  liabilities may
         result in future costs to Artra that are difficult to estimate.









                                       21
<PAGE>


Since 1983, Artra, now our wholly owned subsidiary, has responded to significant
product  liability  claims relating to the use of asbestos in the manufacture of
products by various companies, including a former Artra subsidiary. Reports from
local counsel  indicate,  as of December 31, 1999,  pending  claims  asserted by
approximately 45,000 plaintiffs (excluding loss of consortium claims), and it is
probable  that there are a significant  number of additional  claims that remain
unasserted.  Artra has no  reasonable  basis on which to quantify the  potential
cost to it of the pending claims and any unasserted claims.

Artra's primary insurance carriers paid approximately $13,000,000 in disposition
of the product  liability claims from 1983 through  September 1998, when Artra's
primary insurance  carriers asserted that Artra's primary insurance coverage for
the claims had been  exhausted.  Certain of Artra's excess  insurance  carriers,
under a reservation of the right to deny coverage at a subsequent date,  assumed
under  an  interim  agreement  the  defense  of the  claims  and  paid  defense,
settlement  and  indemnity  costs  relating  to  the  claims  of   approximately
$17,500,000  through December 31, 1999. The interim agreement covered the period
from September 20, 1998,  through  January 31, 2000,  when it expired.  Although
Artra is engaged in negotiations  with its excess insurance  carriers  regarding
their ongoing payment of these defense,  settlement and indemnity  costs, we can
provide no assurance  that Artra will be able to conclude an agreement  with the
excess carriers.

Because of the expiration of the interim agreement and the uncertain  conclusion
of Artra's  negotiations with the excess insurance  carriers,  Artra may have to
advance some or all of these costs,  which could have a material  adverse effect
on Artra's financial  condition,  and seek reimbursement of these costs from the
excess insurance carriers through litigation or otherwise.  If Artra were unable
to conclude a permanent  agreement with its excess insurance  carriers,  a court
could also determine that Artra is responsible  for a portion of the defense and
indemnity costs  associated with the product  liability  claims.  Such a finding
would also have a material adverse effect on Artra's financial condition.

Artra's financial  condition could also be materially  adversely affected to the
extent that its  existing  insurance  coverage  and any to which it might become
entitled in the future is not  sufficient  to respond to the  product  liability
claims.  Although  Artra  believes  that, as of December 31, 1999, its remaining
insurance  coverage as of December 31, 1999  relating to the claims was not less
than  $186,500,000,  we can  provide  no  assurance  that the  coverage  will be
adequate to cover Artra's responsibility for the claims. In the event Artra were
unable to satisfy the claims through a combination of insurance coverage and its
own assets,  it is possible that Artra could be forced to seek protection  under
the  federal  bankruptcy  laws.  In such  event,  Entrade  could lose its entire
investment in Artra (approximately $10,200,000 at December 31, 1999). It is also
possible that the plaintiffs asserting the claims against Artra could attempt to
pursue legal action against Entrade.  Entrade believes that no valid legal basis
exists for, and it would have meritorious  defenses against, the imposition upon
Entrade of Artra's liability, and Entrade would vigorously defend itself against
any attempt to impose such liability.  In the event of an unfavorable outcome of
such legal  action,  however,  there  could be a material  adverse  effect  upon
Entrade's financial condition and results of operations.

Former   operations  of  Artra  and  its  subsidiaries   have  been  subject  to
requirements imposed under federal, state and local environmental and health and
safety laws and regulations, including the Comprehensive Environmental Response,
Compensation and Liability Act and comparable state laws.

Liability under CERCLA is, in most instances, strict, joint and several, meaning
that Artra could be liable for all response  costs  incurred at a specific site.
As a result of these  environmental  matters,  Artra and its subsidiaries  have,
from  time to time,  been and  currently  are  involved  in  administrative  and
judicial  proceedings  and  inquiries.  Artra has  provided  accruals  for these
claims.  Various  uncertainties  with  respect  to these  and  other  sites  and
facilities,  however,  make it difficult to assess the  likelihood  and scope of
further investigation or remediation  activities or to estimate the future costs
of these activities if undertaken. See "Item 3 -- Legal Proceedings."






                                       22
<PAGE>


Item 2.  Properties

         Corporate Headquarters

At December 31, 1999, the only property used by Entrade's  corporate  office was
our headquarters facility of approximately 12,700 square feet of office space in
Northfield,  Illinois.  In December  1995, the building was purchased by a trust
for the benefit of John Harvey,  Chairman of Entrade's  Board of Directors.  The
lease for this property expired in December 1998, and we rented our headquarters
on a month-to-month basis during 1999. In January 2000, the parties entered into
a lease agreement for 12,700 square feet of office space, which lease expires on
December 31, 2004.

         entrade.com

entrade.com  conducts its operations  through leased facilities in Mount Laurel,
New Jersey; Wayne, Pennsylvania; Plymouth, Massachusetts; and Waterloo, Ontario,
Canada.

         Nationwide

Nationwide  operates six full service public auction  facilities located in City
of Industry,  California;  Benicia, California; Kansas City, Missouri; Riverdale
(Atlanta), Georgia; Wilmington, Delaware; and Albuquerque, New Mexico.

Nationwide's  headquarters and Southern  California  operations are located on a
7.7 acre parcel in City of Industry.  This parcel is leased and includes a 6,000
square foot  office  building  and a 4,000  square  foot  warehouse.  This lease
expires  on August 23,  2000,  and is subject  to five  one-year  renewals.  The
auction  business also leases an adjoining  3.75-acre parcel pursuant to a lease
that expires on September 23, 2000, and is subject to two one-year  renewals and
has a month-to-month  license agreement for the use of an approximately one-acre
parking lot used for storage of vehicles held prior to auction.

In  northern  California,  Nationwide  owns a 15.5  acre  parcel  of land with a
building  comprising 3,600 square feet of office space and 15,900 square feet of
storage space.  Nationwide has a subleasehold  interest for the exclusive use of
an adjoining  parcel  consisting  of 2.7 acres of land and a 16,500  square foot
building. This sublease expires on May 8, 2031.

Nationwide  leases an 11 acre parking lot in Kansas City,  Missouri.  This lease
expires on November 30, 2002, and is renewable for one five-year period.

On March 18, 1999, Nationwide purchased an 11.5 acre parcel of land with a 5,000
square foot office building in Riverdale, Georgia. This property is subject to a
mortgage in favor of a local bank.

Nationwide  leases a 12.1 acre parcel of land in Wilmington,  Delaware,  under a
month-to-month lease.

Nationwide  leases a 10 acre parcel of land in  Albuquerque,  New  Mexico.  This
lease expires on December 10, 2000 and is renewable for four one-year periods.

Nationwide  believes it will have no difficulty  replacing  any leased  facility
upon expiration of the term of the current lease.

         utiliparts.com

utiliparts.com   shares   space  with   entrade.com's   facility  in   Plymouth,
Massachusetts.

         printeralliance.com

printeralliance.com   conducts  its  operations  through  leased  facilities  in
Horsham, Pennsylvania.






                                       23
<PAGE>


         Artra

Effective as of January  2000,  Artra entered into a five-year  lease  agreement
with the trust owned by John Harvey,  Chairman of Entrade's  Board of Directors,
for 800 square feet of office and storage space in Northfield, Illinois.

Entrade believes that all of the foregoing  properties are in good condition and
reasonably adequate for current operations.


Item 3.  Legal Proceedings

With the  exception of legal  proceedings  and claims that arise in the ordinary
course of Nationwide's  business, the only legal proceedings in which Entrade is
presently  involved  relate  to  Artra  and  its  subsidiaries,  which  are  the
defendants in various business-related  litigation and environmental matters and
product  liability claims. At December 31, 1999 and December 31, 1998, Artra had
accrued  current  liabilities of $1,400,000 and  $1,500,000,  respectively,  for
potential  business-related   litigation  and  environmental   liabilities.   No
liabilities were accrued for the product  liability claims because no reasonable
basis exists on which such claims could be quantified.


         Product liability claims

Since 1983, Artra has responded to significant product liability claims relating
to the use of asbestos  in the  manufacture  of  products by various  companies,
including a former Artra subsidiary.  Reports from local counsel indicate, as of
December 31, 1999,  pending claims asserted by approximately  45,000  plaintiffs
(excluding  loss of  consortium  claims) in 17  states.  It is  probable  that a
significant  number of additional  claims will be asserted in the future.  Artra
has no reasonable  basis on which to quantify the potential  cost to it of these
pending and unasserted claims.

Artra's primary insurance carriers paid approximately $13,000,000 in disposition
of the claims from 1983 through  September 1998, when Artra's primary  insurance
carriers  asserted that Artra's  primary  insurance  coverage for the claims had
been exhausted. Beginning in September 1998, certain of Artra's excess insurance
carriers,  under a  reservation  of the right to deny  coverage at a  subsequent
date,  assumed  the  defense  of the  claims and paid  defense,  settlement  and
indemnity  costs  relating to these  claims,  pursuant to an interim  agreement,
which costs totaled  approximately  $17,500,000  through  December 31, 1999. The
interim agreement expired as of January 31, 2000.

Until January 31, 2000,  pursuant to the interim  agreement,  certain of Artra's
excess insurance carriers funded defense and indemnity costs as they became due.
Under the  interim  agreement,  the claims were  administered  by one of Artra's
principal  excess  insurers,  which was one of the  participants  in the expired
interim  agreement.  Since  January  31,  2000,  that  excess  insurer  has  not
administered the claims or advanced funds for defense,  settlement and indemnity
expenses.  Nevertheless,  through its counsel,  the excess insurer has indicated
its intent to reimburse  Artra for  payments  made by Artra upon  submission  of
insurance claims to it pursuant to its policies.

Negotiations  are  continuing  with the principal  excess  insurer and the other
excess  insurers  regarding the  establishment  of a permanent  funding,  claims
administration  and  coverage  agreement.  Unless  and  until  such a  permanent
agreement is reached, as to which Artra can provide no assurance, Artra intends,
unless  litigation  should  become  necessary  in light of the  positions of the
excess carriers or other  circumstances,  to: (i) administer the claims and (ii)
fund defense,  settlement and indemnity  costs to the extent  necessary and then
seek reimbursement from the excess insurance carriers.  It is also possible that
these excess  insurance  carriers could cease making payments at any time on the
basis of their various reservations of rights.

Artra  and  two of its  excess  insurers  currently  have  a  dispute  as to the
existence  of  certain  insurance   coverage,   in  the  approximate  amount  of
$25,000,000,  for the period 1968 through 1974.  These carriers contend that the
policies  for this  period,  if they ever  existed,  are "lost." If Artra or its
carriers were to be unable to locate all or some of these policies, then, absent
the negotiation of an agreement with the carriers, as to which Artra can provide
no assurance, a court could find that no coverage existed for all or some of the
periods in question. In that event, a court might find








                                       24
<PAGE>


Artra  responsible  for funding  its pro rata share of payments  for defense and
indemnity  costs.  A similar  issue exists with respect to an unknown  amount of
primary and excess  insurance  coverage by unknown  insurers for the period 1947
through  1962,  for  which  Artra has not been  able to  locate  policies,  with
potential  effect similar to that possible with respect to the 1968 through 1975
period.

If Artra were unable to conclude a permanent agreement with its excess insurance
carriers regarding the claims or with respect to coverage for the potential gaps
described herein, if Artra were ultimately unsuccessful in attempting to marshal
any such insurance, if a court were to determine that gaps in coverage exist, or
if a court  were to  determine  that Artra is  responsible  for a portion of the
defense and indemnity  costs  associated  with those potential gaps in coverage,
there could be a material adverse effect on Artra's financial condition.

Artra's financial  condition could also be materially  adversely affected to the
extent, if any, that its existing  insurance  coverage and any to which it might
become  entitled in the future is not sufficient to respond fully to the claims.
Artra has the following amounts of excess insurance it believes are available to
indemnify  Artra  against  its  liability  on  some  or all of the  claims:  (a)
approximately  $204,000,000 for which Artra has policies,  less amounts expended
through  December 31, 1999 (believed to be  approximately  $17,500,000) and such
additional  amounts as have been paid or committed  since December 31, 1999; (b)
an additional amount which may total as much as $45,000,000 for which Artra thus
far has been unable to locate insurance policies but for which Artra has certain
evidence  of  coverage,  and  (c)  any  potentially  applicable  coverage  in an
undetermined  amount for any other  policies that may exist over certain  years,
which Artra is investigating.  There is also potential  additional coverage from
two excess  insurers,  which Artra believes are or may be involved in insolvency
proceedings.  In the event  Artra were  unable to satisfy  the claims  through a
combination of insurance coverage and its own assets, or in the event that Artra
does not receive timely  reimbursement from its excess carriers of amounts Artra
may be required to expend on defense,  settlement and indemnity payments,  it is
possible  that  Artra  could be forced  to seek  protection  under  the  federal
bankruptcy laws.

If Artra's  insurance  coverage and Artra's  other assets are not  sufficient to
satisfy the claims  against Artra,  Entrade could lose its entire  investment in
Artra,  approximately  $10,200,000  at December 31, 1999. If the  combination of
insurance  coverage and Artra's assets are not sufficient to satisfy the claims,
it is also possible that the  plaintiffs  presenting the claims could attempt to
pursue legal action against Entrade. Entrade believes that no valid basis exists
for, and it would have meritorious  defenses against,  the imposition of Artra's
liability for the claims against Entrade,  and Entrade would  vigorously  defend
itself against any attempt to impose such liability.

In the event of an  unfavorable  outcome of such legal  action,  however,  there
could be a material  adverse  effect  upon  Entrade's  financial  condition  and
results of operations.

         Environmental matters

         EPA notices alleging environmental violations

In April 1994,  the EPA  notified  Artra that it was a  potentially  responsible
party for the  disposal of  hazardous  substances  (principally  waste oil) at a
disposal site in Palmer,  Massachusetts,  generated by a manufacturing  facility
formerly  operated by the Clearshield  Plastics  Division of Harvel  Industries,
Inc., a majority  owned  subsidiary  of Artra.  In 1985,  Harvel was merged into
Artra's Fill-Mor  subsidiary.  This site has been included on the EPA's National
Priorities  List. In February  1983,  Harvel sold the assets of  Clearshield  to
Envirodyne  Industries,  Inc. The alleged  waste  disposal  occurred in 1977 and
1978,  at which time Harvel was a  majority-owned  subsidiary  of Artra.  In May
1994,  Envirodyne and its Clearshield  National,  Inc. subsidiary sued Artra for
indemnification in connection with this proceeding.  The cost of clean-up at the
Palmer,  Massachusetts  site has been estimated to be  approximately  $7,000,000
according  to proofs of claim  filed in the  adversary  proceeding.  A committee
formed by the named potentially  responsible parties has estimated the liability
respecting the activities of Clearshield to be $400,000.  Artra has not made any
independent  investigation  of the  amount of its  potential  liability,  and no
assurances can be given that it will not substantially exceed $400,000.






                                       25
<PAGE>


         Lawsuits seeking recovery of environmental clean-up costs

In a case titled Sherwin-Williams Company v. Artra Group Incorporated,  filed in
1991 in the United States District Court for Maryland,  Sherwin-Williams Company
brought suit  against  Artra and other  former  owners of a paint  manufacturing
facility in  Baltimore,  Maryland,  for recovery of costs of  investigation  and
clean-up of  hazardous  substances  that were  stored,  disposed of or otherwise
released at the  manufacturing  facility.  This  facility was owned by Baltimore
Paint and Chemical  Company,  formerly a subsidiary  of Artra from 1969 to 1980.
Sherwin-Williams's  current  projection of the cost of clean-up is approximately
$5,000,000 to $6,000,000. Artra has filed counterclaims against Sherwin-Williams
and cross claims  against  other former  owners of the  property.  Artra also is
vigorously  defending this action and has raised numerous  defenses.  Currently,
the case is still in  discovery,  and Artra cannot  determine  what, if any, its
liability may be in this matter.

Artra was named as a defendant  in United  States v.  Chevron  Chemical  Company
brought  in the  United  States  District  Court  for the  Central  District  of
California in respect to the Operating  Industries,  Inc. site in Monterey Park,
California. This site is included on the EPA's National Priorities List. Artra's
involvement  stemmed from the alleged  disposal of hazardous  substances  by The
Synkoloid Company subsidiary of Baltimore Paint and Chemical Company,  which was
formerly owned by Artra.  Synkoloid  manufactured spackling paste, wall coatings
and related products,  certain of which generated allegedly hazardous substances
as a  by-product  of the  manufacturing  process.  Artra  entered into a consent
decree  with the EPA in which it  agreed  to pay  $85,000  for one  phase of the
clean-up  costs  for  this  site;  however,   Artra  defaulted  on  its  payment
obligation.  Artra is presently unable to estimate the total potential liability
for clean-up  costs at this site,  which  clean-up is expected to continue for a
number of years.  The consent decree,  even if it had been honored by Artra, was
not intended to release  Artra from  liability for costs  associated  with other
phases of the  clean-up at this site.  Artra is  presently  unable to  determine
what, if any, additional liability it may incur in this matter.

         Other Cases

Bagcraft Packaging, LLC and Packaging Dynamics, LLC filed suit against Artra and
its BCA Holdings, Inc. subsidiary in the Circuit Court of Cook County, Illinois,
on November 22,  1999,  alleging  that Artra  breached a  non-compete  agreement
entered  into  in  connection  with  the  sale of  certain  assets  to  Bagcraft
Packaging,  LLC by  hiring  Mark  Santacrose  as  Chief  Executive  Officer  and
President of Artra.  The plaintiffs seek damages in excess of $5,000,000.  Artra
intends to vigorously defend itself in this action.

While these litigation and environmental matters (exclusive of product liability
claims) involve wide ranges of potential liability,  management does not believe
the outcome of these  matters will have a material  adverse  effect on Entrade's
financial condition or results of operations.

For further  information on legal  proceedings,  see Note 10 to the Consolidated
Financial Statements for the year ended December 31, 1999.


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

         None













                                       26
<PAGE>


                                     PART II

Item 5.  Market  For the  Registrant's  Common  Equity and  Related  Shareholder
         Matters.


Our  common  stock is traded on the New York  Stock  Exchange  under the  symbol
"ETA."

As of March 15, 2000, the approximate  number of holders of Entrade common stock
was 2,500.

The merger of a  subsidiary  of Entrade and Artra  occurred in  September  1999.
Prior to that time, no trading history existed for the Entrade common stock. The
high and low sales prices for Artra common stock (which  traded under the symbol
ATA), as reported in the New York Stock  Exchange  Quarterly  Market  Statistics
reports, in 1998 and for that portion of 1999 ending September 23, 1999, and for
Entrade for the remainder of 1999 were as follows:

                                          1999                     1998
                                          ----                     ----

                                    High         Low          High       Low
                                    ----         ---          ----       ---

       First quarter                10-5/8       4-1/4        4-1/16     3-3/16

       Second quarter               20-7/16      8-1/2        3-15/16    3

       Third quarter 1998                                     4          3-1/4

       Third quarter 1999
       (through 9/23/99)            17-15/16     9-1/8

       Third quarter 1999
       (from 9/24/99)               18           15-1/4

       Fourth quarter               43           14-1/8       4-1/4      2-1/8


We did not pay  dividends  on our  common  stock in 1999 or  1998.  Terms of the
Series A convertible  redeemable  preferred  stock issued in March 2000 prohibit
the payment of common stock  dividends as long as the  preferred  stock  remains
outstanding.


Recent Sales of Unregistered Securities

Between December 21, 1999 and January 28, 2000, Entrade completed the sale of an
aggregate of 422,243  shares of its common stock for an aggregate  consideration
of  $13,960,000  to  unaffiliated   institutional   and  individual   accredited
investors. Net proceeds were $13,412,000.

On March 27, 2000, Entrade closed a private placement financing transaction with
several  institutional  accredited  investors.  Under the  terms of the  private
placement, Entrade issued $30,000,000 of redeemable convertible preferred stock.
The non-voting  preferred  stock bears a 6% dividend,  which Entrade can pay, at
its election, in either cash or common stock. For the first fifteen months after
issuance  of  the  preferred   stock,   and  subject  to  certain   registration
requirements  and other  restrictions,  Entrade has the right to elect to redeem
all or part of the preferred  stock at the lesser of $78.73 or 91% of the lowest
closing sale price of Entrade's common stock during the two consecutive  trading
days ending on the date of such  election.  In addition,  Entrade has the right,
during such period,  to redeem the preferred stock at 115% of par.  Entrade must
redeem or convert all of the preferred stock within two years of the date of its
issuance,  and,  until the  preferred  stock is redeemed or  converted,  Entrade
cannot pay  dividends on its common stock  without the approval of the preferred
stockholders. In conjunction with the agreement, Entrade also issued warrants to
the  investors  to purchase  400,000  shares of its common  stock at $41.375 per
share.






                                       27
<PAGE>


These securities were sold pursuant to an exemption from registration  under the
Act,  pursuant to Regulation D promulgated  thereunder.  Proceeds are being used
for general corporate purposes.

During the first  quarter of 2000,  the  Company  issued  warrants  to  purchase
1,520,500 shares of its common stock, as follows:

         A  warrant  for  1,000,000  shares of  common  stock  was  issued at an
exercise price of $39.65 per share.

         A warrant for 25,000  shares of common  stock was issued at an exercise
price of $37.75 per share.

         Warrants for an aggregate of 12,500  shares of common stock were issued
         at an exercise price of $32.00 per share.

         A warrant for 75,000  shares of common  stock was issued at an exercise
price of $36.938 per share.

         A warrant  for 8,000  shares of common  stock was issued at an exercise
price of $55.65 per share.

         A warrant for 400,000  shares of common stock was issued at an exercise
price of $41.375 per share.

All of the above warrants were issued pursuant to an exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.






















                                       28
<PAGE>


Item 6.  Selected Financial Data.

         Entrade Inc.

This table is a consolidated  summary of selected  financial data of Entrade for
each of the last five fiscal years. On September 23, 1999, pursuant to the terms
of a merger agreement,  Artra became a wholly-owned  subsidiary of Entrade, with
Artra being  deemed to be the  surviving  corporation  for  financial  reporting
purposes.  Accordingly,  Artra historical financial  information is presented in
the table  below.  The  operations  of the Bagcraft  subsidiary,  which was sold
effective  November  20,  1998,  are included in  discontinued  operations.  The
information for fiscal year 1995 presents the operations of Arcar Graphics, Inc.
in discontinued operations. The sale of Arcar Graphics, Inc., which was acquired
effective  April 9, 1994, was completed on October 26, 1995. The information for
fiscal year 1995 presents the operations of Artra's  former jewelry  business in
discontinued operations.

<TABLE>
<CAPTION>

                                                           Fiscal Year Ended (G)
                                        ---------------------------------------------------------
                                          1999        1998        1997         1996        1995
                                          ----        ----        ----         ----        ----

<S>                                    <C>         <C>         <C>         <C>         <C>
Net revenues                           $  4,542    $   --      $   --      $   --      $   --

Earnings (loss) from
    continuing operations (A) (B)(C)    (19,263)     (5,707)      1,066        (445)    (11,113)

Earnings (loss) from
    discontinued operations (D) (E)        --        38,930        (293)      3,994      (5,820)
Extraordinary credits (F)                  --          --          --         9,424      14,030

Net earnings (loss)                     (19,304)     33,223         773      12,973      (2,903)
Earnings (loss) per share:
   Basic and Diluted
      Continuing operations               (3.65)      (0.78)       --         (0.19)      (1.84)

      Discontinued operations              --          4.94       (0.04)       0.53       (0.86)

      Extraordinary credits                --          --          --          1.25        2.07

      Net earnings (loss)                 (3.65)       4.16       (0.04)       1.59       (0.63)

Weighted average number
   of shares outstanding
       Basic and Diluted                 10,216       7,891       7,970       7,525       6,776

Total assets                             80,758      21,268      73,206      77,379      77,949

      Long-term debt                        978        --        50,619      34,207      34,113
      Obligations expected
          to be settled by the
          issuance of common stock        4,743        --          --          --          --
      Cash dividends                       --          --          --          --          --
______________________
<FN>

(A)      Earnings from  continuing  operations  for the years ended December 31,
         1999,  December  31,  1998,  December  31, 1997 and  December  26, 1996
         include realized gains of $66,000, $320,000, $2,531,000 and $5,818,000,
         respectively, from dispositions of Comforce common stock.

(B)      Earnings from  continuing  operations  for the year ended  December 31,
         1999  include  compensation  charges of  $5,046,000  relating  to stock
         options  and  compensation   charges  relating  to  stock  warrants  of
         $6,229,000.

(C)      Earnings from  continuing  operations  for the year ended  December 31,
         1997 includes a gain from settlement of litigation of $10,416,000,  net
         of  related  legal  fees and  other  expenses,  and net  related  party
         compensation/expense reimbursement costs of $2,816,000.






                                       29
<PAGE>


(D)      Earnings from  discontinued  operations for the year ended December 31,
         1998 includes a net gain on disposition  of the Bagcraft  subsidiary of
         $35,985,000.  See Note 3 to the consolidated  financial  statements for
         the year ended December 31, 1998.

(E)      The loss from  discontinued  operations for the year ended December 28,
         1995  includes a charge to  operations  of  $6,430,000 to write off the
         remaining  goodwill of Comforce's  jewelry business  effective June 29,
         1995 and a provision of  $1,000,000  for loss on disposal of Comforce's
         jewelry business.  The loss from  discontinued  operations for the year
         ended December 28, 1995 includes a gain on the sale of Bagcraft's Arcar
         subsidiary of $8,483,000.

(F)      The 1996 and  1995  extraordinary  credits  represent  gains  from  net
         discharge of bank indebtedness.

(G)      In 1997, we changed our fiscal year end to December 31. In prior years,
         we had operated on a 52/53 week fiscal year ending the last Thursday of
         December.

