TRANS GLOBAL SERVICES, INC.
                           1393 Veterans Memorial Hwy
                            Hauppauge, New York 11788

March 30, 2001

Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549

Dear Sirs:

Pursuant to regulations of the Securities and Exchange Commission, submitted
herewith for filing on behalf of Trans Global Services, Inc. (the "Company") is
the Company's Annual Report on Form 10-K for the year ended December 31, 2000.

This filing is being effected by direct transmission to the Commission's EDGAR
System.

Very truly yours,

Glen R. Charles
Chief Financial Officer

































<PAGE>
Trans Global Services, Inc. Form 10-K 12/31/00
Form 10-K 12/31/00

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
-------------------
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ________

                           Commission File No. 0-23382
                        Trans Global Services, Inc.
                (Exact name of Company as Specified in its Charter)

     Delaware                                    62-1544008
(State or other jurisdiction of               (I.R.S. employer
incorporation or organization)                identification no.)

1393 Veterans Memorial Hwy.,
   Hauppauge, New York                            11788
(Address of principal executive offices)        (Zip Code)

Issuer's telephone number, including area code:  (631) 724-0006

Securities registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act:
        Title of Each Class
Common  Stock,  par value .01 per share

Indicate by a check mark whether the Company (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 twelve months (or such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by a 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 Company's  knowledge,  in  definitive  proxy or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock as of March 28, 2001: $ 421,875

State the  number of shares  outstanding  of each of the  Company's  classes  of
common stock as of March 30, 2001: 3,364,295  shares of Common Stock,  par value
$.01 per share.

        DOCUMENTS INCORPORATED BY REFERENCE: None



<PAGE>      2

        PART I

Item 1. Business.

Trans Global Services, Inc. is engaged in providing technical temporary staffing
services. In performing such services, we address the current trend of major
corporations in "downsizing" and "outsourcing" by providing engineers, designers
and technical personnel on a temporary contract assignment basis pursuant to
contracts with major corporations. The engagement may relate to a specific
project or may cover an extended period based on the client's requirements. We
believe that the market for outsourcing services such as those which we offer
results from the trend in employment practices by major corporations principally
in the aircraft and aerospace industries as well as the electronics, energy,
telecommunications, banking and computer science industries and public utilities
industries to reduce their permanent employee staff and to supplement their
staff with temporary personnel on an as-needed basis. We seek to offer our
clients a cost-effective means of work force flexibility and the elimination of
the inconvenience associated with the employment of temporary personnel, such as
advertising, initial interviewing, fringe benefits and record keeping. Although
the employees provided by the Company are on temporary contract assignment, they
work with the client's permanent employees; however, they may receive different
compensation and benefits than permanent employees.

In providing our services, we engage the employees, pay the payroll and related
costs, including FICA, worker's compensation and similar Federal and state
mandated insurance and related payments. We charge our clients for services
based upon the hourly payroll cost of the personnel. Each temporary employee
submits to us a weekly time sheet with work hours approved by the client. The
employee is paid on the basis of such hours, and the client is billed for those
hours at agreed upon billing rates.

Our strategy has been directed at increasing our customer base and providing
additional services, such as integrated logistics support, to our existing
customer base. We believe that the key to profitability is to provide a range of
services to an increased customer base. In this connection, we are increasing
our marketing effort both through our own personnel and in marketing efforts
with other companies that offer complementary services.


















<PAGE>      3
Item 1. Business [Continued]

Our Organization
We are a Delaware corporation which was incorporated in September 1993 under the
name Concept Technologies Group, Inc.  Our executive offices are
located at 1393 Veterans Memorial Hwy., Hauppauge, New York 11788, telephone
(631) 724-0006.

Our operations are conducted  through our two  subsidiaries,  Avionics  ReseArch
Holdings, Inc. and Resource Management International, Inc.

References to us refer to us and our subsidiaries, unless the context indicates
otherwise.


Forward-Looking Statements

The statements in this Form 10-K Annual Report that are not descriptions of
historical facts may be forward-looking statements that are subject to risks and
uncertainties. In particular, statements in this Form 10-K Annual Report,
including any material incorporated by reference in this Form 10-K, that state
our intentions, beliefs, expectations, strategies, predictions or any other
statements relating to our future activities or other future events or
conditions are "forward-looking statements." Forward-looking statements are
subject to risks, uncertainties and other factors, including, but not limited
to, those identified under "Risk Factors," those described in Management's
Discussion and Analysis of Financial Conditions and Results of Operations and
those described in any other filings with the Securities and Exchange
Commission, as well as general economic conditions, any one or more of which
could cause actual results to differ materially from those stated in such
statements.

Risk Factors

Our clients are concentrated in the aircraft and aerospace industries, which has
resulted in a downturn in our business because of the downturn in business from
these industries

Our three largest clients for 2000 and 1999 were in the aircraft and aerospace
industries, accounting for revenue of approximately $13.4 million, or 58% of
revenue, in 2000, and $17 million, or 47% of revenue, in 1999. Revenue from
Lockheed Martin, which was our largest client in 2000, declined from $7.3
million, or 20.2% of revenue, in 1999 to $5.7 million, or 24.5% of revenue, in
2000. These decreases can be attributed to the slowdown in the aircraft and
aerospace industries. We cannot assure you that we will be able to increase our
revenue from the aircraft and aerospace industries or to develop any significant
client base in other industries.









<PAGE> 4

We do not have substantial working capital which could impair our ability to
operate.

At December 31, 2000,  we had working  capital of $102,000,  sufficient  to meet
only  our   present   needs.   Our   current   assets,   include   a  note  from
i-engineering.com,   a  start-up  company  which  requires   financing  for  its
operations,  in the  principal  amount  of  $200,000,  plus  interest,  of which
$150,000   plus   interest   remains   outstanding   and  due  March  31,  2001.
i-engineering.com  has requested that we accept a partial  payment  immediately,
and extend the time for payment of the balance of the note. The request is under
consideration  by the board of  directors.  We cannot  assure you that this note
will be paid. If  i-engineering.com  fails to make payment,  it could impair our
operations, and, even if i-engineering.com makes payment our failure to increase
our working capital could impair our ability to continue our operations.

We incurred losses during 2000 and our losses are continuing.

As a result of the decline in business from our clients in the aircraft and
aerospace industries, we sustained a loss of $1.9 million, or $.67 per share
(basic and diluted) for 2000. We cannot assure you that we will be able to
generate profits in the future.

Our credit agreement expires in June 2001, and we cannot assure you that we will
be able to renew or replace it.

Our  principal  source of cash  during  2000 was our  credit  facility  with our
asset-based lender. This facility expires in June 2001. We require this facility
in order to meet our payroll  obligations  since we pay our employees  before we
receive  payment from our customers.  We may not be able to continue in business
unless we are able to extend our credit facility or otherwise  obtain  necessary
financing, and the terms of any  financing  which is available to us may be less
favorable to us that the terms of our present credit arrangement.

Because of our financial position, we may have difficulty generating business in
a highly competitive industry.

The temporary technical staffing business is highly competitive with respect to
both employers and employees. In order to attract both clients and employees, we
must show that we have the financial capability to meet our obligations and we
must offer employees benefits that our competitors offer. Our financial position
has in the past limited our ability to grow. Our current financial position,
particularly our limited working capital, may increase the difficulty in both
retaining existing clients and obtaining new clients.

We need to offer direct payroll deposit to our employees.

At present, because of our financial position, we do not offer our employees a
direct deposit payroll program by which we deposit the employees' compensation
directly into their bank accounts so that the employee's money will be
immediately available. Employees believe that direct payroll deposit is an
important element to consider in evaluating employment opportunities. In order
to offer this service, we require significant additional funds, and these funds
are not available to us. We believe that our ability to attract new clients will
continue to be impaired by our inability to offer employees direct payroll
deposit.


<PAGE>  5

Item 1. Business [Continued]

Our business may be impaired by any trends in employment practices which result
in temporary staffing employees being treated the same as permanent employees.

Our temporary staffing business is based in part on providing employees at a
lower cost than employers would pay permanent employees.  Many of the temporary
employees work with permanent employees and perform similar duties.  Our
business would be impaired if temporary employees are required to be treated
like permanent employees, whether as a result of labor negotiations, court or
administrative decisions, legislation or regulation, or other factors outside
of our control.

We need to attract qualified employees to service our clients.

We are dependent upon both our ability to obtain contracts with clients and to
provide those clients with qualified employees. The market for qualified
personnel is highly competitive, and we compete with other companies in
obtaining contracts with potential clients and in attracting employees.

We may be held liable for the actions of our employees when on assignment.

Although our client agreements disclaim responsibility for the conduct of our
employees, we may be exposed to liability with respect to actions taken by our
employees while on assignment, such as damages caused by their errors, misuse of
client proprietary information or theft of client property. We do not maintain
insurance coverage against this risk. Due to the nature of our assignments, we
cannot assure you that we will not be exposed to liability as a result of our
employees being on assignment.

We are dependent upon our management.

Our business is dependent upon our senior executive officers, principally Mr.
Joseph G. Sicinski, president and chief executive officer, who is responsible
for the Company's operations, including marketing and business development.
Although we have an employment agreement with Mr. Sicinski, the agreement does
not guarantee that he will continue in his employment with us. Our business may
be adversely affected if any of our key officers left our employ.

We may consider an acquisition.

We may seek to address our lack of liquidity through an acquisition. Any
acquisition may result in a change of control and substantial dilution to our
stockholders. An acquisition may also result in a significant change in our
business. We cannot assure you that we will be able to complete any acquisition
on terms that are favorable to us or our stockholders or will result in
increased liquidity or profitable operations.

We do not anticipate paying dividends on our common stock.

We presently intend to retain future earnings, if any, in order to provide funds
for use in the operation and expansion of our business and, accordingly, we do
not anticipate paying cash dividends on our Common Stock in the foreseeable
future.


<PAGE>  6
Item 1. Business [Continued]

The rights of the holders of common stock may be impaired by the potential
issuance of preferred stock.

Our certificate of incorporation gives our board of directors the right to
create new series of preferred stock. As a result, the board of directors may,
without stockholder approval, issue preferred stock with voting, dividend,
conversion, liquidation or other rights which could adversely affect the voting
power and equity interest of the holders of common stock. The preferred stock,
which could be issued with the right to more than one vote per share, could be
utilized as a method of discouraging, delaying or preventing a change of
control. The possible impact on takeover attempts could adversely affect the
price of our common stock. Although we have no present intention to issue any
additional shares of preferred stock or to create any series of preferred stock,
we may issue such shares in the future.

Our common stock is subject to the SEC's penny-stock rules.

Our  common  stock is  subject  to the SEC's  penny-stock  rules,  which  impose
additional sales practice requirements on broker-dealers which sell our stock to
persons other than established customers and institutional accredited investors.
These rules may affect the ability of  broker-dealers  to sell our common  stock
and may affect the ability of our stockholders to sell any common stock they may
own.

Shares may be issued pursuant to options and warrants.

We may issue stock upon the  exercise of options to purchase up to an  aggregate
784,829  shares of common stock  pursuant to our long-term  incentive  plans and
warrants to purchase an aggregate of 1,429,162 shares.

Markets and Marketing

The market for our services is comprised of major corporations in such
industries as aircraft, aerospace, electronics, energy, engineering, computer
services and telecommunications, where "downsizing" and "outsourcing" have
become an increasingly important method of cost reduction. Typically, a client
enters into an agreement with one or a small number of companies to serve as
employer of record for its temporary staff, and its agreements are terminable by
the client without significant notice.

We maintain a computerized data base of technical personnel based upon their
qualifications and experience. The data base, which contains more than 100,000
names, is generated through employees previously employed by us, referrals and
responses to advertisements placed by us in the media, including newspapers,
yellow pages, magazines and trade publications. Part of our responsibilities for
any engagement is the recruitment and initial interviewing of potential
employees, with the client conducting any final interviews it deems necessary.
The majority of work performed by our employees is performed at the client's
premises and under the client's direction, although we are the employer of
record.

We market our services to potential clients through our officers, management and
recruitment personnel who seek to provide potential clients with a program
designed to meet the client's specific requirements. The marketing effort
utilizes referrals from other clients, sales calls, mailings and telemarketing.

We also conduct an ongoing program to survey and evaluate the clients' needs and
satisfaction with our services, which we use as part of our marketing effort.

Although we have five offices, including our main office in Long Island, New
York, throughout the United States, there are no limited geographic markets for
our services. We have in the past established offices in new locations when we



<PAGE>    7

Item 1.  Business [Continued]

receive a contract in the area and we cannot effectively service such contract
from our existing offices. We intend to continue to establish new offices as
necessary to meet the needs of our customers.

A client will utilize contract engineering services such as those provided by us
when it requires a person with specific technical knowledge or capabilities
which are not available from the client's permanent staff or to supplement its
permanent staff for a specific project or to meet peak load requirements. When
the client requires personnel, it provides us with a detailed job description.
We then conduct an electronic seArch in our computerized resume data base for
candidates matching the job description. In addition, each branch office
maintains a file of active local resumes for candidates available for assignment
in the vicinity of the branch office. The candidates are then contacted by
telephone by our recruiters, who interview interested candidates. If a candidate
is acceptable to us and interested in the position, we refer the candidate to
the client. An employment agreement is executed with us prior to the
commencement of employment.

We serve primarily the aircraft and aerospace industries as well as the
electronics, energy, telecommunications, banking and computer science industries
and public utilities along with numerous manufacturing companies. We are
expanding our effort to address the general trend of "downsizing" and
"outsourcing" by major corporations on a national basis. To meet this goal, we
have commenced a national sales campaign addressing a broad spectrum of Fortune
500 companies, offering a managed staffing service to those companies in the
process of downsizing and outsourcing specific functions. Since a company
engaged in downsizing seeks to focus on its core business needs with its
in-house staff, we seek to identify and address the needs of a specific task or
department not part of the core business for which outsourcing would be an
appropriate method of addressing those needs. In addressing these needs, we have
conducted marketing efforts with Manpower International, Inc., Adecco and Olsten
Corporation.

Our contracts are generally terminable by the client on short notice.

The following table shows the revenue and the percentage of our total revenue
from those clients that accounted for at least 5% of our revenue in 2000:

Client                        Revenue          Percent
Lockheed-Martin            $ 5.7 million        24.5%
Bell Helicopter Textron      4.1 million        17.8%
Boeing                       3.6 million        15.5%
Gulfstream Aerospace         2.2 million         9.3%









<PAGE>   8

Item 1.  Business [Continued]

The  following  table shows the revenue and the  percentage of our total revenue
from our largest clients in 1999:
Client                        Revenue             Percent
Lockheed-Martin           $7.3 million             20.2%
Bell Helicopter Textron    4.9 million             13.7%
Boeing                     4.6 million             12.8%
Gulfstream Aerospace       3.0 million              8.2%
Northrop Grumman           2.8 million              7.9%
CDI Corp.                  2.4 million              6.7%

Competition

The business of providing employees on either a permanent or temporary basis is
highly competitive and is typically local in nature. We compete with numerous
technical service organizations, a number of which are better capitalized,
better known, have more extensive industry contacts and conduct extensive
advertising campaigns aimed at both employers and job applicants than we have.
We believe that the ability to demonstrate a pattern of providing reliable
qualified employees is an important aspect of developing new business and
retaining existing business. Furthermore, our ability to generate revenue is
dependent not only upon our ability to obtain contracts with clients, but also
to provide these clients with qualified employees. The market for qualified
personnel is highly competitive, and we compete with other companies in
attracting employees. Our ability to increase our business with existing clients
or to attract other clients will be affected by our working capital.
Accordingly, our failure to increase our working capital may adversely effect
our ability to expand our business. In addition, our failure to offer employees
the direct deposit of their payroll may affect their willingness to be employed
by us.

Government Regulations

The technical temporary staffing industry, in which we are engaged, does not
require licensing as a personnel or similar agency. However, as a provider of
personnel for other corporations, we are subject to Federal and state
regulations concerning the employment relationship, including those relating to
wages and hours and unemployment compensation. We also maintain a 401(k) plan
for our employees and we are subject to regulations concerning such plan.

We do not have contracts with any government agencies. However, our clients
include major defense contractors, that have contracts with government agencies.
Our contracts with our clients are based on hourly billing rates for each
technical discipline. Many of the clients' contracts with government agencies
are subject to renegotiation or cancellation for the convenience of the
government. Since the manpower needs of each of our clients are based on the








<PAGE>    9
Item 1.  Business [Continued]

clients own requirements and the clients' needs are affected by any modification
in requirements, any reduction in staffing by a client resulting from
cancellation or modification of government contracts could adversely impact our
business.

Employees

At December 31, 2000, we had 321 employees, 297 of which were contract service
employees who performed services on the clients' premises and 24 were executive
and administrative employees. Each of our offices is staffed by recruiters and
sales managers. Each contract service employee enters into a contract with us
which sets forth the client for whom and the facility at which the employee's
services are to be performed and the rate of pay. If an employee ceases to be
required by our clients for any reason, we have no further obligation to the
employee. Although assignments can be for as short as 90 days, in some cases,
they have been for several years. The average assignment is in the range of six
to nine months. Our employees are not represented by a labor union, and we
consider our employee relationships to be good.

