SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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


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

For the transition period from January 1, 1998 to June 30, 1998

Commission file number 0-9040

                                 METRO-TEL CORP.
                 (Name of small business issuer in its charter)

                        Delaware                        11-2014231              
   (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                   Identification No.)

   290 N.E. 68th Street, Miami, Florida 33138              95035   
    (Address of principal executive offices)            (Zip Code)

Issuer's telephone number, including area code:     305-754-4551

Securities  registered  under Section  12(b) of the Exchange Act:  Common Stock,
$.025 par value

Securities registered under Section 12(g) of the Exchange Act: None

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                            Yes   [X]  No [ ]       

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will 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-KSB
or any amendment to this Form 10-KSB. [X]

         Steiner's - Atlantic  Corp's revenues for the six months ended June 30,
1998 was $7,834,709  and for the year ended  December 31, 1997 was  $14,249,441.
The foregoing does not include the revenues of Metro-Tel Corp.

         The  aggregate  market value as at January 21, 1999 of the Common Stock
of the  issuer,  its only  class of voting  stock,  held by  non-affiliates  was
approximately  $20,625,000  calculated on the basis of the closing price of such
stock on the Chicago  Stock  Exchange on that date.  Such market value  excludes
shares owned by all executive  officers and directors (but includes shares owned
by their  spouses);  this should not be  construed as  indicating  that all such
persons are affiliates.

         The number of shares  outstanding  of the  issuer's  Common Stock as at
January 21, 1999 was 6,875,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

Transitional Small Business Disclosure Format   Yes [ ]   No  [X]


<PAGE>

                           FORWARD LOOKING STATEMENTS

         Certain   statements  in  this  Report  under  the  captions  "Item  1.
Business,"  "Item 2.  Properties"  and  "Item  6.  Management's  Discussion  and
Analysis of Financial  Condition  and Results of  Operations,"  and elsewhere in
this Report constitute  "forward-looking  statements"  within the meaning of the
Private  Securities  Litigation  Reform  Act of 1995 (the  "Reform  Act").  Such
forward- looking statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual result,  performance or  achievements of
the Company, or industry trends and results, to be materially different from any
future results, trends, performance or achievements expressed or implied by such
forward-looking statements. Such risks, uncertainties and other factors include,
among others, the following: general economic and business conditions;  industry
conditions and trends,  including supply and demand;  fluctuations in the prices
for telecommunication and dry- cleaning industry products; competition;  changes
in business strategy or development plans; availability, terms and deployment of
debt and equity  capital;  relative  values of the  United  States  currency  to
currencies in the countries in which the Company's customers and competitors are
located;  availability  of  qualified  personnel;  changes in, or the failure to
comply with,  government  regulations;  the ability of certain of the  Company's
customers and suppliers and others to  successfully  and timely  complete  their
Year 2000  compliance  programs.  These and certain  other factors are discussed
from time to time in this Report and from time to time in other Company  reports
hereafter  filed with the Securities and Exchange  Commission.  The Company does
not assume an  obligation  to update the factors  discussed in this Report.  and
other factors referenced in this Report.

         When  used  in  this  Report,   the  words  "may",   "will,   "expect,"
anticipate,"  "continue,"  "estimate," "project," "intend",  "strategy" and "pro
forma"  and  similar  expressions  are  intended  to  identify   forward-looking
statements regarding events, conditions and financial trends that may affect the
Company's future plans of operations,  business strategy,  operating results and
financial position.  Any forward looking statements are not guarantees of future
performance  and are  subject to risks and  significant  uncertainties  and that
actual  results  may  differ   materially   from  those   included   within  the
forward-looking statements as a result of various factors.

                                  INTRODUCTION

         On November 1, 1998, Steiner-Atlantic Corp. ("Steiner") was merged (the
"Merger")  with and into, and became a  wholly-owned  subsidiary  of,  Metro-Tel
Corp. ("Metro-Tel" and collectively with Steiner, the "Company"). As a result of
the  Merger,  the Company has added  Steiner's  operations  as a supplier of dry
cleaning,   industrial  laundry  equipment  and  steam  boilers  to  Metro-Tel's
operations as a manufacturer  and seller of telephone test and customer  premise
equipment.

         All  periodic  reports   heretofore  filed  by  the  Company  with  the
Securities  and Exchange  Commission  have  reflected  only the  operations  and
financial statements of Metro-Tel Corp. on a stand-alone basis.

                                       -2-

<PAGE>

         For financial  accounting (but not corporate law) purposes,  the Merger
is treated as a "reverse  acquisition"  of  Metro-Tel by Steiner  utilizing  the
"purchase" method of accounting.  As a result,  all financial  statements of the
Company  included in this and future  periodic  reports filed by the Company but
covering  periods  prior to  November 1, 1998 will  reflect  only the results of
operations, financial position and cash flows of Steiner on a stand-alone basis.
All  consolidated  financial  statements  of the Company for periods  commencing
November 1, 1998 will, in addition, include the results of operations, financial
position and cash flows of Metro-Tel from and after that date.

         Subsequent to the Merger, the Company elected to adopt Metro-Tel's June
30 fiscal year rather than Steiner's December 31 fiscal year. Accordingly,  this
Transition  Report on Form 10-KSB is being filed  pursuant to Rule  13a-10(b) of
the  Securities  Exchange Act of 1934 to file audited  financial  statements  of
Steiner  as of  December  31,  1997 and June 30,  1998 and for the  years  ended
December 31, 1996, Decenber 31, 1997 and six months ended June 30, 1998.