</FN>
</TABLE>


         Nationwide Auction Systems (Predecessor)

This table is a summary of combined  selected  financial  data of Nationwide for
the  nine-month  periods  ended  September 30, 1999 and 1998 and for each of the
last four years in the period ended December 31, 1998.

<TABLE>
<CAPTION>
                                         Nine Months Ended
                                            September 30             Year Ended December 31
                                         -----------------   -------------------------------------
                                           1999      1998      1998      1997      1996      1995
                                         -------   -------   -------   -------   -------   -------
                                                        (Unaudited in thousands)

<S>                                      <C>       <C>       <C>       <C>       <C>       <C>
Net revenues                             $12,181   $13,849   $19,624   $11,604   $10,017   $ 7,146

Net earnings (loss)                        1,407     1,853     2,446     1,997       808      (640)

Total assets                               8,525     5,364     6,600     2,583     4,132     2,532

Long-term debt                             3,199     2,631     2,631        20       152       115

</TABLE>








                                       30
<PAGE>


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

The  following  discussion   supplements  the  information  found  in  Entrade's
historical financial statements and related notes.

On February 23, 1999,  Artra entered into a merger  agreement with WorldWide Web
NetworX  Corporation  and  Entrade,  at  that  time a 90%  owned  subsidiary  of
WorldWide.  As a result of the merger  agreement,  Artra  became a  wholly-owned
subsidiary of Entrade,  and the  shareholders  of Artra became  shareholders  of
Entrade.

In February 1999,  Entrade acquired  software and other assets necessary for the
conduct of  entrade.com's  e-commerce  business and 25% of the then  outstanding
shares of voting common stock of asseTrade.com  from WorldWide,  in exchange for
1,800,000  shares  of  Entrade  common  stock,  $800,000  in cash and a note for
$500,000,  which Entrade paid upon the closing of the merger.  Entrade issued to
Energy  Trading  Company  200,000 shares of Entrade common stock and paid Energy
Trading  Company  $100,000 in cash upon  closing of the merger,  in exchange for
retained  rights Energy Trading  Company held in the assets acquired by Entrade.
Artra also agreed with both WorldWide and Energy  Trading  Company that it would
provide a minimum of $4,000,000 in funding for entrade.com. Therefore, the total
consideration for the assets acquired by Entrade was 2,000,000 shares of Entrade
common stock and an aggregate of $5,400,000 in cash and committed funding.


Results of Operations

During the third quarter of 1999, we completed the merger  agreement  with Artra
and continued the Internet  business-to-business  electronic  commerce  business
conducted by entrade.com.  As a result of the merger  agreement,  Artra became a
wholly-owned  subsidiary of Entrade.  We continued to hold an equity interest in
asseTrade.com,    which   is   developing   and    implementing    comprehensive
asset/inventory recovery, disposal, and remarketing and management solutions for
corporate clients through advanced Internet  electronic  business  applications,
including on-line auctions.

In October 1999, we acquired all of the outstanding capital stock of Nationwide,
a public auction firm for the  disposition  of  municipality,  law  enforcement,
corporate  and utility  company  surplus  property.  In addition to vehicles and
equipment, Nationwide conducts real property and jewelry auctions.

In October 1999, we also  acquired a majority  interest in  printeralliance.com,
which was formed in 1999 to establish a buying group of  independent  commercial
printers.  printeralliance.com.'s  buying group  concept will offer  independent
commercial  printers cost savings,  equipment and other  services as a result of
the leveraged buying power of the group.

Artra  significantly  changed its business  focus  during the fourth  quarter of
fiscal year 1998,  when it exited its single  industry  segment,  the  packaging
products business, conducted by the discontinued Bagcraft subsidiary.

Our  consolidated   financial   statements  have  been  reclassified  to  report
separately the results of operations of the Bagcraft  subsidiary in discontinued
operations.


         Year Ended December 31, 1999  vs.  Year Ended December 31, 1998

         Continuing Operations

Revenues of $4,542,000  from  continuing  operations  reflect the results of the
e-commerce  and  auction  businesses  acquired in 1999.  Accordingly,  we had no
revenues  from  continuing  operations in prior years.  Revenues  earned in 1999
consist principally of auction fees and related revenue earned by the Nationwide
subsidiary  subsequent  to its  acquisition  in  October  1999.  No  significant
revenues were earned by the Entrade's  e-commerce  business in 1999. The cost of
revenues  for 1999  represents  the cost of  revenues  earned by the  Nationwide
subsidiary.





                                       31
<PAGE>


Selling,  general and  administrative  expenses from continuing  operations were
$9,079,000  for the year ended  December 31, 1999 as compared to $2,660,000  for
the year ended  December 31,  1998.  The 1999  increase in selling,  general and
administrative  expenses  relates  principally  to businesses  acquired in 1999.
Selling, general and administrative expenses from continuing operations included
$1,305,000 of expenses incurred by Entrade for the period from February 23, 1999
until the effective  date of the merger in September,  as the economic  risks of
ownership  were  assumed by Artra  effective  February  23,  1999.  The  Entrade
expenses include  business  development  costs of $280,000,  payroll and related
costs of $927,000 and net administrative costs of $98,000.

During the year ended  December  31, 1999 we incurred a  compensation  charge of
$5,046,000  relating to stock  options.  The stock  option  compensation  charge
relates to stock options granted to certain  individuals  employed to manage our
entry into the  Internet  business-to-business  e-commerce  business and auction
businesses  and to stock  options  granted under terms of an agreement to employ
our current president and chief executive officer.

Depreciation and  amortization of $1,223,000  during the year ended December 31,
1999 is attributable to businesses acquired in 1999.

During the year ended December 31, 1999, we had interest  expense of $532,000 as
compared to interest  expense of $3,450,000  during the year ended  December 31,
1998.  Artra used  approximately  $15,200,000  of the proceeds from the November
1998  sale  of the  assets  of its  Bagcraft  subsidiary  to pay  off all of its
non-trade debt obligations.

In November and December  1999 we extended the  expiration  dates of warrants to
purchase  225,000  shares of our  common  stock at a price of $3.00 per share to
periods  ranging from April 30, 2000 to 30 days after the  underlying  shares of
common  stock have been  registered  for sale with the  Securities  and Exchange
Commission. We incurred interest expense of $6,229,000 relating to the extension
of these common stock warrants.

Our  equity  in the  loss of  asseTrade.com,  in which  we  currently  own a 25%
interest in the Class A common stock, was $445,000.

We were  unable to  recognize  an income  tax  benefit  in  connection  with the
Company's   1999  and  1998  pre-tax  losses  due  to  the  Company's  tax  loss
carryforwards and the uncertainty of future taxable income.

Our loss from  continuing  operations  in the year ended  December  31, 1999 was
$19,304,000  as compared to a loss from  continuing  operations of $5,707,000 in
the year ended December 31, 1998. During 1999, we recorded  compensation charges
of  $5,046,000  relating to common stock  options  issued and  interest  expense
charges of $6,229,000 relating to common stock warrant extensions.

         Discontinued Operations

Earnings from discontinued operations of $38,930,000 for the year ended December
31, 1998 consisted of earnings from operations of $2,945,000 at the discontinued
Bagcraft  subsidiary  and a net gain on  disposal  of the  Bagcraft  business of
$35,985,000.  No income or loss relating to discontinued operations was incurred
during 1999.


         Year Ended December 31, 1998  vs.  Year Ended December 31, 1997

         Continuing Operations

In  November  1998,  Artra  sold the  assets  of  Bagcraft,  its only  operating
subsidiary.  Accordingly,  we had no revenues from continuing operations in 1998
and 1997.

Selling,  general and  administrative  expenses from continuing  operations were
$2,660,000  for the year ended  December 31, 1998 as compared to $5,708,000  for
the year ended  December 31,  1997.  The 1998  decrease in selling,  general and
administrative   expenses  was  attributable  to  the  1997  net  related  party
compensation/expense  reimbursement  costs of $2,816,000.  See the discussion of
Peter R. Harvey advances in Note 16 to our Consolidated Financial Statements.





                                       32
<PAGE>


During the year ended  December 31, 1998, we had interest  expense of $3,450,000
as compared to interest expense of $6,178,000 during the year ended December 31,
1997. The 1998 decrease is  attributable  to the fees and costs  associated with
Artra's 1997 private placement of $12,850,000 of Artra promissory notes.

During  1998,  some of the  officers,  directors  and/or key  employees of Artra
exercised  options to acquire 84,750 shares of Comforce common stock from Artra,
resulting in a realized gain of $320,000.  These Comforce common shares had been
removed from Artra's portfolio of  "available-for-sale  securities" in 1996. See
discussion  under  "Investment  in Comforce  Corporation"  below for  additional
information about this transaction.

During the year ended  December  31, 1997,  Artra sold or otherwise  disposed of
302,203  shares  of  Comforce  common  stock  resulting  in a  realized  gain of
$2,531,000.

Effective  December  31,  1997,  Artra  settled   litigation   relating  to  the
acquisition of Envirodyne Industries,  Inc. in 1989 by Emerald Acquisition Corp.
Artra  recognized a gain from the settlement  agreement of  $10,416,000,  net of
related legal fees and other expenses.

Our loss from  continuing  operations  in the year ended  December  31, 1998 was
$5,707,000 as compared to earnings from  continuing  operations of $1,066,000 in
the year ended December 31, 1998.  During 1997, Artra recognized a gain from the
settlement  agreement  of  $10,416,000,  net of  related  legal  fees and  other
expenses.  During 1998 as discussed  above selling,  general and  administrative
expenses and interest expense decreased significantly.

         Discontinued Operations

Earnings from discontinued operations of $38,930,000 for the year ended December
31, 1998 consisted of earnings from operations of $2,945,000 at the discontinued
Bagcraft  subsidiary  and a net gain on  disposal  of the  Bagcraft  business of
$35,985,000.  The loss from  discontinued  operations  of $293,000  for the year
ended  December  31, 1997  consisted of an  operating  loss at the  discontinued
Bagcraft  subsidiary.  Earnings from  operations in 1998 are  attributable  to a
significant reduction in interest expense due to the February 1998 amendment and
restatement  of Bagcraft's  Credit  Agreement and the November 1998 repayment of
Bagcraft  debt  from  the  sale of the  Bagcraft  assets,  as well as  decreased
depreciation and amortization expense.


 Liquidity and Capital Resources

         Cash and Cash Equivalents and Working Capital

Our unrestricted cash and cash equivalents decreased $2,086,000 to $9,667,000 at
December 31, 1999.  Cash flows used by operating  activities of  $9,502,000  and
cash flows used by investing  activities of $7,860,000  exceeded cash flows from
financing  activities of  $15,276,000.  Operating  activities used cash flows to
fund the  Company's  cash losses for the year ended  December 31, 1999.  The net
loss of  $19,103,000  included  a  non-cash  compensation  charge of  $5,046,000
related to stock options and a non-cash  interest  expense  charge of $6,229,000
relating to the extension of common stock  warrants.  Investing  activities used
cash  flows  for  our   acquisitions   of  Nationwide,   Entrade's   assets  and
printeralliance.com.  Financing activities provided cash flows from the exercise
of stock options and warrants.

Our consolidated  working capital  decreased by $11,704,000 to a working capital
deficit of $4,891,000 at December 31, 1999, as compared to consolidated  working
capital of  $6,813,000  at December  31, 1998.  We used working  capital to fund
operating expenses,  pay liabilities of the discontinued Bagcraft subsidiary and
for our acquisition of Entrade's assets, Nationwide and printeralliance.com. Our
acquisition of Nationwide was funded in part by the issuance of notes payable to
the selling  shareholders.  At December 31, 1999, current  liabilities  included
notes payable to the Nationwide selling shareholders of $7,000,000.  This use of
working  capital was  partially  offset by proceeds  from the  exercise of stock
options and warrants and funds raised by the private  placement of shares of our
common stock.






                                       33
<PAGE>


         Status of Debt Agreements

         Entrade Corporate

As part of the  consideration  for the  acquisition of  Nationwide,  the selling
shareholders  received  short-term  promissory  notes in the principal amount of
$4,800,000 and term notes in the principal amount of $14,000,000. The term notes
are payable in several  installments with the final payment due October 1, 2001.
Interest at 8% is payable quarterly.

In  January  2000,  the  promissory  notes,  net of  amounts  due from a selling
shareholder  of $139,000,  plus accrued  interest,  were  converted into 278,985
shares of Entrade common stock.  Accordingly,  at December 31, 1999, net amounts
due on the  promissory  notes plus accrued  interest  were  reclassified  in the
Company's  consolidated  balance sheet as obligations  expected to be settled by
the issuance of common stock. The total amount  reclassified,  including accrued
interest, was $4,743,000.

In  March  2000 we  entered  into  an  agreement  with  the  Nationwide  selling
shareholders  to convert  the term notes with a remaining  principal  balance of
approximately $10,500,000 into 265,621 shares of Entrade common stock. The notes
originally  provided for  principal  payments of  $3,500,000 in October 2000 and
$7,000,000  in  October  2001.  Completion  of this  transaction  is  subject to
approval by our shareholders.

         Nationwide

Nationwide has a line of credit with a bank that provides for maximum borrowings
of $3,000,000. Borrowings of $1,229,000 were outstanding as of December 31, 1999
and  require  monthly  interest  payments  at the bank's  prime rate plus 1%. At
December 31, 1999,  $1,771,000 was available and unused by Nationwide  under the
credit  agreement.  The  line of  credit  expires  on  December  8,  2000 and is
collateralized by the assets of Nationwide.

The line of credit agreement contains various  restrictive  covenants that among
other restrictions require Nationwide to maintain minimum levels of tangible net
worth,  debt to net worth and  profitability  levels.  In addition,  the line of
credit agreement  prohibits changes in ownership of Nationwide.  At December 31,
1999,  Nationwide was not in compliance  with several  provisions of the line of
credit agreement.  The bank waived the conditions of non-compliance that existed
at December 31, 1999 and has subsequently amended the loan agreement

In June 1999 Nationwide  obtained  $425,000 in notes payable in order to finance
certain  real estate used as an auction  facility  in Atlanta,  Georgia.  During
1998, Nationwide obtained approximately  $2,735,000 in notes payable in order to
purchase  the real estate  currently  used for its Northern  California  auction
facilities. All the notes are collateralized by the related real estate.

At December 31, 1999,  current  liabilities  included  $2,163,000  of Nationwide
notes  reclassified  from  long-term  debt  to  currently  payable.   This  debt
obligation was obtained by Nationwide during 1998. The lender did not consent to
the change in ownership  relating to our  acquisition  of  Nationwide in October
1999.  In March 2000,  this debt  obligation  was paid with funds  available  on
Nationwide's  line of credit agreement and funds from operations.  Nationwide is
currently  negotiating  with a lender to  refinance  the former real estate note
with a long-term credit facility.

         Redeemable Preferred Stock

Under the terms of the Artra/Entrade merger, holders of Artra Series A preferred
stock  received  329 shares of Entrade  common  stock (an  aggregate  of 608,403
Entrade common shares) for each share of Artra Series A preferred stock.

During the fourth  quarter of 1999,  Entrade  exchanged  an aggregate of 727,145
shares of common stock for all of the outstanding  shares of BCA Holdings Series
A and Series B redeemable preferred stock.

As discussed in Note 17 to our consolidated financial statements,  in March 2000
we raised  approximately  $28,500,000  in net  proceeds  from the sale of 30,000
shares of our Series A convertible redeemable preferred stock.


         Investment in Comforce Corporation

Artra,  along with its  wholly-owned  Fill-Mor  subsidiary,  owns a  significant
minority interest in Comforce Corporation ("Comforce"),  consisting of 1,525,500
shares or approximately 9% of the outstanding common stock of Comforce as of






                                       34
<PAGE>


December  31, 1999 with an  aggregate  value as of that date of  $4,386,000.  An
attempt to sell a large  number of the  Comforce  shares  over a limited  period
could be expected to result in a reduction of the value of those shares.

         Plan of Operations

During 1999 Entrade entered the  development  stage business  services  business
primarily through its acquisition of entrade.com,  printeralliance.com and other
equity  interests.  We also entered  transaction  services  business through the
October 1999 acquisition of Nationwide.

Entrade intends to expand these  businesses in 2000 through  internal growth and
the acquisition of related businesses of Entrade.

In December 1999, in order to increase Entrade's  ownership in asseTrade.com,  a
newly created  wholly-owned  subsidiary of Entrade agreed to merge into Positive
Asset Remarketing,  Inc., with the surviving corporation becoming a wholly-owned
subsidiary  of  Entrade.   Upon  consummation  of  the  merger,   the  aggregate
outstanding  shares  of  common  stock of  Positive  Asset  Remarketing  will be
converted into 900,000  shares of Entrade  common stock,  subject to increase to
1,000,000 shares under certain conditions of the merger agreement.  Entrade will
acquire  Positive  Asset  Remarketing's  only asset,  an interest in the Class A
common  stock of  asseTrade.com,  which will  double  its  current  interest  in
asseTrade.com  Class A common  stock.  After the merger,  and  assuming the full
dilution of Entrade's interest  (principally after conversion of preferred stock
and the exercise of stock  options),  Entrade will hold a 29.3%  interest in the
Class A common  stock of  asseTrade.com.  The merger was  approved by  Entrade's
Board of  Directors  on January 3, 2000,  and is subject to various  conditions,
including Entrade shareholder approval.

In January 2000, we entered into an agreement with three individual shareholders
to acquire 15% of the issued and outstanding shares of ATM Service,  Ltd., which
is a licensee of entrade.com's technology,  for shares of our common stock equal
to the  greater  of  352,941  shares  or  that  number  determined  by  dividing
$6,000,000  by the average  closing price for our common stock for the five days
preceding  the  closing  date.  ATM  Service  provides a channel  for  wholesale
redistribution  of consumer  oriented  goods under the name  ATMCenter.com.  The
transaction  is subject to various  conditions,  including  Entrade  shareholder
approval.  WorldWide Web NetworX Corporation, the majority owner of ATM Service,
is currently the beneficial owner of 10.9% of the outstanding  shares of Entrade
common stock.

On February 10, 2000, we agreed with  Associates  First Capital  Corporation  to
organize   a  new   entity   to  be  known  as   TruckCenter.com   to  create  a
business-to-business  e-commerce  marketplace for the sale of trucks and related
services,   including  financing,   certification,   warranty  and  third  party
inspection.  We will invest $3,000,000 and be the sole owner of TruckCenter.com,
but  Associates  First  Capital  Corporation  has an  option to  purchase  a 50%
interest. The TruckCenter.com website was launched March 23, 2000 and expects to
be capable of  transacting  commerce  during the second quarter of 2000. For the
six-month  period  following  the  launch,  Associates  has agreed to list truck
inventory  on the  website  and  not  on any  other  website  unaffiliated  with
Associates,  and  Associates  will  provide the  ability to apply for  financing
services  to  purchasers.   Entrade  agreed  that  TruckCenter.com   would  list
Associates' truck inventory free of any listing fee (but not free of transaction
fees) during such six-month period.

On February 18, 2000, our  entrade.com  subsidiary  entered into an agreement to
acquire a 25% interest in TradeTextile.com  and  warrants to acquire  additional
equity in TradeTextile.com  in exchange for $3,500,000,  a warrant to acquire up
to 75,000  shares of our common  stock and the  license to  TradeTextile.com  of
entrade.com's software technology.  If entrade.com were to exercise all warrants
it  also  received  to  acquire   additional   equity,   it  would  own  35%  of
TradeTextile.com  on  a  fully-diluted  basis.   TradeTextile.com  will  provide
business-to-business e-commerce for the trading of yarns, fabrics, garments, raw
materials,  chemicals,  and  textile  quotas,  initially  targeting  the Chinese
textile industry.

On March 13,  2000,  Entrade  agreed with  Textron  Financial  Corporation,  ATM
Services Ltd. and Safeguard Scientifics,  Inc. to organize a new entity known as
AssetControl.com  to create a B2B e-commerce  marketplace for the management and
disposition of surplus  industrial  equipment,  excess  inventory and commercial
real  estate.  Entrade  has agreed to provide  the  venture a license to use the
Entrade  technology,   e-Business  consulting  and  service  resources.  Textron
Financial  has agreed to provide the  management  support of its existing  asset
management





                                       35
<PAGE>


business, the Asset Control Services division, and financial expertise,  as well
as accounting, tax and legal services for AssetControl.com.  Entrade owns 38% of
the new entity, Textron Financial owns 47%, ATM Services owns 9.5% and Safeguard
Scientifics owns 5%. As part of the  consideration  for this agreement,  Entrade
issued Textron Financial Corporation a warrant to acquire up to 1,000,000 shares
of Entrade  common stock at an exercise  price of $39.65 per share.  The warrant
initially  vests 250,000 shares with the remaining  750,000 shares  scheduled to
vest based upon certain performance standards for  AssetControl.com.  The market
value of Entrade's common stock on the date of grant of the warrants was $49.375
per share.  Accordingly,  we will recognize future charges to operations related
to these warrants.

In March 2000 we acquired an additional  equity interest in  printeralliance.com
for $1,000,000 in cash and now own 64% of printeralliance.com.

We have sustained significant net losses and negative cash flows from operations
in 1999. The Company's ability to meet its obligations in the ordinary course of
business is dependent  upon its ability to establish  profitable  operations  or
raise  additional  financing  through public or private equity  financing,  bank
financing,  or other sources of capital.  During December 1999 and January 2000,
we raised  $13,412,000  in net proceeds from private  placements  of equity.  In
addition,  in March 2000, we raised  approximately  $28,500,000  in net proceeds
from the sale of the Company's Series A convertible  redeemable preferred stock.
Management  believes  current  working  capital  and other  funding  sources are
sufficient  to continue  operations  and achieve its business plan through March
2001. However, if we desire to expand our business operations beyond the current
business plan, make additional  strategic  acquisitions or enter into additional
joint ventures,  we may require additional equity or debt financing.  Additional
financing may not be available to us on favorable  terms.  If adequate funds are
not available on acceptable  terms, we may not be able to continue or expand our
business  operations,  which in the future could harm our  business,  results of
operations and financial condition.

         Legal Proceedings

With exception of legal proceedings and claims that arise in the ordinary course
of  Nationwide's  business,  the only  legal  proceedings  in which  Entrade  is
presently  involved  relate  to  Artra  and  its  subsidiaries,  which  are  the
defendants in various business-related  litigation and environmental matters and
product liability claims. See Note 10 to our consolidated  financial statements.
At  December  31,  1999  and  December  31,  1998,  Artra  had  accrued  current
liabilities  of  $1,400,000   and   $1,500,000,   respectively,   for  potential
business-related  litigation and environmental liabilities.  No liabilities were
accrued for the product  liability  claims because no reasonable basis exists on
which such claims could be quantified.

         Net Operating Loss Carryforwards

At December 31, 1999,  Entrade and its  subsidiaries had federal income tax loss
carryforwards of  approximately  $14,800,000  expiring  principally in the years
2012 to 2019,  available to be applied against future taxable income, if any. In
recent  years,  Artra issued  shares of Artra common stock to repay various debt
obligations,  as  consideration  for  acquisitions,   to  fund  working  capital
obligations and as consideration for various other transactions.  Section 382 of
the Internal  Revenue  Code limits a  corporation's  utilization  of its federal
income tax loss  carryforwards  when changes in the ownership of a corporation's
common stock described in the Code occurs. In the opinion of management,  we are
not  currently  subject  to  such  limitations   regarding  the  utilization  of
substantially all of our Federal income tax loss carryforwards.

Impact of Inflation and Changing Prices

Inflation has become a less significant factor in our economy;  however,  to the
extent  permitted  by  competition,  we  intend to pass  increased  costs to our
customers by increasing our prices and fees over time.

Recently Issued Accounting Pronouncements

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities." This statement  establishes  accounting and
reporting standards for derivative  instruments and requires  recognition of all
derivatives  as assets or  liabilities  in the balance sheet and  measurement of
those  instruments at fair value.  The statement,  as amended,  is effective for
fiscal years beginning  after June 15, 2000.  Management has not determined what
impact this standard, when adopted, will have on our financial statements.







                                       36
<PAGE>


Year 2000 Compliance

The Year 2000 ("Y2K") issue refers to the  inability of many  computer  programs
and systems to process  accurately  dates later than  December 31, 1999.  Unless
these  programs  are  modified  to handle the century  change,  they will likely
interpret the Year 2000 as the year 1900. We anticipate that the Year 2000 Issue
will not have a material adverse effect on our financial  position or results of
operations.  We have not incurred any  significant  costs for Y2K  compliance to
date and do not expect to incur any  significant  additional  costs to  complete
such compliance.


Nationwide Auction Systems

Results of Operations

The following  table  presents  Nationwide's  results of operations for the nine
month periods ended  September 30, 1999 and 1998 and the two years in the period
ended December 31, 1998.

<TABLE>
<CAPTION>
                                            Nine Months Ended
                                              September 30      Year Ended December 31
                                           -------------------    --------------------
                                              1999       1998        1998        1997
                                           --------   --------    --------    --------
                                                         (in thousands)
<S>                                        <C>        <C>         <C>         <C>
Net revenues                               $ 12,181   $ 13,849    $ 19,624    $ 11,604
Cost of sales                                 5,388      4,224       8,223      10,671
                                           --------   --------    --------    --------
      Gross Profit                            6,793      5,626       8,953       7,380

Operating expenses                            5,181      3,819       6,507       5,100
                                           --------   --------    --------    --------
      Earnings from operations                1,612      1,807       2,446       2,280
Interest expense (income), net                  184        (71)        (42)       (131)
Other expense (income), net                    --           (3)          3         384
                                           --------   --------    --------    --------
      Earnings before income taxes            1,881      1,428       2,485       2,027
State income taxes, all current                  21         28          39          30
                                           --------   --------    --------    --------
Net earnings (loss)                        $  1,407   $  1,853    $  2,446    $  1,997
                                           ========   ========    ========    ========
</TABLE>


   Nine Months Ended September 30, 1999 vs. Nine Months Ended September 30, 1998

Gross auction  proceeds for the nine months ended  September 30, 1999  increased
$16,982,000 to $70,832,000 as compared to $53,850,000  for the nine months ended
September 30, 1998. In 1999,  Nationwide  conducted additional off-site auctions
and opened new  permanent  facilities  in Georgia and  Delaware.  Gross  auction
proceeds  represent  the bid  price  of the  merchandise  sold  at  Nationwide's
auctions.  Nationwide's  revenues  and fees earned are based upon gross  auction
proceeds.