Executive Officers of the Company

The following are the executive officers of the Company as of March 31, 2001:

     Name            Age       Position with the Company
    -----            ----      -------------------------
Joseph G. Sicinski   69        Chief Executive Officer and President
Edward D. Bright     63        Chairman of the Board
Glen R. Charles      47        Chief Financial Officer, Secretary and Treasurer

Mr. Joseph G. Sicinski has been our president and a director  since May 1995 and
our chief  executive  officer since April 1998. He served in the same capacities
for our predecessors since 1992. For more than eight years prior thereto, he was
executive  vice  president  of corporate  marketing  for  Interglobal  Technical
Services,  Inc.,  which was engaged in providing  technical  temporary  staffing
services. Mr. Sicinski is also a director of Netsmart Technologies,  Inc., which
is a leading  supplier of enterprise  wide software  solutions for human service
providers.

Mr. Edward Bright has been our chairman of the board and a director  since April
1998.  Mr.  Bright is also the chairman of the Board of the Sagemark  Companies,
Ltd., a public  corporation  which was formerly our  principal  stockholder.  In
April 1998, Mr. Bright was also elected as chairman, secretary,  treasurer and a
director of The Sagemark Companies, Ltd.

Mr. Glen R. Charles has been our chief financial officer and treasurer since May
1995 and of our  predecessor  since January  1995. He has been  secretary of the
Company since April 1998 and a director  since May 1999.  Mr.  Charles served as
chief  financial  officer  of one  of our  subsidiaries  since  its  acquisition
November  1994.  From 1992 to  November  1994,  he was  engaged  in the  private
practice of accounting.

<PAGE>    10


Item 2. Description of Property.

We lease approximately 7,500 square feet of office facilities in Hauppauge, New
York, where we maintain our executive offices. We also rent modest office space
in Phoenix Arizona, Arlington Texas, Seattle Washington and Orlando Florida. Our
aggregate annual rent is approximately $200,000, which is subject to annual
increases. We believe that our present office space is adequate for our present
needs and that additional office space is readily available on commercially
reasonable terms.

Item 3. Legal Proceedings.

In November  1997,  an action was commenced in the Supreme Court of the State of
New York,  County of Suffolk,  by Ralph Corace against our subsidiary,  Resource
Management International, Inc. seeking damages of approximately $1.1 million for
an alleged  breach of contract by us. Mr.  Corace was the  president of Job Shop
Technical   Services,   Inc.,  from  which  we,  through   Resource   Management
International,  Inc.,  purchased  assets in November  1994.  We believe that the
action is  without  merit,  we are  contesting  this  matter  and we have  filed
counterclaims against Mr. Corace.



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

         No matters were voted upon during the fourth quarter of 2000.




























<PAGE>  11

                                        PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Our common stock is traded on OTC Bulletin Board Market under the symbol TGSI.
Prior to March 16, 2000, our common stock was traded on the Nasdaq SmallCap
Market.

The high and low closing price for the Company's Common Stock since January 1999
are as follows:
                                                      Common Stock
                                                    ---------------
                                                      High      Low
1999
  First Quarter                                      1.875        .75
  Second Quarter                                     1.75         .75
  Third Quarter                                      1.375        .6875
  Fourth Quarter                                      .7813       .4063

2000
  First Quarter                                      2.625      .563
  Second Quarter                                     1.1875     .75
  Third Quarter                                       .75       .125
  Fourth Quarter                                      .4531     .125


2001
  First Quarter (through March 28th)                  .4375     .125

The  closing  price for the common  stock on March 28,  2001 was  $.1875.  These
quotations reflect  inter-dealer  prices,  without retail mark-up,  mark-down or
commission and may not represent actual transactions.

As of February 28, 2001, we believe that there were approximately 1,500
beneficial holders of our common stock.

We have not paid dividends on our common stock since inception, and we do not
expect to pay any dividends for the foreseeable future.

During 2000, we issued the following equity securities.

In January 2000, we issued  $1,000,000  of  subordinated  notes in the principal
amount of $1,000,000.  In connection  with the financing,  we issued warrants to
purchase  250,000 shares of common stock at $.35 per share to the investors.  In
addition,  we issued warrants to purchase 300,000 shares of common stock at $.35
per share to SG Martin  Securities,  LLC, the placement  agent. We also issued a
warrant to  purchase  25,000  shares of common  stock at $.35 per share,  to Mr.
James Conway, a director, for services relating to the financing.

Pursuant to a restated  agreement  dated  January 21,  2000,  we issued  270,000
shares of common stock to i-engineering.com. In December 2000, i-engineering.com
returned  those shares to us. For  information  concerning  our  agreement  with
i-engineering.com,   see   "Item   13.   Certain   Relationships   and   Related
Transactions."
















<PAGE>      12
Item 6.  Selected Financial Data.
                             TRANS GLOBAL SERVICES, INC.
                              SELECTED FINANCIAL DATA
                        (In thousands, except per share amounts)

Set forth below is selected financial data with respect to the Company for the
years ended December 31, 2000, 1999, 1998, 1997 and 1996. The selected financial
data for the years ended December 31, 2000, 1999 and 1998 have been derived from
the financial statements which appear elsewhere in this Report. The data for the
years ended December 31, 1997 and 1996 have been derived from our audited
financial statements which are not included in this report. This data should be
read in conjunction with the financial statements of the Company and the related
notes which are included elsewhere in this Report.

Statement of Operations Data 1:
------------------------------
<TABLE>
<CAPTION>
<S>                                   <C>          <C>          <C>        <C>

                                                 Year Ended December 31,
                         -------------------------------------------------------

                                2000        1999         1998        1997       1996
        Revenue                $ 23,325      $ 36,015     $67,244    $75,725   $62,594
        Net (loss)income        (1,923)      ( 1,853)        805      1,023       (681)
        Net (loss)income per share
         of common stock (basic)(  .67)      (   .61)        .21        .27      ( .27)
        Weighted average number of
         shares of common stock
         outstanding             2,861         3,048       3,820      3,820      2,530
        Net (loss) income per
         share of common
         stock (diluted)        ( .67)        (  .61)        .21        .26      ( .27)
        Weighted average number of
         shares of common stock
         outstanding             2,861         3,048       3,831      3,889      2,530

Balance Sheet Data:
                                                      December 31,
                        -----------------------------------------------------
                            2000       1999         1998        1997        1996
        Working capital
         (deficiency)       $  102   $ (  156)   $  972    $   257      $  (755)
        Total assets         4,794      7,365    12,597     13,942       13,100
        Total liabilities    1,960      2,818     3,630      5,943        6,274
        Accumulated deficit (7,735)    (5,813)   (3,959)    (4,765)      (5,788)
        Stockholders' equity 2,834      4,547     8,967      7,999        6,826
</TABLE>




<PAGE> 13

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

Results of Operations

Years ended December 31, 2000, 1999, and 1998

Revenue from technical temporary staffing services is based on the hourly cost
of payroll plus a percentage. The success of our business will be dependent upon
our ability to generate sufficient revenue to enable it to cover our fixed costs
and other operating expenses, and to reduce our variable costs. Under our
agreements with our clients, we are required to pay our employees and pay all
applicable Federal and state withholding and payroll taxes prior to the receipt
of payment from the clients. Furthermore, our payments from our clients are
based upon the hourly rate paid to the employee, without regard to when payroll
taxes are payable with respect to the employee.

Accordingly, our cost of services are greater during the first part of the year,
when Federal Social Security taxes and state unemployment and related taxes,
which are based on a specific level of compensation, are due. Thus, until we
satisfy our payroll tax obligations, we will have a lower gross margin than
after such obligations are satisfied. Furthermore, to the extent that we
experience turnover in employees, our gross margin will be adversely affected.
For example, in 2001, Social Security taxes are payable on the first $80,400 of
compensation. Once that level of compensation is paid with respect to any
employee, there is no further requirement for us to pay Social Security tax for
such employee. Since many of our employees receive compensation in excess of
that amount, our costs with respect to any employee are significantly higher
during the period when we are required to pay Social Security taxes than it is
after such taxes have been paid.

Our revenue is derived principally from the aircraft and aerospace industries.
In 2000 revenue totaled $23 million. This reflected a decrease of 35.2% from the
revenue in 1999. In 1999 we experienced a 46.4% decrease from the revenue in
1998. The decrease over the past two years continues to be the slowdown in the
aircraft and aerospace industries and the continuing delay of requests for
personnel by our multi-national fortune 500 clients we serve. During 2000,
approximately $15.6 million, or 67% of our revenue, was generated from our four
largest clients, Lockheed-Martin, Bell Helicopter Textron, The Boeing Companies
and Gulfstream Aerospace. During 1999, approximately $17 million, or 47% of our
revenue was derived from our three largest clients, Lockheed-Martin, Bell
Helicopter Textron and The Boeing Companies and 69.5% was generated from our six
largest clients. In 1998, approximately $40 million, or 60.1%, of our revenue
was derived from our three largest clients, Boeing, Lockheed-Martin and
Northrop-Grumman, and 75.4% of our revenue was generated from our five largest
clients. The reduction in business from these clients has had a material impact
on our business. However, in the first quarter of 2001, we are experiencing an
increase in revenue compared to revenue of the fourth quarter of 2000. We cannot
assure you that this trend will continue.






<PAGE>  14
Item 7. Management's  Discussion and Analysis of Financial Condition and
        Results of Operations [Continued].

Our gross margins were 10.1% for 2000, 8.2% for 1999 and 9.2% for 1998. The
increased gross margin from 1999 to 2000 can be attributed to the reduction in
business with some of the Company's lower margin aircraft and aerospace clients
combined with a slight increase in revenue from clients in other industries. The
decrease in the gross margin from 1998 to 1999 reflects the loss of some of our
higher gross margin business.

Selling, general and administrative expenses, exclusive of amortization of
intangibles, in 2000 decreased by 21.6% from 1999 which was a decrease of 18.5%
from those expenses in 1998 excluding related party expenses. These selling,
general and administrative expenses were $3.2 million in 2000, $4.1 million in
1999 and $5.0 million in 1998. The decline reflects principally the effects of
our cost reduction program necessitated by the significant drop in revenue.

As a result of the decrease in revenue, in 2000, and the decrease in revenue and
gross margin in 1999, our gross profit was not sufficient to cover our selling,
general and administrative expenses, resulting in operating losses of $1.1
million in 2000 and $1.4 million in 1999.

Interest  expense  for 2000,  which was  $472,000,  increased  by  approximately
$215,000,  or 83%,  over interest  expenses of $257,000 for 1999.  Approximately
$210,000 of the interest expense is attributable to the amortization of non-cash
debt finance costs  associated with the 575,000  warrants issued in January 2000
in  connection  with the $1.0  million  of debt  financing  raised at that time.
Interest  expense for 1999 decreased by 50% from $517,000 in 1998 as a result of
a full year's lower  financing rates payable through the change in the Company's
credit  facility in 1998 as well as the reduced  borrowing  reflecting a reduced
level of revenue and accounts receivable.

Other  income  increased  by  approximately  $140,000 in 2000  compared to 1999.
approximately  $80,000  of this  increase  is  attributable  to fees paid by Arc
Networks in connection with our agreement to extend the Arc Networks' note.

Our net loss before  income tax expense was $1.4 million in 2000 compared with a
net loss of $1.6  million in 1999 and net  income of  $469,000  for 1998.  After
eliminating  the deferred tax benefit of $490,000 in 2000 our net loss  amounted
to $1.9 million,  or $.67 per share (basic and  diluted),  in 2000 compared to a
net loss of $1.8 million,  or $.61 per share (basic and diluted) in 1999 and net
income of $805,000, or $.21 per share (basic and diluted), for 1998.

Gross revenue has increased slightly in the first quarter of 2001,  however,  we
continue to operate at a loss,  and we anticipate  that we will incur a loss for
at least the first and  second  quarters  of 2001.  We can not  predict  when or
whether we will operate profitably.

Liquidity and Capital Resources

At December 31, 2000, we had working capital of $102,000. Our working capital is
sufficient only to meet our most immediate needs, and our failure to increase
our working capital could impair our ability to continue our operations.


<PAGE>     15

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

During 2000, our operations generated cash flow of $143,000. Our principal
source of cash during 2000 was our credit facility with our asset-based lender.
This facility expires in June 2001.

Pursuant  to the  credit  agreement,  we can  borrow up to 85% of our  qualified
accounts receivables at an interest rate of prime plus 2% with a minimum monthly
interest  of  $12,000  and an  additional  fee of $500 per  month.  The  maximum
availability  on the credit  agreement is $2.5  million.  The maximum  available
under our borrowing  formula was  $1,226,000 at December 31, 2000 and $1,687,000
at February 28, 2001.  We will not be able to continue in  operations  if we are
not able to extend or replace our credit agreement.

In  January  2000,  we raised  $1.0  million  through  the  issuance  of our 10%
subordinated  promissory  notes due the  earlier of receipt of payment  from the
note  issued  by Arc  Networks  or 18  months  from  the  date of  issuance.  In
connection with this financing we issued warrants to purchase  575,000 shares of
our common  stock at $.35 per share to the  investors  and others who  performed
services relating to the financing.

Our current assets include a $225,000 note payable from i-engineering.com,  Inc.
In  accordance  with our  agreement  relating to the  issuance of the notes,  we
loaned $500,000 of the proceeds to  i-engineering.com  for a term of 120 days at
an  interest  rate of 10%.  In  addition,  we  acquired  an equity  interest  in
i-engineering.com  and issued to i-engineering.com  270,000 shares of our common
stock.  i-engineering.com  is a start-up  company which  requires  funds for its
operations.  The note was initially due in June 2000 and has been extended twice
as a result of the inability of  i-engineering.com  to make the full payment. On
December 5, 2000 we entered into a new agreement with  i-engineering.com to give
back one-half of our interest in  i-engineering.com  in exchange for the 270,000
shares of our common stock held by i-engineering.com. The agreement provided for
i-engineering.com  to make a payment of  $50,000  on January 2, 2001,  which was
made.  The balance of the note was extended until March 31, 2001, at which time,
the   balance  of  our   interest  in   i-engineering.com,   net  of  shares  of
i-engineering.com  which are to be  transferred to the holders of the promissory
notes which we issued in January 2000 would be returned.  i-engineering.com  has
requested that we accept another partial payment and extend the time for payment
of the balance of the note. This request is presently under consideration by the
board  of  directors.


In September 2000, we received payment in full on the Arc Networks Note, and
used a portion of the proceeds to pay principal and interest on the 10%
promissory notes in the principal amount of $850,000. The remaining noteholders
have agreed to extend the balance until March 31, 2001 in exchange for warrants
to purchase 37,500 shares of our common stock at $.35 per share.

We are seeking to address our working  capital needs by negotiating an extension
of our present credit  agreement  with our  asset-based  lender.  Because of our
present stock price,  it is highly  unlikely that we will be able to raise funds
through the sale of our equity securities,  and our financial condition prevents
us from issuing debt securities.

<PAGE> 16
PART III
Item 10.   Directors and Executive Officers of the Company (continued)

We may consider an acquisition if we believe that the acquired company would
provide us with adequate financial resources. Any acquisition may result in a
change of control and substantial dilution to our stockholders. Although we have
engaged in negotiations in the past, none of such negotiations has resulted in
an agreement. We are not presently engaged in negotiations with respect to any
acquisitions.

Item 7A.   Quantitative and Qualitative Disclosure About Market Risk.
   Not Applicable.

Item 8. Financial Statements.

The Financial Statements begin on Page F-1.

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

        None
                                    PART III

Item 10.  Directors and Executive Officers of the Company

The following table sets forth certain information concerning the directors and
the executive officers of the Company as of March 31, 2001:

Name                       Age             Position with the Company

Joseph G. Sicinski         69    President, chief executive officer and director
Edward D. Bright-1         63    Chairman of the board and director
Glen R. Charles            47    Chief financial officer, secretary, treasurer
                                  and director
James L. Conway-1          52    Director


1 Member of the audit committee.



Mr.  Joseph  G.  Sicinski  has  been  president  and a  director  of us and  our
predecessor  since  September 1992 and our chief  executive  officer since April
1998. For more than eight years prior  thereto,  he was executive vice president
of corporate  marketing for  Interglobal  Technical  Services,  Inc.,  which was
engaged in providing technical temporary staffing services. Mr. Sicinski is also
a director of Netsmart Technologies,  Inc., a publicly-held company that markets
medical information systems.

Mr.  Edward D. Bright has been a director  since April 1998. He is also chairman
of the board and a director of The Sagemark  Companies,  Ltd., a position he has
held since 2000.  Sagemark is a public  company that was formerly our  principal
stockholder.  From  January 1996 until April 1998,  Mr.  Bright was an executive
officer of or advisor to Creative  Socio Medics Corp., a subsidiary of Netsmart.
From June 1994 until January 1996, he was chief executive officer of Netsmart.








<PAGE> 17

PART III Continued

Item 10,  Directors and Executive Officers of the Company


Mr. Glen R. Charles has been chief financial officer and treasurer of us and our
predecessor  since November 1994 and secretary since April 1998. Mr. Charles has
been a director of the Company  since May 1999.  From 1992 to November  1994, he
was engaged in the private practice of accounting.

Mr. James L. Conway has been a director since June 1998. He has been president
and a director of Netsmart since January 1996 and chief executive officer of
Netsmart since April 1998. From 1993 until April 1998, he was president of
S-Tech Corporation, which, until April 1998, was a wholly-owned subsidiary of
Consolidated which manufactures specialty vending equipment for postal,
telecommunication and other industries.

In 1999, the board of directors created an audit committee.

The audit committee consists of two independent  directors.  The audit committee
presently  consists  of Messrs.  Edward D.  Bright and James L. Conway.
The audit committee is charged with the following responsibilities:

   Recommend to the board the selection of the independent accountants.
   Review the scope of the audit with the independent accountants.
   Review the annual and quarterly financial statements with the independent
    accountants prior to the filing of the Form 10-K and 10-Q.
   Review any issues relating to the independence of the independent
    accountants.
   Review with the independent accountants and the board of directors any
    matters raised in any management letters issued by the independent
    accountants.
   Review  any  material  transactions  between  us and any of its  officers
    and directors, other than employment agreements and other matters which are
    subject to approval of the board of directors or any stock option committee.

