<PAGE>

                       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 FEBRUARY 29, 2000

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                         Commission file number 0-14203

                          MERIDIAN NATIONAL CORPORATION
             (Exact name of Registrant as specified in its charter)

                    Delaware                                     34-1470518
        (State or other jurisdiction                         (I.R.S. Employer
      of incorporation or organization)                     Identification No.)

       805 Chicago Street, Toledo, Ohio                            43611
   (Address of principal executive offices)                     (Zip Code)

                                 (419) 729-3918
              (Registrant's telephone number, including area code)

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

                                      None

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

                          Common Stock, $.01 par value
          Series B Convertible Voting Preferred Stock, $.001 par value
                              (Title of each class)

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

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

         As of May 31, 2000, 7,917,552 shares of Meridian National Corporation
common stock were outstanding, and the aggregate market value of voting stock
(based upon the average bid and ask price on the OTC Bulletin Board) held by
non-affiliates was approximately $599,000 for common stock and $117,000 for
Series B convertible voting preferred stock.

                       Documents Incorporated by Reference

         Portions of the registrant's definitive proxy statement for the Annual
Meeting of Shareholders, which the registrant intends to file within 120 days
after the close of its fiscal year ended February 29, 2000, are incorporated by
reference into Part III of this report.
<PAGE>

PART I

ITEM 1.   DESCRIPTION OF BUSINESS

         Meridian National Corporation ("Meridian National" or the "Company",
which, unless otherwise indicated, refers to Meridian National and its
subsidiaries) is engaged in the steel distribution and processing business
through its subsidiary, Ottawa River Steel Company ("Ottawa River Steel") and in
the waste management business through its subsidiary, Environmental Purification
Industries Company ("EPI").

                         GENERAL DEVELOPMENT OF BUSINESS

         Meridian National was incorporated as a Delaware corporation in 1985.
Shortly thereafter, the Company acquired from certain present and former members
of management, who were also principal stockholders of the Company, all of the
outstanding capital stock of Ottawa River Steel, and three other companies whose
operations were either later combined with Ottawa River Steel or discontinued.
The operations of these acquired companies formed the foundation of its current
steel distribution and processing business.

         In January 1994, the Company acquired real property and equipment
located in Detroit, Michigan which was previously operated by the seller as a
steel service center. The acquisition expanded the Company's steel processing
services to the end-user market, primarily serving customers that supply the
automotive industry.

                  In November 1995, the Company acquired the business and assets
of a steel service center located in Gary, Indiana. This facility supplied steel
products to primarily non-automotive markets. In the fourth quarter of fiscal
year ended February 28, 1999, the Company significantly reduced its operations
at this location due to continuing losses resulting from the inability to
generate sufficient sales volume in this competitive market. The Company has
sublet the facility to an unrelated company and either sold, or transferred to
the Company's location in Toledo, Ohio, the steel service center equipment. In
December 1999 the Company closed the sales office it had maintained in the
Chicago market.

         In 1989 the Company formed National Purification, Inc. ("National
Purification"), a wholly owned subsidiary, and entered into a general
partnership with Haden Purification, Inc. ("Haden Purification"). The
partnership, EPI, was formed to own and operate one or more facilities for the
recycling of paint waste using a proprietary paint waste drying system
(DryPureTM) developed by Haden Environmental Corporation ("Haden
Environmental"), an affiliate of Haden Purification, and for the marketing of
the reclaimed solids. EPI's first paint waste recycling facility started
commercial operations in March 1991. National Purification and Haden
Purification were equal partners in EPI and were otherwise unaffiliated. In 1992
Haden Purification terminated and abandoned its interest in EPI, and EPI became
wholly owned by the Company through its subsidiaries, National Purification and
MEPI Corp. ("MEPI"), which was formed in 1992. The Company completed a building
and equipment expansion of its Toledo, Ohio facility in April 1997 that utilized
the Polymeric Recovery System (the "PRS system"), a new paint waste recycling
process. In the fourth quarter of fiscal 1999, the Company recorded
restructuring charges of $2,703,000 to write down certain assets and accrue
certain liabilities related to the PRS system. The Company had intended to use
this system to produce a product using recycled paint waste, which would be
marketed as a lower cost replacement for traditional, virgin materials used in
formulated products in the sealant, coating and adhesive industries. The Company
has been unable to market this product in a commercially viable manner and
therefore has discontinued processing of paint waste through the PRS system. The
Company continues to recycle paint waste using the DryPure(TM) system.








                                       2
<PAGE>

         In February 1996, Meridian National formed EPI Technologies, Inc.,
("EPI Technologies"), as a wholly owned subsidiary. In November 1996, the
Company transferred all of its shares in National Purification and MEPI to EPI
Technologies. After the transfer, EPI Technologies indirectly owned 100% of EPI,
the general partnership that operates the paint waste recycling facility.
Concurrent with the transfers, EPI Technologies issued shares of its common
stock representing a 20% ownership interest, equally to three investors, for
$600,000, reducing the Company's ownership interest in its paint waste recycling
operation to 80%.

         The Company's principal executive offices are located at 805 Chicago
Street, Toledo, Ohio 43611 and its telephone number is (419) 729-3918.




























                                       3
<PAGE>

                  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

         The Company's operations are classified within two separate industry
segments. The steel distribution and processing segment handles flat rolled
steel products primarily for the automotive, truck and appliance industries. The
waste management segment recycles paint wastes for companies in the automotive
and waste management industries, as well as arranging for disposal of paint
wastes at third-party disposal sites.

         For financial information about the Company's industry segments, see
Note 11 to the consolidated financial statements of the Company, which are
included elsewhere in this report as listed in PART IV, ITEM 14.

                        NARRATIVE DESCRIPTION OF BUSINESS

STEEL DISTRIBUTION AND PROCESSING SEGMENT

         Steel service centers and steel distributors represent a major market
for primary steel producers ("steel mills"), serving as a source of supply for
smaller manufacturers whose product requirements make purchasing directly from
the steel mills unfeasible or for companies whose production processes require
steel to be pre-processed before being placed into production. Companies
operating in this industry generally are classified as steel service centers
when they operate facilities that process steel products. Companies that acquire
steel products for warehousing and/or direct redistribution to other steel
consumers are generally classified as distributors. Steel service centers and
distributors acquire steel products from steel mills and from other
distributors. It is not uncommon for steel products to pass through the hands of
one or more steel distributors and/or steel service centers before reaching an
end user. Steel service centers and distributors normally specialize in
particular grades of steel products. The majority of the companies operating in
this industry are small to medium in size with no single company or group of
companies exercising control over the industry. The products handled by the
Company's steel distribution and processing business are carbon steel coils,
sheets and bars.

         STEEL DISTRIBUTION During fiscal years ended February 29, 2000 and
February 28, 1999 and 1998, 40%, 36% and 35%, respectively, of the Company's net
sales were generated through its steel distribution operations. The Company's
steel distribution operations involve purchasing, storing and reselling steel
products in their original form. The Company acquires steel from domestic steel
mills under various steel purchase programs. Some of these programs involve the
purchase of steel that did not meet order specifications of customers of the
steel mills for whom the steel was originally intended. The Company also
acquires steel products from steel mills under excess steel purchase programs.
In times of low steel consumption, steel mills will make offerings of steel to
distributors to maintain higher production rates at the steel mills. Ottawa
River Steel is among the oldest companies operating as a steel distributor and
has attained a good reputation and name identification in its industry.
Historically, Ottawa River Steel has maintained strong relationships with a
number of steel mills. These relationships and a broad base of steel suppliers
have historically allowed Ottawa River Steel access to steel supplies when steel
availability within the industry has been limited due to high demand.

         STEEL PROCESSING During fiscal years ended February 29, 2000 and
February 28, 1999 and 1998, 52%, 56% and 60%, respectively, of the Company's net
sales were generated by processed steel products and processing services. The
Company provides slitting, cut-to-length, and batch pickling for steel products.
These services are provided to customers as a value-added process to the
Company's inventory for sale to end-user customers or to customers for
customer-owned material (toll processing).

         * Slitting and Cut-to-length Flat rolled steel products are generally
manufactured by the steel mills in wide coil form. Consumers of these flat
rolled products may require the steel to be cut into several coils of narrower
widths. The steel slitting process involves the passing of the coil through
roller knives which cut the steel into the desired widths. Additionally, other
users may require coils to be cut-to-length into sheets prior to taking
delivery.

         * Pickling When steel is produced at the steel mills, it is rolled at
high temperatures which creates a scaly surface on the steel. This scale must be
removed for surface sensitive steel applications that require polishing, plating
or other finished surfaces. The pickling process removes this scale by the
immersion of the steel in acid. This process can be performed while the steel is
in coil form through a




                                       4
<PAGE>

continuous pickling process or when the steel is in either the coil or sheet
form through a batch pickling process. Generally, hydrochloric acid is used in
the continuous pickling process and sulfuric acid is used in the batch pickling
process. After pickling, the steel is rinsed in baths of neutralizer and water
and then is coated with oil to prevent rust.

         CUSTOMERS The Company's steel distribution and processing services are
marketed to the automotive, truck, building, appliance, furniture and
agriculture industries and to companies servicing these industries in the upper
midwest, as well as other areas east of the Mississippi River. The majority of
North American car and truck final assembly plants and primary metal industries
are located within a 500-mile radius of the Company's facilities. Sales to a
steel stamping customer, Production Stamping, Inc., accounted for 17%, 12% and
14% of the Company's net sales in fiscal 2000, 1999 and 1998, respectively.

         COMPETITION In the steel distribution and processing business,
competitive factors include quality of service, timeliness and cost. The
Company's success in this business depends on its ability to continue to provide
quality products and services on a timely basis at a competitive cost.

         The steel service center industry is highly fragmented and intensely
competitive within localized areas or regions. Accordingly, the Company faces
substantial competition in the steel distribution and processing business from
other independent steel distributors and processors as well as from steel mills
and customers that perform these functions internally. Among the Company's
competitors and potential competitors are numerous companies that have
substantially greater financial and other resources than the Company.

         RAW MATERIALS The raw materials required for the Company's steel
processing operations are acids, oils and banding supplies. All materials are
readily available from a number of suppliers.


WASTE MANAGEMENT SEGMENT

         Paint wastes, because of their stickiness and leaching characteristics,
are one of the most difficult wastes to legally dispose of and therefore pose a
significant disposal problem for their generators. Approximately 40% to 60% of
the paint used in industrial spray painting processes becomes waste that
requires disposal or recycling. Currently, the only legal disposal methods
available for paint wastes are landfill and incineration. While the short-term
costs associated with landfilling (currently the most widely-used disposal
method) are less than the short-term costs of incineration, generators using
this method of paint waste disposal could be "potentially responsible parties"
for liabilities associated with remediation of landfills where their paint waste
has been disposed. Additionally, there continues to be a trend in the regulatory
environment toward greater restrictions and liabilities associated with
landfilling, including the disposal of paint wastes. As a result, many
generators are electing to use incineration, which is a more expensive disposal
process than direct disposal into landfills. Incineration involves either (i)
fuel blending, which is the commingling of various waste streams into a fuel
supplement for use as an alternative fuel in the manufacture of cement,
reducing, in the process, but not eliminating the generator's liability, or (ii)
direct thermal destruction of waste streams which results in the generation of
an ash residue which may contain heavy metals or other hazardous constituents.
Ash residue containing hazardous constituents must be disposed in a fully
permitted hazardous waste landfill thereby continuing the generator's potential
long-term liability connected with the disposal of hazardous wastes.

         Recycling of waste materials is considered by the U.S. EPA to be a
desirable means of reducing waste. According to the U.S. EPA's definition,
recycle is a broad term that includes "to use, reuse, or reclaim." A material is
reclaimed if it is processed to recover a useful product or if it is
regenerated. When customers send paint waste to the Company's facility, the
Company reclaims the paint waste by processing it to recover a useful product.
The U.S. EPA encourages this type of waste management because it preserves
limited landfill space. Avoiding the need to place hazardous paint waste in
landfills also allows generators to significantly reduce the threat of incurring
liability under the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA"), also known as Superfund liability.