Net revenues for the nine months ended  September 30, 1999 decreased  $1,668,000
to $12,181,000 as compared to  $13,849,000  for the nine months ended  September
30, 1998.  Nationwide's net revenues in 1998 included  approximately  $3,600,000
from  non-recurring  sales of  imported  equipment.  In 1999,  Nationwide's  net
auction revenues  increased due to the addition of new facilities and additional
auctions.

Cost of goods  sold for the nine  months  ended  September  30,  1999  decreased
$2,835,000 to  $5,388,000  as compared to  $8,223,000  for the nine months ended
September  30, 1998.  As a percentage  of net  revenues,  cost of goods sold was
44.2% of net revenues in 1999 as compared to 59.4% of net  revenues in 1998.  In
1998,   Nationwide   earned  net  revenues  of  approximately   $3,600,000  from
non-recurring  sales of imported  equipment.  The cost to purchase and transport
this  equipment  was  approximately  $3,500,000.  In 1999,  Nationwide's  direct
auction costs increased due to additional auctions and the resulting increase in
gross auction proceeds.

Operating  expenses  for the nine months  ended  September  30,  1999  increased
$1,362,000 to $5,181,000.  Nationwide  incurred additional costs in 1999 to open
new permanent facilities in Georgia and Delaware. Nationwide also incurred







                                       37
<PAGE>


professional  fees in  connection  with the October  purchase of  Nationwide  by
Entrade.

During the nine months ended  September  30, 1999,  Nationwide  had net interest
expense of $184,000 as compared  to net  interest  income of $71,000  during the
nine months ended  September 30, 1998.  In December  1998,  Nationwide  borrowed
approximately $2,735,000 to purchase its Northern California auction facility.


         Year Ended December 31, 1998 vs. Year Ended December 31, 1997

Gross auction proceeds for the year ended December 31, 1998 increased $8,546,000
to $75,110,000 as compared to $66,564,000  for the year ended December 31, 1997.
In 1998,  Nationwide  conducted  several  additional  auctions  at its  Missouri
facility opened in August 1997 and also conducted several additional auctions of
construction equipment at our Northern California facility.

Net  revenues  for the year ended  December  31, 1998  increased  $8,020,000  to
$19,624,000  as compared to  $11,604,000  for the year ended  December 31, 1997.
Nationwide's  net  revenues  in  1998  included  approximately  $5,700,000  from
non-recurring  sales of imported  equipment.  In 1998,  Nationwide's net auction
revenues  increased  due to an increase in gross  auction  proceeds as discussed
above.

Cost of goods sold for the year ended December 31, 1998 increased  $6,447,000 to
$10,671,000 as compared to $4,224,000 for the year ended December 31, 1997. As a
percentage of net revenues, cost of goods sold was 54.4% of net revenues in 1998
as compared to 36.4% of net  revenues in 1997.  In 1998,  Nationwide  earned net
revenues  of  approximately  $5,700,000  from  non-recurring  sales of  imported
equipment.  The cost to purchase and transport this equipment was  approximately
$5,300,000.  In  1998,  Nationwide's  direct  auction  costs  increased  due  to
additional auctions and the resulting increase in gross auction proceeds.

Operating expenses for the year ended December 31, 1998 increased  $1,407,000 to
$6,507,000.  Nationwide's  increased  auction  activities in 1998 resulted in an
increase in operating  expenses.  Additionally,  Nationwide  incurred additional
costs in 1998 to operate its Missouri facility opened in August 1997.

During the year ended December 31, 1998,  Nationwide had net interest  income of
$42,000 as compared  to net  interest  income of $131,000  during the year ended
December 31, 1997.  In 1998,  Nationwide  incurred  interest  costs to finance a
non-recurring sale of imported equipment.

During 1997,  Nationwide sold its investment in a nonperforming note receivable,
resulting in a loss of $399,000 included in other expenses, net.


Item 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company is  exposed  to certain  market  risks,  which  include  changes in
interest  rates.  The Company  prepared  sensitivity  analyses to determine  the
impact of a hypothetical  one percentage point increase in interest rates on the
Company's  consolidated  operating  results,  financial position and cash flows.
Based on its  sensitivity  analyses  at  December  31,  1999,  such a change  in
interest  rates would not have a significant  effect on the Company's  operating
results,  financial  position and cash flows.  The  Company's  debt  obligations
primarily have fixed interest rates. The Company's investment in Comforce common
stock is subject to liquidity and market price risks.


Item 8.  Financial Statements and Supplementary Data.

Financial Statements and Schedules as listed on Page F-1.


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

None.





                                       38
<PAGE>


                                    PART III

Item 10.   Directors and Executive Officers of the Registrant

Information  called for by Item No. 10 of Part III is  incorporated by reference
to the  definitive  Prospectus/Proxy  Statement  for the 2000 Annual  Meeting of
Shareholders  to be filed with the Commission  within 120 days of the end of the
Company's last fiscal year.

Item 11.   Executive Compensation

Information  called for by Item No. 11 of Part III is  incorporated by reference
to the  definitive  Prospectus/Proxy  Statement  for the 2000 Annual  Meeting of
Shareholders  to be filed with the Commission  within 120 days of the end of the
Company's last fiscal year.

Item 12.   Security Ownership of Certain Beneficial Owners and Management

Information  called for by Item No. 12 of Part III is  incorporated by reference
to the  definitive  Prospectus/Proxy  Statement  for the 2000 Annual  Meeting of
Shareholders  to be filed with the Commission  within 120 days of the end of the
Company's last fiscal year.

Item 13.   Certain Relationships and Related Transactions

Information  called for by Item No. 13 of Part III is  incorporated by reference
to the  definitive  Prospectus/Proxy  Statement  for the 2000 Annual  Meeting of
Shareholders  to be filed with the Commission  within 120 days of the end of the
Company's last fiscal year.



                                     PART IV

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

          (a)      1.     Financial Statements as listed on Page F-1.
                   2.     Financial Statement Schedules as listed on Page F-1.
                   3.     Exhibits as listed on Page E-1.
                                Compensatory  plans or management  contracts are
                                marked with an asterisk.

(b)      Reports on Form 8-K.

                   On October 6, 1999, the  Registrant  filed Form 8-K to report
                   that the merger (the  "Merger") of a wholly owned  subsidiary
                   of  Entrade  Inc.  ("Entrade")  with  and  into  Artra  Group
                   Incorporated  ("Artra")  was  completed.  As a result  of the
                   Merger,  Artra became a wholly owned  subsidiary  of Entrade,
                   and  Entrade's  Common  Stock  became  listed  and  commenced
                   trading on the New York Stock Exchange under the symbol "ETA"
                   on September 24, 1999.

                   On October 28, 1999, the Registrant  filed Form 8-K to report
                   that it completed its  acquisition of all of the  outstanding
                   capital stock of Public Liquidation  Systems,  Inc. and Asset
                   Liquidation  Group,  Inc., which engage in business under the
                   name Nationwide Auction Systems ("Nationwide").

                   On December 2, 1999, the Registrant filed Form 8-K/A to amend
                   its Form 8-K initially  filed with the  Commission on October
                   28, 1999 that reported the  acquisition  of  Nationwide.  The
                   Form 8-K/A reported:  (i) the historical financial statements
                   of the acquired Nationwide  business;  and (ii) the pro forma
                   financial  information  relating to the  acquired  Nationwide
                   business.









                                       39
<PAGE>


                                    SIGNATURE

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  registrant  has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                                                        ENTRADE INC.

                                          By:      /s/ MARK F. SANTACROSE
                                               ---------------------------------
                                                       Mark F. Santacrose
                                                     President and Director
Dated:  March 29, 2000                               Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons, on behalf of the registrant,  in
the capacities and on the dates indicated.

     /s/ JOHN HARVEY               Chairman and Director          March 29, 2000
---------------------------
       John Harvey

   /s/ PETER R. HARVEY             Vice Chairman and Director     March 29, 2000
---------------------------
     Peter R. Harvey

  /s/ MARK F. SANTACROSE           President and Director         March 29, 2000
---------------------------
    Mark F. Santacrose             Chief Executive Officer

     /s/ JOHN G. HAMM              Executive Vice President,      March 29, 2000
---------------------------        Treasurer and
       John G. Hamm                Chief Financial Officer

   /s/ EDWARD A. CELANO            Director                       March 29, 2000
---------------------------
     Edward A. Celano

   /s/ HOWARD R. CONANT            Director                       March 29, 2000
---------------------------
     Howard R. Conant

  /s/ ROBERT L. JOHNSON            Director                       March 29, 2000
---------------------------
    Robert L. Johnson

   /s/ GERARD M. KENNY             Director                       March 29, 2000
---------------------------
     Gerard M. Kenny

    /s/ ROBERT D. KOHN             Director                       March 29, 2000
---------------------------
      Robert D. Kohn

   /s/ MAYNARD K. LOUIS            Director                       March 29, 2000
---------------------------
     Maynard K. Louis








                                       40
<PAGE>



 /s/ CORY F. SCHLOSSMANN           Director                       March 29, 2000
---------------------------
   Corey F. Schlossmann

     /s/ JOHN K. TULL              Director                       March 29, 2000
---------------------------
       John K.Tull

  /s/ LAWRENCE D. LEVIN            Controller                     March 29, 2000
---------------------------
    Lawrence D. Levin








































                                       41
<PAGE>






                          INDEX TO FINANCIAL STATEMENTS


On  September  23,  1999,  per  terms  of a  merger  agreement,  Artra  became a
wholly-owned  subsidiary of Entrade,  with Artra being the surviving corporation
for  financial  reporting  purposes.   Accordingly,   the  historical  financial
statements  included in this Annual Report on Form 10-K for Entrade  present the
financial  condition  and  results  of  operations  and cash flows for Artra for
periods presented prior to the merger.


                                                                          Page
                                                                          ----

ENTRADE INC. AND SUBSIDIARIES

    Report of Independent Accountants                                      F- 2

    Consolidated Balance Sheets as of December 31, 1999
        and December 31, 1998                                              F-3

    Consolidated Statements of Operations
        for each of the three fiscal years
        in the period ended December 31, 1999                              F-5

    Consolidated Statements of Changes in Shareholders' Equity
        for each of the three fiscal years
        in the period ended December 31, 1999                              F-6

    Consolidated Statements of Cash Flows
        for each of the three fiscal years
        in the period ended December 31, 1999                              F-8

    Notes to Consolidated Financial Statements                             F-10

    Schedules:
         Report of Independent Accountants
              on Financial Statement Schedules                             F-38


         II.      Valuation and Qualifying Accounts                        F-39

NATIONWIDE AUCTION SYSTEMS (Predecessor)

   Report of Independent Accountants                                       F-40

   Independent Auditors' Report                                            F-41

   Combined Balance Sheet as of December 31, 1998                          F-42

   Combined  Statements of Earnings and
        Retained  Earnings for the nine
        month period ended September 30, 1999 and
        for each of the two years in
        the period ended December 31, 1998                                 F-43

   Combined Statements of Cash Flows
        for the nine month period ended
        September  30, 1999 and
        for each of the two years
        in the period ended December 31, 1998                              F-44

    Notes to Combined Financial Statements                                 F-45


Schedules  other than those  listed are  omitted as they are not  applicable  or
required or equivalent information has been included in the financial statements
or notes thereto.


<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Shareholders and Board of Directors
Entrade Inc.
Northfield, Illinois

In our  opinion,  based on our  audits  and the  report of other  auditors,  the
accompanying consolidated balance sheets and the related consolidated statements
of  operations  and changes in  shareholders'  equity and of cash flows  present
fairly, in all material respects, the financial position of Entrade Inc. and its
subsidiaries at December 31, 1999 and 1998, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 1999, in conformity with  accounting  principles  generally  accepted in the
United  States.  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  audits.  We did not  audit  the  financial
statements of  asseTrade.com  Inc., an  unconsolidated  affiliate  accounted for
using the equity method. Such investment  aggregated  $3,554,000 at December 31,
1999 and  equity  in loss of  asseTrade.com  Inc.  was  $445,000  in  1999.  The
financial  statements of asseTrade.com Inc. were audited by other auditors whose
report thereon has been furnished to us, and our opinion,  insofar as it relates
to the amounts included for asseTrade.com  Inc. is based solely on the report of
such other auditors.  We conducted our audits of these  statements in accordance
with auditing  standards  generally  accepted in the United States which 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,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for the opinion expressed above.


PricewaterhouseCoopers LLP


Chicago, Illinois
March 29, 2000








                                      F-1
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)


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

                     ASSETS
Current assets:
   Cash and equivalents                                   $ 9,667     $11,753
   Restricted cash and equivalents                           --         1,045
   Receivables, less allowance for doubtful
       accounts of  $10 in 1999 and $0 in 1998                812         171
   Available-for-sale securities                            4,386       8,200
   Other                                                      461          99
                                                          -------     -------
               Total current assets                        15,326      21,268
                                                          -------     -------

Property and equipment:
    Land                                                    2,271        --
    Buildings                                               1,261        --
    Leasehold improvements                                  2,502        --
    Furniture and equipment                                 1,492        --
    Construction in progress                                   15        --
                                                          -------     -------
                                                            7,541        --
Less accumulated depreciation and amortization                178        --
                                                          -------     -------
                                                            7,363        --
                                                          -------     -------

Other assets:
    Intangibles, principally excess of cost
      over net assets acquired, net of
      accumulated amortization of $1,088                   54,394        --
    Investment in and advances to asseTrade.com             3,554        --
   Other                                                      121        --
                                                          -------     -------
                                                           58,069        --
                                                          -------     -------
                                                          $80,758     $21,268
                                                          =======     =======



The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.





















                                       F-3
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)


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

                        LIABILITIES
Current liabilities:
   Notes payable                                      $   1,229     $    --
   Current maturities of long-term debt,
      including amounts due to
      related parties of $7,000                           9,364          --
   Cash overdraft                                           473          --
   Accounts payable                                       1,345          --
   Accrued expenses                                       2,850           568
   Income taxes                                           1,081         1,854
   Common stock put warrants                               --           1,705
   Liabilities of discontinued operations                 3,875        10,328
                                                      ---------     ---------
               Total current liabilities                 20,217        14,455
                                                      ---------     ---------

Long-term debt                                            7,978          --
Obligations expected to be settled
    by the issuance of common stock                       4,743          --
Commitments and contingencies

Redeemable preferred stock                                 --           2,857


                SHAREHOLDERS' EQUITY
Preferred stock, $1,000 par value,
   authorized 4,000,000 shares;
   no shares issued or outstanding                         --            --
Common stock, no par value;
   authorized 40,000,000 shares;
   issued  and outstanding
   15,082,186 shares in 1999
   and 7,864,228 shares in 1998                            --            --
Additional paid-in capital                              119,539        47,336
Deferred stock compensation                              (4,929)         --
Unrealized appreciation of investments                    7,106        10,920
Accumulated deficit                                     (73,896)      (54,300)
                                                      ---------     ---------
                                                         47,820         3,956
                                                      ---------     ---------
                                                      $  80,758     $  21,268
                                                      =========     =========



The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.

















                                       F-4
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)



<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                        --------------------------------
                                                                          1999        1998        1997
                                                                        --------    --------    --------

<S>                                                                     <C>         <C>         <C>
Net revenues                                                            $  4,542    $   --      $   --
                                                                        --------    --------    --------

Costs and expenses:
   Cost of revenues, exclusive of
      depreciation and amortization                                        1,759        --          --
   Selling, general and administrative,
       exclusive of $5,046,000 of
       compensation related to stock options                               9,079       2,660       5,708
   Compensation related to stock options                                   5,046        --          --
   Depreciation and amortization                                           1,223        --             7
                                                                        --------    --------    --------
                                                                          17,107       2,660       5,715
                                                                        --------    --------    --------

Operating loss                                                           (12,565)     (2,660)     (5,715)
                                                                        --------    --------    --------

Other income (expense):
   Interest expense, exclusive of
      interest expense related to stock warrants                            (532)     (3,450)     (6,178)
   Interest expense related to stock warrants                             (6,229)       --          --
   Equity in loss of asseTrade.com                                          (445)       --          --
   Realized gain on disposal of
      available-for-sale securities                                           66         320       2,531
   Litigation settlement, net                                               --          --        10,416
   Other income, net,  principally interest income                           401          83          12
                                                                        --------    --------    --------
                                                                          (6,739)     (3,047)      6,781
                                                                        --------    --------    --------

Earnings (loss) from continuing operations before income taxes           (19,304)     (5,707)      1,066
Provision for income taxes                                                  --          --          --
                                                                        --------    --------    --------
Earnings (loss) from continuing operations                               (19,304)     (5,707)      1,066
Earnings (loss) from discontinued operations, net                           --        38,930        (293)
                                                                        --------    --------    --------
Net earnings (loss)                                                      (19,304)     33,223         773
Dividends applicable to and loss on
    redemption of redeemable preferred stock                             (18,019)       (410)       (693)
Reduction of retained earnings
    applicable to redeemable common stock                                   --          --          (400)
                                                                        --------    --------    --------
Earnings (loss) applicable to common shares                             ($37,323)   $ 32,813    ($   320)
                                                                        ========    ========    ========


Per share earnings (loss) applicable to common shares:
    Basic and diluted:
       Continuing operations                                            ($  3.65)   ($  0.78)   $   --
       Discontinued operations                                              --          4.94       (0.04)
                                                                        --------    --------    --------
                 Net earnings (loss)                                    ($  3.65)   $   4.16    ($  0.04)
                                                                        ========    ========    ========

     Weighted average number of shares of common stock outstanding        10,216       7,891       7,970
                                                                        ========    ========    ========

</TABLE>


The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.



                                       F-5
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                        (In thousands, except share data)


<TABLE>
<CAPTION>


                                                                     Common Stock            Additional        Deferred
                                                                -------------------------      Paid-in           Stock
                                                                  Shares        Dollars        Capital       Compensation
                                                                -------------  ----------    ------------    --------------

<S>                                                                <C>                           <C>
Balance at December 26, 1996                                       7,617,138           -         $45,952                 -

Comprehensive income (loss):
   Net earnings                                                            -           -               -                 -
   Net decrease in unrealized appreciation of investments                  -           -               -                 -

               Comprehensive loss


Other changes in shareholders' equity:
   Common stock issued to pay liabilities                            444,717                       1,939                 -
   Net increase in receivable from
      related party, including accrued interest                            -           -               -                 -
   Exercise of stock options and warrants                             39,800           -             178                 -
   Redeemable common stock obligation
      paid by the issuance of additional common shares               115,543           -             679                 -
   Purchase of redeemable preferred stock                                  -           -              89                 -
   Redeemable preferred stock dividends                                    -           -               -                 -
   Redeemable common stock accretion                                       -           -               -                 -

               Other changes in shareholders' equity


                                                                -------------  ----------    ------------    --------------
Balance at December 31, 1997                                       8,217,198           -          48,837                 -

Comprehensive income (loss):
   Net earnings                                                            -           -                                 -
   Net decrease in unrealized appreciation of investments                  -           -               -                 -

           Comprehensive income


Other changes in shareholders' equity:
   Repurchase of common stock previously  issued
       to pay down short-term notes                                 (357,270)          -          (1,518)                -
   Net decrease in receivable from
       related party, including accrued interest                           -           -               -                 -
   Exercise of stock options                                           4,300           -              17                 -
   Redeemable preferred stock dividends                                    -           -               -                 -

           Other changes in shareholders' equity


                                                                -------------  ----------    ------------    --------------
Balance at December 31, 1998                                       7,864,228           -          47,336                 -

</TABLE>



<PAGE>


                         ENTRADE INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                        (In thousands, except share data)


<TABLE>
<CAPTION>
                                                                    Receivable       Accumulated                         Total
                                                                       from             Other                        Shareholders'
                                                                     Related       Comphrehensive    Accumulated        Equity
                                                                       Party           Income         Deficit          (Deficit)
                                                                    ------------   ----------------  -------------   --------------

<S>                                                                     <C>                <C>           <C>              <C>
Balance at December 26, 1996                                            ($6,468)           $25,719       ($86,793)        ($21,590)

Comprehensive income (loss):
   Net earnings                                                               -                  -            773              773
   Net decrease in unrealized appreciation of investments                     -            (10,986)             -          (10,986)
                                                                                                                     --------------
               Comprehensive loss                                                                                          (10,213)
                                                                                                                     --------------

Other changes in shareholders' equity:
   Common stock issued to pay liabilities                                     -                  -              -            1,939
   Net increase in receivable from
      related party, including accrued interest                          (6,153)                 -              -           (6,153)
   Exercise of stock options and warrants                                     -                  -              -              178
   Redeemable common stock obligation
      paid by the issuance of additional common shares                        -                  -              -              679
   Purchase of redeemable preferred stock                                     -                  -              -               89
   Redeemable preferred stock dividends                                       -                  -           (693)            (693)
   Redeemable common stock accretion                                          -                  -           (400)            (400)
                                                                                                                     --------------
               Other changes in shareholders' equity                                                                        (4,361)
                                                                                                                     --------------

                                                                    ------------   ----------------  -------------   --------------
Balance at December 31, 1997                                            (12,621)            14,733        (87,113)         (36,164)

Comprehensive income (loss):
   Net earnings                                                               -                  -         33,223           33,223
   Net decrease in unrealized appreciation of investments                     -             (3,813)             -           (3,813)
                                                                                                                     --------------
           Comprehensive income                                                                                             29,410
                                                                                                                     --------------

Other changes in shareholders' equity:
   Repurchase of common stock previously  issued
       to pay down short-term notes                                           -                  -              -           (1,518)
   Net decrease in receivable from
       related party, including accrued interest                         12,621                  -              -           12,621
   Exercise of stock options                                                  -                  -              -               17
   Redeemable preferred stock dividends                                       -                  -           (410)            (410)
                                                                                                                     --------------
           Other changes in shareholders' equity                                                                            10,710
                                                                                                                     --------------

                                                                    ------------   ----------------  -------------   --------------
Balance at December 31, 1998                                                  -             10,920        (54,300)           3,956

</TABLE>


The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.








                                      F-6

<PAGE>



                          ENTRADE INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                        (In thousands, except share data)



<TABLE>
<CAPTION>

                                                                           Common Stock            Additional        Deferred
                                                                        -----------------------      Paid-in           Stock
                                                                        Shares        Dollars        Capital       Compensation
                                                                        -----------  ----------    ------------    --------------


<S>                                                                      <C>                            <C>
Balance at December 31, 1998                                             7,864,228           -          47,336                 -

Comprehensive income (loss):
   Net loss                                                                      -           -                                 -
   Net decrease in unrealized appreciation of investments                        -           -               -                 -

           Comprehensive income


Other changes in shareholders' equity:
   Exercise of warrants to purchase common stock                         1,692,289           -           7,416                 -
   Exercise of options to purchase common stock                            238,246           -           1,019                 -
   Sale of  common stock, net of selling costs                             201,875           -           6,412
   Common stock issued as consideration for Entrade assets acquired      2,100,000           -          11,513
   Common stock issued as consideration for Nationwide                   1,650,000           -          21,038
   Common stock issued in exchange for
         Artra Series A preferred stock                                    608,403           -           9,924
   Common stock issued in exchange for
         BCA Series A and B preferred stock                                727,145                      14,633
   Loss on redemption of Artra redeemable preferred stock                                               (6,775)
   Loss on redemption of BCA Holdings redeemable preferred stock                                       (10,952)
   Stock options issued and deferred stock-based compensation                                            8,200            (8,200)
   Compensation expense recognized                                                                           -             3,271
   Compensatory stock options                                                    -           -           1,841                 -
   Stock warrants extended                                                                               6,229
   Eliminate put liability for warrants exercised                                            -           1,705                 -
   Redeemable preferred stock dividends                                          -           -               -                 -

           Other changes in shareholders' equity


                                                                        -----------  ----------    ------------    --------------
Balance at December 31, 1999                                            15,082,186           -        $119,539           ($4,929)
                                                                        ===========  ==========    ============    ==============
</TABLE>




<PAGE>



                          ENTRADE INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                        (In thousands, except share data)


<TABLE>
<CAPTION>
                                                                             Accumulated                            Total
                                                                                Other                           Shareholders'
                                                                           Comphrehensive       Accumulated        Equity
                                                                               Income            Deficit          (Deficit)
                                                                           ----------------   ---------------   --------------


<S>                                                                                 <C>              <C>                <C>
Balance at December 31, 1998                                                        10,920           (54,300)           3,956

Comprehensive income (loss):
   Net loss                                                                              -           (19,304)         (19,304)
   Net decrease in unrealized appreciation of investments                           (3,814)                -           (3,814)
                                                                                                                --------------
           Comprehensive income                                                                                       (23,118)
                                                                                                                --------------

Other changes in shareholders' equity:
   Exercise of warrants to purchase common stock                                         -                 -            7,416
   Exercise of options to purchase common stock                                          -                 -            1,019
   Sale of  common stock, net of selling costs                                                                          6,412
   Common stock issued as consideration for Entrade assets acquired                                                    11,513
   Common stock issued as consideration for Nationwide                                                                 21,038
   Common stock issued in exchange for
         Artra Series A preferred stock                                                                                 9,924
   Common stock issued in exchange for
         BCA Series A and B preferred stock                                                                            14,633
   Loss on redemption of Artra redeemable preferred stock                                                              (6,775)
   Loss on redemption of BCA Holdings redeemable preferred stock                                                      (10,952)
   Stock options issued and deferred stock-based compensation                                                               -
   Compensation expense recognized                                                                                      3,271
   Compensatory stock options                                                            -                 -            1,841
   Stock warrants extended                                                                                              6,229
   Eliminate put liability for warrants exercised                                        -                 -            1,705
   Redeemable preferred stock dividends                                                  -              (292)            (292)
                                                                                                                --------------
           Other changes in shareholders' equity                                                                       66,982
                                                                                                                --------------

                                                                           ----------------   ---------------   --------------
Balance at December 31, 1999                                                        $7,106          ($73,896)         $47,820
                                                                           ================   ===============   ==============


</TABLE>











                                       F-7
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands of dollars)



<TABLE>
<CAPTION>

                                                                                   Years Ended December 31,
                                                                                --------------------------------
                                                                                   1999        1998        1997
                                                                                --------    --------    --------
Cash flows from operating activities:
<S>                                                                             <C>         <C>         <C>
   Net earnings (loss)                                                          ($19,304)   $ 33,223    $    773
      Adjustments to reconcile net earnings
             to cash flows from operating activities:
         Depreciation of property, plant and equipment                               135       2,446       4,059
         Amortization of intangibles,
            principally excess of cost over net assets acquired                    1,088         272         305
         Costs related to stock options and warrants                              11,275        --          --
         Equity in loss of asseTrade.com                                             445        --          --
         Decrease  in receivable from related party                                 --           400       2,816
         Gain on disposal of discontinued operations                                --       (35,585)       --
         Amortization of other assets, principally financing costs                  --         1,121       4,754
         Gain on sale of idle machinery  and equipment                              --          --          (932)
         Litigation settlement, net                                                 --          --       (10,416)
         Gain on disposal of Comforce common stock                                   (66)       (320)     (2,531)
         Minority interest                                                          --           509       1,109
         Other, principally common stock issued as compensation                       66          21         556
     Changes in assets and  liabilities,
        net of effects of businesses
        acquire and discontinued:
          (Increase) decrease in receivables                                         696         (35)     (1,631)
          (Increase) decrease in inventories                                        --        (2,010)        132
          (Increase) decrease in other current and noncurrent assets                (164)       (456)        517
          Increase (decrease) in payables and accrued expenses                    (2,902)     (8,771)        321
          Decrease in other current and noncurrent liabilities                      (771)     (1,745)       (119)
                                                                                --------    --------    --------
Net cash flows used by operating activities                                       (9,502)    (10,930)       (287)
                                                                                --------    --------    --------

Cash flows from investing activities:
   Proceeds from disposal of Comforce common stock                                    30         170       1,821
   Proceeds from sale of Bagcraft assets                                            --        89,000        --
   (Increase) decrease in restricted cash                                          1,045      (1,045)       --
         Pre-merger Entrade loss                                                   1,305        --          --
   Purchase of Entrade assets, net of cash acquired                               (4,099)       --          --
   Acquisition of Nationwide, net of cash acquired                                (5,323)       --          --
   Acquisition of printeralliance.com                                               (550)       --          --
   Net proceeds from litigation settlement                                          --          --         9,761
   Proceeds from sale of property, plant and equipment                              --          --           537
   Investment in asseTrade.com
   Additions to property, plant and equipment                                       (240)     (2,177)     (3,066)
   (Increase) decrease  in receivable from related party                            --        (8,969)
   Acquistion of AB Specialty, net of deposit                                     (1,131)
   Proceeds from sale of  idle machinery and equipment                              --          --           932
  Other                                                                              (28)       --          --
                                                                                --------    --------    --------
Net cash flows from (used by) investing activities                                (7,860)     85,948        (115)
                                                                                --------    --------    --------
</TABLE>



The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.