Directors are elected for a term of one year. During 2000, we paid directors who
are not also employees a fee of $500 per month, which rate is continuing in
effect during 2001.

None of the Company's officers and directors are related.

Messrs.  James  Conway and Edward  Bright  filed  their Form 5 for 2000 in March
2001.

The Company's Certificate of Incorporation provides that to the fullest extent
provided by Delaware law, a director shall not be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director.
The Certificate of Incorporation also contains broad indemnification provisions.
These provisions do not affect the liability of any director under Federal or
applicable state securities laws.






<PAGE>  18

Item 11.  Executive Compensation



Set forth below is information with respect to compensation paid or accrued by
us for 2000, 1999 and 1998 to our chief executive officer. No other officer had
compensation of $100,000 or more for 2000.

                           SUMMARY COMPENSATION TABLE
                         Annual Compensation   Long-Term
                                               Compensation        (Awards)
Name and Principal                             Restricted Stock  Options,SARS
  Position           Year   Salary    Bonus    Awards (Dollars)    (Number)

Joseph G. Sicinski,
 president and chief
 executive officer  2000   $235,299   --         --                  --
                    1999    265,957   --         --                  85,000
                    1998    267,173  $48,800     --                  60,000

On January 10, 2001 the exercise price of the outstanding options held by our
officers, directors and employees, including the options to purchase 368,333
shares at $.53 per share held by Mr. Sicinski were repriced at $.125 per share,
which was the fair market value of our common stock on that day. In connection
with the repricing, we agreed that payment of the exercise price could be made
by issuance of a non-interest bearing non-recourse promissory note due the
earlier of January 2006 or the date the shares are sold by the employee. The
shares are held by us as security for payment of the notes. In February 2001,
Mr. Sicinski exercised his option to purchase 368,333 shares of common stock at
$.125 per share, for which he issued a promissory note in the principal amount
of $46,041.63.

Employment Contracts,  Compensation Agreements and Termination of Employment and
Change in Control Arrangements

In October 1997, Mr. Joseph G. Sicinski entered into a five-year employment
agreement with us pursuant to which he received minimum annual compensation of
$260,000, subject to an annual increase equal to the greater of the increase in
the cost of living index or 5%. The term of the agreement was amended in March
1999 to extend the term until September 30, 2005. In addition, Mr. Sicinski is
entitled to a bonus of 5% of the Company's income before taxes, all non-cash
adjustments and all payments to our former parent, provided, that his maximum
bonus is 200% of his annual salary. We also provide Mr. Sicinski with an
automobile which he may use for personal use. Mr. Sicinski is also entitled to
severance payments in the event of a termination of his employment following a
change of control, which would equal the greater of five times his annual
compensation or his annual compensation multiplied by the number of years
remaining in the term.

In September 1999, Mr. Glen R. Charles entered into a four-year employment
agreement with us, pursuant to which he receives a minimum base salary of
$127,960 subject to an annual increase of not less than 5%.



<PAGE>  19
Item 11.  Executive Compensation [Continued]

In June 2000, Mr.  Sicinski and Mr. Charles both agreed to reduce their salaries
until such time as the board of directors of the Company  shall  determine  that
sufficient working capital is available to the Company to reinstate their agreed
upon salaries. The amount shown in the summary compensation table reflects the
reduced rate of compensation for 2000.

Option Exercises and Outstanding Options

The following table sets forth information concerning the exercise of options
during 2000 and the year-end value of options and warrants held by our officers
named in the Summary Compensation Table. No stock appreciation rights have been
granted.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value
<TABLE>
<CAPTION>
<S>               <C>            <C>       <C>               <C>
                                           Number of
                                           Securities        Value of
                                           Underlying        Unexercised In-
                                           Unexercised       the- Money
                                           Options at Fiscal Options at Fiscal
                                           Year End -1       Year End-2

                 Shares Acquired  Value    Exercisable/      Exercisable/
Name             Upon Exercise   Realized  Unexercisable     Unexercisable
----              -------------  --------  -------------     -------------
Joseph G. Sicinski      --           --     434,999/--         --/--
</TABLE>

Options and warrants are considered in the money if their exercise price was
less than last reported sales price of our common stock on December 31, 2000,
which was $.125 per share.

We have three long-term  incentive plans,  pursuant which options to purchase an
aggregate of 895,388 shares of common stock may be issued. At December 31, 2000,
options to purchase  784,829 shares off common stock had been granted,  of which
options to  purchase 0 shares had been  exercised,  options to purchase 0 shares
had expired and options to purchase  784,829  shares were  outstanding.  At such
date,  there were options to purchase  110,559 shares of common stock  available
for grant in addition to any options  which become  available as a result of the
cancellation or expiration of outstanding options.

The board of directors or a stock option committee, if appointed, has the
authority to grant the following types of awards under the three option plans:
incentive or non-qualified stock options; stock appreciation rights; restricted
stock; deferred stock; stock purchase rights and/or other stock-based awards.
The option plans are designed to provide us with broad discretion to grant
incentive stock-based rights. All officers, including Mr. Joseph G. Sicinski,
who is also a director, are eligible for awards under the option plans. On April
1 of each year, all outside directors are awarded options to purchase 5,000
shares of common stock at the fair market value on that date.



<PAGE>  20


Item 11.  Executive Compensation [Continued]

Tax consequences of awards provided under the options plans are dependent upon
the type of award granted. The grant of an incentive or non-qualified stock
option does not result in any taxable income to the recipient or deduction to
us. Upon exercise of a non-qualified stock option, the recipient recognizes
income in the amount by which the fair market value on the date of exercise
exceeds the exercise price of the option, and we receive a corresponding tax
deduction. In the case of an incentive stock option, no income is recognized to
the employee, and no deduction is available to us, if the stock issued upon
exercise of the option is not transferred within two years from the date of
grant or one year from the date of exercise, whichever occurs later. However,
the exercise of an incentive stock option may result in additional taxes through
the application of the alternative minimum tax. In the event of a sale or other
disqualifying transfer of stock issued upon exercise of an incentive stock
option, the employee realizes income, and we receive a tax deduction, equal to
the amount by which the lesser of the fair market value at the date of exercise
or the proceeds from the sale exceeds the exercise price. The issuance of stock
pursuant to a stock grant results in taxable income to the recipient at the date
the rights to the stock become nonforfeitable, and we receive a deduction in
such amount. However, if the recipient of the award makes an election in
accordance with the Internal Revenue Code of 1986, as amended, the amount of his
or her income is based on the fair market value on the date of grant rather than
the fair market value on the date the rights become nonforfeitable. When
compensation is to be recognized by the employee, appropriate arrangements may
be required to be made with respect to the payment of withholding tax.

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

Set forth below is information as of March 15, 2001 as to our chief executive
officer, each director, each person owning of record or known by us, based on
information provided to the Company by the persons named below, to own
beneficially at least 5% of the Company's Common Stock and for all officers and
directors as a group.

                                                       Percent of Outstanding
Name and Address                    Shares             Common Stock
--------------------              ----------          -----------------------

Joseph G. Sicinski
1393 Veterans Memorial Hwy.
Hauppauge, NY 11788                  709,998                 21.1%

Glen R. Charles                      107,988                  3.2%

Edward D. Bright                      50,000                  1.5%

James L. Conway                       65,000                  1.9%

All directors and officers
as a group (four individuals owning
stock, warrants or options)          932,996                 27.7%





<PAGE>  21

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
          (Continued)

The number of shares of common stock owned by our directors  and officers  shown
in the table includes shares of common stock which are issuable upon exercise of
options  and  warrants  that are  exercisable  at March 15,  2001 or will become
exercisable  within 60 days after that  date.  Set forth  below is the number of
shares issuable upon exercise of those options for each of our directors and the
officers named in the summary compensation table.

Name                            Shares
Joseph G. Sicinski               66,666
James L. Conway                  65,000
All officers and directors
as a group                      131,666

Mr.  Sicinski's  options and  warrants  include  66,666  shares of common  stock
issuable upon exercise of warrants and Mr. Conway's options and warrants include
25,000  shares of common  stock  issuable  upon  exercise of warrants and 40,000
shares of common stock issuable upon exercise of options. All other officers and
directors only hold options.


Certain relationships and related transactions

At December 31, 1999 Arc  Networks,  Inc., a former  subsidiary  of The Sagemark
Companies,  Ltd., owed us approximately  $1.2 million,  which was represented by
Arc Networks  promissory  note. This promissory note was guaranteed by Sagemark,
which had been our principal stockholder,  and other parties affiliated with Arc
Networks.  Pursuant to an agreement  dated  February 7, 2000 with Arc  Networks,
Sagemark and the other  guarantors,  Sagemark  transferred  50,000 shares of our
common stock to us, and we agreed to extend the  maturity  date of the note from
Arc  Networks to April 2000.  Neither  Sagemark nor Arc were our  affiliates  at
December 31, 2000. In September 2000, Arc Networks paid the note in full.

We entered into a restated agreement dated as of January 21, 2000 with
i-engineering.com, pursuant to which:

We lent i-engineering.com $500,000, for which it issued its 10% promissory notes
which are due on the  earlier of 120 days from the date of  issuance  in January
and  February  2000 or the  first to  occur  of (i) the  date  i-engineering.com
receives  gross  proceeds of at least  $5,000,000  from a private  placement  or
public offering of its securities,  or (ii) the date  i-engineering.com  obtains
bank or other  debt  financings  or credit  lines or other  credit  facility  or
facilities of at least $750,000.

We agreed to provide i-engineering.com with services to assist it in developing
its business.

i-engineering.com issued to us i-engineering.com's common stock equal to
approximately 10% of the then outstanding i-engineering.com common stock.

 We issued to i-engineering.com 270,000 shares of our common stock.

 i-engineering.com elected Mr. Joseph G. Sicinski, our president and chief
executive officer, a director, and we agreed to include Mr. Naval Kapoor, i-
engineering's president and chief executive officer, as one of our board of
directors nominees for director at the 2000 meeting.

Mr.   Kapoor  was   elected  as  a  director   at  the  2000   annual   meeting.
i-engineering.com  did not pay the  $300,000  note when due and we agreed to two
extensions.  In connection with the second  extension,  Mr. Kapoor resigned as a
director,  i-engineering.com  returned to us the 270,000  shares  which had been
issued to i- engineering,  and we returned 50% of the  i-engineering.com  shares
issued to us (net







<PAGE>  22

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


of shares to be issued to certain of our lenders pursuant to agreements with the
lenders) and agreed to return the  remaining 50% if the balance of note is paid.
i-engineering.com  was required to make one payment in January  2001,  which was
made, and is required to pay the principal  balance of $150,000,  plus interest,
on March 31,  2001.  i-engineering.com  has  requested  that we  accept  another
partial payment and extend the time for payment of the balance of the note. This
request is presently under  consideration by the board of directors.  Mr. Joseph
G. Sicinski, resigned as a director of i-engineering.com in October 31, 2000.

In January 2000, we issued to James L. Conway a warrant to purchase 25,000
shares of common stock at $.35 per share for services rendered in connection
with a $1,000,000 debt financing. The terms of the warrants issued to Mr. Conway
are the same as the terms of the warrants which were issued to the lenders.










































<PAGE>     23
                                     PART IV

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

(a)     Financial Statements.

The following financial statements are filed as part of this Form 10-K:

Trans Global Services, Inc. and Subsidiaries

Report of Independent Certified Public Accountants
Consolidated Balance Sheets as of December 31, 2000 and 1999
Consolidated  Statements of Operations for the years ended December 31, 2000,
 1999 and 1998
Consolidated  Statements of Changes in  Stockholders' Equity for the years
 ended  December 31, 2000,  1999 and 1998
Consolidated  Statements  of Cash Flows for the years ended  December  31, 2000,
 1999 and 1998

Notes to Financial Statements

(b)     Financial Statement Schedules.
    None

(c)     Exhibits

3.1-  (1)  Restated Certificate of Incorporation.
3.2-  (2)  By-Laws.
10.1- (3)  Employment agreement dated October 15, 1997, between the Company and
           Joseph G. Sicinski, as amended.
10.2 -(4)  1995 Long-Term Incentive Plan.
10.3 -(5)  1998 Long-Term Incentive Plan
10.4 -(6)  1999 Long-Term Incentive Plan.
10.5 -(2)  Form of Series A Common Stock Purchase Warrants.
10.7       Credit Agreement dated June 7, 2000 between the Company and
           Sterling National Bank

21.1(3)   Subsidiaries of the Registrant
24.1      Consent of Moore Stephens, P.C.
25.1      Powers of attorney (See Signature Page).















<PAGE>  24

Part IV [Continued]



1. Filed as an exhibit to the Company's registration statement on Form S-1,
   File No. 333-14289, and incorporated herein by reference.
2. Filed as an exhibit to the Company's Annual Report on Form 10-KSB for the
   year ended December 31, 1995 and incorporated herein by reference.
3. Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
   ended December 31, 1999 and incorporated herein by reference.
4. Filed as an exhibit to the Company's definitive proxy statement for its
   special meeting of stockholders for November 1996 and incorporated herein by
   reference.
5. Filed as an exhibit to the Company's  definitive proxy statement for its 1998
   annual  meeting of  stockholders  for  August  1998 and  incorporated herein
   by reference.
6. Filed as an exhibit to the Company's definitive proxy statement for its 2000
   annual meeting of stockholders held in May 2000 and incorporated herein by
   reference.


(d)  Reports on Form 8-K

     None
































<PAGE>    25

        SIGNATURES


In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                           TRANS GLOBAL SERVICES, INC.


Date: March 30, 2001                    By:
                                           Joseph G. Sicinski
                                           President, Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the Company
and in the capacities and on the dates indicated. Each person whose signature
appears below hereby authorizes Joseph G. Sicinski as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments to this report, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission.


Signature                              Title                       Date




Joseph G. Sicinski       President, Chief Executive            March 30,   2001
                         Officer and Director
                          (Principal Executive Officer)

Glen R. Charles          Chief Financial Officer (Principal    March 30,   2001
                         Financial and Accounting Officer)
                         and Director

 Edward D. Bright        Director                              March 30,   2001

 James Conway            Director                              March 30,   2001













<PAGE>     26


                          INDEX TO FINANCIAL STATEMENTS


TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES                     PAGE

Report of Independent Certified Public Accounts

Consolidated Balance Sheets as of December 31, 2000 and 1999      F-3

Consolidated Statements of Operations for the years ended
December 31, 2000, 1999 and 1998                                  F-5

Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 2000, 1999,and 1998              F-7

Consolidated Statements of Cash Flows for the years ended
December 31,  2000, 1999 and 1998                                 F-10

Notes to Consolidated Financial Statements                        F-13



































<PAGE>    27

                      INDEPENDENT AUDITOR'S REPORT

To the Stockholders and Board of Directors of Trans Global Services, Inc.
Hauppauge, New York


We have audited the accompanying consolidated balance sheets of Trans Global
Services, Inc. and its subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2000. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Trans
Global Services, Inc. and its subsidiaries as of December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2000, in conformity with accounting  principles
generally accepted in the United States of America.




MOORE STEPHENS, P.C.
Certified Public Accountants

Cranford, New Jersey
February 7, 2001
















<PAGE>    28

TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                           December 31,
                                                   2 0 0 0           1 9 9 9

<S>                                          <C>              <C>
Assets:
Current Assets:
Cash                                         $       58,463   $        43,141
Accounts Receivable - Net                         1,702,998         2,518,343
Note Receivable -i-engineering.com, Inc.            225,451               -0-
Prepaid Expenses and Other Current Assets            75,199           100,865
                                                 ----------        ----------
Total Current Assets                              2,062,111         2,662,349
                                                 ----------         ---------
Property and Equipment - Net                        113,683           162,820
                                                 ----------         ---------
Other Assets:
Due from Arc Networks                                   -0-         1,171,673
Customer Lists                                    1,938,703         2,163,655
Goodwill - Net                                      629,816           678,392
Deferred Tax Asset-Non Current                          -0-           490,000
Other Assets                                         49,864            36,373
                                                 ----------          --------
Total Other Assets                                2,618,383         4,540,093
Total Assets                               $      4,794,177         7,365,262
                                           ================        ==========
</TABLE>

See Notes to Consolidated Financial Statements.















                                       F-3





<PAGE>     29
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                        December 31,
                                                  2 0 0 0           1 9 9 9

<S>                                            <C>              <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts Payable and Accrued Expenses          $    465,981      $   402,735
Accrued Payroll and Related Taxes and Expenses      477,154          359,295
Loan Payable - Asset-Based Lender                   852,035        2,056,372
Notes Payable - Outside Investors(7)                165,000              -0-
                                                  ---------         --------
Total Current Liabilities                         1,960,170        2,818,402
                                                   ---------        --------

Commitments and Contingencies [10]                      --               --
                                                  ---------        --------
Stockholders' Equity:

Common Stock $.01 Par Value, 25,000,000
 Shares authorized. 2000: 4,089,716 issued
 2,619,716 outstanding. 1999: 3,819,716
 issued  2,669,716 outstanding                      40,897            38,197

Capital in Excess of Par Value                  13,499,281        12,887,851

Accumulated Deficit                             (7,735,359)       (5,812,506)
                                                ----------          ---------
                                                 5,804,819         7,113,542
                                                ----------           --------

Less Treasury Stock, at cost
 1,150,000 shares - 1999
 1,470,000 shares - 2000                        (2,970,812)       (2,566,682)
                                                ----------          --------

Total Stockholders' Equity                       2,834,007         4,546,860
Total Liabilities and Stockholders' Equity    $  4,794,177      $  7,365,262
                                               ===========       ===========
</TABLE>
See Notes to Consolidated Financial Statements.