         PAINT WASTE RECYCLING In early 1989, the Company became aware of the
magnitude of the disposal problems facing generators of paint wastes and learned
of a then potentially unique process for the handling of these wastes. The
process, known as DryPureTM and developed by Haden Environmental, heats the
paint wastes, driving off liquids and volatile organic compounds, resulting in a
dry inert powder that



                                       5
<PAGE>

represents a reduction in volume of paint waste by up to 90%. Originally
DryPureTM systems were sold directly to automobile manufacturers that disposed
of the resultant dry powder from the process in landfills. The Company
recognized that small and mid-size paint waste generators presented a market for
the DryPureTM system. In addition, the Company began exploring the possibility
of marketing the resultant dry powder, EPI-PURETM, and was successful in finding
commercial applications for it. In 1989, Haden Purification and the Company
formed EPI as a general partnership for the purpose of constructing and
operating commercial facilities to recycle paint wastes. EPI commenced
commercial operations at its newly constructed paint waste recycling facility in
Toledo, Ohio in March 1991. In 1992, Haden Purification terminated its 50%
partnership interest in EPI and National Purification and MEPI, wholly owned
subsidiaries of the Company, became sole general partners of EPI.

         EPI completed a building and equipment expansion of its Toledo, Ohio
facility in April 1997 to commercialize the PRS system. The Company had intended
to use this system to produce a product using recycled paint waste, which would
be marketed as a lower cost replacement for traditional, virgin materials used
in formulated products in the sealant, coating and adhesive industries. The
Company has been unable to market this product in a commercially viable manner
and therefore discontinued processing of paint waste through the PRS system in
July 1999. In the fourth quarter of fiscal 1999, the Company recorded
restructuring charges of $2,703,000 to write down certain assets and accrue
certain liabilities related to the PRS system. The Company continues to recycle
paint waste using the DryPure(TM) system.

         The paint waste recycling business generated 8% of the Company's net
sales in each of the fiscal years ended February 29, 2000 and February 28, 1999
and 5% in the fiscal year ended February 28, 1998.

         CUSTOMERS The Company markets its paint waste recycling services to
businesses that have spray-painting operations. The Company's marketing
activities are concentrated in the midwest region of the United States where
over 80% of its revenues are generated, with the majority of annual revenues
derived from customers in the automotive assembly business. The Company's
customers generally are environmentally conscientious and demand that the
Company maintain stringent quality controls. The Company has built its
reputation in the industry through consistent customer service by addressing
these customer needs. Since one of the primary benefits of using the Company's
services is the elimination of the potential long-term liability associated with
landfill disposal of paint waste, many customers conduct thorough reviews and
audits of the Company's operations, including the Company's compliance with
environmental laws and regulations.

         COMPETITION Presently, approximately 99% of paint waste nationally is
disposed of through landfills or by incineration, and approximately 1% is
processed and recycled by methods utilized by the Company and its other
competitors. The Company is aware of only three other companies that compete
directly with the Company by providing processing and recycling services to
generators of paint waste. These competitors utilize similar methods of thermal
drying to those of the Company; however, over the years the Company believes it
has developed the capability to process a broader range of paint waste than its
competitors.

         Competitive factors in paint waste processing or disposal include
price, service and the elimination of the potential long-term liability
associated with paint waste generation and disposal. While paint wastes
generally can be landfilled or incinerated at a lower initial cost than
recycling, these disposal methods expose the generators to potential long-term
liability under stringent federal and state regulations. On the other hand,
although the costs of the Company initially are greater than landfill or
incineration, the Company's recycling process substantially eliminates
continuing generator liability. Landfill and incineration services are provided
by national, regional and local companies, many of which have substantially
greater resources than the Company. In addition, the Company's direct recycling
competitors have substantially greater financial, marketing and other resources
than the Company. There can be no assurance that one of the Company's
competitors or a new company will not develop a method of recycling paint waste
which is more efficient and less costly than the methods currently employed by
the Company. Additionally, there can be no assurance that large industrial
customers or other waste management companies will not attempt to develop their
own methods of recycling or otherwise minimizing, treating or disposing of
wastes.

         RAW MATERIALS In the DryPureTM system, trap rock (a small, inexpensive
stone) is used to facilitate heat transfer, to keep paint waste from adhering to
the equipment and to reduce the size of the EPI-PURETM particles. Trap rock is
readily available at reasonable prices.




                                       6
<PAGE>

BACKLOG

         The steel distribution and processing business typically processes
orders within a relatively short time of receipt. Accordingly there is not a
significant backlog of unfilled orders at any time.

         The paint waste recycling business typically processes shipments within
a relatively short time of receipt. Accordingly, no large volume of paint waste
is stored at the Company's Toledo, Ohio facility at any time. Because the
generators and the Company need to carefully control the shipment and processing
of paint waste, upon execution of a sales contract, the Company establishes a
long-term schedule for delivery and processing of the customer's paint waste at
the Company's facility. Accordingly, the Company normally has its maximum
processing capacity scheduled for one to three months in advance.

SEASONALITY

         The Company primarily provides products and services to the automotive,
truck and appliance industries. Therefore, the Company's results are affected by
cycles in such industries and changes in demand based on general economic
conditions. Traditionally, many automotive plants operate at reduced levels
during June and July due to holiday and vacation schedules and are closed during
the last part of December, which adversely affects the Company's revenues for
those periods. The operations of EPI are generally unaffected by seasonality
factors since it has been operating its DryPureTM recycling system at or near
capacity for several years.

GOVERNMENT REGULATION

         The Company's operations are subject to many federal, state and local
requirements relating to the protection of the environment. Management believes
that the Company is in material compliance with all applicable environmental
laws and that the Company's products and processes do not present any unusual
environmental concerns. The Company does not anticipate any material
expenditures to continue to meet environmental requirements.

         The Company's operations are also governed by laws and regulations
relating to workplace safety and worker health, principally the Occupational
Health and Safety Act and regulations thereunder, which, among other
requirements, establish noise, dust and safety standards. Management believes
that the Company is in material compliance with applicable laws and regulations
and does not anticipate that future compliance with such laws and regulations
will have a material adverse effect on the results of operations or financial
condition of the Company.

EMPLOYEES

         As of May 31, 2000, the Company had 115 employees, of whom 87 were
employed in steel distribution and processing (includes 28 leased employees), 22
were employed in waste management, with the remainder serving in executive and
administrative capacities. Approximately 29 of the Company's employees are
covered by a collective bargaining agreement. The Company believes that its
relations with its own employees and with the leased employees presently
employed at its facilities are good.






                                       7
<PAGE>

ITEM 2.     PROPERTIES

         The Company's corporate offices are located in Toledo, Ohio and occupy
approximately one-half of an 8,500 square foot building pursuant to a
month-to-month lease with Greenbelt Associates. Greenbelt is a general
partnership owned by William D. Feniger, Yale M. Feniger and Real P. Remillard,
who are current or former officers and/or stockholders in the Company. The
Company leases the remainder of the building for the offices of its steel
distribution and steel processing operations under identical terms and
conditions. The total monthly rent for these office facilities is $7,344 per
month.

         On a site adjacent to its corporate offices, the Company maintains
office space and its active steel pickling operation in a 23,000 square foot
building. Also on the site the Company utilizes an additional 45,000 square feet
in a building for steel warehousing and a steel slitting operation. The
facilities at this site, including an additional 60,000 square feet of outside
storage space, is leased pursuant to a lease executed in July 1997 for an
initial term of 120 months with Chicago Investors. The lease provides for three
optional one-year renewals. Chicago Investors is a general partnership that is
owned, in turn, by two other partnerships. One of these partnerships is
Champlain Investors, a general partnership, which is owned by William D. Feniger
and Yale M. Feniger, who are current or former officers and stockholders in the
Company. The other partnership is unrelated to the Company. The lease provides
for a monthly rent of $14,255 through the June 30, 2007 lease termination date.
The monthly rental for the option periods is $17,106. Chicago Investors, under
an oral arrangement, has agreed to defer the rental increase that was due to
commence on March 1, 1998 and to maintain the monthly rent at $12,255, at the
option of Chicago Investors. The Company also sub-leases another 22,000 square
feet of warehouse space used for steel storage at this site from an affiliate of
the unrelated partnership.

         The Company's steel service center in Detroit, Michigan is housed in
two adjacent buildings situated on approximately two acres of land owned by the
Company. The main building consists of 58,500 square feet, including 8,500
square feet of office space. The second building consists of 8,000 square feet
and is being used for steel storage. This property is subject to a mortgage in
favor of William D. Feniger (subsequently assigned to a lender) having an
outstanding balance of $501,000 at February 29, 2000.

         In November 1995, the Company acquired the business and assets of a
steel service center located in Gary, Indiana, which operated in a 60,000 square
foot facility in a common building in an industrial park pursuant to a lease
expiring in November 2001 with one renewal option of three years. As of December
15, 1998, the Company has sublet this facility to an unaffiliated company on
substantially the same terms as those contained in the Company's lease.

         The Company conducts its paint waste recycling operations in a 19,500
square foot building in Toledo, Ohio. This property, along with certain
recycling equipment, is owned by EPI and is subject to a mortgage of which the
former partner of EPI has assumed 50% of the obligation. EPI's obligation with
respect to this mortgage was $302,000 at February 29, 2000.

         In addition, an adjacent 14,000 square foot building is leased by EPI
from Chicago Investors where the recycled powder from the DryPureTM process is
screened, packaged and warehoused prior to shipment. The term of the lease
expires February 28, 2001 at a rental of $1,175 per month.

         The Company believes that its existing facilities and properties are
adequate for its current operations.


ITEM 3.     LEGAL PROCEEDINGS

         There are no material legal proceedings pending against the Company.


ITEM 4.     SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

         There were no matters submitted to a vote of security holders during
the last quarter of the Company's fiscal year ended February 29, 2000.




                                       8
<PAGE>

EXECUTIVE OFFICERS

         Set forth below is certain information regarding the executive officers
of the Company. Officers, who are elected annually by the Board of Directors of
the Company, serve at the pleasure of the Board of Directors.


         William D. Feniger       53    Chief Executive Officer and President
         James L. Rosino          45    Chief Financial Officer, Vice President-
                                          Finance, Secretary and Treasurer

         William D. Feniger has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since August 1985. On March 21, 1991, Mr.
Feniger was named President of the Company.

         James L. Rosino has been Chief Financial Officer and Vice President -
Finance of the Company since February 1996. On May 31, 1996, Mr. Rosino was
named Secretary and Treasurer of the Company. Mr. Rosino served as Corporate
Controller from May 1988 through February 1996.


                                     PART II

ITEM 5.     MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         The Common Stock of the Company is traded on the OTC Bulletin Board
maintained by the National Association of Securities Dealers under the symbol
"MRCO". The following table sets forth, for the quarterly periods indicated, the
high and low bid prices for the Common Stock as quoted on the OTC Bulletin
Board. Such quotations on the OTC Bulletin Board represent bids between dealers
without adjustment for retail mark-ups, markdowns, or commissions and may not
necessarily represent actual transactions.


<TABLE>
<CAPTION>
Year ended February 29, 2000                        High                  Low
----------------------------                        ----                  ---
<S>                                                <C>                    <C>
         First Quarter                             $ .19                  $.08
         Second Quarter                              .17                   .13
         Third Quarter                               .19                   .14
         Fourth Quarter                              .29                   .15

Year ended February 28, 1999
----------------------------
         First Quarter                             $.656                 $.406
         Second Quarter                              .54                  .406
         Third Quarter                              .406                  .125
         Fourth Quarter                              .20                  .125
</TABLE>


         As of May 31, 2000 there were approximately 500 stockholders of record
of the Company's Common Stock.

         To date, the Company has not paid any dividends on its Common Stock.
The payment by the Company of dividends, if any, in the future rests within the
discretion of its Board of Directors and will depend, among other things, on the
Company's earnings, its capital requirements and its financial condition, as
well as other relevant factors. The Board does not presently intend to pay any
dividends on its Common Stock in the immediate future, but it intends to retain
all earnings for use in its business operations. Pursuant to a current credit
agreement with the Company's senior lender, the Company cannot pay dividends on
its Common Stock.