                                       F-8
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands of dollars)


<TABLE>
<CAPTION>


                                                                                     Years Ended December 31,
                                                                                 -----------------------------------
                                                                                    1999         1998         1997
                                                                                 ---------    ---------    ---------
Cash flows from financing activities:
<S>                                                                                           <C>          <C>
   Net increase (decrease) in short-term debt                                         --      ($ 15,451)   ($  1,508)
   Increase in cash overdraft                                                          473         --           --
   Proceeds from long-term borrowings                                                 --        124,077      146,891
   Reduction of long-term debt                                                         (44)    (175,019)    (133,781)
   Proceeds from exercise of stock options and warrants                              8,435           17          178
   Net proceeds from sale of common stock                                            6,412         --           --
   Repurchase of common stock previously issued
    to pay down short-term notes                                                      --         (1,518)        --
   Exercise of redeemable common stock put options                                    --           --         (3,379)
   Redemption of detachable put warrants                                              --         (1,440)      (1,728)
   Purchase of redeemable preferred stock                                             --           --           (426)
   Other                                                                                78          (25)
                                                                                 ---------    ---------    ---------
Net cash flows from (used by) financing activities                                  15,276      (69,256)       6,222
                                                                                 ---------    ---------    ---------

Increase (decrease) in cash and cash equivalents                                    (2,086)       5,762        5,820
Cash and equivalents, beginning of year                                             11,753        5,991          171
                                                                                 ---------    ---------    ---------
Cash and equivalents, end of year                                                $   9,667    $  11,753    $   5,991
                                                                                 =========    =========    =========


Supplemental cash flow information:
 Cash paid during the year for:
  Interest                                                                       $     101    $   6,087    $   7,058
                                                                                 =========    =========    =========

  Income taxes paid (refunded), net                                              $     771    $     189    $     177
                                                                                 =========    =========    =========

Supplemental schedule of noncash investing and financing activities:

   Acquistion of Entrade assets, Nationwide and printeralliance.com
       Fair value of assets acquired                                             $  62,520
       Acquisition liabilities and costs                                              (229)
       Notes issued to sellers                                                     (18,800)
       Common stock issued                                                         (32,551)
                                                                                 ---------
       Cash paid                                                                    10,940
       Less:  cash acquired                                                           (968)
                                                                                 ---------
                                                                                 $   9,972
                                                                                 =========

    Exchange Entrade common stock for redeemable preferred stock                 $  24,557
                                                                                 =========

    ARTRA/BCA redeemable preferred stock received as payment of
       Peter Harvey advances                                                                  $  12,787
                                                                                              =========
    Issue common stock and redeemable common stock
       to pay down current liabilities                                                                     $   1,939
                                                                                                           =========

    Issue common stock to pay redeemable common stock put obligation                                      $     679
                                                                                                           =========

    Comforce common stock given to lenders
       as additional consideration for short-term borrowings                                               $     169
                                                                                                           =========
</TABLE>


The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.



                                       F-9
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       BASIS OF PRESENTATION

Prior to September 23, 1999, the Registrant operated as Artra Group Incorporated
("Artra"), a Pennsylvania corporation incorporated in 1933. Through November 20,
1998,  Artra  operated in one industry  segment as a  manufacturer  of packaging
products principally serving the food industry.  The packaging products business
was  conducted  by Artra's  wholly-owned  subsidiary,  Bagcraft  Corporation  of
America ("Bagcraft"), which business was sold on November 20, 1998.

As discussed in Note 3, on February  23, 1999,  Artra  entered into an agreement
with Entrade Inc.  ("Entrade" or the "Company"),  formerly NA Acquisition Corp.,
and WorldWide Web NetworX Corporation  ("WorldWide") providing for the merger of
a wholly-owned subsidiary of Entrade with and into Artra.

On September  22, 1999 Artra's  shareholders  approved  the  transaction  and on
September 23, 1999, the merger (the "Merger") was completed.  As a result of the
Merger, Artra became a wholly-owned  subsidiary of Entrade, and Entrade's common
stock became listed and commenced  trading on the New York Stock  Exchange under
the symbol "ETA" on September 24, 1999.

Entrade is a development  stage business  services  company  specializing in the
creation of electronic commerce, or "e-commerce" marketplaces.

In October  1999,  Entrade  completed the  acquisition  of all of the issued and
outstanding  common  stock  of  Public  Liquidations  Systems,  Inc.  and  Asset
Liquidation  Group,  Inc.,  d/b/a  Nationwide  Auction  Systems  ("Nationwide").
Nationwide, which has operated for over 20 years, is one of the nation's largest
volume public auction firms in the disposition of municipality, law enforcement,
corporate  and utility  company  surplus  property.  In addition to vehicles and
equipment, Nationwide conducts real property and jewelry auctions.

The  Company  has  sustained  significant  losses and  negative  cash flows from
operations  in  1999.  The  Company's  ability  to meet its  obligations  in the
ordinary  course  of  business  is  dependent  upon  its  ability  to  establish
profitable  operations or raise additional  financing  through public or private
equity financing,  bank financing,  or other sources of capital. During December
1999 and January  2000,  the Company  raised  approximately  $13,400,000  in net
proceeds from private  placements  of equity.  In addition,  in March 2000,  the
Company raised approximately $28,500,000 in net proceeds from the sale of 30,000
shares of Series A convertible  redeemable preferred stock.  Management believes
current  working  capital and other funding  sources are  sufficient to continue
operations and achieve its business plan through March 2001.

In 1997, the Company changed its fiscal year end to December 31. The Company had
operated on a 52/53 week fiscal year ending the last Thursday of December.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.   Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
its  majority-owned  subsidiaries.  Intercompany  accounts and  transactions are
eliminated.  The Company's  investment in asseTrade.com  (25% of  assetTrade.com
Class A common stock owned at December 31, 1999) is accounted  for on the equity
method. The Company accounts for its investment in Pricecontainer.com (15% owned
at December 31, 1999) on the cost method.

B.    Cash Equivalents/Restricted Cash

Short-term  investments  with a maturity of less than ninety days at the date of
purchase  are  considered  cash  equivalents.  The  fair  value of cash and cash
equivalents is assumed to approximate  the carrying value of these assets due to
the short duration of these assets.



                                      F-10
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


At December 31, 1998,  restricted  cash represents  amounts  deposited in escrow
accounts to pay certain Bagcraft  liabilities  retained by Artra. These accounts
were  established  in  accordance  with  provisions of the agreement to sell the
assets of the discontinued Bagcraft subsidiary discussed in Note 3.

C.   Property, Plant and Equipment

Property,  plant and equipment is stated at cost.  Expenditures  for maintenance
and repairs are charged to  operations  as incurred and  expenditures  for major
renovations are capitalized.  Depreciation is computed on the basis of estimated
useful lives  principally by the  straight-line  method for financial  statement
purposes and  principally  by  accelerated  methods for tax purposes.  Leasehold
improvements  are amortized over the shorter of the estimated useful life of the
asset or the period covered by the lease.

The costs of property  retired or otherwise  disposed of are applied against the
related accumulated  depreciation to the extent thereof,  and any profit or loss
on the disposition is recognized in earnings.

D.   Financial Instruments

The fair value of cash and cash  equivalents  approximates the carrying value of
these assets due to the short  duration of these  assets.  The fair value of the
Company's debt was estimated to be the carrying value of these liabilities based
upon borrowing  rates  currently  available to the Company for  borrowings  with
similar terms.

E.   Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of
credit risk consist of cash and cash equivalents and accounts  receivable.  Cash
and  cash   equivalents  are  deposited  with  high  credit  quality   financial
institutions.  The Company's accounts receivable are derived from revenue earned
from  customers  located  primarily  in the  U.S.  and are  denominated  in U.S.
dollars.  During each of the periods  presented,  no one customer  accounted for
more than 10% of net  accounts  receivable.  During  1999,  the  Company had one
customer that accounted for approximately 14% of total net revenues.

F.    Investments in Equity Securities

The Company's investment in Comforce Corporation ("Comforce", see Note 5) common
stock is  classified  in current  assets as  available-for-sale  securities  and
stated at fair value in accordance with the provisions of Statement of Financial
Accounting  Standards  ("SFAS") No. 115 "Accounting  for Certain  Investments in
Debt and Equity Securities". Unrealized holding gains and losses are included in
a separate  component of  shareholders'  equity  (deficit) until  realized.  The
investment  in Comforce  common stock is subject to  liquidity  and market price
risks.

G.    Intangible Assets

The net assets of a purchased  business  are recorded at their fair value at the
date of  acquisition.  The excess of  purchase  price over the fair value of net
assets acquired  (goodwill) is reflected as intangible assets and amortized on a
straight-line  basis  principally  over 20 years.  Technology  and  intellectual
property  acquired for the conduct of the Company's  development  stage business
services  e-commerce business is being amortized on a straight-line basis over 5
years.

The Company  reviews the  carrying  value of its  intangible  assets,  including
goodwill  related to  business  enterprises,  in  accordance  with SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of ". The pronouncement  requires that long-lived assets and certain
identifiable  intangibles  to be held  and used by an  entity  be  reviewed  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be  recoverable.  Impairment is evaluated by
comparing future cash flows (undiscounted and




                                      F-11
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


without interest  charges)  expected to result from the use or sale of the asset
and its eventual disposition to the carrying amount of the asset. If an asset is
deemed to be impaired it is adjusted to fair value.

H.    Environmental Matters

The Company expenses environmental  expenditures related to past operations from
which no current benefit is discernable. The Company determines its liability on
a site by site basis and has records a liability at the time when it is probable
and can be reasonably estimated. The Company's estimated liability is reduced to
reflect the anticipated  participation of other potentially  responsible parties
in  those  instances  where  it  is  probable  that  such  parties  are  legally
responsible and  financially  capable of paying their  respective  shares of the
relevant  costs.  The  estimated  liability of the Company is not  discounted or
reduced for possible recoveries from insurance carriers. The Company's estimated
liability for environmental matters relates to and is included in liabilities of
discontinued operations in the Company's consolidated financial statements.

I.    Revenue

Entrade is also creating and building business-to-business e-commerce markets in
select  industries,  in some instances  through joint ventures with  established
companies within those industries. In these joint ventures,  Entrade receives an
equity position in exchange for its  contributions of technology,  capital,  and
management resources. In such transactions revenues are expected to be generated
from licensing fees and transaction fees.

Entrade is creating businesses in fragmented industries to negotiate rebates and
volume  discounts from key industry  suppliers for small to mid-size  companies.
The  Internet  is  utilized to deliver  enhanced  web-based  services to provide
electronic  industry-specific  malls for vendors and participants.  Entrade also
receives an equity  position in exchange  for its  contributions  and collects a
percentage  of the volume  rebates and takes a transaction  fee on  transactions
conducted  utilizing  its  e-commerce  technology.  Entrade  also  licenses  its
technology  both  for the  creation  of joint  ventures  and for  direct  use by
individual  companies.  E-commerce  related revenues were not significant during
the year ended December 31, 1999.

Nationwide's  primary revenue is comprised of consignor  commissions and buyer's
premiums. Consignor commissions are fees paid by the consignor to Nationwide for
selling the  consignor's  merchandise.  Consignor fees are negotiated  with each
consignor.  Buyer's premiums are fees paid by a successful bidder to Nationwide,
are based on the sales price of the merchandise and are added on to the purchase
price.  Buyer's premiums are not negotiable;  however,  not all consignors allow
Nationwide to charge a buyer's  premium.  Auction related fees are recognized on
the date merchandise is sold.

J.   Income Taxes

Income taxes are accounted for as  prescribed  in SFAS No. 109  "Accounting  for
Income  Taxes".  Under the asset and liability  method of Statement No. 109, the
Company  recognizes the amount of income taxes payable.  Deferred tax assets and
liabilities  are  recognized  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 those temporary  differences are expected to be recovered or
settled.

K.       Use of Estimates In Preparation of Financial Statements

The  preparation  of the  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-12
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


L.     Stock-Based Compensation

The Company has adopted SFAS No. 123, "Accounting for Stock-Based Compensation".
The  pronouncement  encourages,  but does not  require,  companies  to recognize
compensation  expense  for  grants of stock,  stock  options,  and other  equity
instruments to employees based on new fair value  accounting  rules. The Company
did not adopt the new fair value  accounting,  but instead  chose to comply with
the disclosure requirements of SFAS No. 123.

As  permitted  by SFAS No.  123,  the Company  measures  employee  and  director
compensation  cost in accordance with Accounting  Principles Board Opinion (APB)
No. 25, "Accounting for Stock Issued to Employees" and related  interpretations.
Accordingly,  no  accounting  recognition  is given to stock  options  issued to
employees  and  directors  that are granted at fair market  value until they are
exercised.  During  1999,  the Company  issued  options to certain  employees at
prices below fair market value on the date of grant.  The Company is recognizing
compensation  expense over the applicable vesting periods for the excess of fair
market value at the date of grant over the option price.

M.     Comprehensive Income

The  Company  reports  comprehensive  income in  accordance  with SFAS No.  130,
"Reporting  Comprehensive Income," which establishes standards for the reporting
and  display of  comprehensive  income  and its  components  in  general-purpose
financial statements.

N.      Product Development Costs

Product  development  costs include expenses incurred by the Company to develop,
enhance,  manage,  monitor and operate the Company's Web sites.  To date product
development costs have been expensed as incurred.  The software development cost
components of product development costs are required to be capitalized beginning
when a product's technological  feasibility has been established and ending when
a product is available for general release to customers.  To date, completion of
a working model of the Company's  products and the date of general  release have
substantially coincided. Costs incurred by the Company between the completion of
the  working  model  and the  point at which the  product  is ready for  general
release have been insignificant. Additionally, development costs associated with
providing content for the Company's Web sites are expensed as incurred.

O.    Segment Information

The  Company  has  adopted  SFAS  No.  131  "Disclosures  About  Segments  of an
Enterprise and Related  Information".  SFAS No. 131 requires certain disclosures
about  operating  segments in a manner that is  consistent  with how  management
evaluates the  performance of the segment.  At December 31, 1999,  Entrade's two
reportable  segments  consist of development  stage business  services  provided
principally by our e-commerce marketplaces and the transaction services business
conducted principally by the Nationwide subsidiary.

P.     Earnings Per Share

The Company has adopted the  provisions  of SFAS No. 128,  "Earnings Per Share".
The  pronouncement  specifies  the  computation,  presentati
on,  and  disclosure
requirements for earnings per share.

Q.     Recently Issued Accounting Pronouncements

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities." This statement  establishes  accounting and
reporting standards for derivative  instruments and requires  recognition of all
derivatives  as assets or  liabilities  in the balance sheet and  measurement of
those  instruments at fair value.  The statement,  as amended,  is effective for
fiscal years beginning  after June 15, 2000.  Management has not determined what
impact  this  standard,  when  adopted,  will  have on the  Company's  financial
statements.

                                      F-13
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


3.       CHANGE OF BUSINESS

                  Entrade

On February 23, 1999,  Artra  entered into an Agreement  and Plan of Merger (the
"Merger Agreement") with Entrade,  WorldWide,  and WWWX Merger Subsidiary,  Inc.
("Merger Sub"), a wholly-owned  subsidiary of Entrade.  Terms of the acquisition
agreement required the Merger Sub to merge into Artra (the "Merger"), with Artra
being the surviving corporation for financial reporting purposes.

On September  22, 1999 Artra's  shareholders  approved  the  transaction  and on
September 23, 1999, the Merger was completed.  As a result of the Merger,  Artra
became a  wholly-owned  subsidiary of Entrade,  and the common  shareholders  of
Artra became  holders of 83% of the common stock of Entrade.  Under the terms of
the  merger  agreement,  the Artra  common  shareholders  received  one share of
Entrade no par common  stock in  exchange  for each share of Artra no par common
stock.  All stock options and warrants  issued by Artra and  outstanding  on the
closing  date of the merger were  converted  on a one for one basis into Entrade
stock options and warrants.  For financial reporting  purposes,  the transaction
has been treated as a recapitalization of Artra with Artra as the acquirer.  All
shareholders'  equity and share  information  has been  restated to reflect this
recapitalization.  Entrade's common stock became listed and commenced trading on
the New York Stock Exchange under the symbol "ETA" on September 24, 1999.

Entrade owns all of the  outstanding  capital stock of entrade.com and currently
owns  25% of the  Class A  common  stock  of  asseTrade.com.  entrade.com  is an
Internet  business-to-business  e-commerce technology subsidiary of Entrade Inc.
seeking to provide asset  disposition  technology  solutions for target markets.
asseTrade.com provides  business-to-business online services that facilitate the
remarketing of industrial machinery, equipment and parts. These services enhance
the  current  operation  of asset  recovery  teams  and  procurement  groups  of
industrial companies.

In connection with the execution of the Merger Agreement,  on February 23, 1999,
Entrade  acquired  certain  software  and  intellectual  property and 25% of the
shares  of  Class A voting  common  stock of  asseTrade.com  (collectively,  the
"Purchased Assets") from WorldWide,  in exchange for 1,800,000 shares of Entrade
common  stock,  $800,000  in  cash  and a  note  for  $500,000,  paid  upon  the
consummation of the Merger. On February 16, 1999, Entrade had agreed with Energy
Trading Company, a wholly-owned  subsidiary of Peco Energy Company,  to issue to
Energy Trading Company 200,000 shares of Entrade common stock, and to pay Energy
Trading Company $100,000,  paid upon the consummation of the Merger, in exchange
for certain retained rights Energy Trading Company held in the Purchased Assets.
Entrade also agreed with both WorldWide and Energy Trading Company that it would
provide a minimum of $4,000,000 in funding for entrade.com.  Under separate loan
agreements,  Artra  agreed to loan  Entrade  up to  $2,000,000  and  advance  an
additional  $250,000  to fund the  $800,000  cash  payment to  WorldWide  and to
provide funding for entrade.com until the consummation of the merger.  Under the
Merger  Agreement,  Artra also agreed to  guaranty  the  $4,000,000  funding for
entrade.com.

In  August  1999,  WorldWide  agreed  to loan  Entrade  up to  $500,000  to fund
Entrade's  operations  for the period  from the date of the loan to the  closing
date under the Merger  Agreement.  Borrowings  totaling  $405,000 were repaid to
WorldWide prior to closing the Merger.

The acquisition has been accounted for as a purchase.  The operating  results of
Entrade have been included in the Company's  consolidated  financial  statements
since the effective date of acquisition.  However, Entrade losses for the period
from February 23, 1999 until the effective  date of the merger in September 1999
have been reflected in the Company's  consolidated  financial  statements as the
economic risks of ownership were assumed by Artra  effective  February 23, 1999.
The amount of the purchase  price  allocated to  intangible  assets  acquired of
approximately $10 million is being amortized over five years.







                                      F-14
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


WorldWide, which holds 1,800,000 shares of Entrade common stock, is subject to a
lockup under the merger  agreement for sales or transfers of its Entrade  shares
until  the first  anniversary  after  the  closing  of the  merger,  subject  to
exceptions for pledges or the distribution of up to 25% of the Entrade shares to
WorldWide's  shareholders.   Subject  to  the  lockup  provision  applicable  to
WorldWide, WorldWide shareholders that receive the distribution may utilize Rule
144 to sell shares.


         Nationwide

In October  1999,  Entrade  completed the  acquisition  of all of the issued and
outstanding  common  stock  of  Public  Liquidations  Systems,  Inc.  and  Asset
Liquidation  Group,  Inc.,  d/b/a  Nationwide  Auction  Systems  ("Nationwide").
Nationwide, which has operated for over 20 years, is one of the nation's largest
volume public auction firms in the disposition of municipality, law enforcement,
corporate and utility company surplus property.

In addition to vehicles and  equipment,  Nationwide  conducts  real property and
jewelry  auctions.  Nationwide  conducts  the auctions at its  facilities  or at
off-site locations. Nationwide has six auction facilities located in California,
Missouri, Delaware, New Mexico and Georgia.

The consideration paid for Nationwide consisted of cash of $6,000,000; 1,570,000
shares of Entrade common stock; short-term promissory notes (the "Notes") in the
principal  amount of $4,800,000;  and promissory notes (the "Term Notes") in the
principal  amount of  $14,000,000,  maturing  October 1, 2001. The Notes and the
Term Notes  provided for interest at an annual rate of 8%. Entrade paid the cash
portion of the  purchase  price out of its existing  cash  assets.  Entrade also
issued 80,000 shares of Entrade  common stock in payment of fees to its agent in
connection with the closing of the transaction.

The acquisition has been accounted for as a purchase.  The operating  results of
Nationwide have been included in the Company's consolidated financial statements
since the  effective  date of  acquisition.  The  amount of the  purchase  price
allocated to intangible assets acquired,  principally goodwill, of approximately
$45 million is being amortized over 20 years.

Holders of  approximately  1,570,000  shares of common stock that were issued in
the Nationwide  acquisition are prohibited from selling more than 500,000 shares
until May 31, 2000, subject to adjustment in certain circumstances.

         printeralliance.com

Effective October 4, 1999,  Entrade acquired all of the Series A Preferred Stock
of printeralliance.com  for cash of $500,000. The cash payment was funded out of
Entrade's   existing  cash  assets.  A   privately-owned   e-commerce   company,
printeralliance.com.  was  formed  in  1999  to  establish  a  buying  group  of
independent  commercial  printers.  printeralliance.com.'s  buying group concept
will offer  independent  commercial  printers cost savings,  equipment and other
services as a result of the leveraged  buying power of the group.  The preferred
shares  acquired by Entrade are  convertible  into a 61% common stock  ownership
interest  in  printeralliance.com  at the option of  Entrade.  Accordingly,  the
acquisition  has been  accounted for as a purchase and the operating  results of
printeralliance.com  have been included in the Company's  consolidated financial
statements  since the effective date of acquisition.  The amount of the purchase
price  allocated to  intangible  assets  acquired is being  amortized  over five
years.

         Other

In October 1999,  entrade.com licensed its technology to  Pricecontainer.com  in
return for a 15% ownership interest.  Pricecontainer.com  is establishing itself
as  an  on-line   reservation  system  for  excess  oceanic  container  shipping
capacities.  Pricecontainer.com  is  developing  business  with  an  established
foreign  global  trading  company.  The Company  accounts for its  investment in
Pricecontainer.com on the cost method.




                                      F-15
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


utiliparts.com  is being  developed  as an  operating  unit and is owned  80% by
entrade.com and 20% by asseTrade.com. utiliparts.com's purpose is to develop and
utilize entrade.com's e-commerce software to provide asset recovery and internal
inventory management services for the utility industry.  In addition to services
provided  through its website,  utiliparts.com  will provide related services in
asset  evaluation,  asset cataloging and the off-line sale or auction of surplus
equipment.