                                       F-4



<PAGE>     30
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                               Y e a r s   e n d e d
                                                D e c e m b e r  31,
                                        2 0 0 0         1 9 9 9      1 9 9 8
<S>                                 <C>             <C>           <C>
Revenue                             $  23,325,194   $ 36,015,273   $ 67,243,713

Cost of Services Provided              20,975,439     33,049,393     61,023,970
                                      ----------      ----------     ----------
Gross Profit                            2,349,755      2,966,880      6,219,743
                                      ----------      ----------     ----------
Operating Expenses:
Selling, General and
Administrative Expenses                 3,220,718      4,109,663      5,040,121
Related Party Administrative Expenses         -0-            -0-         55,000
Amortization - Intangibles                273,528        273,528        273,537
                                        ---------      ---------        -------
Total Operating Expenses                3,494,246      4,383,191      5,368,658
                                        ---------      ---------      ---------
Operating (Loss) Profit                (1,144,491)    (1,416,311)       851,085
                                        ---------      ---------      ---------
Other Income (Expenses):
Interest Expense                         (471,544)      (257,039)      (516,698)
Interest Income                           110,036        119,708        130,000
Other Income (Expense)                     73,146       ( 67,389)         4,611
                                        ---------       --------        -------
Total Other Expenses - Net               (288,362)      (204,720)      (382,087)
                                        ---------       --------       --------
 (Loss)Income before Income
  Tax (Expense) Benefit                (1,432,853)    (1,621,031)       468,998
Income Tax (Expense) Benefit           (  490,000)    (  232,000)       336,263
                                       ---------        --------      ---------
Net (Loss) Income                     $(1,922,853)  $ (1,853,031)   $   805,261
                                        =========     ===========    ===========

Basic (Loss) Earnings Per Share       $      (.67)   $     (.61)    $       .21


Weighted Average Number of Shares       2,860,700     3,047,798       3,819,716

Diluted (Loss)  Earnings Per Share:
  Incremental Shares from Assumed
  Conversion of Options and Warrants          -0-           -0-          11,500
                                       ---------      ----------     ----------
Weighted Average Number of
  Shares Assuming Dilution             2,860,700      3,047,798       3,831,216

Diluted (Loss) Earnings Per Share     $     (.67)    $     (.61)    $       .21
</TABLE>

See Notes to Consolidated Financial Statements
F-5

<PAGE>     31
Trans Global Services, Inc.
Consolidated Statement of Stockholders' Equity
                                                      Shares         Amounts

Common Stock $.01 Par Value Authorized 25,000,000 shares at December 31, 1998,
1999 and 2000

Balance - December 31, 1997                         3,819,716         $38,197
                                                    ---------         -------
Balance - December 31, 1998                         3,819,716         $38,197
                                                  -----------         -------
Balance  December 31, 1999                         3,819,716          $38,197
                                                   ---------          -------
Issuance of shares of Common Stock
 i-engineering.com, Inc.                             270,000          $ 2,700
                                                  ----------          -------
Balance - December 31, 2000                        4,089,716          $40,897
                                                  ===========         =======
Capital in Excess of Par Value

Balance - December 31, 1997                                        12,887,851
                                                                   ----------
Balance - December 31, 1998                                        12,887,851
                                                                   ----------
Balance - December 31, 1999                                        12,887,851
                                                                   ----------
Issuance of below market warrants (7)                                 210,000
Issuance of shares of Common Stock i-engineering.com,Inc.             326,430
Purchase of Treasury Stock                                             75,000
                                                                   ----------
Balance - December 31, 2000                                        13,499,281
                                                                   ==========
Accumulated Deficit

Balance - December 31, 1997                                       $(4,764,736)
Net Income                                                            805,261
                                                                   -----------
Balance - December 31, 1998                                       $(3,959,475)

Net (Loss)                                                         (1,853,031)
                                                                   -----------
Balance - December 31, 1999                                       $(5,812,506)
Net (Loss)                                                         (1,922,853)
                                                                   -----------
Balance - December 31, 2000                                        (7,735,359)
                                                                  ===========
Treasury Stock
Purchase of treasury stock - 1999                  1,150,000      $(2,566,682)
                                                   ---------      -----------
Balance  December 31, 1999                         1,150,000      $(2,566,682)
Purchase of treasury stock - 2000                    320,000       (  404,130)
                                                   ---------      ------------
Balance - December 31, 2000                        1,470,000      $(2,970,812)
                                                   =========      ===========
See Notes to Consolidated Financial Statements
F-6
<PAGE>   32
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                       AMOUNT
<S>                                                              <C>
Deferred Charges

Balance - December 31, 1997                                         ( 162,601)
Amortization of Deferred Consulting Costs                             162,601
                                                                     --------
Balance - December 31, 1998                                               -0-
                                                                     --------
Balance - December 31, 1999                                               -0-
                                                                     --------
Balance - December 31, 2000                                               -0-
                                                                    =========
Total Stockholders' Equity

Balance - December 31, 1997                                       $ 7,998,711
Amortization of deferred Consulting Costs                             162,601
Net Income for the Year Ended December 31, 1998                       805,261
                                                                   ----------
Balance - December 31, 1998                                       $ 8,966,573
Purchase of treasury stock                                         (2,566,682)
Net Loss for the Year Ended December 31, 1999                      (1,853,031)
                                                                   ----------
Balance - December 31, 1999                                       $ 4,546,860
Issuance of below market warrants                                     210,000
Issuance of shares of Common Stock - i-engineering.com, Inc.          329,130
Purchase of treasury stock - i-engineering.com, Inc.                 (329,130)
Net Loss for the Year Ended December 31, 2000                      (1,922,853)
                                                                   ----------
Balance - December 31, 2000                                       $ 2,834,007
                                                                   ==========
</TABLE>


See Notes to Consolidated Financial Statements




                                       F-7













<PAGE>     33
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                 Y e a r s   e n d e d
                                                  D e c e m b e r  31,
                                            2 0 0 0      1 9 9 9        1 9 9 8

<S>                                       <C>           <C>           <C>
Operating Activities:
Net (Loss) Income                          $(1,922,853) $(1,853,031)  $ 805,261
Adjustments to Reconcile Net (Loss) Income
 to Net Cash Provided By (Used in)
 Operations:
  Depreciation and Amortization                344,194      345,921     393,364
  Charges from Option Exercise                     -0-          -0-     162,601
  Deferred Acquisition Costs                       -0-      235,560         -0-
  Debt Issuance Costs                          210,000          -0-         -0-
  Deferred Loan Costs                              -0-       82,266         -0-
  Deferred Income Taxes                        490,000      232,000    (367,000)
Changes in Operating Assets and Liabilities:
 (Increase) Decrease in Assets:
   Accounts Receivable-Net                     815,345    1,404,500   1,547,510
   Loan Receivable - Officer                       -0-        5,000      42,500
   Prepaid Expenses and Other
    Current Assets                              25,666      113,458   (  37,970)
Increase (Decrease) in Liabilities:
  Accounts Payable and Accrued
    Expenses                                    63,246       88,110   ( 276,989)
  Accrued Payroll and Related
    Taxes and Expenses                         117,859     (169,279)  ( 887,560)
  Accrued Income Taxes Payable                     -0-     ( 13,496)  (  62,861)
  Accrued Voluntary Settlement Agreement           -0-          -0-   ( 150,000)
                                             ---------   ----------    --------
Total Adjustments                            2,066,310    2,324,040     363,595
                                           -----------   ---------    ----------
Net Cash -  Operating Activities               143,457      471,009   1,168,856
                                            ----------   ---------   ----------
Forward
</TABLE>


See Notes to Consolidated Financial Statements.


                                       F-8









<PAGE>     34
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S>                                <C>            <C>              <C>
                                       Y e a r s   e n d e d
                                                  D e c e m b e r  31,
                                       2 0 0 0         1 9 9 9         1 9 9 8

Net Cash -
 Operating Activities Forwarded     $  143,457     $  471,009      $  1,168,856

Investing Activities:
 Capital Expenditures                  (21,529)       (64,090)          (55,307)
 Deferred Acquisition Costs                -0-            -0-           (74,915)
 Repayments from Arc Networks        1,171,673        117,410            60,920
 Note Receivable i-engineering.com   ( 500,000)           -0-               -0-
 Repayments from i-engineeing.com      274,549            -0-               -0-
Other, net                          (  13,491)         5,034             1,825
Investments in Preferred Stock
   of Affiliate                            -0-      (   3,500)         (136,500)
                                     --------         --------         --------
Net Cash -  Investing Activities       911,202         54,854          (203,977)
                                    ----------     -----------         ---------
Financing Activities:
 Net Payments to
  Asset-Based Lender                (1,204,337)     ( 590,872)         (923,584)
 Deferred Loan Costs                       -0-            -0-           123,399
 Note Payable -outside investors     1,000,000            -0-               -0-
 Repayment of note payable
  -outside investors                (  835,000)           -0-               -0-
Repayment of Note Payable                  -0-      ( 126,767)         ( 11,463)
                                      ---------      ---------       ----------
Net Cash -
 Financing Activities               (1,039,337)     ( 717,639)       (1,058,446)
Net Increase (Decrease)in Cash and
 Cash Equivalents                       15,322      ( 191,776)       (   93,567)
Cash and Cash Equivalents
  - Beginning of Year                   43,141        234,917           328,484
Cash and Cash Equivalents
  - End of Year                  $      58,463    $    43,141        $  234,917
                                   ===========     ===========      ===========
Supplemental Disclosures of Cash
  Flow Information:
   Interest                      $     244,741    $   257,039        $  516,698
   Income Taxes                  $        -0-     $       -0-        $   68,936

</TABLE>
Supplementary Disclosure of Non Cash Investing and Financing Activities during
the three years ended December 31, 2000.




See Notes to Consolidated Financial Statements.
F-9
<PAGE>     35

TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

In connection  with the  $1,000,000  raised in January,  2000,  from the sale of
subordinated notes due on the earlier of July 2001 or upon the Company's receipt
of the note receivable  from Arc Networks,  Inc., the Company issued warrants to
purchase  250,000 shares of the Company's  common stock at $.35 per share to the
investors.  In addition,  the Company issued warrants to purchase 300,000 shares
of the  Company's  common  stock at $.35 per  share to the  placement  agent and
25,000 shares to a director for services relating to the financing.  The Company
incurred  a charge of  $210,000.  This  charge has been  credited  to capital in
excess of par value.  The Company  used  $500,000 of the proceeds of the loan to
make a loan to i-engineering.com,  as described in the following paragraph,  and
the  Company  agreed  to  transfer  to  the  lenders  10% of  the  shares  of i-
engineering.com, which it acquired.

On May 3,  1999,  the  Company  acquired  1,150,000  shares of  Common  Stock in
exchange for the Investment in Preferred  Stock of an Affiliate,  which was held
by the  Company  in the  amount  of  $2,240,730,  and a  reduction  in Due  from
Affiliates in the amount of $325,952.



















<PAGE> 36
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

[1] Basis of Presentation

Trans  Global  Services,  Inc.  (the  "Company" or "Trans  Global"),  a Delaware
corporation,  operates through two  subsidiaries,  Avionics  Research  Holdings,
Inc.,  ["Holdings"] and Resource  Management  International,  Inc. ["RMI"].  The
Company is engaged in providing technical temporary staffing services throughout
the United States, principally in the aircraft and aerospace industries.


[2] Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated financial statements include the
accounts of Trans Global Services, Inc. and its subsidiaries. All intercompany
transactions have been eliminated in consolidation.

Cash and Cash Equivalents - The Company considers all highly liquid instruments
purchased with a maturity of three months or less to be cash equivalents. There
were no cash equivalents at December 31, 2000 and 1999.

Prepaid Expenses and Other Current Assets - Prepaid expenses primarily consist
of approximately $71,000 and $93,000 of prepaid insurance at December 31, 2000
and 1999, respectively.

Property and Equipment - Property and Equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are
computed using straight-line and accelerated methods over the estimated useful
lives of the respective assets. Amortization of leasehold improvements is
provided using the straight-line method over the term of the respective lease or
the useful life of the asset, whichever period is less. Estimated useful lives
range from 3 to 5 years as follows:

Furniture and Fixtures                  3 - 5   years
Leasehold Improvements                      5   years
Equipment                               3 - 5   years


Expenditures for maintenance and repairs, which do not improve or extend the
life of the respective assets are expensed currently while major repairs are
capitalized.










                                         F-10


<PAGE>  37
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

Deferred Acquisition Costs - Deferred acquisition costs represent legal,
accounting and other costs associated with the planned business acquisitions by
the Company. Since these acquisitions were not completed those costs were
expensed at December 31, 1999.

Revenue Recognition - The Company records revenue as services are provided.

Stock Options and Similar Equity Instruments - On January 1, 1996, the Company
adopted the disclosure requirements of Statement of Financial Accounting
Standards ["SFAS"] No. 123, "Accounting for Stock-Based Compensation," for stock
options and similar equity instruments [collectively, "Options"] issued to
employees, however, the Company will continue to apply the intrinsic value based
method of accounting for options issued to employees prescribed by Accounting
Principles Board ["APB"] Opinion No. 25, "Accounting for Stock Issued to
Employees" rather than the fair value based method of accounting prescribed by
SFAS No.123. SFAS No. 123 also applies to transactions in which an entity issues
its equity instruments to acquire goods or services from non- employees. Those
transactions must be accounted for based on the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more
reliably measurable.

Income Taxes - The Company accounts for income taxes under SFAS No. 109,
"Accounting for Income Taxes." Under SFAS No. 109, the asset and liability
method is used to determine deferred tax assets and liabilities based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

Earnings Per Share- Earnings per share of Common Stock reflects the weighted
average number of shares outstanding for each year.

The Financial Accounting Standards Board has issued SFAS No.128, "Earnings Per
Share," which is effective for financial statements issued for periods ending
after December 15, 1997. Accordingly, earnings per share data in the financial
have been calculated in accordance with SFAS No. 128.












                                      F-11





<PAGE>    38
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

SFAS No. 128 supercedes APB Opinion No.15, "Earnings Per Share," and replaces
its primary earnings per share with a new basic earnings per share representing
the amount of earnings for the period available to each share of common stock
outstanding during the reporting period. SFAS No.128 also requires a dual
presentation of basic and diluted earnings per share on the face of the
statement of operations for all companies with complex capital structures.
Diluted earnings per share reflects the amount of earnings for the period
available to each share of common stock outstanding during the reporting period,
while giving effect to all dilutive potential shares of common stock that were
outstanding during the period, such as common stock that could result from the
potential exercise or conversion of securities into common stock.

The computation of diluted earnings per share does not assume conversion,
exercise or contingent issuance of securities that would have an antidulutive
effect on earnings per share (i.e. increasing earnings per share or reducing
loss per share). The dilutive effect of outstanding options and warrants and
their equivalents are reflected in dilutive earnings per share by the
application of the treasury stock method which recognizes the use of proceeds
that could be obtained upon the exercise of options and warrants in computing
diluted earnings per share. It assumes that any proceeds would be used to
purchase common stock at the average market price during the period. Options and
warrants will have a dilutive effect only when the average market price of the
common stock during the period exceeds the exercise price of the options or
warrants.

Securities that could potentially dilute earnings per share in the future are
disclosed in Notes 13 and 14.

Impairment - The Company reviews certain long-lived assets, including goodwill
and other intangibles for impairment whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable pursuant
to guidance established in SFAS No. 121, "Accounting for the impairment of
long-lived assets and for long-lived assets to be disposed of." [See Note 5]

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






                                      F-12






<PAGE>     39
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

[2] Summary of Significant Accounting Policies [Continued]

Concentration of Credit Risk - The Company extends credit to customers which
results in accounts receivable arising from its normal business activities. The
Company does not require collateral or other security to support financial
instruments subject to credit risk. It routinely assesses the financial strength
of its customers and believes that its accounts receivable credit risk exposure
is limited. Such estimate of the financial strength of such customers may be
subject to change in the near term. For each of the years ended December 31,
2000, and 1999, a significant portion of the Company's receivables were derived
from three customers [See Note 12].

Due to the nature of its operations, the Company deposits, on a monthly basis,
amounts in excess of the federally insured limit in financial institutions for
the payment of payroll costs. Such amounts are reduced below the federally
insured limit as payroll checks are presented for payment. Such reduction
generally occurs over three to four business days. At December 31, 2000, the
Company had amounts on deposit which exceeded the federally insured limit by
approximately $43,000. The Company has not experienced any losses and believes
it is not exposed to any significant credit risk from cash and cash equivalents.

[3] Accounts Receivable and Loan Payable - Asset Based Lender

Receivables are shown net of an allowance for doubtful accounts of $62,500 at
December 31, 2000 and 1999. On June 7, 2000 the Company entered into a one year
revolving credit agreement with an asset-based lender. Pursuant to the credit
agreement, the Company can borrow up to 85% of its qualified accounts
receivables at an interest rate of prime plus 2% with a minimum monthly interest
of $12,000. The maximum availability on the credit agreement is $2.5 million.
The borrowings are secured by a security interest in all of the Company's
assets. At December 31, 2000 such borrowings were approximately $900,000. At
December 31, 1999 the borrowings from the Company's prior lender amounted to
$2.1 million. The interest rate (exclusive of any fees) payable by the Company
at December 31, 2000 was 11.5% and at December 31, 1999 and December 31, 1998
9.75% and 8.5% respectively.