                                       9
<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA

         The selected financial data of the Company set forth below should be
read in conjunction with the audited consolidated financial statements, the
notes thereto and other financial information included elsewhere in this report
and in "Management's Discussion and Analysis of Financial Condition and Results
of Operations" included elsewhere herein.

<TABLE>
<CAPTION>
                                                                      Year ended February 28 or 29
                                              -----------------------------------------------------------------------------

                                                  2000           1999             1998             1997             1996
                                              -----------------------------------------------------------------------------
<S>                                           <C>           <C>              <C>              <C>             <C>
OPERATIONS STATEMENT DATA:

Net sales                                     $42,562,854   $ 49,291,003     $ 70,683,989     $ 66,511,224    $  54,672,987
Gross margin                                    5,227,583      3,973,144        6,284,309        7,988,913        5,659,971
Loss from continuing
   operations before extraordinary gain        (1,059,205)    (5,533,982)(3)   (2,617,911)(2)     (619,465)      (1,728,196)
Net (loss) income                              (1,059,205)    (5,533,982)(3)   (2,617,911)(2)        4,392       (1,349,608)
Loss applicable
   to common stock (1)                         (1,172,737)    (5,657,700)(3)   (2,763,101)(2)     (131,967)      (1,479,370)
Loss per common share -
   Basic and diluted :
      Loss from continuing
        operations before extraordinary gain  $     (0.20)  $      (1.54)(3) $      (0.78)(2) $      (0.23)   $       (0.71)
      Net loss                                      (0.20)         (1.54)(3)        (0.78)(2)        (0.04)           (0.56)
 Weighted average common shares:
       Basic                                    5,794,601      3,678,082        3,532,195        3,241,349        2,638,126
       Diluted                                  5,794,601      3,678,082        3,532,195        3,241,349        2,638,126

BALANCE SHEET DATA:

Working capital (deficiency)                  $  (976,840)  $(10,141,118)    $ (7,511,001)    $ (1,866,090)   $  (1,443,113)
Total assets                                   16,571,343     22,122,626       32,924,546       33,700,810       26,546,797
Long-term debt                                 10,307,810      1,169,705        2,983,375        6,586,293        6,847,416
Stockholders' (deficit) equity                 (7,956,763)    (7,040,026)      (1,431,271)       1,198,162          546,581
</TABLE>

-----------

(1)    Represents net (loss) income reduced by dividends paid on preferred stock
       in cash and in shares of common stock. To date, the Company has not paid
       any dividends on its common stock.

(2)    Includes a $169,465 charge or 5 cents per share, net of income tax, from
       write-down of noncurrent assets.

(3)    Includes a $2,702,764 charge or 73 cents per share, net of income tax,
       from restructuring charges.







                                       10
<PAGE>

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

                              RESULTS OF OPERATIONS

      YEAR ENDED FEBRUARY 29, 2000 COMPARED TO YEAR ENDED FEBRUARY 28, 1999

STEEL DISTRIBUTION AND PROCESSING SEGMENT The steel distribution and processing
operations reported net sales of $39.2 million for fiscal 2000, a decrease of
$6.2 million or 14% compared to fiscal 1999. The steel processing operations at
the Company's Gary, Indiana facility were significantly curtailed in the fourth
quarter of the prior fiscal year and a sales office servicing the Chicago market
was closed in the latter part of fiscal 2000. Sales generated by the Indiana
operations decreased by $6.0 million in fiscal 2000 compared to fiscal 1999.
Sales volumes were also affected as a result of reduced availability of steel
products from suppliers due to credit constraints earlier in fiscal 2000.

         Operating income for this segment amounted to $852,000 for fiscal 2000
compared to operating income of $12,000 for fiscal 1999. Gross margin (net sales
less cost of sales) as a percentage of net sales was 11.4% in fiscal 2000
compared to 7.4% in the prior fiscal year. The increase in gross margin
percentage is a result of stronger sales of value-added product to the
automotive market, which generally has a greater gross margin than as-is sales.
Fiscal 1999 operations were affected by the pervasive effects on the steel
industry, and many of the Company's customers, of a major automotive strike in
the summer of 1998. The Company's gross margins are subject to fluctuation as a
result of changes in the cost of steel purchases. While the Company is typically
able to pass the increase in steel costs on to its customers, the timing of such
increases may not coincide with the purchasing side. Overall, the market for
steel products strengthened somewhat in the latter part of fiscal 2000 as demand
outpaced steel production. Accordingly, as steel prices in the market increased,
the margins the Company generated during the second half of fiscal 2000
decreased. The Company anticipates increasing sales levels in fiscal 2001 as its
ability to purchase steel has been enhanced with the equity investment in the
Company, the loan arrangement with MNP Corporation and the renegotiated
financing arrangements with its senior lender, as discussed in the Liquidity and
Capital Resources section which follows. However, the forecast for fiscal 2001
sales volumes and margins are somewhat unsettled as steel inventories in the
distribution channels are rising and pricing pressures are reappearing in the
steel markets.

WASTE MANAGEMENT SEGMENT This segment reflects the results of operations of the
Company's paint waste recycling business. In July 1999, the Company discontinued
processing of paint waste using its developmental PRS system. In fiscal year
ended February 28, 1999 a $2.7 million restructuring charge was recorded to
write down certain assets, mainly impaired equipment, and accrue certain
liabilities related to the PRS system. As a result, operating and administrative
costs of the paint waste recycling operation have been significantly reduced.
Revenues are affected to a lesser extent since revenues are primarily generated
by its continuing DryPureTM recycling process. Net sales for this segment
decreased to $3,342,000 in fiscal 2000 from $3,872,000 in the prior fiscal year,
a 14% decline.

         The paint waste recycling business recorded an operating loss of
$73,000 for fiscal 2000. The operating loss of $3,174,000 for fiscal 1999
included a $2,703,000 restructuring charge to write down certain assets,
principally impaired equipment, and accrue certain liabilities related to the
PRS system. The DryPureTM process for the last several years has operated at or
near its capacity.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The $769,000 decrease in selling,
general and administrative expenses in the current fiscal year is primarily
attributable to lower personnel and administration costs for the paint waste
recycling operation and the Gary, Indiana steel operation when compared to the
prior fiscal year.

INTEREST EXPENSE Interest expense decreased $323,000, or 19%, in the current
fiscal year compared to the prior year. Average outstanding borrowings fell due
to a decrease in steel purchasing, significantly lower inventory levels and
reduced working capital requirements.









                                       11
<PAGE>

      YEAR ENDED FEBRUARY 28, 1999 COMPARED TO YEAR ENDED FEBRUARY 28, 1998

STEEL DISTRIBUTION AND PROCESSING SEGMENT The Company's steel distribution and
processing operations reported net sales of $45.4 million for fiscal 1999, a
decrease of $21.5 million or 32% from the prior year. The sales decrease
resulted primarily from the pervasive effects on the steel industry, and many of
the Company's customers, of a major automotive strike in the summer of 1998.
Also a sharp decline in demand for steel products at reasonable pricing was
experienced in the latter half of the year as a result of the large supply of
low-priced foreign steel entering the domestic steel market.

         Operating profits for this segment amounted to $12,000 for fiscal 1999,
a decrease of $1,074,000 from the prior year. Gross margin (net sales less cost
of sales) as a percentage of net sales was 7.4% in fiscal 1999 compared to 8.2%
in the prior year. Gross margin percentages decreased due to pricing pressures
resulting from a softening of demand in the steel markets in fiscal 1999.

WASTE MANAGEMENT SEGMENT Net sales for paint waste recycling increased slightly
to $3,872,000 in fiscal 1999 from $3,719,000 in the prior year. For the past
several years, this business has operated at or near its processing capacity.

         This segment reported a $3,174,000 operating loss for fiscal 1999,
compared to a $1,067,000 operating loss for the prior year. The operating
results for this segment included operating costs related to the commencement of
the start-up period for the Polymeric Recovery System, which used the new paint
waste recycling technology. In fiscal 1999, the Company recorded restructuring
charges of $2,703,000 to write down certain assets, principally impaired
equipment, and accrue certain liabilities related to the Polymeric Recovery
System. The operating loss in fiscal 1998 also includes $462,000 of costs
written off relating to a proposed public offering for this segment. The funding
for this expansion was to have been provided from the proceeds of an initial
pubic offering of an approximate 50% interest in EPI Technologies. The proposed
offering was abandoned due to weakness in the public market for the offering and
other matters.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The $1,090,000 decrease in selling,
general and administrative expenses is primarily attributable to reduced
personnel and administration costs in response to the significant decline in the
Company's sales in fiscal 1999 and the closing of the steel processing center in
Gary, Indiana.

INTEREST EXPENSE Interest expense decreased $66,000 or 4% in fiscal 1999. The
decrease is due primarily to lower interest rates during fiscal 1999.

                         LIQUIDITY AND CAPITAL RESOURCES

         The Company had a $977,000 working capital deficiency at February 29,
2000. The improvement from a working capital deficiency at February 28, 1999 of
$10,141,000 is due primarily to the reclassification of previous short-term
obligations to long-term, as discussed below. Certain components of working
capital, including accounts receivable, inventories, accounts payable and notes
payable, historically may fluctuate significantly based upon trends in overall
market conditions, sales volume and steel purchasing strategies of the Company's
steel operations. In fiscal 2000 the reduction of steel inventories was
primarily responsible for the generation of $2,488,000 of cash flows from
operations.

         On September 1, 1999, a private investor group (the "Buyers") purchased
4.2 million previously unissued shares of the Company's common stock pursuant to
a Stock Purchase Agreement dated June 25, 1999 (the "Agreement") for $256,000 in
cash, net of issuance costs of $38,000. The purchase of the common stock
represents approximately 53% of the issued and outstanding shares of the
Company's common stock. The Buyers are affiliated with MNP Corporation ("MNP"),
a privately held company which holds approximately 280,000 shares of the
Company's common stock and whose majority owner is a director of the Company.
The percentage ownership of the Buyers, together with the holdings of MNP,
constitutes 57% of the Company's outstanding and issued common stock.

                                       12
<PAGE>

         On September 3, 1999, the Company entered into an Amended and Restated
Loan Agreement (the "Loan Agreement") with the National Bank of Canada (the
"Bank"). The Loan Agreement provides for a $10 million revolving line of credit
with interest at 3/4% above prime and a term loan of $1,650,000 with interest at
1% above prime. Provided there are no covenant defaults or other events of
default under the Loan Agreement, the interest rate on the revolving loan and
the term loan will be reduced by 1/4% as of August 31, 2000. The revolving loan
expires in March 2002. The term loan provides for payments of interest only
through March 2000 and, thereafter, monthly principal payments of $35,000 plus
interest until fully paid in March 2004. Prior to the Loan Agreement, the
revolving line of credit and term loan were classified as current liabilities in
the Company's balance sheet. As a result of the revised terms of its obligations
under the Loan Agreement, the long-term portion of the obligations owing to the
Bank are shown as long-term debt at February 29, 2000.

         The Company's primary source of liquidity is the $10 million revolving
credit line with the Bank. Borrowing availability under the revolving credit
line is determined using a formula based upon eligible accounts receivable and
inventories. As of February 29, 2000, the outstanding balance of the revolving
credit line amounted to $7,198,000 and unused availability amounted to $721,000.
The Loan Agreement prohibits the payment of cash dividends on the Company's
common stock and allows the payment of cash dividends on the Company's preferred
stock issues only if the Company is not in default of any provisions in the Loan
Agreement and payment of such dividend would not result in any defaults. The
Loan agreement prohibits capital expenditures in excess of $250,000 during any
fiscal year and requires maintaining an interest coverage ratio of at least 1.0
to 1.0, and maintaining a fixed charge coverage ratio of at least 1.0 to 1.0
(1.2 to 1.0 for the quarter ended May 31, 2000 and thereafter).

         Since July 1999, MNP has loaned the Company a total of $3.6 million as
of February 29, 2000. The loans bear interest at prime plus 1% and are secured
by substantially all assets of the Company, however, all such security interests
and liens are junior and subordinate to the secured positions of the Bank and
other secured lenders. The loans are due on demand, however, MNP, as part of a
subordination agreement with the Company and the Bank, has agreed that while the
Company has any outstanding obligations to the Bank, MNP will not cause the
amount of loans to the Company to be less than $1.5 million. Accordingly, $1.5
million of loans from MNP have been classified as long-term debt in the
accompanying balance sheet at February 29, 2000.