The following  unaudited pro forma  information (in thousands,  except per share
amounts)  presents a summary of the results of  operations  of the Company as if
the  acquisition of Nationwide and the merger with Entrade had been completed as
of January 1, 1998.  There were no  operations  and no  revenues  related to the
assets the  Company  acquired  in  February  1999 to develop  its entry into the
Internet  business-to-business  e-commerce  business.  These assets consisted of
assets  acquired  by the  entrade.com  subsidiary  and  an  equity  interest  in
asseTrade.com.

asseTrade.com had no operations and no revenues when the initial 25% interest in
its  Class A  common  stock  was  acquired  by the  Company  in  February  1999.
Accordingly,  no pro forma results of operations  are presented for the Internet
business-to-business  e-commerce  business for the year ended December 31, 1998,
as in the opinion of management this information would not be meaningful.



                                                 Year Ended       Year Ended
                                                December 31,     December 31,
                                                     1999             1998
                                                 ----------       ----------

Net sales                                        $   17,318       $   19,624
                                                 ==========       ==========

Loss from continuing operations
                                                 $  (22,775)      $   (9,028)
                                                 ==========       ==========

Net earnings (loss)                              $  (22,775)      $   29,902
                                                 ==========       ==========

Basic and diluted net loss per common share:
     Continuing operations                       $    (3.15)      $     (.79)
                                                 ==========       ==========

      Net earnings (loss)                        $    (3.15)      $     2.47
                                                 ==========       ==========


These  unaudited  pro  forma  results  include  certain  adjustments,   such  as
additional amortization expense primarily related to intangible assets, interest
expense on notes payable to Nationwide  selling  shareholders  and  compensation
related to stock options issued to certain employees of acquired companies. They
do not purport to be  indicative  of the results of  operations  which  actually
would have  resulted  had the  acquisitions  occurred on January 1, 1998,  or of
future results of operations.

         Bagcraft

Effective August 26, 1998,  Artra and its wholly-owned  subsidiary BCA Holdings,
Inc.  ("BCA",  the parent of  Bagcraft),  agreed to sell the business  assets of
Bagcraft. Additionally, the buyer agreed to assume certain Bagcraft liabilities.
The  transaction  was  completed on November 20, 1998 and Artra  received  gross
consideration  of  approximately  $88,100,000  in cash.  The  disposition of the
Bagcraft business resulted in a net gain of $35,985,000.

A  substantial   portion  of  the  cash  proceeds  received  from  the  Bagcraft
disposition  was used to  retire  or  otherwise  settle  certain  Bagcraft  debt
obligations.  After the disposition of certain Bagcraft obligations noted above,
Artra  received  net  proceeds  of  approximately  $28,000,000  from the sale of
Bagcraft.  Artra used approximately  $15,200,000 of these net proceeds to retire
its debt  obligations.  Artra used the  remainder  of the  proceeds  for working
capital and to participate in new business opportunities.





                                      F-16
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


         AB Specialty

Effective January 2, 1997,  Bagcraft  purchased the business assets,  subject to
buyer's assumption of certain liabilities, of AB Specialty Holding Company, Inc.
("AB") for consideration  consisting of cash of approximately $2.3 million.  The
purchased assets  consisted  principally of plant and equipment of approximately
$1.3 million and inventory of approximately $1.1 million. The acquisition of AB,
funded through  borrowings under Bagcraft's Credit Agreement,  was accounted for
by the purchase method and,  accordingly,  the assets and liabilities of AB were
included in the Company's  financial  statements at their  estimated fair market
value at the date of  acquisition.  The business  and related  assets of AB were
part of the Bagcraft disposition.

The Company's consolidated financial statements have been reclassified to report
separately  the results of  operations of Bagcraft.  The  operating  results (in
thousands)  for  fiscal  years  1998  and  1997  of  the  discontinued  Bagcraft
subsidiary and net gain on disposal consist of:

                                                  1998         1997
                                               ---------    ---------

Net sales                                      $ 111,342    $ 125,027
                                               =========    =========


Earnings from operations before income taxes
     and minority interest                     $   3,534    $     797

(Provision) credit for income taxeS                  (80)          19

Minority interest                                   (509)      (1,109)
                                               ---------    ---------
Earnings (loss) from operations                    2,945         (293)
                                               ---------    ---------

Gain on sale of Bagcraft subsidiary               37,505         --

Provision for income taxes                        (1,520)        --
                                               ---------    ---------
Gain on disposal of business                      35,985         --
                                               ---------    ---------


Earnings (loss) from discontinued operations   $  38,930    $    (293)
                                               =========    =========

Liabilities  of  discontinued  operations  at  December  31,  1999  and  1998 of
$3,875,000 and $10,328,000,  respectively,  include  redeemable  preferred stock
issues (see Note 8), contractual  obligations,  environmental  matters and other
future  estimated  costs  for  various  discontinued  operations.  Additionally,
liabilities  of  discontinued   operations  at  December  31,  1998  include  an
adjustment  to  the  sales  price  of the  Bagcraft  business  of  approximately
$900,000.

4.            INVESTMENT IN asseTrade.com

On  February  23,  1999,  Entrade  acquired  25% of the shares of Class A voting
common  stock  of  asseTrade.com,  a  provider  of  business-to-business  online
services that facilitate the remarketing of industrial machinery,  equipment and
parts.

In September 1999,  asseTrade.com  entered into an agreement to sell to Internet
Capital Group,  Inc.,  12,669,520  shares of its Series A convertible  preferred
stock for  $11,500,000.  Upon  completion of the  transaction,  and assuming the
conversion  of the  asseTrade.com  Series A preferred  stock into Class A common
stock of asseTrade.com and the issuance of stock options for 7,500,000 shares of
Class A common stock that asseTrade.com






                                      F-17
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


is authorized to issue,  Internet  Capital Group would hold a 25.25% interest in
the Class A common stock of asseTrade.com.  In September 1999,  Internet Capital
Group funded  $5,750,000 of its $11,500,000  equity  investment in asseTrade.com
and the balance of the investment in January 2000.

On January 3, 2000,  Entrade's  Board of Directors  approved a merger  agreement
between  a  newly-formed  merger  subsidiary  of  Entrade  with  Positive  Asset
Remarketing,  Inc. As a result of the merger,  Positive Asset  Remarketing  will
become a wholly owned  subsidiary of Entrade,  and the  shareholders of Positive
Asset Remarketing will receive 900,000 shares of Entrade's common stock (subject
to an increase to  1,000,000  shares in certain  circumstances)  in exchange for
their shares in Positive Asset Remarketing.  Entrade will acquire Positive Asset
Remarketing's   only  asset,  an  interest  in  the  Class  A  common  stock  of
asseTrade.com,  which will double our current interest in asseTrade.com. Class A
common  stock.  After the merger,  and assuming  the full  dilution of Entrade's
interest  (principally  after  conversion of preferred stock and the exercise of
stock  options),  Entrade will hold a 29.3% interest in the Class A common stock
of asseTrade.com. The owners of Positive Asset Remarketing include a director of
Entrade who is also an officer of both entrade.com and asseTrade.com, as well as
two other officers of entrade.com. The transaction is subject to the approval of
Entrade's shareholders.

Summarized  financial data for asseTrade.com at December 31, 1999 (in thousands)
is as follows:


               Revenues                            $  --
                                                   =======
               Operating loss                      $(1,831)
                                                   =======
               Net loss                            $(1,778)
                                                   =======

               Current assets                      $ 4,719
               Noncurrent assets                       283
                                                   -------
                                                   $ 5,002
                                                   =======

               Current liabilities                 $   869
               Noncurrent liabilities                 --
               Redeemable preferred stock            5,750
               Shareholders' deficit                (1,617)
                                                   -------
                                                   $ 5,002
                                                   =======


5.            INVESTMENT IN COMFORCE CORPORATION

At December 31, 1999 and 1998 the Company's  investment in Comforce  Corporation
("Comforce"),  1,525,500 shares,  currently a common stock ownership interest of
approximately 9%, was classified in the Company's  consolidated balance sheet in
current assets as "Available-for-sale securities." At December 31, 1999 and 1998
the gross unrealized gain relating to Artra's investment in Comforce,  reflected
as a separate component of shareholders' equity, was $7,106,000 and $10,920,000,
respectively.  The  investment in Comforce  common stock is subject to liquidity
and market price risks. An attempt to sell a large number of the Comforce shares
over a limited period could be expected to result in a reduction of the value of
those shares.







                                      F-18
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



In January  1996,  Artra's  board of  directors  approved the sale of 200,000 of
Artra's  Comforce  common  shares  to some of the  officers,  directors  and key
employees of Artra for non-interest  bearing notes totaling $400,000.  The notes
are  collateralized  by the related  Comforce common shares.  Additionally,  the
noteholders  have the right to put their  Comforce  shares back to Artra in full
payment of the balance of their notes.

Artra had concluded that, for reporting  purposes,  it had  effectively  granted
options to those  officers,  directors  andkey  employees to acquire  200,000 of
Artra's  Comforce  common shares.  Accordingly,  in January 1996,  these 200,000
Comforce    common    shares   were   removed   from   Artra's    portfolio   of
"available-for-sale  securities" and were classified in its consolidated balance
sheet as other  receivables with an aggregate value of $400,000,  based upon the
value of proceeds to be received upon future exercise of the options.

The disposition of these 200,000  Comforce common shares resulted in a gain that
was deferred and will not be recognized in Artra's  financial  statements  until
the options to purchase  these 200,000  Comforce  common  shares are  exercised.
Prior to the fourth  quarter of 1997,  no options to acquire  any of the 200,000
Comforce  common shares had been  exercised.  During the fourth quarter of 1997,
options  to  acquire  59,500 of these  Comforce  common  shares  were  exercised
resulting in a realized gain of $225,000. During 1998, options to acquire 84,750
of these Comforce  common shares were exercised  resulting in a realized gain of
$320,000. During 1999, options to acquire 20,000 of these Comforce common shares
were exercised resulting in a realized gain of $66,000.

At December 31, 1999 and December 31, 1998, options to acquire 37,250 and 57,250
Comforce common shares,  respectively,  remained unexercised and were classified
in the Company's  consolidated balance sheet as other receivables with aggregate
values of $73,000 and  $103,000  based upon the value of proceeds to be received
upon future exercise of the options.

During 1997,  Artra sold 219,203 shares of Comforce  common stock in the market,
with the net  proceeds of  approximately  $1,700,000  used for working  capital.
During 1997, a lender  received  25,000  Comforce common shares held by Artra as
additional consideration for a short-term loan. The disposition of these 244,203
shares Comforce common stock resulted in realized gains of $2,306,000 during the
year ended December 31, 1997, with cost determined by average cost.

6.       NOTES PAYABLE

Notes payable at December 31, 1999 (in thousands) consist of:

         Amounts due to related parties:
              Entrade 8% term notes due to
              Nationwide selling shareholders, net          $ 4,661
         Nationwide bank line of credit,
              interest at the prime rate plus 1%              1,229
                                                            -------
                                                              5,890
         Less amounts reclassified to
              obligations expected to be settled
              by the issuance of common stock                (4,661)
                                                            -------
                                                            $ 1,229
                                                            =======

In  January  2000,  the  promissory  notes,  net of  amounts  due from a selling
shareholder  of $139,000,  plus accrued  interest,  were  converted into 278,985
shares of Entrade common stock.  Accordingly,  at December 31, 1999, net







                                      F-19
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



amounts due on the promissory notes plus accrued  interest were  reclassified in
the Company's  consolidated  balance sheet as obligations expected to be settled
by the  issuance  of common  stock.  The total  amount  reclassified,  including
accrued interest, was $4,743,000.

The holder of promissory notes with a with a principal  balance of approximately
$4,181,000,  net  of  amounts  due  from  the  noteholder  of  $139,000,  is the
beneficial owner of approximately 9% of the outstanding shares of Entrade common
stock at January  31,  2000.  The holder of  promissory  notes with a  principal
balance of $480,000  is a director  of the  company  and is the Chief  Executive
Officer of Nationwide.

Nationwide has a line of credit with a bank that provides for maximum borrowings
of $3,000,000. Borrowings of $1,229,000 were outstanding as of December 31, 1999
and require monthly interest  payments at the bank's prime rate plus 1% (9.5% at
December 31, 1999). At December 31, 1999, $1,771,000 was available and unused by
Nationwide under the credit agreement. The line of credit expires on December 8,
2000 and is collateralized by the assets of Nationwide.

The line of credit agreement contains various  restrictive  covenants that among
other restrictions require Nationwide to maintain minimum levels of tangible net
worth,  debt to net worth and  profitability  levels.  In addition,  the line of
credit agreement  prohibits changes in ownership of Nationwide.  At December 31,
1999, Nationwide was not in compliance with several provisions of line of credit
agreement.  The bank waived the  conditions  of  non-compliance  that existed at
December 31, 1999 and has subsequently amended the loan agreement.

7.       LONG-TERM DEBT

     Long-term debt at December 31, 1999 (in thousands) consists of:

         Entrade:
            Amounts due to related parties:
                Entrade 8% term notes due
                to Nationwide selling shareholders                  $ 14,000

         Nationwide:
            Note payable, due January 1, 2009, interest at
                8%, collateralized by real estate                      2,194
            Note payable, due January 1, 2004, interest at
                8.25%, collateralized by real estate                     435
            Note payable, due July 15, 2004, interest at
                8.45%, collateralized by real estate,                    419
            Obligations under capital leases, interest at
                10.20%, collateralized by property,
                plant and equipment                                      294
                                                                    --------
                                                                      17,342
                 Current scheduled maturities                         (7,201)
                 Long-term debt reclassified as currently payable     (2,163)
                                                                    --------
                                                                    $  7,978
                                                                    ========






                                      F-20

<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


       Entrade

As part of the  consideration  for the  acquisition of  Nationwide,  the selling
shareholders  received term notes in the principal  amount of  $14,000,000.  The
term notes are  payable  in  several  installments  with the final  payment  due
October 1, 2001.  Interest at 8% is payable quarterly.  The holder of term notes
with a principal balance of $12,600,000 is the beneficial owner of approximately
9% of the  outstanding  shares of Entrade  common stock at January 31, 1999. The
holder of promissory notes with a principal  balance of $1,400,000 is a director
of the company and is the Chief Executive Officer of Nationwide.

In March 2000 the Company entered into an agreement with the Nationwide  selling
shareholders  to convert  the term notes with a remaining  principal  balance of
approximately $10,500,000 into 265,621 shares of Entrade common stock. The notes
originally  provided for  principal  payments of  $3,500,000 in October 2000 and
$7,000,000  in  October  2001.  Completion  of this  transaction  is  subject to
approval by the Company's shareholders.

         Nationwide

In June 1999,  Nationwide obtained $425,000 in notes payable in order to finance
certain  real estate used as an auction  facility  in Atlanta,  Georgia.  During
1998,  Nationwide issued  approximately  $2,735,000 in notes payable in order to
purchase  the real estate  currently  used for its Northern  California  auction
facilities. All the notes are collateralized by the related real estate.

At December 31, 1999,  current  liabilities  included  $2,163,000  of Nationwide
notes  reclassified  from  long-term  debt  to  currently  payable.   This  debt
obligation was incurred by Nationwide during 1998. The lender did not consent to
the change in ownership  relating to our  acquisition  of  Nationwide in October
1999.  In March  2000 this debt  obligation  was paid with  funds  available  on
Nationwide's  line of credit agreement and funds from operations.  Nationwide is
currently  negotiating  with a lender to  refinance  the former real estate note
with a long-term credit facility.

At December 31, 1999 the aggregate amount of yearly maturities of long-term debt
(in thousands) are:


              Year
              2000                           $9,364
              2001                            7,187
              2002                              209
              2003                              221
              2004                              361
                                          ---------
                                           $ 17,342
                                          =========


8.       REDEEMABLE PREFERRED STOCK

         Artra

In  March  1990,   Artra   issued  3,750  shares  of  $1,000  par  value  junior
non-convertible  payment-in-kind  redeemable  Series A  Preferred  Stock with an
estimated fair value of $1,012,000, net of unamortized discount of $2,738,000 as
partial consideration for the acquisition of the former Bagcraft subsidiary.

At  December  31,  1998,  1,849.34  shares  of  Series A  Preferred  Stock  were
outstanding  with  a  carrying  value  of  $2,857,000,   including   accumulated
dividends, net of unamortized discount of $239,000. The Series A Preferred Stock










                                      F-21
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



accrued  dividends  at the rate of 6% per annum and was  redeemable  by Artra on
March 1, 2000 at a price of $1,000 per share plus accrued dividends. Accumulated
dividends of $1,246,000 ($674 per share) were accrued at December 31, 1998.

Under the terms of the Artra/Entrade  merger, as discussed in Note 2, holders of
Artra Series A preferred  stock  received 329 shares of Entrade common stock (an
aggregate  of 608,403  Entrade  common  shares) for each share of Artra Series A
preferred  stock. The Entrade common stock issued,  valued at $9,924,000  (based
upon the  closing  market  price of Entrade  common  stock on the New York Stock
Exchange on September 23, 1999 of $16-5/16),  exceeded the carrying value of the
Artra Series A preferred stock of $3,149,000,  resulting in a loss on redemption
of  redeemable  preferredstock  of  $6,775,000.  This loss was  reflected in the
Company's  consolidated  financial  statements  as a direct  charge  to  paid-in
capital.

         BCA Holdings/Bagcraft

At September  30, 1999,  liabilities  of  discontinued  operations  included BCA
Series A and Series B redeemable preferred shares with aggregate carrying values
of $3,681,000.

In October 1999, the Company's board of directors  approved an offer to exchange
shares of Entrade common stock for the BCA Series A preferred  stock and the BCA
Series B preferred stock.  During the fourth quarter of 1999,  Entrade exchanged
an aggregate of 727,145 shares of common stock for all of the outstanding shares
of BCA Holdings Series A and Series B redeemable  preferred  stock.  The Entrade
common stock issued,  valued at $14,633,000 (based upon the closing market price
of Entrade common stock on the New York Stock  Exchange on the respective  dates
the  exchanged  shares were  tendered),  exceeded the carrying  value of the BCA
Series A  preferred  stock and the BCA Series B preferred  stock of  $3,681,000,
resulting in a loss on redemption of redeemable  preferred stock of $10,952,000.
This loss was reflected in the Company's  consolidated financial statements as a
direct charge to paid-in capital.

At  December  31,  1999 and  December  31,  1998,  liabilities  of  discontinued
operations  included  8,650  shares of  Bagcraft  13.5%  cumulative,  redeemable
preferred  stock  (liquidation  preference  equal to $100 per share),  including
accumulated dividends of $1,315,000.

9.       STOCK OPTIONS AND WARRANTS

         Stock Option Plans

The  Company has stock  option  plans that  provide  for the  granting of either
incentive  or  non-qualified  stock  options  to  officers,  key  employees  and
non-employee  members of the Company's  Board of  Directors.  A summary of stock
option plans is as follows:

         The 1985 and 1996 Option Plans

The  Restated  1985 Stock Option Plan and 1996 Stock Option Plan provide for the
grant of options to purchase  Entrade  common stock that are intended to qualify
as incentive  stock options  under Section 422 of the Internal  Revenue Code and
non-qualified  options to key employees and  non-employee  directors of Entrade,
its subsidiaries and affiliated entities.

As of  December  31,  1999,  Entrade  had  outstanding  options to  purchase  an
aggregate  of  252,403  shares of Entrade  common  stock  granted  to  Entrade's
employees under the 1985 Plan at exercise prices of $3.65 and $3.75.  All of the
options  granted  under  the 1985  Plan are fully  vested  and  expire on either
December19,  2000,  September  19,  2001 or January 8, 2003.  The 1985 Plan will
remain  in  effect  until  all  options  granted  under  the 1985 Plan have been
satisfied  by the  issuance  of  shares  or the  expiration  of the  outstanding
options, but no new options may be granted under the 1985 Plan.














                                      F-22
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


As of  December  31,  1999,  Entrade  had  outstanding  options to  purchase  an
aggregate  of  1,855,351  shares of Entrade  common stock under the 1996 Plan at
exercise prices ranging from $4.75 to $22.3125 per share. An aggregate of 39,000
shares of Entrade common stock remain available for grant under the 1996 Plan as
of December 31, 1999.

         The 1996 Disinterested Directors Stock Option Plan

As of  December  31,  1999,  Entrade  had  outstanding  nonqualified  options to
purchase  an  aggregate  of 85,000  shares of Entrade  common  stock  granted to
directors  under the 1996  Disinterested  Directors  Plan at exercise  prices of
$3.125 to $5.375 per share.


An aggregate of 100,000  shares of Entrade  common  stock remain  available  for
grant under the 1996 Disinterested Director Plan as of December 31, 1999.

         The 1999 Non-Qualified Stock Option Plan

As of  December  31,  1999,  Entrade  had  outstanding  options to  purchase  an
aggregate  of  1,600,000  shares of Entrade  common stock issued to four current
employees of entrade.com under the 1999  Non-Qualified Plan at an exercise price
of $2.75 per share. The options become  exercisable in three equal  installments
on  December 1, 1999,  February  18,  2000 and  February  18, 2001 and expire on
February 23, 2009. The market value of the Company's common stock on the date of
grant of the options was $5.8125 per share,  resulting in deferred  compensation
of  $4,900,000  associated  with the  granting of these  options.  The  deferred
compensation  is being  amortized  over the  vesting  period  of these  options.
Accordingly,  during the year ended  December 31, 1999,  the Company  recognized
compensation expense of approximately $2,996,000 related to these stock options.

         The 1999 Stock Option Plan For Non-Executive Employees

In October 1999, the Company's board of directors  adopted the 1999 Nonqualified
Stock Option Plan For  Non-Executive  Officer  Employees (the "1999 Plan").  The
1999 Plan originally reserved 1,000,000 shares of the Company's common stock for
the  granting of options.  In January  2000,  the  Company's  board of directors
amended the 1999 Plan to increase the number of shares of the  Company's  common
stock reserved for the granting of options under the plan to 2,000,000.

As of  December  31,  1999,  Entrade  had  outstanding  nonqualified  options to
purchase an aggregate of 675,000 shares of its common stock granted to employees
under the 1999 Stock  Option  Plan For  Non-Executive  Employees  at an exercise
prices of $9.00 to $37.00 per share.  The market value of the  Company's  common
stock on the date of grant of options to acquire 550,000 shares of the Company's
common  stock at an  exercise  price of $9.00 per share was  $15.00  per  share,
resulting in deferred  compensation  of $3,300,000  associated with the grant of
these options.  The deferred  compensation  is being  amortized over the vesting
period of these  options.  During the year ended  December 31, 1999, the Company
recognized  compensation expense of approximately $275,000 related to certain of
these stock options.

         Other Option Grants

On  June  28,  1999,  Artra's  board  of  directors  entered  into a  three-year
employment agreement with Mark F. Santacrose,  under which Mr. Santacrose agreed
to  become  the  President  and  Chief  Executive  Officer  of the  Company.  In
connection with such employment,  Mr. Santacrose  received an option to purchase
200,000 shares of the Company's  common stock at an exercise price of $10.00 per
share (exercisable immediately) and 100,000 shares of the Company's common stock
at an  exercise  price of $12.875  per share  (exercisable  commencing  June 28,
2000).  The market value of the  Company's  common stock on the date of grant of
the  options  was  $12.875  per share.  Accordingly,  during  1999,  the Company
recognized compensation expense of $575,000 related to these stock options.

In October 1999, Entrade entered into an employment agreement with an individual
to serve as the chief executive  officer of Nationwide.  The initial term of the
employment  agreement is three years. In connection with such









                                      F-23
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)




employment,  this  individual  was issued a  nonqualified  stock  option for the
purchase of 200,000 shares of Entrade Common Stock at an exercise price of $9.00
per share.  The option became  exercisable in full on the date of the closing of
the Nationwide  acquisition.  The market value of the Company's  common stock on
the date of grant of the options was $15.00 per share. Accordingly, during 1999,
the Company recognized compensation expense of $1,200,000 related to these stock
options.