                                      F-13











<PAGE>     40

TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

[4] Property and Equipment

Property and equipment at December 31, 2000 and 1999 is as follows:

                                               2 0 0 0     1 9 9 9
Equipment                                   $  472,929   $ 454,214
Furniture and Fixtures                         199,921     197,107
Leasehold Improvements                         100,510     100,510
                                             ---------    ---------
Totals - At Cost                               773,360     751,831
Less: Accumulated Depreciation                 659,677     589,011
                                             ---------    ---------
Totals                                      $  113,683   $ 162,820

Depreciation expense charged to operations was $70,666 in 2000, and $72,393 in
1999 and $78,694 in 1998.

[5] Intangibles

The Company acquired its subsidiaries during 1994. As part of the purchase
agreements, the Company acquired customer lists, a restrictive covenant and
goodwill. The intangible assets acquired and the related amortization on the
straight-line method are summarized as follows:
<TABLE>
<S>               <C>  <C>          <C>        <C>          <C>         <C>

                                     Accumulated Amortization      Net of Amortization
                    Life                  December 31,              December 31,
                    Years    Cost       2000       1999              2000      1999
Customer Lists         15   $3,374,477  $1,435,774 $1,210,822    $1,938,703  $2,163,655
Goodwill               20    $ 971,623  $  341,807 $  293,231    $  629,816  $  678,392

</TABLE>

Goodwill represents the excess of the acquisition costs over the fair value of
net assets of business acquired. Amortization expense is calculated on a
straight-line basis over twenty years. Customer Lists represent listings of
customers obtained through acquisitions to which the Company can market its
services. Customer Lists are recorded at cost and are amortized on a straight-
line basis over the estimated useful life of fifteen years. The Company reviews
Goodwill and other intangibles to assess recoverability from future operations
using undiscounted cash flows. If the review indicates impairment, the Company
will incur a charge against operations to the extent that carrying value exceeds
fair value. Management has determined that fair value exceeds carrying value as
of December 31, 2000.


                                      F-14




<PAGE>     41
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

[6] Related Party Transactions

Pursuant to an agreement  with  i-engineering.com,  Inc., the Company (i) loaned
$500,000 to  i-engineering.com on a short-term basis, (ii) issued 270,000 shares
of Common Stock to  i-engineering.com  and (iii) acquired a minority interest in
i-engineering.com. The value of this interest was determined by the market value
of the Company's shares exchanged which was $331,830.

On December 5, 2000,  following the failure of  i-engineering.com,  Inc. to make
timely  payment of principal and interest in the  aggregate  amount of $223,951,
the Company entered into an agreement with i-engineering.com pursuant to which ,
among other things, the Company extended payment of the note, i- engineering.com
returned to us the 270,000 shares of Common Stock,  and the Company  returned to
i-engineering.com,  50% of the shares of i-  engineering.com  which it  received
(other than shares  which are to be issued to the lenders  described  above) and
placed the remaining  shares in escrow pending payment by  i-engineering.com  of
its notes to the Company.

In September 2000, Arc Networks, which was formerly a subsidiary of The Sagemark
Companies  Ltd.  ("Sagemark"),  made  payment  in full  on the  10%  installment
promissory  note due the  Company  August 21,  2003 in the  principal  amount of
$1,216,673,  (the  "Arc  Note").  Sagemark  was  formerly  know as  Consolidated
Technology  Group Ltd. On December 31, 1999,  Arc Networks was in default on the
Arc Note which was  guaranteed  by Sagemark and others.  In February,  April and
July 2000 the Company  agreed to extend the maturity  date of the Arc Note until
September  15,  2000 in  exchange  for  $80,000 and a transfer to the Company of
50,000 shares of common stock from Sagemark.  This transfer  reduced  Sagemark's
holdings in the Company to 329,994,  or  approximately  11.4%.  At December  31,
2000, Sagemark was not considered an affiliate of the Company.

On May 3, 1999, Sagemark, through a subsidiary, transferred 1,150,000 shares of
the Company's common stock to the Company in consideration of the cancellation
of shares of Sagemarks Series G 2% Cumulative Redeemable Preferred Stock owned
by the Company, including accrued dividends, and certain other obligations due
to the Company. The transfer of the 1,150,000 shares to the Company reduced
Sagemark's holdings in the Company to 379,994 shares, or approximately 14.2% of
its outstanding common stock. Prior to the transfer, Sagemark owned 40.1% of the
Company's outstanding common stock. The effect of this transaction is the
elimination of the investment in preferred stock of affiliate and the reduction
of the amount due from affiliates by $325,952, and an increase in Treasury Stock
of approximately $2.6 million, which resulted in a reduction in stockholders
equity for the same amount.

The Company had a management  services agreement with a wholly-owned  subsidiary
of Sagemark  pursuant to which the Company paid a monthly fee of $10,000 through
January 1998.  Commencing  February 1998 such fee was increased to $15,000.  The
Company terminated the management services agreement effective April 30, 1998.
















                                      F- 15






<PAGE>     42
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENT

[7] Notes Payable

In January,  2000 the  Company  raised $1 million  through  the  issuance of 10%
subordinated  promissory  notes  due July  2001 or  earlier  upon the  Company's
receipt of payment of the note from Arc  Networks,  Inc. At June 30,  2000,  the
unpaid  principal  balance  of the note from Arc  Networks  ("the Arc Note") was
$994,000. In connection with the subordinated notes, the Company issued warrants
to purchase  575,000  shares of the Company's  common stock at $.35 per share to
the  investors,  the placement  agent and others who assisted the Company in the
financing, including a director of the Company. The Company incurred a financing
charge of $210,000  which was  credited to paid in capital for the fair value of
the  warrants.  The  Company  also  agreed to transfer to the lenders 10% of its
equity  interest  in  i-engineering.com.  At  December  31, 2000 the Company had
repaid the  noteholders  $850,000 of the  principal  amount plus  interest.  The
remaining  noteholders  have  agreed to extend  the due date of the notes to the
earlier of March 31,  2001 or when the  Company is able to raise  $300,000  from
outside sources.

[8] Income Taxes

Deferred income taxes reflect the net tax effects of (a) temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, and (b) operating loss
carryforwards. The tax effects of significant items comprising the Company's net
deferred tax asset as of December 31, 2000 and 1999 are as follows:

                                                              December 31,
                                                           2000        1999

Deferred Tax Liabilities                                 $    --      $     --
                                                          --------      --------
Deferred Tax Assets:
 Allowance for Doubtful Accounts not
  Currently Deductible                                     25,000       25,000
 Net Operating Loss Carryforwards                       2,320,000    1,748,000
                                                         ---------- -----------
Totals                                                  2,345,000    1,773,000

Valuation Allowance                                     2,345,000    1,283,000
                                                       -----------   -----------
Net Deferred Tax Asset                                        -0-      490,000
Net Deferred Tax Asset - Current Portion                      -0-          -0-
                                                          ---------   ---------
Net Deferred Tax Asset - Non Current                      $   -0-    $ 490,000

The  Company's  deferred  tax  asset  valuation  allowance  was  $2,345,000  and
$1,283,000  as of  December  31,  2000 and  1999,  respectively.  The  valuation
allowance  represents  the tax effects of net operating loss  carryforwards  and
other temporary  differences  which the Company does not expect to realize.  The
increase in the valuation  allowance amounted to $1,062,000 and $648,000 for the
years ended December 31, 2000 and 1999, respectively.
                                     F-16

<PAGE>     43
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

The current and deferred income tax components of the provision [benefit] for
income taxes consist of the following:
                                             Years ended  December 31,
                                      2000           1999           1998
                                      -----          ----          -----
<TABLE>
<S>                                 <C>              <C>             <C>
Current:
 Federal                            $       -0-      $     -0-        $ 149,009
 State                                      -0-            -0-           49,965
Tax Benefit of Net Operating
 Loss Carryforwards                         -0-            -0-         (168,237)
                                       --------        -------          -------
Totals                              $       -0-      $     -0-        $  30,737

Deferred:
 Federal                            $   382,000      $  181,424       $(286,994)
 State                                  108,000          50,576        ( 80,006)
                                      ---------      ---------         --------
Totals                              $   490,000      $  232,000       $(367,000)
                                      --------       ----------        --------
Totals                              $   490,000      $  232,000       $(336,263)
                                     ==========      ==========        ========
</TABLE>
A reconciliation of the federal statutory rate to the Company's effective tax
rate is as follows:
<TABLE>
<CAPTION>
                                              Years Ended December 31,
                                            2000            1999        1998
                                             ----            ----        ----
<S>                                         <C>             <C>         <C>
Federal Statutory Rate                      (34%)           34%           34%

State Income Taxes, net of
 federal tax                                ( 7%)            7%            7%

Federal tax benefit of net operating
 loss carryforwards                          -0-            -0-          (32%)
Increase (Decrease)in valuation allowance    75%            55%          (81%)
                                            -----          -----         -----
Effective tax rate                           34%            14%          (72%)
                                            =====         =====          =====
</TABLE>
The following summarizes the operating loss carryforwards by year of expiration:

                  Amount                 Expiration Date
                $   80,000               December 31, 2009
                 2,163,000               December 31, 2010
                   189,000               December 31, 2011
                   438,000               December 31, 2012
                 1,500,000               December 31, 2014
                 1,430,000               December 31, 2015
                 ---------
                $5,800,000
              ==========              F-17
<PAGE>     44
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

[9] Commitments
The Company leases office space and several office machines under operating
leases which expire in 2002. The following is an analysis of future minimum
lease commitments as of December 31, 2000:

2000                    208,717
2001                    205,331
2002                     79,385
2003                     27,960
2004                      1,120
                       --------
Total           $       522,513

Rent expense amounted to $208,717, $202,802, and $225,198 for the years ended
December 31, 2000, 1999 and 1998, respectively.

The company has an employment  agreement with the chief executive  officer which
expires in 2005. Pursuant to the agreement, the chief executive officer received
minimum annual compensation of $260,000,  subject to an annual increase equal to
the  greater  of the  increase  in the cost of  living  index or 5%.  The  chief
executive  officer is entitled to a bonus of 5% of the  Company's  income before
taxes,  as  defined,  up to a maximum  of 200% of his annual  salary.  The chief
executive  officer is also  entitled  to  severance  payments  in the event of a
termination of his employment  following a change of control,  which would equal
the  greater of five times his annual  compensation  or his annual  compensation
multiplied by the number of years remaining in the term.

The Company also has an employment  agreement with its chief  financial  officer
which  expires in 2003,  pursuant to which he receives a minimum  base salary of
$127,960 subject to an annual increase not less than 5%.

In January 2000, we entered into a two year  consulting  agreement with Westwind
Holdings,  Inc.  to  provide  advisory  services  to  the  Company  specifically
concerning  strategic  planning,  mergers and  acquisitions , public  relations,
raising  capital and other related  matters.  The Company  agreed to pay $10,000
each month for the services.

[10] Contingencies

In November  1997,  an action was commenced in the Supreme Court of the State of
New York,  County of Suffolk,  by Ralph  Corace  against RMI seeking  damages of
approximately $1.1 million for an alleged breach of contract by the Company. Mr.
Corace was the president of Job Shop Technical  Services,  Inc.,  from which the
Company,  through a subsidiary,  purchased  assets in November  1994. We believe
that the action is without  merit,  we are  contesting  this  matter and we have
filed counterclaims against Mr. Corace.



Due to the  uncertainties  in the legal process it is  reasonably  possible that
management's view of the outcome of this may change in the near term.

[11] Fair Value of Financial Instruments
Effective December 31, 1995, the Company adopted SFAS No. 107, which requires
disclosing fair value to the extent practicable for financial instruments which

F-18
<PAGE> 45
TRANS GLOBAL SERVICES,INC.
NOTES TO FINANCIAL STATEMENTS

are recognized or unrecognized in the balance sheet. The fair value of the
financial instruments disclosed therein is not necessarily representative of the
amount that could be realized or settled, nor does the fair value amount
consider the tax consequences or realization or settlement.

For certain  financial  instruments,  including cash and cash  equivalents,notes
receivable,  trade receivables and payables, and short-term debt, it was assumed
that the  carrying  amount  approximated  fair  value  because  of the near term
maturities of such obligations.

[12] Economic Dependency

In 2000, three customers accounted for revenue of approximately $13.4 million or
57% of the Company's total revenue. Accounts receivable of $940,000 were due
from these customers collectively at December 31, 2000.

In 1999, three customers accounted for revenue of approximately $17 million, or
47% of the Company's total revenue. Accounts receivable of $670,000 were due
from these customers collectively at December 31, 1999. In 1998, three customers
accounted for approximately $40 million, or 60% of the Company's total revenue.
Accounts receivable of $1,720,000 were due from these customers collectively at
December 31, 1998.
                                       Revenues for the twelve
                                      months ended December 31
<TABLE>
<S>                                  <C>           <C>          <C>
                                       2000          1999         1998

Lockheed-Martin                      5,700,000      7,300,000   12,200,000
Bell Helicopter Textron              4,100,000      4,900,000
Boeing                               3,600,000      4,600,000   16,300,000
Northrop Grumman                                                11,600,000
                                     ---------     ----------   ----------
                                    13,400,000     16,800,000   40,100,000
</TABLE>
 [13] Stockholders Equity

At  December  31, 2000 and 1999,  the  authorized  capital  stock of the Company
consisted of 5,000,000  shares of preferred stock, par value $.01 per share, and
25,000,000  shares  of common  stock,  par value  $.01 per  share.  The Board of
Directors  has the right to create and to define  the  rights,  preferences  and
privileges of the holders of one or more series of Preferred Stock.

F-19
<PAGE>     46
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

At December  31,  2000 and 1999 there were no shares of any series of  preferred
stock outstanding.

At December 31, 2000, there were outstanding warrants to purchase 1,429,162
shares of Common Stock at prices ranging from $.35 - $21.00 per share.

A summary of warrant activity is as follows:

                               2000                   1999                1998
                               Weighted              Weighted           Weighted
                               Average               Average            Average
                               Exercise              Exercise           Exercise
                    Shares     Price       Shares    Price     Shares   Price
<TABLE>
<S>                 <C>        <C>        <C>       <C>       <C>        <C>
Outstanding-Beginning
 of Years             892,312     8.64    901,485   $ 9.07     913,359    $9.36
Granted or Sold
 during the years     612,500      .35         --       --          --       --
Cancelled during
 the years                --       --         --       --           --      --
Expired during
 the years                --       --       9,173    50.70      11,874    30.95
Exercised during
 the years                --       --          --       --          --       --
Outstanding-
 End of Years       1,504,812     5.27     892,312    8.64     901,485     9.07
                      =======     ====    =========   =====    =======   =====
Exercisable -
 End of Years       1,429,162     4.44     816,662    7.50     825,835     7.98
                      =======     ====    =========   =====    =======   ======
</TABLE>
The following table summarizes warrant information as of December 31, 2000

                                             Weighted Avg.       Weighted Avg.
Range of Exercise Price                      Remaining           Exercise
                            Shares           Contractual Life    Price
<TABLE>
 <S>                        <C>              <C>                 <C>
   .35                      612,500            1 Year              .35
  7.50                      816,662           .3 Years            7.50
 21.00                       75,650            (A)               21.00
                            -------
                          1,504,812
</TABLE>
(A) These warrants are exercisable  immediately upon issuance and expire 45 days
after  the  effective  date  of  the  first  registration  statement  under  the
Securities  Act of 1933,  as amended,  in which the holders of the  warrants are
given the  opportunity  to include  the  shares of Common  Stock  issuable  upon
exercise of the warrants.

F-20

<PAGE>   47
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

[14] Stock Option Plans

The Company presently has three stock option plans. In 1993, the Company adopted
the 1993 Stock Incentive Plan [the "1993 Plan"], covering an aggregate of 25,000
shares of Common Stock. In January 1995, the board of directors adopted the 1995
Stock Incentive plan [the "1995 Plan"], pursuant to which stock options and
stock appreciation rights can be granted with respect to 50,833 shares of Common
Stock. All of the options outstanding under the "1993 Plan" and "1995 Plan"
expired prior to December 31, 2000.

In May 1995, the board of directors adopted, and, in March 1996, the
stockholders approved the 1995 Long Term Incentive Plan [the "1995 Incentive
Plan"], initially covering 83,333 shares of Common Stock.

In April and November 1996, the board of directors and stockholders approved an
amendment to the 1995 Incentive Plan which increased the number of shares of
Common Stock currently subject to the 1995 Incentive Plan to 415,388 shares. The
number of shares of common stock subject to the 1995 Incentive Plan
automatically increases by 5% of any shares of Common Stock issued by the
Company other than shares issued pursuant to the 1995 Incentive Plan.

In October 1997, the committee granted incentive stock options to purchase an
aggregate of 216,000 shares of common stock at $3.875 per share, being the fair
market value on the date of grant. Such options were granted to Mr. Joseph G.
Sicinski, president of the Company, who received an option to purchase 90,000
shares of common stock, Mr. Lewis S. Schiller, chairman of the board of the
Company, at that time, who received an option to purchase 25,000 shares of
common stock, one other officer, who received an option to purchase 20,000
shares of common stock and twenty other employees who received options to
purchase an aggregate of 81,000 shares of common stock. All options have a 5
year term.