         Until midway through fiscal 2000, the Company had not been able to make
timely payments to many of its trade and other creditors. As a result of the
sale of the stock to the Buyers and the financing arrangements made with the
Bank and MNP, the Company was able to negotiate deferred payment terms and
expanded credit lines with most of its major suppliers. Management believes the
arrangements established with its major suppliers will allow for adequate
supplies of steel product at competitive prices to meet its customers'
requirements and allow the Company to increase its sales volume during fiscal
2001.

         In addition to the sale of stock, modifications to its debt obligations
and discontinuance of the PRS system during fiscal 2000, the Company is
continuing to focus on its core steel processing and distribution business and
is placing additional emphasis on purchasing and inventory management to improve
operating results and enhance cash generated from operations.

         The Company does not have any material capital expenditure commitments
at this time. Capital expenditures are limited under the Loan Agreement with the
Bank. Management believes its existing resources, including cash provided by
operating activities and its credit facilities will be sufficient to satisfy its
working capital and other capital requirements for fiscal 2001.


                                    YEAR 2000

         The Company uses computer hardware and financial and manufacturing
software that it purchased from third party suppliers. Such suppliers confirmed
to the Company that such products are Year 2000 compliant. The Company did not
incur any significant costs to become Year 2000 compliant. The Company did not
experience any significant Year 2000 difficulties on January 1, 2000 or
thereafter from its own hardware or software, nor was it affected, to the best
of the Company's knowledge, by any significant Year 2000 problems at its
suppliers or customers.


                                       13
<PAGE>

                           FORWARD-LOOKING STATEMENTS

         This Form 10-K, other SEC filings, and other pronouncements made from
time to time by the Company may include a number of forward-looking statements,
including, but not limited to, statements with respect to the Company's future
financial performance, operating results, plans and objectives. Such statements
are made pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based upon
the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control. The Company is
subject to risks inherent in the industries which the Company operates and to
which the Company sells products. These industries, and therefore the Company,
are subject to changes in the economy in general, including the effects of
rising interest rates. The Company's relationship to and business dealings with
significant vendors and customers and the intense price competition in the
Company's markets also may affect the Company's results. Accordingly, actual
results may differ materially from those anticipated by such statements. In
light of these risks and uncertainties, there can be no assurance that any
forward-looking information contained herein will in fact transpire or prove to
be accurate and such information and statements should not be relied upon. The
Company undertakes no responsibility to update any forward-looking statement
that may be made to reflect events or circumstances occurring after the dates
the statements were made or to reflect the occurrence of unanticipated events.


ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


         The principal market risk (i.e., the risk of loss arising from adverse
changes in market rates and prices) that the Company is exposed to is interest
rate risks. The adverse effect of potential changes in this market risk is
discussed below. The sensitivity analysis presented does not consider the
effects that such adverse changes may have on overall economic activity, nor do
they consider additional actions management may take to mitigate the Company's
exposure to such changes. Actual results may differ. See the notes to the
consolidated financial statements for a description of the Company's accounting
policies and other information related to these financial instruments.

VARIABLE-RATE DEBT. As of February 29, 2000, the Company had approximately $12.4
million outstanding under various debt instruments whose interest rates vary in
accordance with the Bank's prime rate. The amount outstanding under these credit
facilities will fluctuate throughout the year based upon working capital
requirements. Based upon the $12.4 million outstanding under these obligations
at February 29, 2000, a hypothetical 1.0% change in the interest rate from the
rates in effect at February 29, 2000 would cause a change in interest expense of
approximately $123,000 on an annual basis. The Company's objective in
maintaining these variable rate borrowings is flexibility and lower overall cost
as compared with fixed-rate borrowings.

FIXED-RATE DEBT. As of February 29, 2000, the Company had approximately $1.6
million of long-term fixed-rate debt outstanding. The estimated fair value of
this debt approximates the carrying value and the market risk from a
hypothetical 1.0% change in interest rates is not considered material due to the
relatively short maturities on the this fixed-rate debt.


ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Consolidated financial statements of the Company are included elsewhere
in this report as listed in Part IV, ITEM 14.


ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

            None.




                                       14
<PAGE>

                                    PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by this Item, except for certain information
relating to Executive Officers set forth at the end of Part I. is omitted
inasmuch as the Company intends to file its definitive 2000 Proxy Statement (the
"2000 Proxy statement") containing such information with the Securities and
Exchange Commission within 120 days after the close of its fiscal year ended
February 29, 2000, and such information is incorporated herein by reference.



ITEM 11.     EXECUTIVE COMPENSATION

         The information required by this Item is incorporated by reference from
the 2000 Proxy Statement.


ITEM 12.     SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

         The information required by this Item is incorporated by reference from
the 2000 Proxy Statement.


ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by this Item is incorporated by reference from
the 2000 Proxy Statement.














                                       15
<PAGE>

                                     PART IV

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

(a)     Documents filed as part of this report:

         1.   The following consolidated financial statements of the
              Company are submitted pursuant to the requirements of ITEM 8:

              Report of Independent Auditors                                F-1

              Consolidated Balance Sheets at February 29, 2000 and February
              28, 1999                                                      F-2

              Consolidated Statements of Operations for each of the three
              years in the period ended February 29, 2000                   F-4

              Consolidated Statements of Stockholders' (Deficit) Equity for
              each of the three years in the period ended February 29, 2000 F-5

              Consolidated Statements of Cash Flows for each of the three
              years in the period ended February 29, 2000                   F-6

              Notes to Consolidated Financial Statements                    F-7

         2.   The following consolidated financial statement schedule of the
              Company is submitted  pursuant to the  requirements of ITEM 14(d):

             Schedule II - Valuation and Qualifying Accounts                F-21

             All other schedules required pursuant to the requirements of ITEM
             14 (d) are omitted because they are not applicable, not material,
             not required or the required information is included in the
             applicable consolidated financial statements or notes thereto.


      3. EXHIBITS

         3.1(a)*         Certificate of Incorporation of the Company
                         (incorporated herein by reference from the Company's
                         Registration Statement on Form 8-A, dated January 31,
                         1986).

         3.1(b)*         Amendment to the Certificate of Incorporation of the
                         Company, effective September 30, 1986 (incorporated
                         herein by reference from the Company's Report on Form
                         10-K for fiscal year ended February 28, 1987).

         3.1(c)*         Amendment to the Certificate of Incorporation of the
                         Company, effective August 1, 1988 (incorporated herein
                         by reference from the Company's Registration Statement
                         on Form S-1, filed April 15, 1989, File No. 33-27955).

         3.1(d)*         Amendment to the Certificate of Incorporation of the
                         Company, effective August 18, 1993 (incorporated herein
                         by reference from the Company's Report on Form 10-Q for
                         the quarterly period ended August 31, 1993).

         3.2(a)*         Certificate of Designation, Preferences and Rights of
                         the Company (incorporated herein by reference from the
                         Company's Registration Statement on Form S-1, filed
                         September 16, 1989, File No. 33-27955).

         3.2(b)*         Amendment to the Certificate of Designation,
                         Preferences and Rights of the Company, effective August
                         25, 1993 (incorporated herein by reference from the
                         Company's Report on Form 10-Q for the quarterly period
                         ended August 31, 1993).



                                       16
<PAGE>

         3.3(a)*         By-Laws of the Company (incorporated herein by
                         reference from the Company's Registration Statement on
                         Form 8-A, dated January 31, 1986).

         3.3(b)*         Certificate of Amendment of By-Laws of the Company
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1990).

         4.1*            Specimen Stock Certificate (incorporated herein by
                         reference from the Company's Registration Statement on
                         Form 8-A, dated January 31, 1986).

         4.2*            Registration Statement on Form 8-A, dated January 31,
                         1986 (incorporated herein by reference to File No.
                         0-14203).

         4.3*            Form of Series B Preferred Stock (incorporated herein
                         by reference from the Company's Registration on Form
                         S-1, filed June 4, 1989, File No. 33-27955).

         10.01(a)        Amended and Restated Loan and Security Agreement, dated
                         September 3, 1999, among the Company, certain of its
                         subsidiaries and National Bank of Canada.

         10.01(b)        Subordination Agreement dated September 3, 1999, among
                         the Company, certain of its subsidiaries, MNP
                         Corporation and National Bank of Canada.

         10.02(a)*       Form of Amended and Restated Non-negotiable Promissory
                         Note for $596,822.79 issued to William D. Feniger
                         (incorporated herein by reference from the Company's
                         Registration Statement on Form S-1, filed June 9, 1989,
                         File No. 33-27955).

         10.02(b)*       Escrow Agreement, dated January 4, 1990, by and among
                         Yale M. Feniger, William D. Feniger, Melvin G.
                         DeGrazia, Ted R. Meyers and David A. Katz (incorporated
                         herein by reference from the Company's Report on Form
                         10-K for fiscal year ended February 28, 1990).

         10.02(c)*       Amendment to Non-negotiable Promissory Note, dated
                         November 1, 1992, between the Company and William D.
                         Feniger (incorporated herein by reference from the
                         Company's Report on Form 10-K for fiscal year ended
                         February 28, 1993).

         10.02(d)*       Subscription Agreement, dated May 31, 1996, between the
                         Company and William D. Feniger. (Incorporated herein by
                         reference from the Company's Report on Form 10-K for
                         fiscal year ended February 29, 1996).

         10.03(a)*       Lease between the Company and Greenbelt Associates,
                         dated February 14, 1992 (incorporated herein by
                         reference from the Company's Report on Form 10-K for
                         fiscal year ended February 29, 1992).

         10.03(b)*       Lease between Ottawa River Steel and Greenbelt
                         Associates, dated February 14, 1992 (incorporated
                         herein by reference from the Company's Report on Form
                         10-K for fiscal year ended February 29, 1992).

         10.04(a)*       Lease between Ottawa River Steel Co. and Chicago
                         Investors, dated March 1, 1996 (incorporated herein by
                         reference from the Company's Report on Form 10-K for
                         fiscal year ended February 29, 1996).

         10.04(b)*       Lease between Environmental Purification Industries
                         Company and Chicago Investors, dated March 1, 1996
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 29,
                         1996).

         10.05(a)*       Meridian National Corporation 1990 Non-Qualified and
                         Incentive Stock Option Plan, dated August 20, 1990
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1991).



                                       17
<PAGE>

         10.05(b)*       Amendment No. 1 to the Meridian National Corporation
                         1990 Non-Qualified and Incentive Stock Option Plan,
                         effective May 12, 1994 (incorporated herein by
                         reference from the Company's Report on Form 10-K for
                         fiscal year ended February 29, 1996).

         10.05(c)*       Amendment No. 2 to the Meridian National Corporation
                         1990 Non-Qualified and Incentive Stock Option Plan,
                         effective June 6, 1995 (incorporated herein by
                         reference from the Company's Report on Form 10-K for
                         fiscal year ended February 29, 1996).

         10.06(a)*       Amended and Restated 1987 Non-Employee Directors' Stock
                         Option Plan of Meridian National Corporation, dated
                         August 20, 1990 (incorporated herein by reference from
                         the Company's Report on Form 10-K for fiscal year ended
                         February 28, 1991).

         10.06(b)*       Amendment No. 1 to the Amended and Restated 1987
                         Non-Employee Directors' Stock Option Plan of Meridian
                         National Corporation, effective May 27, 1993
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1994).

         10.06(c)*       Amendment No. 2 to the Amended and Restated 1987
                         Non-Employee Directors' Stock Option Plan of Meridian
                         National Corporation, effective May 12, 1994
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 29,
                         1996).

         10.06(d)*       Amendment No. 3 to the Amended and Restated 1987
                         Non-Employee Directors' Stock Option Plan of Meridian
                         National Corporation, effective June 6, 1995
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 29,
                         1996).

         10.07*          Meridian National Corporation Tax Deferred Retirement
                         and Savings Plan, as amended and restated (incorporated
                         herein by reference from the Company's Report on Form
                         10-K for fiscal year ended February 28, 1995).