Effective for the fiscal year ending  December 26, 1996, the Company has adopted
only the  disclosure  provisions of SFAS No. 123,  "Accounting  for  Stock-Based
Compensation".  In 1998 all stock options were granted at exercise  prices equal
to fair market value of the common stock at the date of grant and,  accordingly,
no  compensation  expense was recognized in connection  with the Company's stock
option plans. As discussed above, in 1999  certainstock  options were granted at
exercise  prices less than fair market  value of the common stock at the date of
grant. Compensation cost was recognized in accordance with the provisions of APB
No. 25, "Accounting for Stock Issued to Employees" and related  interpretations.
The Company is  recognizing  compensation  expense over the  applicable  vesting
periods for the excess of fair market  value of the common  stock at the date of
grant over the option  price.  Had  compensation  cost for the  Company's  stock
option plan been determined based on the fair value of the option on the date of
grant for awards in 1999 and 1998,  consistent  with the  provisions of SFAS No.
123, the Company's earnings  applicable to common shares would have been reduced
to the pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                                   Year Ended December 31, 1999    Year Ended December 31, 1998
                                                   ----------------------------    -----------------------

                                                     Pro forma      As Reported     Pro forma   As Reported
                                                   ------------    ------------    ----------    ----------
                                                         (in thousands, except per share data)

      Earnings (loss) applicable to common shares:
<S>                                                  <C>          <C>            <C>           <C>
                  Continuing operations              $  (37,282)  $   (50,136)   $   (6,117)   $   (6,216)
                  Discontinued operations                  --            --          38,930        38,930
                                                     ----------    ----------    ----------    ----------
                       Net  earnings (loss)          $  (37,282)  $   (50,136)   $   32,813    $   32,714
                                                     ==========    ==========    ==========    ==========


     Earnings (loss) per share:
                  Basic and Diluted
                    Continuing operations            $    (3.65)    $   (4.91)   $     (.78)   $     (.79)
                    Discontinued operations                --            --            4.94          4.94
                                                     ----------    ----------    ----------    ----------
                       Net earnings (loss)           $    (3.65)   $    (4.91)   $     4.16 $  $     4.15
                                                     ==========    ==========    ==========    ==========

</TABLE>



The fair value of stock options granted in 1999 and 1998 was estimated using the
Black-Scholes   option  pricing  model  with  the  following   weighted  average
assumptions:

                                                     1999           1998
                                                     -------        ----

           Expected life (years)                       5             5
           Interest rate                               6.0%          5.0%
           Volatility                                 60.0%         50.0%
           Dividend yield                               -             -






                                      F-23
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Information  regarding  all stock option plans for the three years in the period
ended December 31, 1999 is as follows:

<TABLE>
<CAPTION>
                                                     1999          1998          1997
                                                  ----------    ----------    ----------

<S>                                                  <C>           <C>           <C>
     Options outstanding at beginning of year        971,250       913,050       917,850
     Options granted                               4,240,750        62,500          --
     Options exercised                              (238,246)       (4,300)       (4,800)
     Options canceled                                 (6,000)         --            --
                                                  ----------    ----------    ----------
     Options outstanding at end of year            4,967,754       971,250       913,050
                                                  ==========    ==========    ==========

      Options exercisable at end of year           2,111,087       971,250       913,050
                                                  ==========    ==========    ==========

     Options available for grant at end of year      464,000     1,604,750     1,667,250
                                                  ==========    ==========    ==========

     Weighted average option prices:
         Outstanding at beginning of year         $     4.52    $     4.61    $     4.61
         Options granted                          $     8.87    $    3.125          --
         Options exercised                        $     4.28    $     3.70    $     3.70
         Options canceled                               --            --            --
         Outstanding at end of year               $     8.24    $     4.52    $     4.61
         Exercisable at end of year               $     5.10    $     4.52    $     4.61

</TABLE>

Significant  option groups outstanding at December 31, 1999 and related weighted
average price and remaining life information are as follows:

                  Options           Options        Exercise       Remaining
 Grant Date     Outstanding       Exercisable       Price        Life (Years)
 ----------     ------------     -------------   ------------   --------------
  12-12-09            15,000            -             $ 37.00          9
  11-11-99           390,000            -           $ 22.3125          9
  11-08-99           100,000            -           $ 19.1875          9
  10-19-99           200,000           200,000        $  9.00          9
  10-19-99           550,000            -             $  9.00          9
  10-09-99           525,000            -           $ 15.8125          9
  10-04-99            30,000            -             $ 15.75          9
  10-04-99            10,000            -           $ 15.8125          9
  07-01-99            70,000            -           $ 12.9375          9
  06-28-99           200,000           200,000        $ 10.00          9
  06-28-99           100,000            -            $ 12.875          9
  02-23-99         1,600,000           533,333        $  2.75          9
  02-02-99            15,000            15,000        $ 5.375          9
  01-06-99           390,898           390,898        $  4.75          9
  05-27-98            50,000            50,000        $ 3.125          8
  10-04-96           469,453           469,453          $5.25          6
  01-08-93           103,300           103,300          $3.75          3
  09-19-91            39,000            39,000         $ 3.65          1
  12-19-90           110,103           110,103         $ 3.65          -









                                      F-25
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


         Warrants

Information  regarding warrants to purchase shares of the Company's common stock
for the three years in the period ended December 31, 1999 is as follows:

<TABLE>
<CAPTION>
                                                    1999          1998          1997
                                                 ----------    ----------    ----------
<S>                                               <C>           <C>           <C>
     Warrants outstanding at beginning of year    2,070,000     2,592,350     1,711,032
     Warrants granted                                  --         192,500     1,196,894
     Warrants exercised                          (1,692,289)         --         (35,000)
     Warrants put back                                 --        (500,000)     (114,000)
     Warrants expired                                  --        (214,850)     (166,576)
                                                 ----------    ----------    ----------
     Warrants outstanding at end of year            377,711     2,070,000     2,592,350
                                                 ==========    ==========    ==========

                                                 $     3.00    $     3.00    $     3.50
     Exercise prices per share                           to            to            to
                                                 $     8.00    $     8.00    $     8.00
</TABLE>


The  warrants,  exercisable  from the date of  issue,  expire at  various  dates
through 2003. These warrants were issued principally as additional  compensation
for various  short-terms loans.  During 1998 warrants to purchase 500,000 shares
of the  Company's  common stock at prices  ranging from $3.75 per share to $5.00
per share were put back to Artra for total  consideration of $1,440,000.  During
1997 warrants to purchase 114,000 shares of the Company's common stock at prices
ranging from $5.00 per share to $6.00 per share were put back to Artra for total
consideration of $228,000.

In  November  and  December  1999 the  expiration  dates of warrants to purchase
225,000  shares of the  Company's  common  stock a price of $3.00 per share were
extended to periods  ranging from April 30, 2000 to 30 days after the underlying
shares of common stock have been  registered  for sale with the  Securities  and
Exchange Commission. As a result of this extension the Company incurred interest
expense of $6,229,000 relating to common stock warrants.

In January and February 2000,  warrants were exercised to purchase 41,167 shares
of the  Company's  common stock at prices  ranging from $3.00 per share to $8.00
per share.

In January 2000, in conjunction with certain of the private placements of shares
of its common stock  entered  into in December  1999 and January  2000,  finders
received  warrants to purchase an  aggregate of 20,500  shares of the  Company's
common stock at prices  ranging  from $32.00 per share to $55.65 per share.  The
warrants expire in January 2003.

In February 2000, as part of the consideration for our entrade.com subsidiary to
acquire a 25% interest in TradeTextile.com,  Entrade issued a warrant to acquire
up to 75,000  shares of our common  stock at an  exercise  price of $36.938  per
share. The warrant expires in December 2002.

In March 2000,  as part of the  consideration  for the  agreement  with  Textron
Financial  Corporation to organize a new entity to be known as AssetControl.com,
Entrade  issued  Textron  Financial  Corporation  a  warrant  to  acquire  up to
1,000,000  shares of Entrade  common  stock at an  exercise  price of $39.65 per
share.  The warrant  initially  vests 250,000 shares with the remaining  750,000
shares  scheduled  to  vest  based  upon  certain   performance   standards  for
AssetControl.com.  The market value of the Company's common stock on the date of
grant of the  warrants  was $49.375  per share.  Accordingly,  the Company  will
recognize future charges to operations related to these warrants.

In March 2000, in conjunction with the private placement of the Company's Series
A convertible  redeemable  preferred stock, the investors  received  warrants to
purchase  400,000 shares of Entrade common stock at an exercise price of $41.375
per share, subject to adjustment in certain circumstances.






                                      F-26
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


10.      COMMITMENTS AND CONTINGENCIES

         Lease Commitments

The Company and its subsidiaries  lease certain office and other facilities.  At
December 31, 1999,  future minimum lease payments  under  operating  leases that
have an  initial  or  remaining  noncancellable  term of more  than one year (in
thousands) are:

                             Year
                             ----
                             2000                    $ 1,136
                             2001                      1,102
                             2002                      1,032
                             2003                        905
                             2004                        860
                             After 2004                  385
                                                     -------
                                                     $ 5,420
                                                     =======

Rental expense from continuing operations was $468,000, $138,000 and $134,000 in
fiscal years 1999, 1998 and 1997, respectively. Effective December 1995, a trust
for the benefit of John Harvey, the Company's Chairman of the board of directors
purchased  the  building  in which  the  Company  leases  office  space  for its
corporate headquarters. The lease expired in December 1998 and was extended on a
month-to-month basis. In the second half of 1999, the Company assumed additional
space in the building. Rental expense for this lease was $175,000,  $126,000 and
$126,000 annually for fiscal years 1999, 1998 and 1997, respectively. In January
2000  the  Company   entered  into  a  new  five-year  lease  at  this  building
encompassing  additional  space and  providing  for annual  rental  payments  of
approximately $300,000.

Nationwide  leases  one of its  office  and  yard  facilities  from an  informal
partnership  in  which a  partner  is a former  stockholder  of  Nationwide  and
currently the beneficial owner of approximately 9% of the outstanding  shares of
Entrade  common  stock.  Rental  payments   aggregating  $63,000  were  made  by
Nationwide  to this  partnership  for the three months ended  December 31, 1999,
subsequent to Entrade's  acquisition  of  Nationwide.  Future lease  commitments
under this agreement included in the table above are approximately $1,200,000.

         Employment Contracts

On  June  28,  1999,  Artra's  board  of  directors  entered  into a  three-year
employment agreement with Mark F. Santacrose,  under which Mr. Santacrose agreed
to  become  the  President  and  Chief  Executive  Officer  of the  Company.  In
connection with such employment,  Mr. Santacrose  received an option to purchase
200,000 shares of the Company's  common stock at an exercise price of $10.00 per
share (exercisable immediately) and 100,000 shares of the Company's common stock
at an  exercise  price of $12.875  per share  (exercisable  commencing  June 28,
2000).

Entrade also entered into an employment agreement with an individual to serve as
an executive officer of Nationwide. The initial term of the employment agreement
is three years.  The term will  automatically be extended on each anniversary of
the agreement  commencing with the third  anniversary for one year unless either
party gives notice that it does not wish to extend the employment term not later
than  90  days  preceding  such  anniversary   date.  In  connection  with  such
employment,  this  individual  was issued a  nonqualified  stock  option for the
purchase of 200,000 shares of Entrade Common Stock at an exercise price of $9.00
per share. The Option became exercisable in full on the date of








                                      F-27
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


the  closing  of the  Nationwide  acquisition.  As of the  closing  date  of the
Nationwide acquisition, this individual was appointed as a director of Entrade.

On February 23, 1999, Artra entered into three-year  employment  agreements with
four   individuals   to  manage   the   Company's   entry   into  the   Internet
business-to-business e-commerce and on-line auction business. In connection with
such employment,  the four individuals  received  nonqualified stock options for
the purchase of 1,600,000  shares of the  Company's  Common Stock at an exercise
price of $2.75 per share.  The options vest in three equal  installments  over a
period ending February 18, 2001.

The  Company has other  employment  agreements  with  certain  officers  and key
members of  management.  As of December 31, 1999,  the aggregate  commitment for
future salary payments for all employment contracts is approximately $5,000,000.

         Legal Proceedings

With the  exception of legal  proceedings  and claims that arise in the ordinary
course of Nationwide's  business, the only legal proceedings in which Entrade is
presently  involved  relate  to  Artra  and  its  subsidiaries,  which  are  the
defendants in various business-related  litigation and environmental matters and
product  liability claims. At December 31, 1999 and December 31, 1998, Artra had
accrued  current  liabilities of $1,400,000 and  $1,500,000,  respectively,  for
potential  business-related   litigation  and  environmental   liabilities.   No
liabilities were accrued for the product  liability claims because no reasonable
basis exists on which such claims could be quantified.

         Product liability claims

Since 1983, Artra Group Incorporated,  which has been a wholly-owned  subsidiary
of Entrade since September 1999, has responded to significant  product liability
claims relating to the use of asbestos in the manufacture of products by various
companies,  including a former  Artra  subsidiary.  Reports  from local  counsel
indicate,  as of December 31, 1999,  pending  claims  asserted by  approximately
45,000 plaintiffs (excluding loss of consortium claims), and it is probable that
there are a  significant  number of  additional  claims that remain  unasserted.
Artra has no reasonable  basis on which to quantify the potential  cost to it of
the pending claims and any unasserted claims.

Artra's primary insurance carriers paid approximately $13,000,000 in disposition
of the product  liability claims from 1983 through  September 1998, when Artra's
primary insurance  carriers asserted that Artra's primary insurance coverage for
the claims had been exhausted.  Beginning in September 1998,  certain of Artra's
excess  insurance  carriers,  under a reservation  of the right to deny coverage
liability at a subsequent date, have, under a temporary  agreement which expired
on January  31,  2000,  assumed  the  defense  of the  claims and paid  defense,
settlement  and  indemnity  costs  relating  to  the  claims  of   approximately
$17,500,000 through December 31, 1999. Although Artra is engaged in negotiations
with its excess  insurance  carriers  regarding  their payment of these defense,
settlement and indemnity costs subsequent to January 31, 2000, we can provide no
assurance  that  Artra will be able to  conclude  an  agreement  with the excess
carriers.

Because  of  the  expiration  of  the  temporary  agreement  and  the  uncertain
conclusion of Artra's negotiations with the excess insurance carriers, Artra may
have to advance some or all of these costs,  which could have a material adverse
effect on Artra's  financial  condition,  and seek  reimbursement of these costs
from the excess  insurance  carriers through  litigation or otherwise.  If Artra
were  unable  to  conclude  a  permanent  agreement  with its  excess  insurance
carriers,  a court could also determine that Artra is responsible  for a portion
of the defense and indemnity costs associated with the product liability claims.
Such a finding would also have a material  adverse  effect on Artra's  financial
condition.

Artra's financial  condition could also be materially  adversely affected to the
extent that its  existing  insurance  coverage  and any to which it might become
entitled in the future is not  sufficient  to respond to the  product  liability
claims.  Although  Artra  believes that its remaining  insurance  coverage as of
December 31, 1999 relating to the claims is not less






                                      F-28
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


than  $185,000,000,  Artra can provide no assurance  that the  coverage  will be
adequate to cover Artra's responsibility for the claims. In the event Artra were
unable to satisfy the claims through a combination of insurance coverage and its
own assets,  it is possible that Artra could be forced to seek protection  under
the  federal  bankruptcy  laws.  In such  event,  Entrade  could lose its entire
investment in Artra (approximately $10,200,000 at December 31, 1999). It is also
possible that the plaintiffs asserting the claims against Artra could attempt to
pursue legal action against Entrade.  Entrade believes that no valid legal basis
exists for, and it would have meritorious  defenses  against,  the imposition of
Artra's  liabilities for the claims and Entrade would  vigorously  defend itself
against  any attempt to impose such  liability.  In the event of an  unfavorable
outcome of such legal action however,  there could be a material  adverse effect
upon Entrade's financial condition and results of operations.

         Environmental matters

         EPA notices alleging environmental violations

In April 1994,  the EPA  notified  Artra that it was a  potentially  responsible
party for the  disposal of  hazardous  substances  (principally  waste oil) at a
disposal site in Palmer,  Massachusetts,  generated by a manufacturing  facility
formerly  operated by the Clearshield  Plastics  Division of Harvel  Industries,
Inc., a majority  owned  subsidiary  of Artra.  In 1985,  Harvel was merged into
Artra's Fill-Mor  subsidiary.  This site has been included on the EPA's National
Priorities  List. In February  1983,  Harvel sold the assets of  Clearshield  to
Envirodyne  Industries,  Inc. The alleged  waste  disposal  occurred in 1977 and
1978,  at which time Harvel was a  majority-owned  subsidiary  of Artra.  In May
1994,  Envirodyne and its Clearshield  National,  Inc. subsidiary sued Artra for
indemnification in connection with this proceeding.  The cost of clean-up at the
Palmer,  Massachusetts  site has been estimated to be  approximately  $7,000,000
according  to proofs of claim  filed in the  adversary  proceeding.  A committee
formed by the named potentially  responsible parties has estimated the liability
respecting the activities of Clearshield to be $400,000.  Artra has not made any
independent  investigation  of the  amount  of its  potential  liability  and no
assurances can be given that it will not substantially exceed $400,000.

         Lawsuits seeking recovery of environmental clean-up costs

In a case titled Sherwin-Williams Company v. Artra Group Incorporated,  filed in
1991 in the United States District Court for Maryland,  Sherwin-Williams Company
brought suit  against  Artra and other  former  owners of a paint  manufacturing
facility in  Baltimore,  Maryland,  for recovery of costs of  investigation  and
clean-up of  hazardous  substances  that were  stored,  disposed of or otherwise
released at the  manufacturing  facility.  This  facility was owned by Baltimore
Paint and Chemical  Company,  formerly a subsidiary  of Artra from 1969 to 1980.
Sherwin-Williams'  current  projection of the cost of clean-up is  approximately
$5,000,000 to $6,000,000. Artra has filed counterclaims against Sherwin-Williams
and cross claims  against  other former  owners of the  property.  Artra also is
vigorously  defending this action and has raised numerous  defenses.  Currently,
the case is still in  discovery,  and Artra cannot  determine  what, if any, its
liability may be in this matter.

Artra was named as a defendant  in United  States v.  Chevron  Chemical  Company
brought  in the  United  States  District  Court  for the  Central  District  of
California  in respect to  Operating  Industries,  Inc.  site in Monterey  Park,
California. This site is included on the EPA's National Priorities List. Artra's
involvement  stemmed from the alleged  disposal of hazardous  substances  by The
Synkoloid Company subsidiary of Baltimore Paint and Chemical Company,  which was
formerly owned by Artra.  Synkoloid  manufactured spackling paste, wall coatings
and related  products,  certain of which  generated  hazardous  substances  as a
by-product of the  manufacturing  process.  Artra entered into a consent  decree
with the EPA in which it agreed  to pay  $85,000  for one phase of the  clean-up
costs for this site; however,  Artra defaulted on its payment obligation.  Artra
is presently unable to estimate the total potential liability for clean-up costs
at this site,  which clean-up is expected to continue for a number of years. The
consent  decree,  even if it had been  honored  by Artra,  was not  intended  to
release  Artra from  liability  for costs  associated  with other  phases of the
clean-up at this site.  Artra is  presently  unable to determine  what,  if any,
additional liability it may incur in this matter.






                                      F-29
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)


         Other Cases

Bagcraft Packaging, LLC and Packaging Dynamics, LLC filed suit against Artra and
its BCA Holdings, Inc. subsidiary in the Circuit Court of Cook County, Illinois,
on November 22,  1999,  alleging  that Artra  breached a  non-compete  agreement
entered  into  in  connection  with  the  sale of  certain  assets  to  Bagcraft
Packaging,  LLC by  hiring  Mark  Santacrose  as  Chief  Executive  Officer  and
President of Artra.  The plaintiffs seek damages in excess of $5,000,000.  Artra
intends to vigorously defend itself in this action.

While these litigation and environmental matters (exclusive of product liability
claims) involve wide ranges of potential liability,  management does not believe
the outcome of these  matters will have a material  adverse  effect on Entrade's
financial condition or results of operations.

11.      INCOME TAXES

The  provision  (credit)  for income  taxes (in  thousands)  is  included in the
statements of operations as follows:


                                1999      1998       1997
                                ------   -------    -------
     Continuing operations      $-       $  --      $  --


     Extraordinary credit         --        --         --
     Discontinued  operations     --       1,600        (19)
                                ------   -------    -------

                                $ --     $ 1,600    $   (19)
                                ======   =======    =======


A summary of the  provision  (credit)  for  income  taxes (in  thousands)  is as
follows:



                                1999      1998       1997
     Current:                  ------   -------    -------

         Federal
         State                 $ --     $   700    $  --
                                 --         900        (19)
                               ------   -------    -------
                               $ --     $ 1,600    $   (19)
                               ======   =======    =======















                                      F-30
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



11.      INCOME TAXES, continued

Due to the utilization of tax loss carryforwards,  no Federal income tax expense
is reflected  in the  Company's  financial  statements  resulting  from the 1998
earnings from discontinued  operations,  except for Federal  alternative minimum
tax.

In 1999,  1998 and 1997,  the  effective  tax rates from  operations,  including
discontinued operations were 0%, 4.5% and (1.0)%,  respectively,  as compared to
the statutory Federal rate, which are reconciled (in thousands) as follows:


                                               1999        1998        1997
                                           --------    --------    --------

     Provision (credit) for income taxes
         using statutory rate              $ (6,563)   $ 12,013    $    633
     State and local taxes,
         net of Federal benefit                --           900         (19)
     Current year tax loss not utilized       5,592        --        (1,680)
     Deferred finance fee                      --          --           919
     Amortization of goodwill                   370        --           104
     Effect of not including
         all subsidiaries in  the
         consolidated tax return                595        --          --
     Previously unrecognized benefit
         from utilizing tax loss               --       (12,035)       --
          carryforwards
     Alternative minimum tax                   --           700        --
     Other                                        6          22          24
                                           --------    --------    --------
                                           $   --      $  1,600    $    (19)
                                           ========    ========    ========








                                      F-31
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


11.      INCOME TAXES, continued

The  types  of  temporary  differences  between  the tax  bases  of  assets  and
liabilities and their financial reporting amounts that give rise to the deferred
tax  liabilities  and  deferred tax assets at December 31, 1999 and December 31,
1998 and their approximate tax effects (in thousands) are as follows:

<TABLE>
<CAPTION>
                                                                1999                           1998
                                                      --------------------------      ------------------------
                                                      Temporary          Tax          Temporary        Tax
                                                      Difference     Difference       Difference    Difference
                                                      ----------     ----------       ----------    ----------

<S>                                                     <C>           <C>               <C>           <C>
     Investment in Comforce Corporation                 $ 32,700      $ 12,100          $ 36,000      $ 14,000
     Accrued personnel costs                               5,100         1,900                 -             -
     Other                                                 4,200         1,600             2,500         1,000
     Alternative minimum tax carryforward                    700           700                -             -
     Net operating loss                                   14,800         5,500            10,200         4,000
                                                                      --------                        --------
               Total deferred tax assets                                21,800                          19,000
                                                                      --------                        --------

     Accumulated depreciation                               (500)         (200)                -             -
     Other                                                  (800)         (300)             (800)         (300)
                                                                      --------                        --------
               Total deferred tax liabilities                             (500)                          (300)
               Valuation allowance                                     (21,300)                        (18,700)
                                                                      --------                        --------
               Net deferred tax asset
                                                                      $      -                        $      -
                                                                      ========                        ========

</TABLE>

The Company has  recorded a valuation  allowance  with respect to the future tax
benefits and the net operating loss reflected in deferred tax assets as ultimate
realization is not considered more likely than not.

At December 31, 1999,  the Company and its  subsidiaries  had Federal income tax
loss carryforwards of approximately  $14,800,000  expiring principally in 2012 -
2019,  available to be applied against future taxable income,  if any. In recent
years,  the Company has issued  shares of its common stock to repay various debt
obligations,  as  consideration  for  acquisitions,   to  fund  working  capital
obligations and as consideration for various other transactions.  Section 382 of
the Internal  Revenue  Code of 1986 limits a  corporation's  utilization  of its
Federal income tax loss carryforwards when certain changes in the ownership of a
corporation's common stock occurs. In the opinion of management,  the Company is
not  currently  subject  to  such  limitations   regarding  the  utilization  of
substantially all of its Federal income tax loss carryforwards.

12.      EMPLOYEE BENEFIT PLANS

The Company maintains a defined contribution 401(k) plan covering  substantially
all employees. Both employee and employer contributions are generally determined
as a percentage of the covered employee's annual compensation. The total expense
charged to  operations  relating to this plan  amounted to $45,000,  $38,000 and
$28,000 in 1999, 1998 and 1997, respectively.






                                      F-32
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Nationwide  has a qualified,  noncontributory  profit sharing plan in effect for
certain eligible  employees.  The plan provides for contributions by the Company
in such amounts as the Board of Directors may annually determine.  There were no
contributions made to the plan for 1999.

The Company  typically  does not offer the types of benefit  programs  that fall
under the  guidelines of Statement of Financial  Accounting  Standards No. 132 -
Employers' Disclosures about Pensions and Other Postretirement Benefits.

13.      EARNINGS PER SHARE

The Company  computes  earnings per share in accordance  with the  provisions of
SFAS No. 128, "Earnings per Share".  Basic earnings (loss) per share is computed
by dividing the income  available to common  shareholders,  net earnings (loss),
less  redeemable  preferred  stock  dividends,  loss on redemption of redeemable
preferred stock and redeemable  common stock accretion,  by the weighted average
number of shares of common stock outstanding during each period.

Diluted  earnings (loss) per share is computed by dividing the income  available
to common  shareholders,  net earnings (loss),  less redeemable  preferred stock
dividends,  loss on  redemption  of redeemable  preferred  stock and  redeemable
common stock accretion, by the weighted average number of shares of common stock
and common  stock  equivalents  (redeemable  common  stock,  stock  options  and
warrants), unless anti-dilutive, during each period.