During 1998, the Company adopted the 1998 Long-Term Incentive Plan (the "1998
Plan"), covering 350,000 shares of common stock. In June 1998, the committee
granted stock options to purchase an aggregate of 215,000 shares of common stock
at $4.00 per share, being the fair market value on the date of grant. In
December 1998, these options were repriced to $1.25 per share of common stock,
the fair market value on that date. All options are fully vested as of December
31, 1998. Such options were granted to Mr. Joseph G. Sicinski, president and CEO
of the Company, who received an option to purchase 60,000 shares of common
stock, two other officers who received options to purchase an aggregate of
40,000 shares of common stock, the chairman of the board received options to
purchase 20,000 shares of common stock, the three other directors of the Company
each received options to purchase 10,000 shares of common stock and seven other
employees who received options to purchase an aggregate of 65,000 shares of
common stock. All options have a five year term.





                                          F-21
<PAGE>     48
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

In June 1999,  the  committee  granted stock options to purchase an aggregate of
254,332  shares of common  stock,  122,224 under the 1995 Plan and 132,108 under
the 1998 Plan,  at $.80 per share,  being the fair  market  value on the date of
grant.

In December 1999, the board of directors repriced all of the outstanding stock
options held by present employees and directors to $.53, the fair market value
on that date. (See Note 17)

During 2000, the Company  adopted the 1999  Long-Term  Incentive Plan (the "1999
Plan"),  covering 130,000 shares of common stock. On the date of the adoption of
the Plan, each of three Non-Employee  Directors  received a Non-Qualified  Stock
Option to purchase  10,000  shares of Common Stock at an option price of $.9375.
During 2000,  options to purchase 35,000 shares became  available under the 1998
Plan due to  employee  terminations  and the  board  granted  stock  options  to
purchase an aggregate  of 37,333 at an option  price of $.1562 per share,  being
the fair market value on the date of grant.

No compensation cost was recognized for stock-based employee awards.

A summary of the activity under the Company's stock option plans is as follows:
<TABLE>
<CAPTION>
<S>                     <C>           <C>         <C>           <C>         <C>

                        1993          1995          1995          1998      1999
                        Plan          Plan          Plan          Plan      Plan

Options Outstanding
 and Exercisable
  - December 31, 1997  18,992        5,833         434,333           --       --
Weighted Average Exercise
   Price              $ 13.50      $  5.28        $   5.39           --       --
Granted                    --           --              --      215,000       --
Exercised                  --           --              --           --       --
Canceled or expired        --           --        (141,169)          --       --

Options Outstanding and
  Exercisable
  - December 31, 1998  18,992        5,833         293,164      215,000       --

Weighted Average Exercise
    Price             $ 13.50      $  5.28        $   5.39     $   1.25       --
Granted                    --           --         122,224      132,108       --
Exercised                  --           --              --          -0-       --
Canceled or expired        --           --              --      (10,000)      --

Options Outstanding and
  Exercisable
  - December 31, 1999  18,992        5,833         415,388      337,108       --
Weighted Average Exercise
    Price             $ 13.50      $  5.28        $    .53     $    .53  $ .9375
Granted                    --           --              --       37,333   30,000
Exercised                  --           --              --          -0-       --
Canceled or expired   (18,992)      (5,833)             --      (35,000)      --
Options Outstanding and
  Exercisable
  - December 31, 2000     --            --         415,388      339,441   30,000
Weighted Average Remaining
   Contractual Life                              3.42 years    3.0 years  9.6 years
</TABLE>
F-22

<PAGE>     49
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

The following table summarizes option information as of December 31, 2000

                                             Weighted Avg.       Weighted Avg.
Range of Exercise Price                      Remaining           Exercise
                            Shares           Contractual Life    Price
<TABLE>
 <S>                        <C>              <C>                 <C>
   .9375                     30,000           9.6  Years           .9375
   .53                      339,441           4.0  Years           .53
   .53                      415,388           4.42 Years           .53
</TABLE>
If the Company had  accounted  for the issuance of all options and  compensation
based  warrants  pursuant  to the fair value based  method of SFAS No. 123,  the
Company would have recorded compensation expense totaling $42,300,  $135,441 and
$168,439,  for the years ended December 31, 2000,  1999 and 1998,  respectively,
and the  Company's  net income (loss) and net income (loss) per share would have
been as follows:
                                                 Years ended
                                                 December 31,
                                       2 0 0 0        1 9 9 9       1 9 9 8
<TABLE>
<S>                                 <C>            <C>             <C>
Net(Loss) Income as Reported        $(1,922,853)   $(1,853,031)    $  805,261
                                      ==========     =========     ===========
Pro Forma Net(Loss) Income          $(1,965,153)   $(1,988,472)    $  636,822
                                      ==========     =========     ===========
Basic (Loss) Earnings
 Per Share as Reported              $     (.67)    $      (.61)    $      .21
                                      ==========     =========     ===========
Pro Forma Basic (Loss) Earnings
 Per Share                          $     (.69)    $      (.65)    $      .17
                                      =========     ===========   ============
</TABLE>
The fair value of options and warrants [See Note 13] at date of grant was
estimated using the fair value based method with the following weighted average
assumptions:
                                  2000    1999     1998
Expected Life [Years]               5        4        5
Interest Rate                     6.2%     6.4%    4.67%
Annual Rate of Dividends            0%       0%       0%
Volatility                     126.59%  120.53%   71.99%

The weighted average fair value of options at date of grant using the fair value
based method during 2000, 1999, and 1998 is estimated at $0.63, $0.44, and $0.78
respectively.




F-23
<PAGE>     50
TRANS GLOBAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

 [15] Employment Benefit Plans

The Company  sponsors a Qualified  Retirement  Plan under section  401(k) of the
Internal  Revenue  Code.  Employees  become  eligible  for  participation  after
completing  three months of service and  attaining  the age of  twenty-one.  The
Company has the option to make a matching contribution to the Plan for the years
ended December 31, 2000,  1999 and 1998,  however,  it has not made any matching
contributions to the Plan.

 [16] New Authoritative Accounting Pronouncements

In December 1999, the SEC issued Staff Accounting  Bulletin No. 101 ("SAB 101"),
"Revenue Recognition in Financial Statements." SAB 101 summarized the SEC's view
in  applying  generally  accepted  accounting  principles  to  selected  revenue
recognition issues. SAB 101 was effective as of October 1, 2000. The adoption of
SAB 101 did not have a material  impact on the Company's  financial  position or
results of operations.

In  April  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation No 44 ("FIN44"),  "Accounting for Certain Transactions  Involving
Stock  Compensation,"  and  interpretation  of  APB  Opinion  No.25.  FIN  44 is
effective for transactions  occurring after July 1, 2000. The application of FIN
44 did not have material impact on the Company's financial statements.


(17)  Subsequent Events

In January 2001, the exercise price of all stock options outstanding was reduced
to $.125 per share,  and the option holders were given the right to exercise the
options  through  the  issuance  of  their  non-interest   bearing  non-recourse
promissory  notes which are  payable on the earlier of January  2006 or the date
the shares are sold.  The shares are held by the Company as security for payment
of the notes.


(18)  Selected Quarterly Financial Data (Unaudited)

The following information shows selected items by quarter fo rthe years ended
December 2000 and 1999 respectively.

<TABLE>
<S>                         <C>            <C>           <C>           <C>
                              First         Second        Third        Fourth
                             Quarter        Quarter      Quarter       Quarter

Net Revenue:
  2000                      6,503,330      5,498,973     5,455,547     5,867,344
  1999                     11,218,307      9,477,423     8,353,145     6,966,398

Gross Profit:
  2000                        646,011        580,314       512,166       611,264
  1999                        725,810        757,570       740,321       743,179

Net (Loss):
  2000                      ( 308,161)      (323,608)    ( 443,608)   ( 847,476)-2
  1999                   1- ( 139,555)      (435,368)    ( 414,517)   ( 863,590)-2

Basic and diluted
 (Loss) per share:
  2000                      (    0.11)      (   0.11)    (    0.15)   (    0.30)
  1999                      (    0.04)      (   0.14)    (    0.16)   (    0.27)
</TABLE>


1- Includes a $323,000 payroll tax refund from the IRS, that was a result of the
Company's  successful  efforts in collecting  contested tax penalties which were
paid in previous years.

2 Includes an  adjustment  to the  deferred  tax asset  valuation  allowance of
$490,000 in 2000 and $232,000 in 1999.
                                     F-24


<PAGE>  51
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

                                                          SECURITY AGREEMENT
                                                          ACCOUNTS RECEIVABLE


AGREEMENT dated June 7, 2000 between STERLING NATIONAL BANK ("Secured Party"), a
national banking  association  having an office at 500 Seventh Avenue, New York,
New York 10018, and TRANS GLOBAL SERVICES,  INC. ("Trans Global"), 1393 Veterans
Memorial Highway,  Hauppauge,  New York 11788, a Delaware corporation,  RESOURCE
MANAGEMENT INTERNATIONAL,  INC., 1393 Veterans Memorial Highway,  Hauppauge, New
York 11788, a Delaware  corporation,  AVIONICS  RESEARCH  HOLDINGS,  INC.,  1393
Veterans  Memorial  Highway,  Hauppauge,  New York 11788 a New York Corporation,
AVIONICS RESEARCH CORPORATION,  1393 Veterans Memorial Highway,  Hauppauge,  New
York 11788 a New York corporation and AVIONICS RESEARCH  CORPORATION OF FLORIDA,
1393 Veterans Memorial Highway, Hauppauge, New York 11788 a Florida corporation,
hereinafter  collectively  referred to as  ("Debtor")  and each of whom shall be
jointly and severally bound hereunder.

Debtor  desires  to  obtain  loans  from  Secured  Party  from time to time on a
revolving  basis on the security of Debtor's  "Receivables,"  as herein defined,
upon the following terms and conditions:

All advances shall be disbursed by Secured Party from its office in the City and
State of New York,  may be made by  crediting  the account of Trans  Global with
Secured  Party or otherwise as Secured  Party may determine and shall be payable
at such office,  and this  Agreement  and all  transactions  hereunder  shall be
deemed to be consummated  in, shall be governed by, and shall be construed under
the laws of such State.

1.  Secured  Party  agrees to make  advances to Debtor from time to time in such
amounts as may be mutually agreed upon to an aggregate amount  outstanding up to
85% of the outstanding  amount of  Receivables,  which shall have been assigned,
pledged or  transferred  to Secured  Party as  provided  in  paragraph 5 of this
Agreement and still held by Secured Party and shall conform to the definition of
"Eligible  Receivables"  herein.  All  amounts  collected  by  Secured  Party on
Receivables  shall be credited to Debtor's  current  account with Secured Party.
The excess of  collections  over  Obligations as defined herein shall be paid to
Debtor at the termination of this Agreement,  or at such earlier time as Secured
Party may determine. Unless Debtor is in default to Secured Party collections in
excess of Obligations shall be paid over to Debtor upon request.

2 (a). If at any time the ratio of  Obligations  to Eligible  Receivables  shall
exceed the foregoing  percentage,  Debtor shall on  notification of such fact by
Secured  Party  forthwith  pay to Secured  Party such  amount as will reduce the
Obligations  to the foregoing  percentage of Eligible  Receivables.  Such excess
Obligations  shall be deemed an  "Overadvance."  Any  Overadvance  which Secured
Party,  in its sole  discretion,  permits to exist shall bear interest at a rate
equal to five percent (5%) above the  contractual  rate of interest set forth in
paragraph 7 of this Agreement.








<PAGE>  52
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank


     (b) Debtor shall pay to Secured  Party on demand the unpaid  portion of any
Receivable which was formerly an Eligible Receivable and which has been assigned
or  transferred  to Secured  Party or in which  Secured  Party  otherwise has an
interest (i) if such  Receivable was not paid promptly at its maturity;  (ii) if
the services out of which the  Receivable  arises have not been performed to the
satisfaction  of the Account  Debtor,  or the goods out of which the  Receivable
arises have not been  delivered  to and  accepted by the Account  Debtor,  or if
Account  Debtor has returned or sought to return the goods or made any complaint
or claimed any adjustment with respect thereto;  (iii) if any petition under the
Bankruptcy  Act or any  similar  Federal  or State  statute  or a  petition  for
receivership  has been filed by or against the Account Debtor or its property or
if it has made an assignment for the benefit of creditors or (iv) if the Secured
Party shall at any time  reasonably  have  rejected the  Receivable as no longer
eligible.

     (c) All  advances and all other  Obligations  of Debtor shall be payable to
the Secured Party  without the  necessity of the Secured  Party  resorting to or
having  recourse to any  Collateral,  as herein  defined,  or at Secured Party's
option such amount may be charged  against and deducted from any payment then or
thereafter due from Secured Party to Debtor.

     (d)  Upon  the  effective  date  of  termination  of  this  Agreement,  all
Obligations shall be due and payable by Debtor to Secured Party.

     (e) Upon full payment of all  Obligations,  Secured Party shall reassign to
Debtor,  without  recourse  and  without  warranties  express  or  implied,  all
Collateral.

3. Secured  Party shall render to Debtor each month by mailing to Trans  Global,
by ordinary mail prepaid,  a statement of Debtor's  account with Secured  Party,
which  shall be deemed to be correct and  accepted  by and  binding  upon Debtor
unless  Secured  Party  shall have  received  a written  statement  of  Debtor's
exceptions  within 15 days after the mailing thereof,  and in any event shall be
deemed correct and accepted except as to the matters stated in such exceptions.

4. Definitions:

     (a)  "Receivables"  includes but is not limited to open accounts whether or
not matured and whether or not executory, contract rights, chattel paper, notes,
rental  receivables,  tax refunds,  installment  payment  obligations  and other
obligations  for the payment of money payable to Debtor and created by Debtor or
acquired by Debtor from others,  and  contracts,  documents,  invoices and other
instruments  evidencing  the same,  which  Receivables  are created or otherwise
arise out of the sale of  merchandise  or the supplying of services by Debtor in
the regular course of its business or otherwise.  The term includes any property
or interest in property  classified  as  "Accounts"  or an  "Account"  under the
Uniform  Commercial  Code in effect in the State of New York, as the same may be
amended  from time to time,  as well as accounts  receivable,  contract  rights,
general  intangibles,  chattel paper or  instruments,  and all cash and non-cash
proceeds  thereof,  and all security therefor and all of Debtor's rights present
or future to any property sold or leased which is represented thereby.




<PAGE>  53
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

     (b) "Eligible  Receivables" mean open account  Receivables which are and at
all times shall  continue to be acceptable to Secured Party in all respects,  as
determined in its sole  discretion  exercised  reasonably and in good faith.  No
Receivable the amount of which the Debtor is obliged to pay to the Secured Party
pursuant to paragraph 2 (b) shall be deemed to be an Eligible  Receivable unless
otherwise deemed  ineligible by Secured Party.  Eligible  Receivable may include
Receivables  payable within 90 days of invoice.  Eligible  Receivables shall not
include  the Arc Note and the  i-engineering.com  Note.  The Arc Note is the 10%
promissory  note  issued  by Arc  Networks,  Inc.  in the  principal  amount  of
approximately  $1.0 million at June 2, 2000, and the  i-engineering.com  Note is
the 10%  promissory  note issued by  i-engineering.com,  Inc.  in the  principal
amount of $300,000 at June 2, 2000. The Arc Note and the i-engineering.com  Note
are  collectively  referred to as the  "Outstanding  Notes."  Nevertheless,  the
Outstanding  Notes  shall be  deemed  security  for the  payment  in full of all
Obligations, subject to existing obligations of Debtor to the holders of the 10%
Subordinated  Note due July 12, 2001 related  thereto,  provided  such  existing
obligations  are not  extended  or renewed  without  consent  of Secured  Party.
Secured  Party hereby  consents to a 90 day  extension of the  i-engineering.com
Note.  Collections  on the  Outstanding  Notes shall be deposited by Debtor in a
separate bank account  maintained with Secured Party for that purpose.  Provided
Debtor is not in default under this Agreement,  proceeds from payment of the Arc
Note may be used by Debtor to pay principal and interest on the existing note of
Trans Global Services,  Inc. to the holders of the 10% Subordinated  Note due in
July , 2001.

     (c) "Obligations" shall mean all advances from time to time made by Secured
Party to Debtor and to others at Debtor's  request or for Debtor's account under
this Agreement and also all other  indebtedness and obligations  owing by Debtor
or its  subsidiaries or affiliates or persons  controlling the Debtor to Secured
Party and its  affiliates  under this  Agreement or  otherwise,  now existing or
hereafter arising, whether such Obligations be absolute or contingent,  joint or
several, matured or unmatured,  direct or indirect, primary or secondary, due or
to become due, including without limitation Secured Party's compensation and all
fees  referred  to herein,  all  charges  and fees that  Secured  Party may have
incurred in filing  public  notices and any local taxes  relating  thereto,  all
costs and expenses  (including  attorneys'  fees)  incurred by Secured  Party in
efforts  made to  enforce  payment  or to  otherwise  effect  collection  of any
Receivables, in protecting,  maintaining,  preserving,  enforcing or foreclosing
the  pledge,  lien  and  security  interest  in  Receivables  of  Secured  Party
hereunder,  and in defending or prosecuting  any actions or proceedings  arising
out of or  relating  to  Secured  Party's  transactions  with  Debtor or Secured
Party's  transactions  with  third  parties  that  refer to or relate to Debtor,
through judicial proceedings or otherwise,  all of which Debtor agrees to pay as
provided  herein.  If the Secured Party shall become liable to the United States
in relation  to wages of  employees  of Debtor by virtue of Section  3505 of the
Internal  Revenue  Code of 1954 (as added by Section 105 of the Federal Tax Lien
Act of 1966),  whether or not such amount has been paid by Secured  Party,  such
amount  shall be an  Obligation  payable by Debtor to Secured  Party  hereunder.
Debtor  authorizes  Secured Party to pay any such amount to the United States on
behalf of Debtor,  but Secured Party shall not be obligated to do so or continue
to do so.  Debtor  authorizes  Secured Party to pay to any landlord on behalf of
Debtor the amount of any  statutory  landlord's  lien on premises on which or in
the contents of which Secured Party has a security interest. Secured Party shall
not take any  action  to pay any  taxes or make  any  payments  to any  landlord
without notice to Debtor unless the claim involves $150,000.00 or more, in which
event Secured Party shall give Debtor five days written notice,  unless there is
a valid dispute and Debtor has posted an appropriate bond..
<PAGE>  54
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

     (d) "Base Rate" is the interest  rate  announced by Secured Party from time
to time as a guide for  determining  interest  and is not  necessarily  the rate
charged to Secured Party's most creditworthy customers.