         10.08*          Employment Agreement of William D. Feniger, dated July
                         31, 1997 (incorporated herein by reference from the
                         Company's Report on Form 10-K for fiscal year ended
                         February 28, 1998).

         10.9(a)*        Bond Purchase Agreement, dated February 12, 1990,
                         between the Company, EPI, Haden MacLellan Holdings,
                         plc, Miller & Schroeder Financial, Inc. and The
                         Toledo-Lucas County Port Authority (incorporated herein
                         by reference from the Company's Report on Form 10-K for
                         fiscal year ended February 28, 1990).

         10.9(b)*        Guaranty Agreement, dated as of December 15, 1989,
                         between the Company and Society Bank & Trust, Trustee
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1990).

         10.9(c)*        Loan Agreement, dated as of December 15, 1989
                         (including the Note as an Exhibit thereto) between
                         Toledo-Lucas County Port Authority and EPI
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1990).

         10.9(d)*        Open-End Mortgage and Security Agreement, dated as of
                         December 15, 1989, between EPI and Society Bank &
                         Trust, Trustee (incorporated herein by reference from
                         the Company's Report on Form 10-K for fiscal year ended
                         February 28, 1990).



                                       18
<PAGE>

         10.10*          Amended and Restated Partnership Agreement of
                         Environmental Purification Industries Company
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1994).

         10.11(a)*       Loan and Security Agreement, dated November 17, 1995,
                         between Ottawa River Steel Co. and FINOVA Capital
                         Corporation (incorporated herein by reference from the
                         Company's Report on Form 10-K for fiscal year ended
                         February 29, 1996).

         10.11(c)*       Industrial Building Lease, dated November 10, 1995,
                         between Ottawa River Steel Co. and Centerpoint
                         Properties Corporation (incorporated herein by
                         reference from the Company's Report on Form 10-K for
                         fiscal year ended February 29, 1996).

         10.11(d)*       Second Lease Amendment dated December 15, 1998, between
                         Ottawa River Steel Co., Meridian National Corporation
                         and Great Lakes Industrial Partners L.P. (incorporated
                         herein by reference from the Company's Report on Form
                         10-K for fiscal year ended February 28, 1999).

         10.11(e)*       Sublease Agreement, effective as of December 15, 1998,
                         between Ottawa River Steel Co. and Centennial Steel
                         Processing, LLC (incorporated herein by reference from
                         the Company's Report on Form 10-K for fiscal year ended
                         February 28, 1999).

         10.13(a)*       Stock Purchase Agreement, dated November 19, 1996,
                         among Environmental Purification Industries, Inc.,
                         Spencer Browne, MNP Corporation and Elliot Smith
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1997).

         10.13(b)*       Registration Rights Agreement, dated November 19, 1996,
                         among Environmental Purification Industries, Inc.,
                         Spencer Browne, MNP Corporation and Elliot Smith
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1997).

         10.13(c)*       Stockholders Agreement, dated November 19, 1996,
                         among Environmental Purification Industries, Inc.,
                         Spencer Browne, MNP Corporation and Elliot Smith
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1997).

         10.14(a)*       Cognovit Demand Promissory Note for $618,000, dated
                         February 4, 1999, of Ottawa River Steel Co. to William
                         D. Feniger (incorporated herein by reference from the
                         Company's Report on Form 10-K for fiscal year ended
                         February 28, 1999).


         10.14(b)*       Open-end Mortgage, dated February 4, 1999, between
                         Ottawa River Steel Co. and William D. Feniger
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1999).


         10.14(c)*       Security Agreement, dated February 4, 1999, between
                         Ottawa River Steel Co. and William D. Feniger
                         (incorporated herein by reference from the Company's
                         Report on Form 10-K for fiscal year ended February 28,
                         1999).


         10.15(a)        Stock Purchase Agreement, Dated as of June 25, 1999,
                         among The Company, the Buyers as listed in the document
                         and MNP Corporation.

         10.15(b)        Loan Agreement, dated as of June 30, 1999, among the
                         Company, certain of its subsidiaries and MNP
                         Corporation.



                                       19
<PAGE>

         21              List of Subsidiaries of Registrant

         23              Consent of Independent Auditors

         27              Financial Data Schedule




(b)      Reports filed on Form 8-K.

         There were no reports filed on Form 8-K during the fourth quarter of
         the Company's 2000 fiscal year.

------------------------

*      Indicates an exhibit previously filed with the Securities and Exchange
       Commission and incorporated herein by reference.


















                                       20
<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 13th day of June
2000.

                                      MERIDIAN NATIONAL CORPORATION



                                      By: /s/ William D. Feniger
                                          -------------------------------------
                                          William D. Feniger
                                          Chairman of the Board of Directors,
                                          President and Chief Executive Officer
                                          (Principal Executive Officer)



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

         Signature                       Title                        Date
         ---------                       -----                        ----

/s/ William D. Feniger         Chairman of the Board               June 13, 2000
-------------------------      of Directors, Director, President
William D. Feniger             and Chief Executive Officer
                               (Principal Executive Officer)



/s/ James L. Rosino            Vice President - Finance            June 13, 2000
-------------------------      (Principal Financial and
James L. Rosino                Accounting Officer)



/s/ Larry Berman               Director                            June 13, 2000
-------------------------
Larry Berman











                                       21
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
Meridian National Corporation and Subsidiaries
Toledo, Ohio


We have audited the accompanying consolidated balance sheets of Meridian
National Corporation and Subsidiaries as of February 29, 2000 and February 28,
1999, and the related consolidated statements of operations, stockholders'
deficit, and cash flows for each of the three years in the period ended February
29, 2000. Our audits also included the financial statement schedule listed in
the Index at Item 14(a). These consolidated financial statements and schedule
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 generally accepted auditing
standards. 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
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
Meridian National Corporation and Subsidiaries as of February 29, 2000 and
February 28, 1999, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended February 29, 2000, in
conformity with generally accepted accounting principles. Also, in our opinion,
the related financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presented fairly, in
all material respects the information set forth therein.


                                                    REHMANN ROBSON, P.C.

Farmington Hills,  Michigan
April 21, 2000


                                      F-1
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                ASSETS                          FEBRUARY 29        FEBRUARY 28
                                                                -----------        -----------
                                                                  2 0 0 0            1 9 9 9
                                                                -----------        -----------
<S>                                                             <C>                <C>
CURRENT ASSETS
     Cash and cash equivalents                                  $     3,350        $   825,437
     Accounts receivable, net of allowance  for doubtful
        accounts of $477,600 ($448,000 in 1999)                   8,032,915          8,021,764
     Inventories                                                  4,287,544          8,281,272
     Restricted investments                                         294,516               --
     Other current assets                                           625,131            723,356
                                                                -----------        -----------
TOTAL CURRENT ASSETS                                             13,243,456         17,851,829
                                                                -----------        -----------

PROPERTY AND EQUIPMENT
     Buildings, building improvements and
        leasehold improvements                                    1,260,452          1,263,209
     Machinery and equipment                                      4,961,206          4,825,722
     Office furniture and equipment                                 714,602            815,466
     Land and land improvements                                     175,939            163,592
     Construction in progress                                          --               26,350
                                                                -----------        -----------
Total property and equipment                                      7,112,199          7,094,339
     Less accumulated depreciation and amortization               3,849,994          3,514,601
                                                                -----------        -----------
NET PROPERTY AND EQUIPMENT                                        3,262,205          3,579,738
                                                                -----------        -----------
OTHER ASSETS                                                         65,682            691,059
                                                                -----------        -----------



TOTAL ASSETS                                                    $16,571,343        $22,122,626
                                                                ===========        ===========
</TABLE>


The accompanying notes are on integral part of these consolidated
financial statements.


                                      F-2
<PAGE>

<TABLE>
<CAPTION>
               LIABILITIES AND STOCKHOLDERS' DEFICIT                       FEBRUARY 29           FEBRUARY 28
                                                                           ------------         ------------
                                                                              2 0 0 0             1 9 9 9
                                                                           ------------         ------------
<S>                                                                        <C>                  <C>
CURRENT LIABILITIES
     Accounts payable                                                      $  7,269,644         $ 11,424,481
     Accrued liabilities                                                        814,351              721,882
     Accrued compensation                                                       432,029              382,100
     Short-term notes payable
        Revolving line of credit                                                   --             11,811,627
        Affiliate                                                             2,100,000                 --
        Other                                                                 1,642,084                 --
     Current portion of long-term debt
        Loans payable to affiliate                                              501,465              607,811
        Other                                                                 1,460,723            3,045,046
                                                                           ------------         ------------
TOTAL CURRENT LIABILITIES                                                    14,220,296           27,992,947
                                                                           ------------         ------------
Long-term debt due after one year
     Revolving line of credit                                                 7,198,025                 --
     Affiliates                                                               1,775,232              275,232
     Other                                                                    1,334,553              894,473
                                                                           ------------         ------------
Total long-term debt due after one year                                      10,307,810            1,169,705
                                                                           ------------         ------------
TOTAL LIABILITIES                                                            24,528,106           29,162,652
                                                                           ------------         ------------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
STOCKHOLDERS' DEFICIT
     Preferred stock, $.001 par value; authorized 5,000,000 shares:
        $100 Series A, 5,000 shares authorized,
           4,000 shares issued and outstanding                                  400,000              400,000
        $3.75 Series B, 1,375,000 shares authorized,
           206,752 shares issued and outstanding                                775,320              775,320
     Common stock, $.01 par value; authorized 20,000,000
       shares, issued and outstanding, 7,917,552 shares
        (3,717,552 in 1999)                                                      79,176               37,176
     Additional paid in capital                                              11,212,866           10,998,866
     Accumulated deficit                                                    (20,424,125)         (19,251,388)
                                                                           ------------         ------------
TOTAL STOCKHOLDERS' DEFICIT                                                  (7,956,763)          (7,040,026)
                                                                           ------------         ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                $ 16,571,343         $ 22,122,626
                                                                           ============         ============
</TABLE>




                                       F-3
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                               ------------------------------------------------------
                                                FEBRUARY 29          FEBRUARY 28          FEBRUARY 28
                                                  2 0 0 0              1 9 9 9              1 9 9 8
                                               ------------         ------------         ------------
<S>                                            <C>                  <C>                  <C>
Net sales                                      $ 42,562,854         $ 49,291,003         $ 70,683,989
Cost of sales                                    37,335,271           45,317,859           64,399,680
                                               ------------         ------------         ------------
Gross margin                                      5,227,583            3,973,144            6,284,309
                                               ------------         ------------         ------------

Other costs and expenses (income)
    Selling, general and administrative           5,043,142            5,811,642            6,901,510
    Interest                                      1,397,347            1,720,719            1,786,465
    Restructuring charges                              --              2,702,764                 --
    Loss (gain) on disposal of property
      and equipment                                  11,413             (501,327)                --
    Cost of abandoned registration                     --                   --                462,414
    Minority interests                                 --                   --                (96,600)
    Miscellaneous - net                            (165,114)            (226,672)            (151,569)
                                               ------------         ------------         ------------
Total other costs and expenses                    6,286,788            9,507,126            8,902,220
                                               ------------         ------------         ------------
Net loss                                       $ (1,059,205)        $ (5,533,982)        $ (2,617,911)
                                               ============         ============         ============

Loss applicable to common stock                $ (1,172,737)        $ (5,657,700)        $ (2,763,101)
                                               ============         ============         ============


Loss per common share -
  basic and diluted                            $      (0.20)        $      (1.54)        $      (0.78)
                                               ============         ============         ============


</TABLE>



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

                                       F-4
<PAGE>

                 MERIDIAN NATIONAL CORPORATION AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY


<TABLE>
<CAPTION>
                                                                  $100               $3.75
                                                                SERIES A            SERIES B
                                                                PREFERRED           PREFERRED               COMMON
                                                                  STOCK               STOCK                  STOCK
                                                              -------------        ------------         -------------
<S>              <C>                                          <C>                  <C>                  <C>
Balance at March 1, 1997                                      $    400,000         $    775,320         $     34,882
    Net loss for 1998                                                 --                   --                   --
    Dividends:
       Cash dividends on Series A preferred stock                     --                   --                   --
       Cash dividends on Series B preferred stock                     --                   --                   --
       136,957 shares of common stock issued
           to holders of Series B preferred stock                     --                   --                  1,370
    Issuance of warrants for purchase of common
       stock of subsidiary                                            --                   --                   --
                                                              ------------         ------------         ------------
Balance at February 28, 1998                                       400,000              775,320               36,252
    Net loss for 1999                                           (5,533,982)          (5,533,982)
    Dividends:
       Cash dividends on Series A preferred stock                     --                   --                   --
       Cash dividends on Series B preferred stock                     --                   --                   --
       92,349 shares of common stock issued to holders
          of Series B preferred stock                                 --                   --                    924
       Accrued dividends on Series B preferred stock                  --                   --                   --
                                                              ------------         ------------         ------------
Balance at February 28, 1999                                       400,000              775,320               37,176
    Net loss for 2000                                                 --                   --                   --
    Dividends:
       Cash dividends on Series A preferred stock                     --                   --                   --
       Accrued dividends on Series B preferred stock                  --                   --                   --
    Issuance of 4,200,000 shares of common stock                      --                   --                 42,000
                                                              ------------         ------------         ------------
Balance at February 29, 2000                                  $    400,000         $    775,320         $     79,176
                                                              ============         ============         ============

<CAPTION>

                                                                ADDITIONAL
                                                                 PAID IN           ACCUMULATED
                                                                 CAPITAL             DEFICIT                 TOTAL
                                                              ------------        ------------         -------------
<S>              <C>                                          <C>                 <C>                  <C>
Balance at March 1, 1997                                      $ 10,818,545        $(10,830,585)        $  1,198,162
Net loss for 1998                                                     --            (2,617,911)          (2,617,911)
Dividends:
Cash dividends on Series A preferred stock                            --               (36,000)             (36,000)
       Cash dividends on Series B preferred stock                     --                   (22)                 (22)
       136,957 shares of common stock issued
           to holders of Series B preferred stock                  107,300            (109,170)                (500)
    Issuance of warrants for purchase of common
       stock of subsidiary                                          25,000                --                 25,000
                                                              ------------        ------------         ------------
Balance at February 28, 1998                                    10,950,845         (13,593,688)          (1,431,271)
    Net loss for 1999
    Dividends:
       Cash dividends on Series A preferred stock                     --               (36,000)             (36,000)
       Cash dividends on Series B preferred stock                     --                    (7)                  (7)
       92,349 shares of common stock issued to holders
          of Series B preferred stock                               48,021             (48,945)                --
       Accrued dividends on Series B preferred stock                  --               (38,766)             (38,766)
                                                              ------------        ------------         ------------
Balance at February 28, 1999                                    10,998,866         (19,251,388)          (7,040,026)
    Net loss for 2000                                                 --            (1,059,205)          (1,059,205)
    Dividends:
       Cash dividends on Series A preferred stock                     --               (36,000)             (36,000)
       Accrued dividends on Series B preferred stock                  --               (77,532)             (77,532)
    Issuance of 4,200,000 shares of common stock                   214,000                --                256,000
                                                              ------------        ------------         ------------
Balance at February 29, 2000                                  $ 11,212,866        $(20,424,125)        $ (7,956,763)
                                                              ============        ============         ============
</TABLE>

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

                                      F-5
<PAGE>

                 MERIDIAN NATIONAL CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                 YEAR ENDED
                                                            ----------------------------------------------------
                                                            FEBRUARY 29         FEBRUARY 28          FEBRUARY 28
                                                              2 0 0 0             1 9 9 9              1 9 9 8
                                                            ------------        ------------        ------------
<S>                                                         <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                    $(1,059,205)        $(5,533,982)        $(2,617,911)
Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Depreciation and amortization                             560,343             974,160             856,332
      Loss (gain) on disposal of
        property and equipment                                   11,413            (501,327)               --
      Write-down of inventory                                   949,000             830,000                --
      Restructuring charges                                        --             2,702,764                --
      Minority interest                                            --                  --               (96,600)
      Write-down of noncurrent assets                              --                  --               169,463
      Changes in operating assets and
       liabilities which provided (used) cash:
        Accounts receivable                                     (97,129)          3,176,784             (17,124)
        Inventories                                           3,044,728           2,817,683             154,577
        Other current assets                                    136,147             (31,730)            (13,122)
        Accounts payable and
          accrued liabilities                                (1,057,691)         (1,935,031)            786,517
                                                            -----------         -----------         -----------
NET CASH PROVIDED BY (USED IN) OPERATING  ACTIVITIES          2,487,606           2,499,321            (777,868)
                                                            -----------         -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment                            (230,897)           (486,591)           (331,277)
Proceeds from disposals of property and equipment                31,767           2,119,811                --
Changes in other assets                                         (56,176)             24,543             (17,221)
                                                            -----------         -----------         -----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES            (255,306)          1,657,763            (348,498)
                                                            -----------         -----------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net line of credit borrowings (repayments)                   (4,613,602)         (1,341,846)          2,015,219
Payments on borrowed debt                                    (2,260,785)         (1,975,054)         (1,123,349)
Dividends paid on preferred stock                               (36,000)            (36,007)            (36,022)
Proceeds from borrowed debt                                   3,600,000                --               250,000
Net proceeds from issuance of common stock                      256,000                --                  --
Net proceeds from exchange of warrants                             --                  --                25,000
                                                            -----------         -----------         -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES          (3,054,387)         (3,352,907)          1,130,848
                                                            -----------         -----------         -----------
(Decrease) increase in cash and cash equivalents               (822,087)            804,177               4,482
Cash and cash equivalents, beginning of year                    825,437              21,260              16,778
                                                            -----------         -----------         -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                      $     3,350         $   825,437         $    21,260
                                                            ===========         ===========         ===========
Supplemental cash flows information:
    Cash paid for interest                                  $ 1,415,672         $ 1,718,983         $ 1,915,035
                                                            ===========         ===========         ===========
</TABLE>



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

                                       F-6
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.       OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Operations

         Meridian National Corporation and its subsidiaries (the "Company") are
         engaged principally in the trading and processing of steel products for
         the automotive, truck and appliance industries. Secondarily, the
         Company also recycles or disposes paint wastes for generators of such
         wastes in the automotive industries. All customers are located
         primarily in the Midwest Region of the United States.

         Principles of Consolidation

         The consolidated financial statements include the accounts of Meridian
         National Corporation and all subsidiaries in which it has in excess of
         a 50% ownership interest. All material intercompany transactions and
         balances have been eliminated.

         Restructuring of the Paint Waste Business

         During the year ended February 28, 1999, the Company recorded
         restructuring charges of $2,702,764 to write down certain assets,
         principally impaired equipment, and accrue certain liabilities related
         to the Polymeric Recovery System ("PRS") of the paint waste business
         unit. As of February 29, 2000 and February 28, 1999, the accompanying
         consolidated financial statements include in accounts payable and
         accrued liabilities $400,000 for removal of PRS products in connection
         with these restructuring charges. The Company had intended to use this
         system to produce a product using recycled paint waste, which would be
         marketed as a lower cost replacement for traditional, virgin materials
         used in formulated products in the sealant, coating, and adhesive
         industries. The Company had been unable to market this product in a
         commercially viable manner. The Company continues to recycle paint
         waste using the DryPure system, which generates an inert dry powder,
         used as a filler in the formulation of certain building and
         construction products.

         Concentration Risks

         Substantially all of the Company's accounts receivable as of February
         29, 2000 and February 28, 1999 are due from businesses which operate in
         the automotive, truck and appliance industries. The Company extends
         credit based on an evaluation of credit reports, payment practices and,
         in most cases, financial condition. Generally, collateral or letters of
         credit are not required. Allowances for credit losses are provided for
         in the consolidated financial statements and such losses consistently
         have been within management's expectations.


                                      F-7
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Use of Estimates

         The preparation of consolidated financial statements in accordance with
         generally accepted accounting principles requires management to make
         estimates and assumptions that affect the reported amounts of assets
         and liabilities and disclosures of contingent assets and liabilities at
         the date of the consolidated financial statements and the reported
         amounts of revenues and expenses during the reporting period. Estimates
         are used for, but not limited to, allowances for doubtful accounts
         receivable and slow-moving inventory. Actual results may differ from
         these estimates.

         Cash and Cash Equivalents

         Cash and cash equivalents consist of demand deposits in banks, cash on
         hand, and certificates of deposit with original maturities when
         purchased of less than three months.

         Restricted Investments

         Restricted investments consist of money market funds held in escrow for
         the repayment of a mortgage note payable to trustee bank. These
         investments are carried at fair value.

         Inventory Valuation

         Inventories, consisting primarily of coiled steel, are carried at the
         lower of cost, using the specific identification method, or market.
         During the years ended 2000 and 1999, the Company recorded charges of
         $949,000 and $830,000, respectively, to cost of sales for inventory
         write downs to their estimated net realizable values.

         Revenue Recognition

         Sales are generally recognized at the time of shipment of products or
         performance of services.

         Property and Equipment and Depreciation

         Property and equipment are stated at cost. Major improvements and
         renewals are capitalized while ordinary maintenance and repairs are
         expensed.

         Depreciation and amortization are provided, principally by means of
         accelerated methods, except for the paint waste recycling subsidiary
         for which all assets are depreciated using the straight-line method,
         based on the following estimated useful lives:

             Land improvements                                  15 to 20  years
             Buildings, building improvements and
               leasehold improvements                           32 to 40  years
             Machinery and equipment                             5 to 15  years
             Office furniture and equipment                      5 to 10  years



                                      F-8
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Capitalized Interest

         Interest costs of approximately $36,000 in 1998 were capitalized as a
         cost of the expansion of the Company's paint waste recycling facility.

         Fair Value of Financial Instruments

         The fair value of the Company's financial instruments, including notes
         payable and long-term debt owed to nonaffiliates, and certain other
         assets and liabilities, approximates their carrying costs due to either
         short maturity of these instruments, or because interest rates of the
         Company's debt approximate rates currently available for borrowings
         with similar terms.

         Loss Per Common Share

         Loss per share is computed using the weighted average number of common
         shares outstanding during the year. Diluted per share amounts reflect
         the potential dilution of all common stock equivalents. At February 29,
         2000 and February 28, 1999 and 1998 options to purchase 435,250,
         427,750 and 497,750 shares, respectively, were excluded from the
         computation of loss per share because the options' exercise prices were
         greater than the average market price of the common shares. Common
         shares issued for dividends on preferred stock are included in weighted
         average shares outstanding beginning on the date issued. The effects of
         options and warrants are excluded from loss per share calculations when
         the effect would be anti-dilutive. The weighted average number of
         common and common equivalent shares used to compute loss per share for
         each year is:

                                        2 0 0 0        1 9 9 9     1 9 9 8
                                      ----------     ----------   ----------
                 Basic and diluted     5,794,601      3,678,082    3,532,195

         Cash dividends on preferred stock and the value of common shares issued
         in lieu of dividends on Series B preferred stock (totaling $113,532 in
         2000, $123,718 in 1999 and $145,192 in 1998) are deducted in arriving
         at loss applicable to common stock.

         Common Stock Options

         All common stock options have been granted at prices not less than the
         market price on the date granted. Accordingly, the Company recognizes
         no compensation expense related to these options in accordance with
         Accounting Principles Board Opinion No. 25, "Accounting for Stock
         Issued to Employees" (APB No. 25).



                                      F-9
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.       SALE OF COMMON STOCK

         On September 1, 1999, a private investor group (the "Buyers") purchased
         4.2 million previously unissued shares of the Company's common stock
         pursuant to a Stock Purchase Agreement dated June 25, 1999 (the
         "Agreement") for $256,000 in cash, net of issuance costs of $38,000.
         The purchase of the common stock represented approximately 53% of the
         issued and outstanding shares of the Company's common stock. The Buyers
         are affiliated with MNP Corporation ("MNP"), a privately held company
         which holds 280,000 shares of the Company's common stock and whose
         majority owner is a director of the Company. The percentage ownership
         of the Buyers, together with the holdings of MNP, constitutes 57% of
         the Company's issued and outstanding common stock.