Earnings (loss) per share for each of the three fiscal years in the period ended
December  31,  1999 was  computed  as follows  (in  thousands,  except per share
amounts):

<TABLE>
<CAPTION>
                                                              Year Ended             Year Ended             Year Ended
                                                              December 31, 1999      December 31, 1998        December 31, 1997
                                                            --------------------    --------------------    --------------------
                                                             Basic      Diluted       Basic     Diluted       Basic     Diluted
                                                            --------    --------    --------    --------    --------    --------

     AVERAGE SHARES OUTSTANDING:
<S>                                                           <C>         <C>          <C>         <C>         <C>         <C>
       Weighted average shares outstanding                    10,216      10,216       7,891       7,891       7,970       7,970
       Common stock equivalents
           (options/warrants)                                   --          --          --          --          --          --
                                                            --------    --------    --------    --------    --------    --------
                                                              10,216      10,216       7,891       7,891       7,970       7,970
                                                            ========    ========    ========    ========    ========    ========

     EARNINGS (LOSS):
       Earnings (loss)from continuing operations            $(19,304)   $(19,304)   $ (5,707)   $ (5,707)   $  1,066    $  1,066

       Loss on  redemption of
           redeemable preferred stock                        (17,727)    (17,727)       --          --          --          --
       Dividends applicable to
           redeemable preferred stock                           (292)       (292)       (410)       (410)       (693)       (693)
       Redeemable common stock accretion                        --          --          --          --          (400)       (400)
                                                            --------    --------    --------    --------    --------    --------
       Loss from continuing operations
          applicable to common shareholders                  (37,323)    (37,323)     (6,117)     (6,117)        (27)        (27)
       Earnings (loss) from
          discontinued operations                               --          --        38,930      38,930        (293)       (293)
                                                            --------    --------    --------    --------    --------    --------

       Net earnings (loss)                                  $(37,323)   $(37,323)   $ 32,813    $ 32,813    $   (320)   $   (320)
                                                            ========    ========    ========    ========    ========    ========
</TABLE>







                                      F-33
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


13.      EARNINGS PER SHARE, continued

<TABLE>
<CAPTION>
                                                    Year Ended                Year Ended                  Year Ended
                                                December 31, 1999         December 31, 1998            December 26, 1997
                                               ---------------------     ---------------------      ------------------------
                                                Basic       Diluted        Basic      Diluted         Basic        Diluted

PER SHARE AMOUNTS:
  Loss from continuing operations
<S>                                             <C>          <C>            <C>         <C>            <C>             <C>
      applicable to common shares               $ (3.65)     $(3.65)        $ (.78)     $  (.78)       $     -         $   -
  Earnings (loss) from
      discontinued operations                        -            -           4.94         4.94           ( .04)        ( .04)
                                               ---------    --------       --------    ---------     -----------   -----------
  Net earnings (loss) applicable
      to common shares                          $ (3.65)     $(3.65)        $ 4.16      $  4.16        $   (.04)       $ (.04)
                                               =========    ========       ========    =========     ===========   ===========
</TABLE>


14.      LITIGATION SETTLEMENT

In  November,  1993,  Artra  filed suit in the Circuit  Court of the  Eighteenth
Judicial  Circuit  for the state of Illinois  against  Salomon  Brothers,  Inc.,
Salomon  Brothers  Holding  Company,  Inc.,  Charles K.  Bobrinskoy,  Michael J.
Zimmerman,  D.P. Kelly & Associates,  L.P., Donald P. Kelly, James F. Massey and
William Rifkind  relating to the acquisition of Envirodyne  Industries,  Inc. in
1989 by Emerald Acquisition Corp.

Effective  December 31, 1997, the above parties  reached a settlement  agreement
and all pending  litigation  was  dismissed.  Artra  recognized  a gain from the
settlement agreement of $10,416,000 ($1.31 per share), net of related legal fees
and other expenses.

The  Company  and  its   subsidiaries   are  the  defendants  in  various  other
business-related  litigation and environmental matters (see Note 10). Management
does not believe the outcome of these matters  (exclusive  of product  liability
claims)  will  have  a  material  adverse  effect  on  the  Company's  financial
statements.

15.      BUSINESS SEGMENTS

Through  November 20,  1998,  the  Company's  Artra  subsidiary  operated in one
industry segment as a manufacturer of packaging products principally serving the
food  industry.  The  packaging  products  business  was  conducted  by  Artra's
wholly-owned Bagcraft subsidiary, which business was sold on November 20, 1998.

As discussed in Note 3, on February  23, 1999,  Artra  entered into an agreement
with Entrade  providing for the merger of a  wholly-owned  subsidiary of Entrade
with and into Artra. On September 22, 1999,  Artra's  shareholders  approved the
transaction and on September 23, 1999, the merger was completed.  As a result of
the merger,  Artra became a  wholly-owned  subsidiary of Entrade.  For financial
reporting  purposes,  the transaction has been treated as a recapitalization  of
Artra with Artra as the acquirer.

Entrade  is a  business-to-business  company  specializing  in the  creation  of
e-commerce marketplaces.

In October  1999,  Entrade  completed the  acquisition  of all of the issued and
outstanding common stock of Nationwide, which has operated for over 20 years and
is one of the nation's largest volume public auction firms in the disposition of
municipality,  law enforcement,  corporate and utility company surplus property.
In addition to vehicles and  equipment,  Nationwide  conducts  real property and
jewelry auctions.

The  Company  has  adopted  SFAS  No.  131  "Disclosures  About  Segments  of an
Enterprise and Related  Information".  SFAS No. 131 requires certain disclosures
about  operating  segments in a manner that is  consistent  with how  management
evaluates the performance of the segments.  At December 31, 1999,  Entrade's two
reportable segments






                                      F-34
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


consist of  development  stage  business  services  provided  principally by our
e-commerce   marketplaces  and  the  transaction   services  business  conducted
principally by the Nationwide subsidiary.

The  following  table  summarizes   financial   information  for  the  Company's
reportable segments since their respective acquisitions in 1999:

                                                     1999
                                                  --------

     Revenues:
          Development stage business              $     77
          Transaction services                       4,465
                                                  --------
                                                  $  4,542
                                                  ========

     Operating earnings (loss):
          Development stage business              $ (3,331)
          Transaction services                         100
          Corporate expenses                        (4,288)
          Compensation related to stock options     (5,046)
                                                  --------
     Operating loss                                (12,565)
     Equity in loss of asseTrade.com                  (445)
     Interest expense related to stock warrants     (6,229)
     Interest expense, net                            (131)
     Other                                              66
                                                  --------
     Loss from continuing
          operations before income taxes          $(19,304)
                                                  ========

     Total assets:
          Development stage business              $ 11,043
          Transaction services                      53,187
          Corporate                                 12,974
          Investment in asseTrade.com                3,554
                                                  --------
                                                  $ 80,758
                                                  ========

     Capital expenditures:
          Development stage business
                                                  $     98
          Transaction services                         142
                                                  --------
                                                  $    240
                                                  ========




                                      F-35
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


15.      BUSINESS SEGMENTS, continued

                                               1999
                                             ------

     Depreciation and amortization:
          Development stage business         $  550
          Transaction services                  673
                                             ------
                                             $1,223
                                             ======

Nationwide's  primary revenue is comprised of consignor  commissions and buyer's
premiums.  Gross  auction  proceeds  represent the  successful  bid price of the
merchandise  sold.   Nationwide's  gross  auction  proceeds  from  the  date  of
acquisition through December 31, 1999 were $25,446,000.

During 1999,  there were no  significant  intersegment  sales.  One  transaction
services  customer  accounted  for  14%  of the  Company's  total  revenues.  No
significant revenues were generated by development stage business in 1999.

16.      OTHER RELATED PARTY TRANSACTIONS

Artra had total advances due from its then president, Peter R. Harvey (currently
Vice Chairman of Entrade),  of which  $12,621,000,  including  accrued interest,
remained  outstanding at December 31, 1997. These advances provided for interest
at varying rate from 10.5% to 12%. This receivable from Peter R. Harvey had been
classified as a reduction of common shareholders' equity.

Commencing  January  1, 1993 and  through  January  31,  1998,  interest  on the
advances to Peter R. Harvey had been accrued and fully reserved.

In March  1998,  Artra's  Board of  Directors  ratified a proposal to settle Mr.
Harvey's advances as follows:

          Effective December 31, 1997, Mr. Harvey's net advances from Artra were
          offset by $2,816,000  ($5,605,000 net of interest accrued and reserved
          for the  period  1993 -  1997)  to  $12,621,000.  This  offset  of Mr.
          Harvey's advances  represented a combination of compensation for prior
          year  guarantees  of Artra  obligations  to private and  institutional
          lenders,  compensation  in excess of the nominal  amounts  Mr.  Harvey
          received  for the years  1995 - 1997 and  reimbursement  for  expenses
          incurred to defend Artra against certain litigation.

          Effective January 31, 1998, Mr. Harvey's  remaining  advances totaling
          $12,787,000 were paid with  consideration  consisting of the following
          ARTRA/BCA preferred stock held by Mr. Harvey:


                                                                  Face Value
                                                                     Plus
                               Security                        Accrued Dividends
   ------------------------------------------------------      -----------------
   ARTRA redeemable preferred stock, 1,734.28 shares             $   2,751,000
   BCA Holdings Series A preferred stock, 1,784.029 shares           2,234,000
   BCA Holdings Series B preferred stock,  6,172 shares              7,802,000
                                                                 -------------
                                                                 $  12,787,000
                                                                 =============


17.      SUBSEQUENT EVENTS

On January 26, 2000,  Entrade  entered into an agreement  with three  individual
shareholders to acquire 15% of the issued and outstanding shares of ATM Service,
Ltd. ("ATM Service"), for shares of Entrade common stock equal to





                                      F-36
<PAGE>


                          ENTRADE INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


the greater of 352,941 shares, or that number determined by dividing  $6,000,000
by the  average  closing  price  for  Entrade  common  stock  for the five  days
preceding the closing date.  ATM Service,  which is a licensee of  entrade.com's
software,  provides a channel for wholesale  redistribution of consumer oriented
goods  under the name  ATMCenter.com.  The  transaction  is  subject  to various
conditions,  including Entrade  shareholder  approval.  WorldWide,  the majority
owner  of ATM  Service,  is  currently  the  beneficial  owner  of  10.9% of the
outstanding shares of Entrade common stock.

On February 10, 2000,  Entrade agreed with Associates First Capital  Corporation
to  organize  a  new  entity  to  be  known  as   TruckCenter.com  to  create  a
business-to-business  e-commerce  marketplace for the sale of trucks and related
services,   including  financing,   certification,   warranty  and  third  party
inspection.   Entrade  will  invest   $3,000,000   and  be  the  sole  owner  of
TruckCenter.com, but Associates First Capital Corporation will have an option to
purchase a 50% interest.  The target date for the launch of the  TruckCenter.com
website is March 23,  2000.  For the  six-month  period  following  the  launch,
Associates  has agreed to list truck  inventory  on the  website  and not on any
other website  unaffiliated  with  Associates,  and Associates  will provide the
ability to apply for financing services to purchasers.

On February 18, 2000, the Company's wholly-owned  entrade.com subsidiary entered
into an agreement to acquire 1,011,667 shares of Series A Convertible  Preferred
Shares, par value $.001 per share of TradeTextile.com ("Series A Preferred"),  a
warrant to acquire 288,778 shares of Series A Preferred and a warrant to acquire
333,609  shares of Series A Preferred in exchange for  $3,500,000,  a warrant to
acquire  up to  75,000  shares  of  Entrade  common  stock  and the  license  to
TradeTextile.com of entrade.com's software technology.  Pursuant to the terms of
the agreement,  entrade.com will own 35% of  TradeTextile.com on a fully-diluted
basis, assuming the full exercise of its warrants to purchase Series A Preferred
of   TradeTextile.com.   TradeTextile.com   will  provide   business-to-business
e-commerce  for  the  trading  of  yarns,  fabrics,   garments,  raw  materials,
chemicals, and textile quotas, initially targeting the Chinese textile industry.

On March  13,  2000,  Entrade  agreed  with  Textron  Financial  Corporation,  a
subsidiary   of  Textron   Inc.  to  organize  a  new  entity  to  be  known  as
AssetControl.com to create a business-to-business e-commerce marketplace for the
sale of surplus  industrial  equipment,  excess  inventory and  commercial  real
estate. Entrade owns 38% of AssetControl.com with Textron Financial owning 47.5%
of the joint  venture.  Other  partners  include ATM Service,  a  subsidiary  of
WorldWide,  a 9.5% equity  owner and  Safeguard  Scientifics  Inc.,  a 5% equity
owner. As part of the consideration  for this agreement,  Entrade issued Textron
Financial  Corporation  a warrant to acquire up to  1,000,000  shares of Entrade
common  stock at an exercise  price of $39.65 per share.  The warrant  initially
vests 250,000 shares with the remaining  750,000 shares  scheduled to vest based
upon certain performance standards for AssetControl.com. The market value of the
Company's  common  stock on the date of grant of the  warrants  was  $49.375 per
share.  Accordingly,  the Company will  recognize  future  charges to operations
related to these warrants.

In  March   2000   Entrade   acquired   an   additional   equity   interest   in
printeralliance.com.   for   $1,000,000   in   cash   and   now   own   64%   of
printeralliance.com.

In March 2000, Entrade raised approximately $28,500,000 in net proceeds from the
sale of 30,000  shares of Entrade's  Series A convertible  redeemable  preferred
stock.  The  investors  also  received  warrants to purchase  400,000  shares of
Entrade  common  stock at an  exercise  price of $41.375  per share,  subject to
adjustment in certain  circumstances.  The non-voting  Series A preferred stock,
$1,000 par value, bears a 6% dividend payable at Entrade's option in either cash
or common  stock.  For the first fifteen  months after  issuance of the Series A
preferred  stock,  and  subject  to  certain   registration   rights  and  other
conditions,  Entrade  has the  right  to  convert  all or part of the  Series  A
preferred  stock at the lesser of $78.73 per share or 91% of the lowest  closing
sale price of Entrade's  common stock  during the two  consecutive  trading days
ending on the date of the election.  In addition,  Entrade has the right, during
this period to redeem the preferred stock at 115% of its par value. Entrade must
redeem or convert all of the preferred stock within two years of the date of its
issuance,  and,  until the  preferred  stock is redeemed or  converted,  Entrade
cannot pay  dividends on its common stock  without the approval of the preferred
stockholders.  To the extent  that the fair  market  value of the  common  stock
received upon conversion of the preferred stock is deemed to exceed the carrying
value of the Series A preferred stock, a beneficial conversion feature exists. A
deemed dividend to the Series A preferred  shareholders will be reflected to the
extent of any  beneficial  conversion  feature and would  increase  the net loss
available to common shareholders.  The Series A convertible redeemable preferred
stock  will  be  classified  in  Entrade's  consolidated  balance  sheet  in the
mezzanine section between liabilities and shareholders' equity.






                                      F-37
<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS
                        ON FINANCIAL STATEMENT SCHEDULES


To the Shareholders and Board of Directors
Entrade Inc.
Northfield, Illinois


Our report on of the consolidated  financial  statements of Entrade Inc. and its
Subsidiaries  is  included on page F-2 of this  Annual  Report on Form 10-K.  In
connection  with our audits of such financial  statements,  we have also audited
the related financial statement schedule listed in the index on page F-1 of this
Annual Report on Form 10-K.

In our  opinion,  the  financial  statement  schedule  referred  to above,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents  fairly,  in all  material  respects,  the  information  required to be
included therein.




PricewaterhouseCoopers LLP


Chicago, Illinois
March 29, 2000














                                      F-38
<PAGE>

                          ENTRADE INC. AND SUBSIDIARIES
                 SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
        for each of the three years in the period ended December 31, 1999
                                 (in thousands)



<TABLE>
<CAPTION>


        Column A                                    Column B                   Column C                   Column D        Column E
       -----------                               ---------------    -------------------------------    ---------------  ------------
                                                                               Additions
                                                                    ------------------------------
                                                                         (a)             (b)
                                                   Balance at         Charged to      Charged to
                                                  Beginning of        Costs and         Other          Deductions        Balance at
        Description                                  Period            Expenses        Accounts        (Describe)      End of Period
                                                ---------------    ---------------  --------------    -------------    -------------
<S>                                                   <C>               <C>                               <C>                 <C>
For the fiscal year ended December 31, 1999:

   Deducted from assets to which they apply:

      Allowance for doubtful accounts                 $    -                                              $   10(B)         $    10
                                                      =======                                             ======            =======

      Net deferred income tax valuation allowance     $18,700                            $ 2,600                            $21,300
                                                      =======                            =======                            =======



For the fiscal year ended December 31, 1998:

   Deducted from assets to which they apply:
      Allowance for inventory valuation               $ 277             $   21                            $ (298)(D)        $  -
                                                      =====             ======                            ======            =======

      Allowance for doubtful accounts                 $ 275             $   45                            $ (320)(D)        $  -
                                                      =====             ======                            ======            =======

      Net deferred income tax valuation allowance     $30,100                                             $11,400(E)        $18,700
                                                      =======                                             =======           =======


For the fiscal year ended December 31, 1997:

   Deducted from assets to which they apply:

      Allowance for inventory valuation               $ 249             $  172                            $ (144)(C)          $ 277
                                                      =====             =======                           ======            =======

      Allowance for doubtful accounts                 $ 512             $  63                             $ (300)(A)          $ 275
                                                      =====             ======                            ======            =======

      Net deferred income tax valuation allowance     $30,800                                             $ (700)(F)        $30,100
                                                      =======                                             ======            =======

<FN>

(A)  Principally uncollectible accounts written off, net of recoveries.

(B)  Allowance for doubtful accounts related to Nationwide acquisition.

(C)  Principally inventory written off, net of recoveries.

(D)  Principally amounts of discontinued operations.

(E)  Principally  reduction of deferred tax valuation due to  utilization of tax
     loss carryforwards against earnings of discontinued operations.

(F)  Principally revision of estimated net deferred tax liability.

</FN>
</TABLE>







                                      F-39
<PAGE>


Report of Independent Accountants



To the Board of Directors and Shareholders of
Entrade Inc.


In our opinion,  the accompanying  combined statements of operations and changes
in  shareholders'  equity  and of cash flows  present  fairly,  in all  material
respects,  the results of Nationwide  Auction  Systems  operations  and its cash
flows for the nine months in the period ended  September 30, 1999, in conformity
with  accounting  principles  generally  accepted  in the United  States.  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 of these  statements  in  accordance  with
auditing standards generally accepted in the United States which 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,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for the opinion expressed above.



PRICEWATERCOOPERS LLP



Chicago, Illinois
March 29, 2000
































                                      F-40
<PAGE>

                          Independent Auditors' Report



The Board of Directors
Nationwide Auction Systems:


We have audited the accompanying  combined  balance sheet of Nationwide  Auction
Systems  (the  Company - see note 1(a)) as of December  31, 1998 and the related
combined statements of earnings and retained earnings and cash flows for each of
the  years in the two year  period  ended  December  31,  1998.  These  combined
financial  statements are the  responsibility of the Company's  management.  Our
responsibility is to express an opinion on these combined  financial  statements
based on our audits.

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

In our opinion,  the combined  financial  statements  referred to above  present
fairly, in all material  respects,  the financial position of Nationwide Auction
Systems as of December 31, 1998 and the results of its  operations  and its cash
flows for each of the years in the two year period  ended  December  31, 1998 in
conformity with generally accepted accounting principles.




/S/KPMG LLP


Los Angeles, California
March 5, 1999






                                      F-41

<PAGE>

                           NATIONWIDE AUCTION SYSTEMS

                             Combined Balance Sheet


                                                                    December 31
                      Assets                                            1998
                                                                     ----------

Current assets:
     Cash and cash equivalents                                       $  986,000
     Accounts receivable                                                594,000
     Inventories                                                         24,000
     Prepaid expenses                                                    17,000
                                                                     ----------
                 Total current assets                                 1,621,000
                                                                     ----------

Property and equipment, at cost (notes 3, 4 and 5):
     Land                                                             2,021,000
     Land improvements                                                  754,000
     Building                                                           295,000
     Leasehold interest                                                 726,000
     Office furniture and equipment                                     212,000
     Leasehold improvements                                           1,028,000
     Transportation equipment                                           188,000
                                                                     ----------
                                                                      5,224,000
     Less accumulated depreciation and amortization                     315,000
                                                                     ----------
                 Net property and equipment                           4,909,000
                                                                     ----------
Deposits                                                                 70,000
                                                                     ----------

                                                                     $6,600,000
                                                                     ==========

          Liabilities and Stockholder's Equity

Current liabilities:
     Bank lines of credit (note 4)                                   $  929,000
     Current installments of long-term debt (note 5)                    124,000
     Accounts payable                                                 1,197,000
     Accrued expenses                                                   439,000
     Income taxes payable                                                10,000
                                                                     ----------
                 Total current liabilities                            2,699,000
Long-term debt, excluding current installments (note 5)               2,631,000
                                                                     ----------
                 Total liabilities                                    5,330,000
                                                                     ----------

Stockholder's equity:
     Common stock, no par value
        Authorized 5,000 shares; issued
        and outstanding 2,600 shares                                    150,000
     Retained earnings                                                1,120,000
                                                                     ----------
                 Total stockholder's equity                           1,270,000
Commitments, contingencies and
     subsequent events (notes 6,10 and 11)
                                                                     ----------
                                                                     $6,600,000
                                                                     ==========


See accompanying notes to combined financial statements.





                                      F-42
<PAGE>

                           NATIONWIDE AUCTION SYSTEMS

              Combined Statements of Earnings and Retained Earnings


<TABLE>
<CAPTION>
                                                   Nine Months
                                                      ended           Year ended December 31
                                                   September 30,   ----------------------------
                                                       1999            1998            1997
                                                   ------------    ------------    ------------

<S>                                                <C>             <C>               <C>
Net revenues (note 2)                              $ 12,181,000    $ 19,624,000      11,604,000
Cost of sales                                         5,388,000      10,671,000       4,224,000
                                                   ------------    ------------    ------------
              Gross profit                            6,793,000       8,953,000       7,380,000
Operating expenses                                    5,181,000       6,507,000       5,100,000
                                                   ------------    ------------    ------------
              Earnings from operations                1,612,000       2,446,000       2,280,000
Interest income                                         (84,000)       (136,000)       (152,000)
Interest expense                                        268,000          94,000          21,000
Other expenses, net (note 7)                                --            3,000         384,000
                                                   ------------    ------------    ------------
              Earnings before income taxes            1,428,000       2,485,000       2,027,000
State income taxes, all current                          21,000          39,000          30,000
                                                   ------------    ------------    ------------
              Net earnings                            1,407,000       2,446,000       1,997,000
Retained earnings at beginning of period              1,120,000         891,000       1,135,000
Distributions to stockholder                         (2,143,000)     (2,217,000)     (2,241,000)
                                                   ------------    ------------    ------------
Retained earnings at end of period                 $    384,000    $  1,120,000         891,000
                                                   ============    ============    ============

</TABLE>

See accompanying notes to combined financial statements.




















                                      F-43
<PAGE>
                           NATIONWIDE AUCTION SYSTEMS

                        Combined Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                               Nine Months
                                                                                  ended              Year ended December 31
                                                                               September 30,       --------------------------
                                                                                   1999                1998           1997
                                                                               ------------        -----------    -----------
Cash flows from operating activities:
<S>                                                                             <C>                <C>              <C>
     Net earnings                                                               $ 1,407,000        $ 2,446,000      1,997,000
                                                                                -----------        -----------    -----------

     Adjustments to reconcile net earnings to net cash
        provided by operating activities:
           Depreciation and amortization                                            151,000             79,000         64,000
           Loss on disposal of equipment                                               --                9,000           --
           Loss on sale of note receivable                                             --                 --          399,000
           Changes in assets and liabilities:
              (Increase) decrease in:
                 Accounts receivable                                                (10,000)          (202,000)      (226,000)
                 Stockholder advances                                              (339,000)              --          450,000
                 Due from affiliates                                                   --                2,000        140,000
                 Inventories                                                           --                9,000        145,000
                 Prepaid expenses                                                  (113,000)            29,000        (15,000)
                 Deposits                                                           (17,000)           (55,000)       110,000
              Increase (decrease) in:
                 Accounts payable and accrued expenses                            1,740,000            204,000     (1,762,000)
                 Income taxes payable                                               (10,000)            (2,000)         7,000
                                                                                -----------        -----------    -----------
                    Total adjustments                                             1,402,000             73,000       (688,000)
                                                                                -----------        -----------    -----------
                    Net cash provided by operating activities                     2,809,000          2,519,000      1,309,000
                                                                                -----------        -----------    -----------
Cash flows from investing activities:
     Purchases of property and equipment                                         (1,773,000)        (4,711,000)      (115,000)
     Proceeds from the sale of property and equipment                                  --               36,000          9,000
                                                                                -----------        -----------    -----------
                    Net cash used in investing activities                        (1,773,000)        (4,675,000)      (106,000)
                                                                                -----------        -----------    -----------
Cash flows from financing activities:
     Proceeds from note payable                                                     763,000          2,735,000           --
     Proceeds from line of credit                                                   700,000            929,000           --
     Principal payments of long-term debt                                          (531,000)           (78,000)       (77,000)
     Distributions to stockholder                                                (2,143,000)        (2,217,000)    (1,707,000)
                                                                                -----------        -----------    -----------
                    Net cash (used in) provided by financing activities          (1,211,000)         1,369,000     (1,784,000)
                                                                                -----------        -----------    -----------
                    Net decrease in cash and cash equivalents                      (175,000)          (787,000)      (581,000)
Cash and cash equivalents at beginning of period                                    986,000          1,773,000      2,354,000
                                                                                -----------        -----------    -----------
Cash and cash equivalents at end of period                                      $   811,000        $   986,000      1,773,000
                                                                                ===========        ===========    ===========

Supplemental schedule of noncash distributions:
     Distribution of real estate to stockholder                                  $      --         $      --         (588,000)
     Transfer of real estate related debt to stockholder                                --                --           54,000
                                                                                 ===========       ===========    ===========

</TABLE>

See accompanying notes to combined financial statements.





                                      F-44
<PAGE>


                           Nationwide Auction Systems

                     Notes to Combined Financial Statements

                    September 30, 1999 and December 31, 1998



(1)    Summary of Significant Accounting Principles

       (a)    Background

              Asset Liquidation Group, Inc. and Public Liquidation Systems, Inc.
              dba Nationwide  Auction Systems (the Company) were incorporated in
              the state of Nevada on September  21, 1988 and September 26, 1990,
              respectively.  The  Company's  principal  line of  business is the
              public  auction of  vehicles,  machinery,  equipment,  jewelry and
              other  personal  property on a  consignment  basis.  Auctions  are
              primarily  held  at the  Company's  sites,  but are  also  held at
              various locations throughout the United States.

              The entities are owned and controlled by common ownership.

              Certain advances to affiliates previously presented as receivables
              have  been  accounted  for as  distributions  to the  owner in the
              accompanying 1998 financial statements.

              Additionally,  impairment losses previously  recorded in 1997 have
              been  restated  and  recorded  in 1996.  This has  resulted  in an
              increase  in  other  expenses  in 1996  and a  decrease  in  other
              expenses in 1997.