     (e)  "Account  Debtor"  shall  mean a person  (other  than the  Debtor or a
guarantor of the Debtor) who is obligated on an account, chattel paper, contract
right, general intangible, instrument or other Receivable.

5 As security for the payment in full of all Obligations, including all advances
made and to be made  hereunder  by Secured  Party,  Debtor does hereby  grant to
Secured Party a continuing security interest in, and hereby assigns,  transfers,
pledges and sets over to Secured Party all of Debtor's right, title and interest
in and to: all property  and all assets and  interests in property and assets of
Debtor, of whatever kind or nature,  whether real, personal,  or mixed, wherever
located,  now  existing or  hereafter  acquired or created,  including,  but not
limited to all the Debtor's  Receivables present and future,  whether or not now
or hereafter  specifically  assigned or pledged to Secured Party, and whether or
not  constituting  Eligible  Receivables,  whether  now  existing  or  hereafter
created;  all proceeds of such  Receivables  in whatever form,  including  cash,
deposit accounts,  negotiable  instruments and other instruments for the payment
of money;  the merchandise or other property  represented by such Receivables or
out of which they arise;  all such property that may be reclaimed or repossessed
from Account Debtors; all other accounts due from Account Debtors to Debtor; all
of Debtor's right as an unpaid vendor or lienor  including  stoppage in transit,
replevin and reclamation;  any other of Debtor's  property held by Secured Party
or by others for the Secured  Party's  account,  including  any deposit or other
balances  standing to the Debtor's credit on Secured Party's books which Secured
Party may at any time,  without  notice,  apply against payment of any or all of
the Obligations,  whether or not due. The continuing  general  assignment of and
security  interest in Receivables  contained herein shall include all documents,
contracts, lien and security instruments, guarantees, books and records (whether
in paper form on kept on  computer)  evidencing,  securing  or  relating to such
property,   computer  programs  and  data  files,  discs,   diskettes,   drives,
print-outs,   any  other  computer  materials,  data  processing  cards,  tapes,
tabulating  runs,  programs and similar  material  pertaining to the  foregoing,
together with all of Debtor's  rights and remedies of whatever kind or nature it
may hold or acquire for the purpose of securing and enforcing such  Receivables.
Debtor will mark its ledger cards, books of account and other records (including
computer   records)   relating  to  Receivables   with   appropriate   notations
satisfactory  to  Secured  Party  disclosing  that  such  Receivables  have been
pledged, transferred and assigned to Secured Party.















<PAGE>  55
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

6. In  furtherance of the continuing  assignment  and security  interest  herein
contained,  Debtor will, upon the creation of Receivables,  or at such intervals
as  Secured  Party  may  require,   provide  Secured  Party  with   confirmatory
assignments  in form  satisfactory  to  Secured  Party,  copies of  invoices  to
customers,  evidence of shipment and delivery,  and such further information and
documentation  as Secured  Party may  require  and  Debtor,  at Secured  Party's
request or performance of services, shall deliver to Secured Party all documents
and written  instruments  constituting or relating to  Receivables.  Debtor will
take any and all steps and observe such formalities and will execute and deliver
all papers  and  instruments  and do all things  necessary  to  effectuate  this
agreement  and  facilitate  collection  of  Receivables.  The  delivery  of  any
information and documentation pursuant to this Agreement shall be deemed to be a
certification  by Debtor that as of the date of such delivery,  such information
and documentation is true and correct in all material respects and does not omit
any material  fact  required to be stated  therein or necessary in order to make
such  information  and  documentation  not misleading and shall also be deemed a
certification  that Debtor has no  knowledge  of any default or Event of Default
under this Agreement.

7 (a). Debtor will pay Secured Party as its  compensation,  monthly,  as billed,
within seven (7) days of receipt of monthly statement of charges:  the higher of
(i) Base Rate plus one and  three-quarters  of one  percent  (1.75%) or (ii) the
prime rate as  published  in the Wall Street  Journal  from time to time ("Prime
Rate") plus two percent (2%) per annum on all Obligations outstanding hereunder.

Monthly Minimum Compensation: $12,000.00

     (b) The amount  billed may be charged into the Debtor's  Account by Secured
Party as of the  first  day of the  month  following  the  month for which it is
billed.  Such amount  shall be deemed paid out of the first  collections  in the
account  subsequent to the date of the charge.  At Secured  Party's option up to
three  business  days shall be  allowed  subsequent  to receipt of  remittances,
without regard to the form thereof, from Account Debtors or the Debtor to permit
bank  clearance and  collection of such  remittances  before the amount  thereof
shall be deemed collected by Secured Party, which time interval Debtor agrees is
reasonable.  If the  Secured  Party's  Base  Rate or the  Prime  Rate  shall  be
increased,  the  compensation  to be paid by Debtor to  Secured  Party  shall be
increased  by 1/4 of 1% per annum for each 1/4 of 1% per  annum of  increase  in
said Base Rate or Prime Rate:  The Secured  Party's  present Base Rate is 9.75 %
per annum.  The Prime rate is 9.50% per annum.  If the Secured Party's Base Rate
or the Prime Rate shall be  decreased,  the  compensation  to be paid to Secured
Party  shall be  reduced  by 1/4 of 1% per  annum  for each 1/4 of 1% per  annum
reduction in the said Base Rate or Prime Rate. In no event,  however,  shall the
compensation  to be paid by Debtor to Secured Party be less than the contractual
rate first shown in this Paragraph 7.  Remittances  received by Secured Party by
wire transfer shall be deemed collected upon receipt.

     (c) If  Obligations  become  immediately  due and  payable  pursuant to the
provisions of this  Agreement,  or if Obligations  are not paid in full upon the
effective  date of  termination  of this  Agreement,  or if Debtor is in default
under this  Agreement  (whether or not an Event of Default  has been  declared),
Debtor  shall  thereafter  pay  interest  on  Obligations  from the date of such
declaration,  termination,  or  default,  as the  case  may be,  until  the date
Obligations  are paid in full at a rate per  annum  (calculated  for the  actual
number  of days  based  upon a thirty  (30)  day  month  elapsed  over a year of
360-days)  equal to 5% plus the rate of  compensation  set forth in  paragraph 7
then in effect,  provided,  however,  that such  interest rate shall in no event
exceed the maximum interest rate which Debtor may by law pay.

<PAGE>  56
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

(d) In addition to the  foregoing  compensation,  Debtor shall pay the following
fees and charges.  Debtor agrees that such fees and charges represent reasonable
compensation  for  services  rendered  by  Secured  Party in  administering  the
collateral and the credit facility  established herein or in otherwise providing
reasonable  and  necessary  services to Debtor,  and that such fees are not, and
will not be deemed or alleged to be, disguised interest in any form:

(i) A per  diem  fee of  $750.00  per  person  per day to a  maximum  amount  of
$10,000.00 per year, plus out-of-pocket  expenses, for any examination performed
by or on behalf of Secured Party;

(ii) An annual facility fee of $18,750.00  which fee shall be payable at closing
and annually on the anniversary of this Agreement if renewed.

(iii) A monthly fee of $500.00 for monitoring Receivables.

8. With respect to each Receivable,  present or future,  Debtor hereby makes the
following representations, covenants and warranties, which shall be deemed to be
incorporated by reference in each confirmatory assignment submitted by Debtor to
Secured Party and shall in any event be deemed to be repeated and confirmed with
respect to each item of  Collateral  as it is created or  otherwise  acquired by
Debtor:

     (a)  Debtor's  chief  place of  business,  the  office  where  its  records
concerning  Receivables  are kept,  is at the address  shown at the head of this
Agreement.  Debtor has no other place of business except as set forth in Exhibit
C.

Secured Party may rely upon the foregoing  until it shall have received  written
notice to the  contrary  from Debtor.  Debtor  shall give Secured  Party 30 days
prior written notice of any change of its address, which shall set forth the new
address.
     (b)  Debtor  shall  not,  directly  or  indirectly,  merge  into or with or
consolidate  with any  other  corporation,  partnership,  or  limited  liability
company  or permit any other  corporation,  partnership,  or  limited  liability
company to merge into or with or  consolidate  with it. There shall be no change
in the control or management  of Debtor  without  Secured  Party's prior written
consent.  Debtor shall give Secured  Party 30 days prior  written  notice of any
proposed change in its legal name or any name under which it transacts business,
which notice shall set forth the new name,  and Debtor shall  deliver to Secured
Party  a  copy  of  any  amendment  to the  applicable  organizational  document
providing  for the  name  change  certified  by the  Secretary  of  State of the
jurisdiction of Debtor's organization as soon as it is available.



<PAGE> 57
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank
     (c) So long as any  Obligations  to  Secured  Party  shall be  outstanding,
Debtor shall not,  without the prior written  consent of Secured Party,  pledge,
assign, or grant any security interest in any Receivable or pledge,  mortgage or
grant a security interest in any of its inventory,  equipment, or other property
to anyone except Secured  Party,  or permit any lien or encumbrance to attach to
any of the foregoing, or any levy to be made thereon, or any financing statement
(except the Secured  Party's) to be on file with  respect  thereto,  or sell any
Receivable  otherwise than in the ordinary  course of business.  Notwithstanding
the foregoing,  Debtor may grant security interest in its assets leased pursuant
to a capital  lease or liens for the  purchase of assets  where the lien secures
payment of the purchase price of the assets and is secured only by the purchased
assets; provided, however, that the purchase price of the assets subject to such
capital  leases or  security  interests  shall  not  exceed  $150,000.00  in any
calendar year. All such proposed transactions shall first be offered exclusively
to Secured  Party for a period of 10 business  days.  In the event Secured Party
declines  such  proposed  transactions  Debtor may  proceed to  consummate  such
transactions with others, subject to the terms of this Agreement.

     (d) Debtor is solvent and will remain so and has induced  Secured  Party to
make advances  hereunder  upon Debtor's  written  representation  concerning its
financial  responsibility,  which  Debtor  agrees to renew in writing to Secured
Party upon request from time to time,  but in any event not less often than once
each year.  No federal tax lien has been assessed  against  Debtor which remains
unpaid and  undischarged.  Debtor is not and will not be during the term of this
Agreement  in  default  to the  United  States  in  payment  or  deposit  of any
withholding  taxes or F.I.C.A.  taxes, and will furnish proof in respect thereto
on request.

     (e) Debtor will furnish to Secured  Party within 90 days after the close of
Debtor's fiscal year and within 60 days after the close of the second quarter of
each fiscal year a balance sheet of Debtor as of the end of such fiscal year and
second  quarter,  and a profit and loss  statement  and surplus  statement,  all
reviewed by independent public accountants  acceptable to Secured Party.  Debtor
will furnish to Secured  Party within 60 days after the close of the first,  and
third quarters of each fiscal year similar statements,  certified by a principal
financial  officer of Debtor,  for the elapsed  portion of the fiscal year.  All
such  statements  shall  correspond  to the books of  account of Debtor and such
books  shall have been kept and such  statements  prepared  in  accordance  with
generally  accepted  accounting  principles.   The  delivery  of  any  financial
information  pursuant to this Agreement shall be deemed to be a certification by
Debtor  that as of the  date of such  delivery,  such  information  is true  and
correct in all material respects and does not omit any material fact required to
be stated therein or necessary in order to make such  information not misleading
and shall also be deemed a  certification  that Debtor has no  knowledge  of any
default  or Event of Default  under  this  Agreement.  Debtor  may  satisfy  its
obligations to deliver consolidated  financial statements by delivering its Form
10-K  annual  report  and 10-Q  quarterly  reports  within  five days after such
reports are required to be filed with the Securities and Exchange Commission.







<PAGE>  58
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

     (f) All statements made and all unpaid balances  appearing in the invoices,
documents and instruments  representing or constituting any Collateral or in the
title retention or security  agreement  accompanying  such  Collateral,  and the
nature of the  transaction  as  indicated,  are true and  correct and are in all
respects what they purport to be. All  signatures and  endorsements  that appear
thereon are genuine and all  signatories  and  endorsers  have full  capacity to
contract.

     (g) At the time any Receivable  becomes  subject to a security  interest in
favor of  Secured  Party:  Said  Receivable  shall be a good and  valid  account
representing an undisputed, unconditional bona fide indebtedness incurred by the
Account  Debtor  named  therein for  merchandise  sold and  delivered,  or if so
indicated in the papers  delivered to Secured Party,  sold and shipped,  or sold
and held subject to delivery  instructions,  or for services  theretofore  fully
performed  by the  Debtor  for said  Account  Debtor.  There are and shall be no
setoffs or counterclaims or rights of recoupment against any such Receivable; no
agreement  under which any  deduction or discount may be claimed shall have been
made with Debtor on any such  Receivable  except as indicated in a written list,
statement, or invoice furnished to Secured Party; and Debtor shall be the lawful
owner of each such  Receivable and shall have the right to subject the same to a
first and prior security interest in favor of Secured Party,  without limitation
by any  agreement  or document to which  Debtor is a party or by which Debtor is
bound. No such Receivable shall have been or shall thereafter be sold,  assigned
or  transferred  to any person other than Secured Party or in any way encumbered
except to Secured Party and no other person shall have proceeds  claims thereto,
and the Debtor  shall  defend  the same  against  the claims and  demands of all
persons.

     (h) Any reprogramming or other corrective  modifications required to permit
the  proper  functioning  in and  following  the year  2000 of (1) the  computer
systems of Debtor and (2) equipment  containing embedded  microchips  (including
systems  and  equipment  supplied  to Debtor by third  parties or with which the
systems of Debtor  interface) and the testing of all such systems and equipment,
as  so   reprogrammed,   has  been  completed.   The  cost  to  Debtor  of  such
reprogramming,  modifications  and  testing  and of the  reasonably  foreseeable
consequences of year 2000 to Debtor (including, without limitation reprogramming
errors and failure of the systems and equipment of third  parties) will not have
a material adverse effect on the business,  properties or financial condition of
Debtor  or  result  in an Event of  Default  hereunder.  Except  for such of the
reprogramming and modifications  referred to in the preceding sentence as may be
necessary,  the computer and management  information  systems of Debtor are, and
with ordinary course upgrading and  maintenance,  will continue to be sufficient
to permit Debtor to conduct its business without any adverse effect thereon.

     (i) Debtor  shall not  terminate  any plan of a type  described  in Section
4021(a)  of ERISA in respect  of which a Debtor is an  "employer"  as defined in
Section  3(5) of ERISA (a "Plan") so as to result in any  material  liability to
the Pension Benefit Guaranty  Corporation  established pursuant to subtitle A of
Title IV of ERISA (the "PBGC"), (ii) engage in or permit any person to engage in
any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1954, as amended) involving any Plan which would
subject a Debtor to any material tax, penalty or other liability, (iii) incur or
suffer to exist any material  "accumulated  funding  deficiency"  (as defined in
Section 302 of ERISA), whether or not waived,  involving any Plan, or (iv) allow
or suffer to exist any event or  condition,  which  presents a material  risk of
incurring a material liability to the PBGC by reason of termination of any Plan.

<PAGE>  59
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

     (j) Debtor  agrees not to take or suffer any action  affecting any premises
owned, leased,  operated or controlled by it that violates any federal, state or
local  statute,  law,  regulation,  or ordinance  relating to health,  safety or
environmental  protection  ("Environmental  Laws").  Debtor  agrees  not to use,
store, dispose of or release any Hazardous Substance, as hereinafter defined, on
such  premises  or to permit or suffer any  Hazardous  Substance  to be present,
used, stored,  disposed of, or released on such premises by others. For purposes
of this Agreement, "Hazardous Substance" shall include any substance or material
defined as toxic or hazardous under any Environmental Law and shall also include
gasoline,   kerosene,   other  flammable  or  toxic  petroleum  products,  toxic
pesticides and herbicides,  volatile solvents,  materials containing asbestos or
formaldehyde, and radioactive materials. This paragraph shall not apply to small
quantities of Hazardous  Substances that are generally recognized as appropriate
for normal use and  maintenance  of Debtor's  premises.  Debtor  shall  promptly
notify Secured Party in writing of any investigation, claim, demand, lawsuit, or
other action by any  governmental  entity or private  party  involving  Debtor's
premises and any Hazardous Substance or Environmental Law.

     (k)  Debtor  shall  cause a  policy  of life  insurance  in the  amount  of
$500,000.00 to be maintained on Joseph  Sicinski in which Secured Party shall be
designated the beneficiary,  said designation to be irrevocable. Any payments to
Secured Party under said policy shall be applied to Obligations.