3.       DEBT (INCLUDING RELATED PARTY)

         Short-term Debt

         Short-term notes payable at February 29, 2000 consist of $2,100,000 in
         notes payable to MNP (see long-term debt below) and various notes
         payable to vendors due within one year at interest rates ranging from
         7% to 8%.

         Long-term Debt

         On September 3, 1999, the Company entered into an Amended and Restated
         Loan Agreement (the "Loan Agreement") with the National Bank of Canada
         (the "Bank"). The Loan Agreement provides for a $10 million revolving
         line of credit with interest at .75% above prime (effective rate of
         9.75% at February 29, 2000) and a term loan of $1.65 million with
         interest at 1% above prime (effective rate of 10% at February 29,
         2000). Provided there are no covenant defaults or other events of
         default under the Loan Agreement, the interest rate on the revolving
         loan and the term loan will be reduced by .25% as of August 31, 2000.
         The revolving loan expires in March 2002. Prior to the Loan Agreement,
         the revolving line of credit was classified as a current liability in
         the Company's balance sheet. As a result of the revised terms under the
         Loan Agreement, the revolving line of credit is shown as long-term at
         February 29, 2000.

         The revolving line of credit allows borrowings under a lending formula
         based upon eligible accounts receivable and inventories less
         outstanding letters of credit. The Loan Agreement provides for a
         facility fee equal to .25% of the excess of $10 million over average
         daily borrowings under the revolving line of credit and is secured by
         substantially all of the Company's personal property not otherwise
         pledged. The Loan Agreement prohibits the payment of cash dividends on
         the Company's common stock and allows payment of cash dividends on the
         Company's preferred stock issues only if the Company is not in default
         of any provisions in the Loan Agreement and payment of such dividend
         would not result in any defaults. The Loan Agreement prohibits capital
         expenditures in excess of $250,000 during any fiscal year and

                                     F-10
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



         requires maintaining an interest coverage ratio of at least 1.0 to 1.0,
         and maintaining a fixed charge coverage ratio of at least 1.0 to 1.0
         (1.2 to 1.0 for the quarter ended May 31, 2000 and thereafter).

         Since July 1999, MNP has loaned the Company a total of $3.6 million.
         The loans bear interest at 1% over prime (effective rate of 10% at
         February 29, 2000) and are secured by substantially all assets of the
         Company, however, all such security interests and liens are junior and
         subordinate to the secured positions of the Bank and other secured
         lenders. The loans are due on demand, however, MNP, as part of a
         subordination agreement with the Company and the Bank, has agreed that
         while the Company has any outstanding obligations to the Bank, MNP will
         not cause the amount of loans to the Company to be less than $1.5
         million. Accordingly, $1.5 million of loans from MNP have been
         classified as long-term debt in the accompanying balance sheet.

         Weighted average interest rates, on the revolving Bank line of credit,
         during the year were 8.84% in 2000, 9.00% in 1999, and 9.48% in 1998.

         Long-term debt consists of the following obligations at February 29,
         2000 and February 28, 1999:

<TABLE>
<CAPTION>
                                                                        2 0 0 0           1 9 9 9
                                                                     ------------      ------------
<S>                                                                  <C>                <C>
               Revolving Bank line of credit                         $ 7,198,025        $      --

               Term notes payable to Bank, due in
               monthly installments of $35,000,
               commencing April 2000 until final
               maturity in March 2004                                  1,650,000          1,783,000

                Note payable to MNP                                    1,500,000               --

               8.5% mortgage note payable to trustee
               bank, due in monthly installments of
               approximately $73,000, including
               interest until final maturity in
               November 2000                                             603,750          1,363,750

               Note payable to an officer and
               stockholder, due in monthly installments
               of $14,000, including interest at 9.25%
               with balance due in July 2000. The note
               is guaranteed by the Company and a
               security interest in certain machinery
               and equipment                                             501,465            607,811

               Convertible note payable to an officer
               and stockholder, interest payable
               quarterly at 9%. The note is subordinate
               to bank borrowings and is convertible
               into shares of common stock at a
               conversion price of $15.60 per share                      275,232            275,232
</TABLE>



                                      F-11
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                        2 0 0 0           1 9 9 9
                                                                     ------------      ------------
               <S>                                                  <C>                <C>
               Unsecured promissory note, which was due
               August 1998, and currently in default,
               plus interest at a rate of 10% per
               annum                                                 $   250,000        $   250,000

               Note payable, collateralized by certain
               machinery and equipment, due in monthly
               installments of $17,675 including
               interest at 11.7% through December 2000                   167,625            348,444

               Obligations under long-term capital
               leases (Note 4)                                           123,901            151,624

               Other                                                        --               42,701
                                                                     -----------        -----------

               Total long-term debt                                   12,269,998          4,822,562

               Less amounts due within one year                        1,962,188          3,652,857
                                                                     -----------        -----------

               Long-term debt due after one year                     $10,307,810        $ 1,169,705
                                                                     ===========        ===========

</TABLE>
         Interest expense incurred on related party debt was $258,000, $30,000
         and $25,000 in 2000, 1999 and 1998, respectively.

         Effective July 1, 1992, Environmental Purification Industries Company
         ("EPI") became a wholly-owned subsidiary of the Company when, pursuant
         to an agreement, Haden Purification, Inc. ("Haden Purification")
         terminated and abandoned its 50% partnership interest in EPI. Under the
         agreement, Haden Purification assumed liability for one-half of the
         remaining principal, interest and fee payments due under the Company's
         8.5% mortgage note payable and was assigned 50% of the amount held in
         trust to meet future debt service requirements. Haden Purification
         continues to make principal, interest and fee payments directly to the
         trustee bank. As such, these payments are excluded from the statement
         of cash flows. Interest expense in the accompanying consolidated
         statements of operations excludes interest and fee payments made by
         Haden Purification amounting to $60,500 in 2000, $91,600 in 1999, and
         $120,100 in 1998.

         Scheduled maturities of long-term debt in each of the five fiscal years
         subsequent to February 29, 2000, including the principal portion of
         minimum payments under long-term lease obligations, are approximately
         as follows:

                2001                      $ 1,962,188
                2002                        9,448,373
                2003                          434,437
                2004                          420,000
                2005                            5,000
                                          -----------
               Total                      $12,269,998
                                          ===========


                                      F-12
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         The amount for 2001 includes principal payments to be made by Haden
         Purification in the amount of $301,875.


4.       LEASE COMMITMENTS

         Capitalized Leases

         The Company leases certain property and equipment under long-term
         agreements classified as capital leases. The property and equipment can
         be purchased at the expiration of the leases for nominal amounts.

         The cost and accumulated amortization of property leased under capital
         leases are as follows as of February 29, 2000 and February 28, 1999:

                                                      2 0 0 0         1 9 9 9
                                                    -----------      ----------
               Machinery and equipment                $328,521        $328,521
               Less accumulated amortization           209,252         153,875
                                                      --------        --------
                                                      $119,269        $174,646


         Future minimum payments and their present value under these leases at
         February 29, 2000 are approximately as follows:

               2001                                                   $ 61,000
               2002                                                     58,000
               2003                                                     12,000
                                                                      --------
               Total minimum lease payments                            131,000
               Less amount representing interest at imputed rates
                 ranging from 5% to 12.83%                               7,000
                                                                      --------
               Present value of net minimum lease payments
                 included in long-term debt                           $124,000
                                                                      ========
         Operating Leases

         The Company leases certain property and equipment under agreements
         classified as operating leases. Total rent expense charged to
         operations for 2000, 1999, and 1998 approximated $466,000, $588,000,
         and $620,000, respectively, which included $242,000, $253,000, and
         $249,000, respectively, to related parties. Minimum future rental
         commitments under noncancelable operating leases at February 29, 2000,
         including aggregate payments of $888,000 to an affiliate of an officer
         and certain stockholders, are $460,000 in 2001, $339,000 in 2002,
         $173,000 in the years 2003 through 2005.

                                      F-13
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         The Company subleases certain property leased under operating leases.
         Minimum future rentals scheduled to be received are $223,000 in 2001
         and $149,000 in 2002.


5.       COMMITMENTS AND CONTINGENCIES

         Litigation and Regulatory Matters

         The Company is involved in routine litigation incidental to its
         business, management believes that the resolution of these matters will
         not materially affect the financial statements.


6.       CAPITAL STOCK

         The Series B preferred stock has a mandatory dividend payable
         semiannually at an annual rate of $.375 per share, if paid in cash, or,
         at the Company's option, $.4875 per share if paid in shares of common
         stock based on the average market value of the common stock for the 20
         days prior to the record date. At February 29, 2000, preferred stock
         dividends of $116,298 have been accrued but not paid. Holders of the
         Series B preferred stock are entitled to one-tenth vote for each share
         held and, subject to certain conditions, vote together with the holders
         of common stock as a single class. Each share of the Series B preferred
         stock is convertible, at the option of the holder into .25 shares of
         common stock, subject to adjustment under certain circumstances. The
         Series B preferred stock may be redeemed by the Company, in whole or in
         part, at a redemption price of $4.875 per share if the average of the
         closing prices of the common stock has been at least $22.50 per share
         during twenty consecutive trading days.

         Holders of the Series A preferred stock are entitled to receive
         quarterly, cumulative dividends of $2.25 per share. The Series A
         preferred stock does not have voting rights and is redeemable at the
         Company's discretion for $100 plus accrued and unpaid dividends.

         Common shares reserved for future issuance at February 29, 2000
         aggregated 801,551 and related to the following instruments:

               Common stock options                     732,220
               Convertible debt                          17,643
               Convertible preferred stock               51,688

                                      F-14
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.       COMMON STOCK OPTIONS

         The Company has elected to follow APB No. 25, "Accounting for Stock
         Issued to Employees", in accounting for its employee and non-employee
         director stock options. The alternative fair value accounting provided
         for under Statement of Financial Accounting Standards No. 123,
         "Accounting for Stock-Based Compensation" (SFAS No. 123), requires use
         of option valuation models that were not developed for use in valuing
         employee stock options. Under APB No. 25 no compensation expense is
         recognized because the exercise price of the Company's employee stock
         options equals or exceeds the market price of the underlying stock at
         the date of the grant.

         In the opinion of management, the existing fair value models do not
         provide a reliable measure of the fair value of employee stock options.
         The Black-Scholes option valuation model was developed for use in
         estimating the fair value of traded options which have no vesting
         restrictions and are fully transferable. The Company's employee and
         non-employee director stock options have characteristics significantly
         different from those of traded options. In addition, option valuation
         models require highly subjective assumptions. Changes in these
         assumptions can materially affect the fair value estimate.

         SFAS No. 123 requires, if APB No. 25 is followed, disclosure of pro
         forma information regarding net income and earnings per share
         determined as if the Company accounted for its stock options under the
         fair value method. The fair value for these options was estimated at
         the date of grant using a Black-Scholes option pricing model with the
         following weighted-average assumptions for 2000, 1999, and 1998,
         respectively; a risk-free interest rate of 6.5%; a dividend yield of
         0%; expected volatility of the Company's common stock .929, .929, and
         .484; and a weighted-average expected life of the options of 7 years.

         The weighted-average fair value of options granted in 2000, 1999, and
         1998 was $0.13, $0.43, and $0.49, respectively. For purposes of pro
         forma disclosures, the estimated fair value of options is amortized to
         expense over the option's vesting period. Amortization attributable to
         grants awarded in 2000, 1999, and 1998 impact the pro forma results.
         The Company's reported and pro forma information follows:

<TABLE>
<CAPTION>
                                         2 0 0 0                1 9 9 9               1 9 9 8
                                      --------------        -------------         --------------
               <S>                    <C>                   <C>                   <C>
               Net loss:
                  Reported            $  (1,059,205)        $  (5,533,982)        $  (2,617,911)
                  Pro forma              (1,073,605)           (5,551,390)           (2,670,322)
               Loss per share:
                  Reported                    (0.20)                (1.54)                (0.78)
                  Pro forma                   (0.20)                (1.55)                (0.80)
</TABLE>


                                      F-15
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         The Company has a nonqualified and incentive stock option plan for its
         officers and key employees under which 600,000 shares of common stock
         may be issued. Incentive stock options issued to stockholders
         possessing more than ten percent of the combined voting rights of the
         Company may be granted at an exercise price of not less than 110
         percent of the fair market value of the common stock at the date of the
         grant and are exercisable for a period not exceeding five years from
         the date of the grant. All other options under the plan may be granted
         at amounts not less than the market value of the common stock at the
         date of the grant and are exercisable for a period not exceeding ten
         years from the date of the grant.