       (b)    Revenue

              Consigned  goods are sold at public auctions to the highest bidder
              on an "as-is,  where-is" basis.  Gross auction proceeds  represent
              the successful bid price of the  merchandise  sold. The successful
              bidder is  required to pay a minimum 25% deposit on the day of the
              auction.  The balance must be paid by the end of the next business
              day,  otherwise  the deposit is forfeited and the  merchandise  is
              reauctioned. The Company remits to the consignor the gross auction
              proceeds less its consignment fee and any direct costs incurred by
              the Company which are to be borne by the consignor. Gross proceeds
              for the nine months ended  September  30, 1999 and the years ended
              December 31, 1998 and 1997  totaled  $70,832,000  $75,110,000  and
              $66,564,000, , respectively.

              The  buyer  is  generally  required  to  pay  a  buyer's  premium,
              typically a fixed  percentage  of the  successful  bid price and a
              processing fee. The Company's consignment fee, the buyer's premium
              and the  processing  fees are recorded as revenues upon payment by
              the buyer.

       (c)    Cash Equivalents

              For purposes of the statement of cash flows, the Company considers
              all highly liquid  investments  with original  maturities of three
              months or less to be cash equivalents.

       (d)    Inventories

              Inventories,  consisting of various merchandise, are stated at the
              lower  of  cost  (specific-identification   method)  or  estimated
              realizable   value.   Inventories  are  acquired   through  direct
              purchases of auctionable merchandise.







                                      F-45
<PAGE>


                           Nationwide Auction Systems

                     Notes to Combined Financial Statements

                    September 30, 1999 and December 31, 1998



       (e)    Asset Impairment

              The Company reviews the carrying value of the Company's long-lived
              assets if facts and circumstances suggest that it may be impaired.
              If this review  indicates that the  long-lived  assets will not be
              recoverable,  as determined by an undiscounted  cash flow analysis
              over the remaining  amortization period, the carrying value of the
              Company's long-lived assets would be reduced to its estimated fair
              market  value.

       (f)    Use of Estimates

              Management  of the  Company  has made a number  of  estimates  and
              assumptions  relating  to the  reporting  of assets,  liabilities,
              revenues and expenses and the disclosure of contingent  assets and
              liabilities  to prepare these  financial  statements in conformity
              with  generally  accepted  accounting  principles.  Actual results
              could differ from these estimates.

       (g)    Depreciation and Amortization

              Depreciation  of property  and  equipment  is  computed  using the
              straight-line  method and  accelerated  methods over the estimated
              useful  lives of the  related  assets  ranging  from  four to five
              years.  Land  improvements  and the building are  depreciated on a
              straight-line  basis over the  estimated  useful lives of 20 to 40
              years.  Leasehold  improvements  are amortized on a  straight-line
              basis over their estimated economic useful life or the life of the
              lease, whichever is less.

       (h)    Income Taxes

              The  Company  has  elected to be treated as an S  Corporation  for
              Federal  and  California  state  income tax  purposes.  Under this
              election,  the stockholder of the corporation is personally liable
              for Federal and state income taxes and the Company is liable for a
              minimum  California  state  excise tax of 1.5% of taxable  income.
              Accordingly,   the  accompanying   combined  financial  statements
              contain only a provision for the minimum excise tax.

       (i)    Comprehensive Income

              Effective   January  1,  1998,  the  Company   adopted   Financial
              Accounting  Standards  Board  Statement  No.  130 (SFAS No.  130),
              Reporting Comprehensive Income. SFAS No. 130 requires companies to
              classify items of other comprehensive  income by their nature in a
              financial  statement and display the accumulated  balance of other
              comprehensive   income   separately  from  retained  earnings  and
              additional paid-in capital in the equity section of a statement of
              financial  position.  Comprehensive  income of the  Company is the
              same as net income; accordingly,  the adoption of SFAS No. 130 did
              not affect the Company's financial reporting.







                                      F-46
<PAGE>


                           Nationwide Auction Systems

                     Notes to Combined Financial Statements

                    September 30, 1999 and December 31, 1998



       (j)    Fair Value of Financial Instruments

              The carrying  amounts of financial  instruments  approximate  fair
              value as of  December  31,  1998 and 1997.  The  carrying  amounts
              related to cash and cash  equivalents,  accounts  receivable,  due
              from affiliates and all current liabilities approximate fair value
              due to the relatively short maturity of such instruments. The fair
              value of long-term  debt is estimated  by  discounting  the future
              cash flows of each instrument at rates currently  available to the
              Company for similar debt  instruments of comparable  maturities by
              the Company's banker.

       (k)    Recently Issued Accounting Standards

              In June 1997, the Financial Accounting Standards Board issued SFAS
              No. 131,  "Disclosures about Segments of an Enterprise and Related
              Information."  SFAS  No.131  establishes  a  standard  for the way
              public business  enterprises  are to report  selected  information
              about  operating  segments.   The  determination  of  an  entity's
              operating segments is based upon a management approach,  including
              the way management organizes the segment within the enterprise for
              making operating decisions and assessing  performance.  Management
              currently  reviews  financial  data  at  the  highest  level,  the
              conducting of public  auctions.  Therefore,  under the  management
              approach of SFAS No.  131,  there is only one  operating  segment.
              Accordingly,  SFAS No. 131 did not have a  material  impact on the
              combined financial statements.

(2)    Related Party Transactions

       Gross auction  proceeds from the sale of consigned  goods on behalf of an
       affiliated  company  aggregated  $3,031,000, $3,445,000 and $470,000 from
       which  the  Company  earned   commissions,   buyers'  premiums  and  fees
       aggregating  $422,000,  $536,000  and $70,000  for the nine months  ended
       September  30,  1999 and the  years  ended  December  31,  1998 and 1997,
       respectively.

       The Company leases one of its office and yard facilities from an informal
       partnership  in which a partner is also the  stockholder  of the Company.
       See note 6.

(3)    Leasehold Interest

       Property and equipment  includes a leasehold interest valued at $726,000,
       the cash  consideration  paid,  representing  the Company's  right to use
       certain land, land improvements and a building through May 8, 2031.

(4)    Bank Credit Lines

       The Company had two lines of credit  with two  different  banks for total
       available  borrowings of $3,500,000.  The Company's  first credit line of
       $1,000,000  at  December  31, 1997 was reduced to $500,000 as of December
       31,  1998.  Borrowings  under this  agreement  require  monthly  interest
       payments at the bank's prime rate.  As of December  31, 1998,  no amounts
       were outstanding under this line of credit. The second line of credit was
       entered into in 1998 and provides for maximum  borrowings of  $3,000,000.
       Borrowings of $1,229,000  and $929,000 were  outstanding  as of September
       30, 1999 and December 31, 1998 and require monthly  interest  payments at
       the bank's prime rate plus 1%.





                                      F-47
<PAGE>


                           Nationwide Auction Systems

                     Notes to Combined Financial Statements

                    September 30, 1999 and December 31, 1998



       The  second  credit  line  includes  financial  covenants  with which the
       Company is in  compliance  as of  December  31,  1998.  No  amounts  were
       outstanding under either line at December 31, 1997. The first credit line
       expired on June 30, 1999,  and the second credit line expires on December
       8, 2000.  Both credit  lines are secured by the assets of the Company and
       have been personally guaranteed by the stockholder of the Company.

       The  second  line  of  credit  agreement  contains  various   restrictive
       covenants,  that among other restrictions  require Nationwide to maintain
       minimum levels of tangible net worth, debt to net worth and profitability
       levels.  In  addition,  the  second  line of credit  agreement  prohibits
       changes in ownership of Nationwide.  At September 30, 1999 Nationwide was
       not in compliance  with the provisions of this line of credit  agreement.
       The bank has waived the  conditions  of  non-compliance  that  existed at
       September 30, 1999 and has subsequently amended the loan agreement.


(5)    Long-Term Debt

       Long-term debt at December 31, 1998 is summarized as follows:

       Note payable, due August 28, 1999,
           with interest at 10.25% per annum,
           secured by property and equipment,
           principal and interest payable
           monthly in equal installments of $2,563               $   20,000
       Note payable, due January 1, 2009,
           with interest at 8%
           secured by real estate                                 2,222,000
       Note payable, due January 1, 2004,
           with interest at 8.25%,
           secured by real estate                                   513,000
                                                                 ----------
                                                                  2,755,000
       Less current installments                                    124,000
                                                                 ----------
                                                                 $2,631,000
                                                                 ==========



       The Company obtained  approximately  $2,735,000 in notes payable in order
       to  purchase  real  estate in 1998.  The  Company  has moved its  auction
       facilities to the newly  purchased real estate and has vacated its leased
       auction  facilities in Northern  California.  All long-term debt has also
       been personally guaranteed by the stockholder of the Company.

       Total  principal  repayments  under all  long-term  debt  agreements  are
       summarized as follows:

                             1999                  $    124,000
                             2000                       124,000
                             2001                       135,000
                             2002                       147,000
                             2003                       159,000
                             Thereafter               2,066,000
                                                     ----------
                                                   $  2,755,000
                                                     ==========



                                      F-48
<PAGE>


                           Nationwide Auction Systems

                     Notes to Combined Financial Statements

                    September 30, 1999 and December 31, 1998



(6)    Commitments

       The Company leases certain  equipment and facilities under  noncancelable
       operating  leases.  Future  minimum rental  payments  required under such
       operating leases are summarized as follows as of December 31, 1998:

                      Year ending December 31:
                          1999                       $    521,000
                          2000                            469,000
                          2001                            379,000
                          2002                            306,000
                          2003                            252,000
                          Thereafter                      420,000
                                                       ----------
                                                     $  2,347,000
                                                       ==========


       The Company leases one of its office and yard facilities from an informal
       partnership in which a partner is the stockholder of the Company.  Rental
       payments  aggregating $178,000 and $257,000 and $249,000 were made by the
       Company to this  partnership for the nine months ended September 30, 1999
       and the years  ended  December  31, 1998 and 1997,  respectively.  Future
       lease  commitments  under this  agreement and included in the table above
       approximate $1,700,000.

       Total rent and related  expenses for the nine months ended  September 30,
       1999 and the years ended  December 31, 1998 and 1997,  including  related
       party rents, aggregated $688,000,  $652,000 and $627,000 respectively.


(7)    Sale of Note Receivable

       During 1997, the Company sold certain nonperforming notes receivable from
       companies  which  are  affiliated  by  their  common   ownership  by  the
       shareholder of the Company to an unrelated  party resulting in a net loss
       of $399,000 which is included in other expenses  (income) in the combined
       statement of earnings and retained earnings for 1997.






                                      F-49
<PAGE>


                           Nationwide Auction Systems

                     Notes to Combined Financial Statements

                    September 30, 1999 and December 31, 1998




(8)    Profit Sharing Plan

       The Company  has a  qualified,  noncontributory  profit  sharing  plan in
       effect  for  certain   eligible   employees.   The  plan   provides   for
       contributions  by the Company in such  amounts as the Board of  Directors
       may annually determine.  There were no contributions made to the plan for
       the nine months ended September 30, 1999 and the years ended December 31,
       1998 and 1997.


(9)    Stockholder's Equity

       During  1997,  real  estate  with  a  net  book  value  of  $585,000  was
       distributed  to the  stockholder.  Also during 1997,  real estate related
       debt of $54,000 was transferred to the stockholder.


(10)   Contingencies

       The Company is subject to legal  proceedings and claims,  which arise, in
       the  ordinary  course of  business.  In the  opinion of  management,  any
       ultimate  liability  with respect to these  actions  will not  materially
       affect the financial statements of the Company taken as a whole.


(11)   Subsequent Events (Unaudited)

       On October 19, 1999, Entrade Inc.  ("Entrade")  completed the acquisition
       of all of the outstanding  capital stock of Nationwide for  consideration
       consisting  of the  following:  (a) an aggregate  of 1,650,000  shares of
       Entrade  common stock,  including  80,000 shares of Entrade  common stock
       issued in payment of finders fees in  connection  with the  transacation;
       (b) promissory  notes (the "Notes") in the aggregate  principal amount of
       $4,800,000, maturing on November 29, 1999; (c) an aggregate of $6,000,000
       cash;  and (d)  promissory  notes  (the "Term  Notes")  in the  aggregate
       principal amount of $14,000,000,  maturing October 1, 2001. The Notes and
       the Term Notes bear  interest at an annual rate of 8%.  Entrade  paid the
       cash portion of the purchase price with its existing cash assets.

       In January 2000, the Notes with a principal amount of $4,800,000,  net of
       amounts  due  from  a  selling  shareholder  of  $139,000,  plus  accrued
       interest, were converted into 278,985 shares of Entrade common stock.

       In March 2000 the Entrade  entered into an agreement  with the Nationwide
       selling shareholders to convert the term notes with a remaining principal
       balance  of  approximately  $10,500,000  into  265,621  shares of Entrade
       common stock.  The notes  originally  provided for principal  payments of
       $3,500,000 in October 2000 and $7,000,000 in October 2001.  Completion of
       this transaction is subject to approval by the Entrade's shareholders.

       As  discussed  in  Note  5, in  1998  Nationwide  obtained  approximately
       $2,735,000  in notes  payable in order to  purchase  real  estate.  As of
       October 19, 1999,  Nationwide was not in compliance  with one of the note
       agreements.  The  lender  did not  consent  to the  change  in  ownership
       relating to Entrade's acquisition of Nationwide.  In March 2000 this debt
       obligation of  approximately  $2,100,000 was paid with funds available on
       Nationwide's line of credit agreement and funds from operations.














                                      F-50
<PAGE>




                                INDEX OF EXHIBITS



     Exhibit Number

         2.1               Agreement and Plan of Merger dated as of February 23,
                           1999 among Artra,  WorldWide Web NetworX  Corporation
                           ("WWWX"), NA Acquisition Corp. ("NAAC") (now known as
                           Entrade  Inc.)  and  WWWX  Merger  Subsidiary,  Inc.;
                           Amendment to Agreement and Plan of Merger dated as of
                           April 30, 1999;  Second  Amendment  to Agreement  and
                           Plan of Merger dated as of May 14, 1999. (1)

         3.1               Articles of Incorporation of Entrade. (1)

         3.2               Bylaws of Entrade. (1)

         3.3               Statement   with   Respect  to  Shares  of  Series  A
                           Convertible  Preferred Stock of Entrade Inc. as filed
                           with   the   Secretary   of   Commonwealth   of   the
                           Commonwealth of Pennsylvania on March 24, 2000. (8)

         *4.1              Restated 1985 Stock Option Plan. (6)

         *4.2              1996 Stock Option Plan; (6)

         *4.3              1996 Disinterested Directors Stock Option Plan; (6)

         *4.4              1999 Employment Agreement Option (6)

         *4.5              1999 Stock  Option Plan for  Non-Executive  Employees
                           (7)

         *4.6              1999  Non-qualified  Stock  Option  Plan of Artra and
                           form of Non-Qualified Stock Option Agreement. (1) 4.7
                           Form of Warrant to Purchase Common Stock. (3)

         *4.8              Warrant to Purchase Common Stock dated as of February
                           7, 2000 granted to Braden Sutphin Ink Company. (4)

         4.9               Warrant  Agreement  and Form of Warrant  to  Purchase
                           Common  Stock of  Entrade  Inc.  dated as of March 9,
                           2000  between  Entrade  Inc.  and  Textron  Financial
                           Corporation

         4.10              Form of Warrant to Purchase  Common  Stock of Entrade
                           Inc.   dated  March  24,  2000,   issued  to  certain
                           investors. (8)

         10.1              Acquisition  Agreement  dated as of February 23, 1999
                           between WWWX and NAAC. (1)

         10.2              Bill of Sale and  Instrument  of  Assignment  of WWWX
                           dated February 23, 1999. (1)

         10.3              Promissory  Note dated as of February 23, 1999 in the
                           principal  amount of $500,000 issued by NAAC to WWWX.
                           (1)

         10.4              Agreement  dated as of February 16, 1999 among Energy
                           Trading  Company,  WorldWide Web NetworX  Corporation
                           and NAAC. (1)

         10.5              Loan Agreement  dated as of February 23, 1999 between
                           Artra and NAAC. (1)





                                      E-1
<PAGE>


         10.6              Promissory  Note dated as of February 23, 1999 in the
                           principal  amount  of  $1,400,000  issued  by NAAC to
                           Artra. (1)

         10.7              Guaranty  dated as of February  23, 1999 made by WWWX
                           in favor of Artra to secure the  obligations of NAAC.
                           (1)

         10.8              Pledge  Agreement  dated  as  of  February  23,  1999
                           between Artra and NAAC. (1)

         10.9              Security  Agreement  dated as of  February  23,  1999
                           between Artra and NAAC. (1)

         *10.10            Employment  Agreement  dated as of February  23, 1999
                           between Artra and Robert D. Kohn. (1)

         *10.11            Employment  Agreement as of February 23, 1999 between
                           Artra and Benjamin Kafka. (1)

         *10.12            Employment  Agreement  dated as of February  23, 1999
                           between Artra and Gary Lerman (1)

         *10.13            Employment  Agreement  dated as of February  23, 1999
                           between Artra and Mark L.M. Quinn.  (1)

         10.14             Finders  Agreement  between Artra and Jeffrey Newman.
                           (1)

         10.15             Agreement  dated as of December  11, 1998 among Henry
                           Butcher USA, Inc.,  Michael Fox  International,  Inc.
                           Butcher Fox, LLC,  Positive Asset  Remarketing,  Inc.
                           and asseTrade.com, Inc. (1)

         10.16             Software  License  Agreement dated as of December 11,
                           1998 between  asseTrade.com,  Inc. and  BarterOne LLC
                           (d/b/a entrade.com). (1)

         10.17             Stock Purchase Agreement dated as of October 15, 1999
                           among Entrade Inc., Don Haidl,  Corey P. Schlossmann,
                           Peggy  Haidl,  as trustee of the Capital  Direct 1999
                           Trust  and  the  Core   Capital   IV  Trust,   Public
                           Liquidation  Systems,  Inc.,  and  Asset  Liquidation
                           Group,  Inc.  and  the  Closing  Letter  dated  as of
                           October  15,  1999  among  all  parties  to the Stock
                           Purchase  Agreement,   without  schedules  and  other
                           exhibits.  Entrade  agrees to furnish  supplementally
                           copies of these schedules and other exhibits  omitted
                           to the Commission upon request. (2)

         10.18             Promissory  Note  dated as of October  15,  1999 from
                           Entrade  to Don  Haidl,  in the  principal  amount of
                           $4,320,000. (2)

         10.19             Promissory  Note  dated as of October  15,  1999 from
                           Entrade  to Corey P.  Schlossmann,  in the  principal
                           amount of $480,000. (2)

         10.20             Promissory  Note  dated as of October  15,  1999 from
                           Entrade  to Don  Haidl,  in the  principal  amount of
                           $12,600,000. (2)

         10.21             Promissory  Note  dated as of October  15,  1999 from
                           Entrade  to Corey P.  Schlossmann,  in the  principal
                           amount of $1,400,000. (2)

         *10.22            Employment  Agreement  dated as of October  15,  1999
                           between Entrade and Corey P. Schlossmann. (2)

         *10.23            Stock Option  Agreement  dated as of October 15, 1999
                           between Entrade Inc. and Corey P. Schlossmann. (2)




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<PAGE>


         10.24             Stock  Restriction and Registration  Rights Agreement
                           dated as of October 15, 1999 between Entrade Inc. and
                           the Sellers. (2)

         *10.25            Employment  Agreement dated November 11, 1999 between
                           Entrade and Mark P. Miller. (4)

         *10.26            Employment  Agreement dated November 11, 1999 between
                           Entrade and Carrie L. Shea. (4)

         *10.27            Employment  Agreement  dated October 22, 1999 between
                           Entrade and Anthony E. Rothschild. (4)

         10.28             Subscription and Investment  Representation Agreement
                           entered  into by  Flybridge  & Company - Sun  America
                           Growth  Opportunities  Fund on December  20, 1999 and
                           accepted by Entrade on December 21, 1999. (3)

         10.29             Subscription and Investment  Representation Agreement
                           entered into by Parisa  Company - Style Select Series
                           Aggressive  Growth Portfolio on December 20, 1999 and
                           accepted by Entrade on December 21, 1999. (3)

         10.30             Subscription and Investment  Representation Agreement
                           entered  into by  Fleetfooted  & Company - SunAmerica
                           Small  Company  Growth Fund on December  20, 1999 and
                           accepted by Entrade on December 21, 1999. (3)

         10.31             Subscription and Investment  Representation Agreement
                           entered  into by  Flagline  &  Company  -  SunAmerica
                           Series Trust Aggressive  Growth Portfolio on December
                           20,  1999 and  accepted  by Entrade on  December  21,
                           1999. (3)

         10.32             Subscription  and Investment  Registration  Agreement
                           entered  into by  Sisyphus  & Company - Style  Select
                           Series Mid-Cap Growth  Portfolio on December 20, 1999
                           and accepted by Entrade on December 21, 1999. (3)

         10.33             Subscription  and Investment  Registration  Agreement
                           entered  into by Stewart  Greenebaum  on December 23,
                           1999 and  accepted  by the  Company on  December  23,
                           1999. (3)

         10.34             Subscription  and Investment  Registration  Agreement
                           entered into by James Filler on December 30, 1999 and
                           accepted by the Company on December 30, 1999. (3)

         10.35             Subscription  and Investment  Registration  Agreement
                           entered into by Elliott Associates, L.P. and Westgate
                           International, L.P. on December 30, 1999 and accepted
                           by the Company on December 30, 1999. (3)

         10.36             Subscription  and Investment  Registration  Agreement
                           entered into by Lunn Partners Multiple  Opportunities
                           Portfolio L.P. on January 3, 2000 and accepted by the
                           Company on January 3, 2000. (3)

         10.37             Subscription  and Investment  Registration  Agreement
                           entered into by Dr. Richard A. Chaifetz on January 3,
                           2000 and  accepted by the Company on January 5, 2000.
                           (3)

         10.38             Agreement and Plan of Merger dated as of December 31,
                           1999 among Entrade, Inc., Positive Asset Remarketing,
                           Inc.,   a   Nevada   corporation,    Positive   Asset
                           Remarketing,   Inc.,  a  Massachusetts   corporation,
                           Robert D.  Kohn,  Benjamin  Kafka,  Mark  Quinn,  and
                           Entrade Merger Subsidiary, Inc. (3)





                                      E-3
<PAGE>


         10.39             Subscription  and Investment  Registration  Agreement
                           entered into by A.T.  Kearney on January 28, 2000 and
                           accepted by the Company on January 28, 2000. (4)

         10.40             Stock Purchase Agreement dated January 26, 2000 among
                           Entrade, Inc., Warren Rothstein, Thomas Settineri and
                           Gary Levi. (5)

         10.41             Investment  Agreement  dated as of February  18, 2000
                           among entrade.com, Inc. and TradeTextile.com. (5)

         10.42             Term Sheet  dated as of  February  10,  2000  between
                           Entrade and Associates Commercial Corporation. (5)

         10.43             Operating Agreement Of Assetcontrol.Com,  LLC made as
                           of March 9, 2000.

         10.44             Contribution  Agreement  dated as of  March  9,  2000
                           between Entrade Inc. and AssetControl.com, LLC;

         10.45             Non-Competition  Agreement  dated as of March 9, 2000
                           among   AssetControl.com,   LLC,  Textron   Financial
                           Corporation, Entrade Inc. and ATM Service, Ltd.;

         10.46             Credit Agreement dated as of December 8, 1998 between
                           Asset Liquidation Group, Inc. and Imperial Bank.

         10.47             Modification  And  Amendment  To Standard  Industrial
                           Lease-Special   Net  dated   September  1,  1990,  as
                           modified  on August 20,  1993  ("Amendment")  entered
                           into  effective  as of the 15th day of October,  1999
                           ("Effective  Date"),   between  Guy  Christensen  and
                           Jeanne Christensen, husband and wife; Rudy Macias and
                           Tina Macias,  husband and wife; and Don G. Haidl,  an
                           unmarried man (hereinafter  collectively  referred to
                           as  "Lessor"  or  "Landlord")  and Asset  Liquidation
                           Group, Inc.  (hereinafter  referred to as "Lessee" or
                           "Tenant").

         10.48             Promissory  Note  Satisfaction  Agreement dated as of
                           March 10, 2000, between Entrade Inc. and Don Haidl.

         10.49             Promissory  Note  Satisfaction  Agreement dated as of
                           March  10,  2000,  between  Entrade  Inc.  and  Corey
                           Schlossmann.

         10.50             Registration Rights Agreement,  dated as of March 24,
                           2000,  among  Entrade  Inc. and the  investors  named
                           therein. (8)

         10.51             Securities  Purchase  Agreement,  dated  as of  March
                           24,2000,  among Entrade Inc. and the investors listed
                           on the Schedule of Buyers attached thereto. (8)

         21                Subsidiaries.

         23.1              Consent of PricewaterhouseCoopers LLP.

         23.2              Consent of KPMG LLP.

         27                Financial Data Schedule




(1)  Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form  S-4  (Registration  No.  333-79175)  filed  with the  Securities  and
     Exchange Commission on May 24, 1999.







                                      E-4
<PAGE>


(2)  Incorporated by reference to the Registrant's Report on Form 8-K filed with
     the  Securities  and Exchange  Commission  on October 28,  1999.  (File No.
     1-15303).

(3)  Incorporated by reference to the Registrant's Report on Form 8-K filed with
     the  Securities  and Exchange  Commission  on January 25,  2000.  (File No.
     1-15303).

(4)  Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form  S-1  (Registration  No.  333-96523)  filed  with the  Securities  and
     Exchange Commission on February 10, 2000.

(5)  Incorporated by reference to the Registrant's Report on Form 8-K filed with
     the Securities and Exchange Commission on March 2, 2000. (File No 1-15303).

(6)  Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form S-8  (Registration  No.  333-  88039)  filed with the  Securities  and
     Exchange Commission on September 29, 1999.

(7)  Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form S-8  (Registration  No.  333-  91409)  filed with the  Securities  and
     Exchange Commission on November 22, 1999.

(8)  Incorporated by reference to the Registrant's Report on Form 8-K filed with
     the  Securities  and  Exchange  Commission  on March  29,  2000.  (File No.
     1-15303).





*    Compensatory Plan or management contract.














                                      E-5