9. Until  Debtor's  authority  so to do is  terminated  by written  notice  from
Secured Party (which notice Secured Party may give at any time in its discretion
or at any time after default by Debtor under this Agreement) Debtor will, at its
own cost and  expense,  but on Secured  Party's  behalf and for Secured  Party's
account,  collect and otherwise enforce as Secured Party's property and in trust
for Secured Party,  all amounts unpaid on  Receivables,  and shall not commingle
such  collections with Debtor's own funds or use the same except to pay Debtor's
obligations  to Secured Party.  Following  execution of this  Agreement,  Debtor
shall  promptly  notify and instruct,  pursuant to a letter in the form attached
hereto as Exhibit B, all Account  Debtors to make payments  owing to Debtor with
respect to Receivables by wire transfer or other  electronic means to an account
designated  by Secured  Party ( the "Payment  Account")  or if wire  transfer or
electronic  payments are not  possible,  by check mailed to a secure post office
box (the "Lockbox") as designated by Secured Party on Exhibit A annexed  hereto
and made a part  hereof.  Only  Secured  Party  shall be  authorized  to  remove
payments  and other  items  from the  Lockbox  and  Debtor  shall have no access
thereto.  Debtor shall not change such instructions,  and it shall constitute an
Event of Default  under  Paragraph 14 of this  agreement if Debtor  changes such
instructions.  At Debtor's expense,  Secured Party shall remove all payments and
other items from Lockbox each business  day.  Debtor agrees that all funds which
have been mailed to the Lockbox  will be applied  first to  Obligations.  Debtor
shall forthwith  remit all amounts so collected in kind,  whether in the form of
electronic payment, cash, checks,  drafts, notes,  acceptances or other evidence
of payment,  including all  prepayments by Account Debtors to Debtor in the form
received.






<PAGE> 60
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank


10. Any remittance  received by Debtor from any Account Debtor shall be presumed
applicable to Receivables and subject to Secured Party's  security  interest and
shall be  turned  over by Debtor  to  Secured  Party  forthwith.  No  electronic
payment,  check,  note, draft or other instrument for the payment of money which
may be received on any Collateral  shall be considered to be payment thereof for
any purpose  whatsoever  hereunder  unless and until the same has actually  been
collected by Secured Party.

11.  Secured  Party  shall at all  reasonable  times have full access to and the
right to audit or examine Debtor's accounts,  books,  records,  shipping records
and  correspondence;  to confirm orders and sales,  and to verify all Collateral
assigned to Secured Party in the name of Secured Party or any other name used by
Secured Party for  verifications or through any public  accountant,  and to take
any other steps deemed  necessary  or advisable by Secured  Party to protect its
interest.  Debtor shall reimburse Secured Party for all fees incurred by Secured
Party in obtaining an appraisal or verification of Inventory.

12.  Debtor  hereby  irrevocably  authorizes  and  directs all  accountants  and
auditors  employed  or  engaged  by Debtor at any time  during  the term of this
Agreement and all data  processing  centers or other persons  holding  materials
herein  mentioned  relating to Debtor to exhibit to Secured Party and to deliver
to it copies of any of Debtor's  financial  statements,  trial balances or other
accounting  records of any sort in their  possession,  or data processing cards,
tapes, programs, tabulating runs, or similar material and to disclose to Secured
Party any information  they may have concerning  Debtor's  financial  status and
business operations, whether relating to Collateral or otherwise, and authorizes
Secured  Party to rely  thereon.  Debtor  will at the  request of Secured  Party
execute confirmatory letters of direction in accordance with this paragraph.

13. Debtor shall  immediately  notify  Secured Party of all cases  involving the
return, rejection, repossession, loss of or damage to merchandise covered by the
Receivables,  of any  request for credit or  adjustment  of any  merchandise  or
services or other dispute arising with respect to the Receivables; and generally
of all  happenings  and  events  affecting  Receivables  or the  value or amount
thereof.  If any Account  Debtor shall reject or return  merchandise,  or if any
merchandise be  repossessed,  Debtor will forthwith  deliver the same to Secured
Party or  notify  Secured  Party and hold the same  segregated  in trust for and
subject to the order of Secured  Party,  and Secured Party may take and sell the
same without notice upon such terms as it shall  determine.  Debtor is to remain
liable  for any  difference  between  the  original  invoice  price  and the net
proceeds of resale, after expenses.  At Secured Party's option,  Debtor will pay
to Secured Party the amount of the original Receivable relating to such goods or
any services  reduced to Account  Debtors the object of which are  disputed.  In
case any such goods should be resold,  the Receivable  thereby  created shall be
deemed subject to Secured Party's security interest hereunder.









<PAGE>  61
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

14. In the event any one or more of the following  Events of Default shall occur
and be continuing as to any one or more of the corporations comprising Debtor as
set forth at the head of this Agreement:  if Debtor shall have failed to pay any
Obligation  when due; or if Debtor shall have breached any of the  provisions of
this  Agreement  or any other  agreement  between the  parties  now  existing or
hereafter entered into, or if any statements furnished by Debtor relating to the
Receivables or to the  operations  and financial  condition of Debtor shall have
proved to be false in any material respect; or if Debtor shall become insolvent;
or if Debtor  shall be unable to meet its debts as they  mature,  or shall  have
suspended  operations;  or if Debtor shall have  discontinued  its business as a
going  concern,  or  shall  have  committed  an act of  bankruptcy  or  made  an
assignment for the benefit of creditors;  or if a meeting of Debtor's  creditors
shall have been called; or if there shall have been filed by or against Debtor a
petition under any of the provisions of the Bankruptcy Act; or if any proceeding
shall have been commenced by or against Debtor under any insolvency law; or if a
receiver  or  trustee  shall have been  appointed  to  administer  the assets or
affairs of Debtor;  or if a judgment  shall have been  entered or an  attachment
shall have been  levied  involving  $150,000.00  or more  against  the assets of
Debtor which, in the judgment of Secured Party,  will adversely  affect Debtor's
ability to perform this Agreement or which,  in Secured Party's  judgment,  will
impair the  enforceability of Secured Party's lien upon and security interest in
the  Receivables or if the condition or affairs of Debtor shall so change as, in
the opinion of Secured Party shall increase its credit risk, or if it reasonably
deems itself  insecure;  or if Debtor shall have breached any agreement  between
Debtor and any third party now  existing or  hereafter  entered  into  involving
$150,000.00  and such breach remains  uncured or results in the  acceleration of
any indebtedness  owed by Debtor to such third party; or if any of the foregoing
events  shall  have  occurred  in  reference  to any  one  of  the  corporations
comprising  Debtor as set forth at the head of this  agreement or any  guarantor
for the Debtor; then in any of such events, all of Debtor's Obligations shall at
the option of Secured Party  immediately  become due and payable  without notice
and Secured Party shall have in any  jurisdiction  where  enforcement  hereof is
sought, in addition to all other rights and remedies, the rights and remedies of
a secured party under the Uniform  Commercial Code of New York. All requirements
of notice  shall be met if Secured  Party shall give to Debtor at least five (5)
days'  prior  written  notice  of the  time  and  place  of any  public  sale of
Receivables or other property or of the time after which any private sale or any
other  disposition  is to be made,  which  period  of  notice  Debtor  agrees is
reasonable;  nor shall  notice be required  if the  property  is  perishable  or
threatens  to decline  speedily in value or is of a type  customarily  sold on a
recognized  market.  The net cash proceeds resulting from the exercise of any of
the  foregoing  rights,  after  deducting  all  charges,   expenses,  costs  and
attorneys'  fees  relating  thereto,  shall be applied  by Secured  Party to the
payment of  Obligations,  whether due or to become due, in such order as Secured
Party may  elect,  and  Debtor  shall  remain  liable to  Secured  Party for any
deficiency,  which shall be paid on demand. If an attorney is used to enforce or
collect the  Obligations,  a reasonable  attorney's  fee shall be added thereto.
Debtor  further  agrees to indemnify  and hold Secured  Party  harmless from and
against all costs and expenses,  including  attorneys' fees, incurred by Secured
Party as a result of, arising out of, or relating to the  transactions of Debtor
or any guarantor of Debtor with any third party.




<PAGE>  62
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

15. Debtor shall notify Secured Party if any Receivable includes an amount equal
to any tax due to any governmental taxing authority.  If a Receivable includes a
charge for any tax payable to any governmental  taxing authority,  Secured Party
is authorized,  in its discretion, to pay the amount of such tax for the account
of Debtor and to charge Debtor's account therefor.  If at any time Secured Party
shall be  required  to pay any  Federal,  State  or  local  taxes of any kind in
relation to the  Receivables,  Secured  Party may charge to Debtor as an advance
the amount of tax so paid. If Secured Party becomes  liable to the United States
on Debtor's  account by virtue of Section 3505 of the  Internal  Revenue Code of
1954 (as added by Section 105 of the Federal Tax Lien Act of 1966) Secured Party
may charge the amount thereof to Debtor's current account whether or not Secured
Party has made payment, and Debtor shall pay Secured Party the amount thereof on
demand or present satisfactory proof that Debtor has paid the amount involved to
the United States.  Secured Party shall not take any action to make any payments
pursuant to this paragraph 15 unless the claim involves  $150,000.00 or more and
Secured Party shall give Debtor notice thereof.

16. Debtor hereby constitutes Secured Party and each of its officers,  agents or
designees as Debtor's Attorney in Fact, with power to endorse the name of Debtor
upon any notes, acceptances,  checks, drafts, money orders or other evidences of
payment or collateral  that may come into Secured  Party's  possession;  to sign
Debtor's  name to any  invoice  or bill of lading  relating  to any  Receivable,
drafts  against  Account  Debtors,  assignments,  verifications  and  notices to
Account Debtors;  to send verifications of Receivables to any Account Debtor; to
execute  in  Debtor's  name  as  well as its  own  name  and to  file  financing
statements and other  instruments or documents;  to do all other acts and things
necessary to carry out this Agreement;  to receive, open and dispose of all mail
addressed  to Debtor and to notify  the post  office  authorities  to change the
address for  delivery  of mail  addressed  to Debtor to such  address as Secured
Party may designate.  All acts of said attorney or designee are hereby  ratified
and approved,  and said attorney or designee shall not be liable for any acts of
commission or omission, nor for any error of judgment or mistake of fact or law.
This power, being coupled with an interest, is irrevocable while any Obligations
shall remain unpaid.  Debtor authorizes Secured Party to file in its own name as
Secured Party any financing  statement  under the Uniform  Commercial Code which
Secured  Party deems  necessary or  advisable to perfect the security  interests
which it is intended that Secured Party have under this Agreement.

17. Debtor  subordinates  to the payment of any obligations due or to become due
to Secured Party from Account  Debtors on Collateral,  any and all sums then and
thereafter  due and to become due to Debtor from such Account  Debtors,  waiving
and postponing all rights with respect thereto until such obligations to Secured
Party  shall have been fully  discharged.  In  addition  to such  subordination,
Debtor hereby  assigns such sums to Secured Party as additional  collateral  for
all Obligations hereunder.









<PAGE>  63
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank


18.  Secured Party may,  without  notice to or consent from Debtor,  sue upon or
otherwise  collect,  extend the time of payment of, or  compromise or settle for
cash,  credit or otherwise,  upon any terms,  any Receivable or Inventory or any
security or insurance  applicable  thereto,  which is hereby assigned to Secured
Party,  and  release  any Account  Debtor  thereon,  or accept the return of any
merchandise, all without affecting in any way the liability of Debtor hereunder.

19. Debtor shall not, without the consent of Secured Party, compromise or adjust
any Receivable (or extend the time for payment  thereof) or grant any additional
discounts,  allowances or credits thereon in excess of $1,000.00,  or accept the
return of any merchandise.  Upon the making of any such unauthorized  discounts,
allowances or credits or acceptance  of returns,  Debtor shall  forthwith pay to
Secured Party a sum equal thereto to apply on the Obligations.

20. Failure by Secured Party to exercise any right,  remedy or option under this
Agreement or declare any default  herein or delay by Secured Party in exercising
the same  shall not  operate as a waiver  thereof or as a waiver of any  similar
right or remedy in any other  situation.  No waiver by  Secured  Party  shall be
effective  unless  it is  confirmed  in  writing  and  then  only to the  extent
specifically  stated.  Secured  Party's rights and remedies under this Agreement
shall be cumulative and not exclusive of any other right or remedy which Secured
Party may have.  No course of dealing  shall be effective  to change,  modify or
discharge  any provision  hereof.  Secured  Party's  rights shall remain in full
force and effect notwithstanding the fact that Debtor's account may from time to
time be temporarily in a credit position, until final payment of all Obligations
in full. To the extent that Debtor's Obligations are now or hereafter secured by
property other than the Collateral or supported by the guarantee, endorsement or
property of any person,  firm or corporation,  then Secured Party shall have the
right in its  sole  discretion  to  determine  which  rights,  security,  liens,
security  interests,  or  remedies  Secured  Party  shall  at any  time  pursue,
relinquish,  subordinate,  modify or otherwise act with respect thereto, without
in any way  modifying  or affecting  any of Secured  Party's  rights  hereunder.
Debtor  hereby  waives  presentment,  notice  of  dishonor  and  protest  of all
instruments  included in or evidencing  Receivables or collateral and, except as
specified herein, any and all other notices and demands  whatsoever,  whether or
not  relating  to  such   instruments.   Secured  Party  shall  not,  under  any
circumstances  or in any event  whatsoever,  have any liability for any error or
omission  or  delay  of  any  kind  occurring  in  the  settlement,  collection,
liquidation or payment of any  Receivable or any instrument  received in payment
thereof  or for any  damage  resulting  therefrom.  Secured  Party  shall not be
obligated to take any particular  steps in collection in any situation  where it
has taken over collection of any Receivable or Receivables.

21. Neither this Agreement, nor any portion or provision hereof, may be changed,
modified,  amended, waived,  supplemented,  discharged,  canceled, or terminated
orally or in any manner  other  than by an  agreement  in writing  signed by the
party to be charged.  Any notices to be served hereunder must (except as stated)
be served by certified mail,  addressed to the last known post office address of
the party to whom such notice is given and shall be deemed served when deposited
in any post office or branch post  office.  Demands or notices  addressed to the
Debtor's address at which Secured Party customarily communicates with the Debtor
or Trans  Global by hand  delivery or by  facsimile  transmission  shall also be
effective.


<PAGE>  64
EXHIBIT 10.7
Credit  Agreement  dated June 7,2000  between the Company and Sterling  National
Bank

22. This  Agreement  shall inure to the benefit of and shall be binding upon the
respective  successors  and/or  assigns of Debtor and  Secured  Party.  It shall
become effective on the day when finally accepted by Secured Party at its office
in the State of New York.  This Agreement shall remain in effect for a period of
one year  from  date  hereof  and  shall be  deemed  automatically  renewed  for
successive periods of one year;  subject,  however, to the right of either party
to  terminate  it at any time upon at least  sixty  (60) days'  written  notice,
provided,  however,  that the Debtor shall  remain  obligated to pay the Monthly
Minimum  Compensation  set  forth in  Paragraph  7(a)  for the full  term of the
Agreement in the event Debtor gives notice of termination effective prior to the
end of any one year term.  So long as no Event of  Default as defined  hereunder
shall have  occurred and be  continuing,  Secured Party shall not be entitled to
the  remaining  Monthly  Minimum  Compensation  if Secured Party gives notice of
termination effective prior to the end of any one year term, but should an Event
of Default as defined hereunder have occurred and be continuing,  this Agreement
shall be terminable at any time by Secured Party forthwith on written notice and
Debtor shall remain liable for the Monthly Minimum  Compensation  until the date
the Agreement  would have expired but for  termination by reason of the Event of
Default and without  regard to Debtor's right to terminate.  The  termination of
this  Agreement  shall not affect any of Debtor's  obligations  with  respect to
Receivables  assigned  to Secured  Party or any  obligations  to  Secured  Party
incurred  prior to the effective  date of such  termination,  and the provisions
hereof shall continue to be fully operative until all transactions entered into,
rights created, or obligations incurred prior to the termination have been fully
disposed of, concluded or liquidated.

23. This  Agreement and all other  agreements  between  Secured Party and Debtor
together with all  assignments  made hereunder  shall be deemed made in New York
and  subject  to the laws of the State of New York and  Debtor  consents  to the
jurisdiction  of any local,  State or Federal Court located  within the State of
New York, which jurisdiction  shall be exclusive.  Debtor hereby waives personal
service of any and all process  and  consents  that all such  service of process
shall be made by certified mail, return receipt requested, directed to Debtor at
its address  appearing  on the records of the Secured  Party and service so made
shall be  complete  ten (10) days after the same has been  posted as  aforesaid,
provided,  however,  that  if such  certified  mail is  rejected,  unclaimed  or
undeliverable,  service may be made by ordinary  mail.  DEBTOR AND SECURED PARTY
EACH  HEREBY  UNCONDITIONALLY  WAIVES  ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION  BASED UPON OR ARISING  OUT OF,  DIRECTLY  OR  INDIRECTLY,  THIS
AGREEMENT,  ANY RELATED  DOCUMENTS,  ANY DEALINGS  BETWEEN THEM  RELATING TO THE
SUBJECT  MATTER  OF THIS  AGREEMENT,  AND/OR  THE  RELATIONSHIP  THAT  IS  BEING
ESTABLISHED BY THEM.

     IN WITNESS WHEREOF,  Secured Party and Debtor have caused this Agreement to
be executed by their respective  officers duly authorized the day and year first
above written.

                            Trans Global Services, Inc.


                            By:________________________
Seal
                            Resource Management International, Inc.

                            By:______________________________

Seal                        Avionics Research Holdings, Inc.


                            By:________________________

Seal
                            Avionics Research Corporation


                            By:________________________

Seal
                            Avionics Research Corporation of Florida


                            By:________________________

Seal

ACCEPTED:

STERLING NATIONAL BANK


By:_________________________

Date:_______________________