         The Company has also established a non-employee directors' stock option
         plan under which 150,000 shares of common stock may be issued. Under
         this plan, eligible directors who have served twelve consecutive months
         are annually granted options to purchase 2,500 shares. Under the plan,
         options may be granted at an exercise price equal to the market value
         on the date of grant and are exercisable for a period not exceeding ten
         years from the date of grant.

         Summary information on stock options is as follows for the year ended
         February:

<TABLE>
<CAPTION>
                                                      2 0 0 0                      1 9 9 9                      1 9 9 8
                                              ----------------------       ------------------------     ------------------------
                                                            Weighted                      Weighted                      Weighted
                                                            Average                       Average                       Average
                                                            Exercise                      Exercise                      Exercise
                                               Shares        Price          Shares          Price         Shares          Price
                                              --------      --------       --------      ----------      --------       --------
               <S>                            <C>            <C>           <C>             <C>           <C>             <C>
               Outstanding,
                 beginning of year             427,750        $1.41         497,750         $1.48         503,300         $1.48
               Granted                           7,500          .16           7,500           .52           7,500           .78
               Terminated                         --           --           (77,500)         1.74         (13,050)         1.34
                                              --------        -----        --------         -----        --------         -----
               Outstanding,
                 end of year                   435,250        $1.39         427,750         $1.41         497,750         $1.48
                                              ========        =====        ========         =====        ========         =====

               Options exercisable,
                  end of year                  322,050        $1.49         248,300         $1.57         213,050         $1.74
                                              ========        =====        ========         =====        ========         =====

               Weighted average fair
               value of options
               granted during the year                        $0.13                         $0.43                         $0.49
                                                              =====                         =====                         =====
</TABLE>

         The weighted average remaining contractual life of options outstanding
         at February 29, 2000 is 5.7 years. Exercise prices for outstanding
         options at February 29, 2000 range from $0.16 to $4.00 per share.


8.       INCOME TAXES

         The Company has net operating loss, alternative minimum tax credit and
         business credit carryforwards for federal income tax purposes of
         approximately $10,139,000, $9,000 and $18,000, respectively, available
         for the reduction of future federal taxable income and income taxes.
         Net operating loss carryforwards begin expiring in fiscal 2005.

                                      F-16
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         The effective income tax rate, excluding extraordinary gains and
         discontinued operations for 2000, 1999, and 1998 differs from the
         statutory U.S. federal income tax rate due to the following:

<TABLE>
<CAPTION>
                                                     2 0 0 0       1 9 9 9       1 9 9 8
                                                     -------       -------       -------
<S>                                                   <C>           <C>           <C>
               Tax (benefit) based on statutory
                  U.S. federal income tax rate        (34.0)%       (34.0)%       (34.0)%
               Change in valuation allowance           41.0          38.6          27.2
               Meals and entertainment                 10.1           1.0           3.7
               State and local tax effects             (7.5)         (6.6)         (4.5)
               Writedown of goodwill                     --            --           6.3
               Other                                   (9.6)          1.0           1.3
                                                       ----          ----          ----
               Effective rate                            --%           --%           --%
                                                       ====          ====          ====
</TABLE>


         Deferred income taxes are measured based on temporary differences
         between the carrying amounts of assets and liabilities for financial
         reporting purposes and the amounts used for income tax purposes.
         Significant components of the Company's deferred tax assets and
         liabilities are as follows as of February 29, 2000 and February 28,
         1999:
<TABLE>
<CAPTION>
                                                               2 0 0 0               1 9 9 9
                                                              -----------         -----------
<S>                                                           <C>                 <C>
               Deferred tax assets:
                  Net operating loss carryforwards            $ 4,056,000         $ 4,530,000
                  Inventory                                       384,000             545,000
                  Property and equipment                          534,000             690,000
                  Other                                           438,000             300,000
                                                              -----------         -----------
               Total deferred tax assets                        5,412,000           6,065,000
               Valuation allowance                             (5,060,000)         (5,494,000)
                                                              -----------         -----------
               Net deferred tax assets                            352,000             571,000
                                                              -----------         -----------
               Deferred tax liabilities:
                  Property and equipment                         (347,000)           (566,000)
                  Other                                            (5,000)             (5,000)
                                                              -----------         -----------
               Total deferred tax liabilities                    (352,000)           (571,000)
                                                              -----------         -----------
               Net deferred tax assets and liabilities        $      --           $      --
                                                              ===========         ===========
</TABLE>


         Change in the valuation allowance equals the change in net deferred
         taxes.


                                      F-17
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.       INDUSTRY SEGMENT INFORMATION

         The Company has two operating segments which conduct business in
         separate industries. The steel distribution and processing segment
         handles flat-rolled steel products for the automotive, truck and
         appliance industries. The waste management segment recycles paint
         wastes for companies in the automotive industry.

         Net sales by segment include sales to unaffiliated customers and
         intersegment sales at prices which the Company believes approximate
         market. Intersegment sales represent services provided by the waste
         management segment for the steel distribution and processing segment.
         Corporate charges incurred on behalf of the segments are allocated
         based on the percentage of time devoted to segment business by
         corporate personnel. Operating profit (loss) by segment excludes
         unallocated general corporate expenses and net interest expense.
         Corporate assets consist primarily of cash and other short-term assets.

         Net sales of the steel distribution and processing segment include
         $7,366,000, $5,878,000, and $10,101,000 in 2000, 1999, and 1998,
         respectively, for slitting of coil steel for a steel stamping customer.
         The accounts receivable balances from this customer at February 29,
         2000 and February 28, 1999 were approximately $1,631,000 and
         $1,079,000, respectively.

         The following summarizes the Company's operations and identifiable
         assets by segment:

<TABLE>
<CAPTION>
                                                          2 0 0 0             1 9 9 9               1 9 9 8
                                                       ------------         ------------         ------------
               <S>                                     <C>                  <C>                  <C>
               Net sales:
                 Steel distribution and
                   processing                          $ 39,220,800         $ 45,418,511         $ 66,965,409
                 Waste management                         3,342,054            3,872,492            3,718,580
                                                       ------------         ------------         ------------
               Total net sales                         $ 42,562,854         $ 49,291,003         $ 70,683,989
                                                       ============         ============         ============

               Operating profit (loss):
                 Steel distribution and
                    processing                         $    852,601         $     12,326         $  1,085,575
                 Waste management               (a)         (72,504)          (3,174,435)          (1,066,514)
                                                       ------------         ------------         ------------
               Total operating profit (loss)    (a)         780,097           (3,162,109)              19,061
                 General corporate expenses                (441,955)            (651,154)            (850,507)
                 Interest expense - net                  (1,397,347)          (1,720,719)          (1,786,465)
                                                       ------------         ------------         ------------
               Net loss                         (a)    $ (1,059,205)        $ (5,533,982)        $ (2,617,911
                                                       ============         ============         ============
</TABLE>

                                      F-18
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                     2 0 0 0              1 9 9 9
                                                   ------------        ------------
<S>                                                <C>                 <C>
               Identifiable assets:
                 Steel distribution and
                    Processing                     $ 14,189,935        $ 18,063,893
                 Waste management                     1,917,297           2,833,790
                 Corporate and discontinued
                    operations                          464,111           1,227,567
                  Eliminations                             --                (2,624)
                                                   ------------        ------------
               Total assets                        $ 16,571,343        $ 22,122,626
                                                   ============        ============
</TABLE>


              (a)  Includes restructuring charges of $2,702,764 in fiscal 1999
                   and costs of an abandoned registration of $462,000 in 1998.
<TABLE>
<CAPTION>

                                                     2 0 0 0         1 9 9 9         1 9 9 8
                                                    ----------      ----------      ----------
               <S>                                   <C>             <C>             <C>
               Depreciation and amortization:
                 Steel distribution and
                    processing                       $239,073        $423,936        $436,313
                 Waste management                     290,995         522,675         389,724
                 Corporate assets                      30,275          27,549          30,292
                                                     --------        --------        --------
               Total depreciation and
                  amortization                       $560,343        $974,160        $856,329
                                                     ========        ========        ========

               Capital expenditures:
                 Steel distribution and
                    processing                       $184,260        $258,260         355,294
                 Waste management                      45,629         228,331         315,732
                 Corporate assets and
                    discontinued operations             1,008            --             3,505
                                                     --------        --------        --------
               Total capital expenditures            $230,897        $486,591         674,531
                                                     ========        ========        ========
</TABLE>




                                      F-19
<PAGE>

                          MERIDIAN NATIONAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.      COSTS OF ABANDONED REGISTRATION

         During 1998, the Company incurred expenses in conjunction with a
         proposed initial public offering of approximately 50% of a subsidiary
         which includes the Company's paint waste recycling operation. Due to
         weakness in the public market and to other matters, the planned
         offering was ultimately abandoned. The Company charged to operations in
         the fourth quarter of fiscal 1998 approximately $462,000 of legal,
         accounting and other costs related to the unsuccessful offering.


11.      RELATED PARTY TRANSACTIONS

         Note Receivable

         Included in accounts receivable is a note receivable from an officer
         and stockholder of the Company. The note had a balance of $115,000 and
         $110,000, including accrued interest at 6%, of $23,000 and $17,000 at
         February 29, 2000 and February 28, 1999, respectively. Interest earned
         on the note was $5,600 in each of 2000, 1999 and 1998.

         Sale of Property and Equipment

         In August 1998, the Company sold property and equipment to MNP for
         $1,500,000 in cash, which resulted in a gain of approximately $960,000.
         The proceeds were used to pay off existing debt on the building and
         also to make payments against the Company's bank borrowings.

         Inventory Financing

         During fiscal 1999, the Company entered into an agreement whereby it
         was advanced $680,000 from MNP to purchase steel. In return, the
         Company paid MNP interest on unpaid advances at a rate of 7.75% plus
         50% of the gross profit resulting from the related sale of steel
         products totaling $161,000.



                                    * * * * *


                                      F-20
<PAGE>

                 MERIDIAN NATIONAL CORPORATION AND SUBSIDIARIES

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                        ADDITIONS     UNCOLLECTIBLE
                                        BALANCE AT      CHARGED TO      ACCOUNTS
                                       BEGINNING OF     COSTS AND      CHARGED TO       BALANCE AT
      DESCRIPTION                          YEAR          EXPENSES     THE ALLOWANCE    END OF YEAR
---------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>             <C>             <C>
 YEAR ENDED FEBRUARY 29, 2000

        Allowance for doubtful
        trade accounts receivable        $448,000        $216,939        $187,339        $477,600


 YEAR ENDED FEBRUARY 28, 1999

        Allowance for doubtful
        trade accounts receivable        $149,492        $368,816        $ 70,308        $448,000


 YEAR ENDED FEBRUARY 28, 1998

        Allowance for doubtful
        trade accounts receivable        $152,500        $ 99,074        $102,082        $149,492

</TABLE>






                                      F-21
<PAGE>

                         MERIDIAN NATIONAL CORPORATION
                                   FORM 10-K

                               INDEX TO EXHIBITS




     10.01(a)  Amended and Restated Loan and Security Agreement, dated September
               3, 1999, among the Company, certain of its subsidiaries and
               National Bank of Canada.

     10.01(b)  Subordination Agreement dated September 3, 1999, among the
               Company, certain of its subsidiaries, MNP Corporation and
               National Bank of Canada.

     10.15(a)  Stock Purchase Agreement, Dated as of June 25, 1999, among The
               Company, the Buyers as listed in the document and MNP
               Corporation.

     10.15(b)  Loan Agreement, dated as of June 30, 1999, among the Company,
               certain of its subsidiaries and MNP Corporation.

     21        List of Subsidiaries of Registrant

     23        Consent of Independent Auditors

     27        Financial Data Schedule