                                     PART 1
                                     ------

Item 1. Business
----------------

General

         Founded  in 1960,  Steiner  is a supplier  of dry  cleaning  equipment,
industrial  laundry  equipment  and  steam  boilers,  offering  over 30 lines of
commercial systems to customers in South Florida,  the Caribbean and Central and
South American  markets  ("Latin  America").  Steiner's  services  include:  (1)
designing and planning  "turn-key"  laundry and/or dry cleaning  systems to meet
the layout,  volume and budget  needs of a variety of  institutional  and retail
customers,  (2) supplying replacement equipment and parts to its customers,  (3)
providing  warranty  and  preventative   maintenance   through   factory-trained
technicians  and service  managers,  (4)  selling  its own line of dry  cleaning
systems to customers in the United States, the Caribbean and Latin America;  and
(5) selling process steam systems and boilers.

         Founded in 1963, Metro-Tel has been engaged in the manufacture and sale
of  telephone  test and customer  premise  equipment  utilized by telephone  and
telephone interconnect companies in the

                                       -3-

<PAGE>



installation and maintenance of telephone  equipment.  Through internal research
and  development  and through  acquisition,  Metro-Tel has added various product
lines to its telephone test and customer premise product lines.


Steiner's Operations

         History.  Steiner  was founded in 1960 by William K.  Steiner.  Steiner
initially operated as a distributor of dry cleaning systems and boilers,  and as
a rebuilder of laundry,  dry cleaning and boiler equipment.  Steiner expanded in
1972 when it began  distributing  institutional  laundry  equipment  to  hotels,
motels and hospitals. In 1980, Steiner began importing dry cleaning systems from
an English manufacturer,  and four years later, Steiner developed a relationship
with  an  Italian  manufacturer  of  dry  cleaning  systems.  In  1990,  Steiner
established its own branded product line with the introduction of an updated dry
cleaning  system  under  the  Aero-Tech  label,  substantially  all of  which is
currently manufactured exclusively for Steiner in Italy.

         Steiner's  laundry  equipment  includes  washers and dryers,  including
coin-operated  machines,  boilers,  water  reuse and heat  reclamation  systems,
flatwork  ironers  and  automatic  folders.  Steiner's  dry  cleaning  equipment
includes  dry cleaning  machines,  garment  presses,  finishing  equipment,  and
sorting  and  distributing  conveyors.  Steiner's  marketing  staff  sells  to a
customer  base that  includes  franchise and  independent  drycleaners,  hotels,
motels,  hospitals,  cruise lines, nursing homes,  governmental institutions and
distributors.

         Product  Lines.  Steiner offers a broad line of over 30 laundry and dry
cleaning systems and boilers and over 1,000 accessory parts.  Steiner's products
are manufactured by a number of suppliers.  Steiner also markets a complete line
of dry cleaning equipment under its Aero-Tech trademark. Steiner's product lines
are positioned and priced to appeal to customers in the high-end,  mid-range and
value priced markets. Suggested prices for most of Steiner's products range from
approximately  $5,000 to $50,000.  Steiner's product line offers its customers a
"one-stop shop" for laundry and dry cleaning systems, boilers and accessories.

         In 1990,  Steiner  introduced  its own line of dry cleaning  equipment,
marketed under the Aero-Tech brand name, manufactured exclusively for Steiner in
Italy.  Steiner does not have a formal  contract with its Italian  manufacturer,
but relies on its long-standing  relationship  with it. Steiner  collaborates in
the design and  closely  monitors  the quality of the  manufactured  product and
believes its  Aero-Tech  systems  exceed the  environmental  regulations  set by
safety and environmental regulatory agencies. Steiner must place its orders with
its  Italian  manufacturer  prior to the time  Steiner has  received  all of its
orders.  However,  because of  Steiner's  close  working  relationship  with its
Italian  manufacturer,  Steiner can adjust  orders  rapidly and  efficiently  to
reflect a change in customer demands.

                                       -4-

<PAGE>

         According to its arrangement with its  manufacturer,  Steiner purchases
dry cleaning systems from its manufacturer in Italian lire. However, in the case
of a  substantial  decline in the value of the U.S.  dollar  against the Italian
lire or the  implementation of custom duties,  import controls or trade barriers
with Italy,  Steiner has the ability to have its Aero-Tech line  manufactured by
other  international  suppliers.  Imports into the United States are affected by
the cost of  transportation,  the  imposition  of import  duties  and  increased
competition from greater  production demands abroad. The United States and Italy
may, from time to time, impose new quotas, duties, tariffs or other restrictions
or adjust prevailing quotas, duty or tariff levels, which could affect Steiner's
margins on its Aero-Tech  systems.  United States customs  duties  presently are
approximately 1% of invoice cost on dry cleaning systems.

         Sales,  Marketing  and  Customer  Support.  Steiner's  laundry  and dry
cleaning  equipment  products are marketed in the United States,  the Caribbean,
Mexico  and  other  Latin  American  countries.   Steiner  employs  seven  sales
executives  to  market  its  products  in South  Florida  and the  international
markets. Aero-Tech products are sold by the same seven sales executives. Steiner
supports  its  products by  representative  advertising  in trade  publications,
participating  in trade  shows and  engaging in  regional  promotions  and sales
incentive  programs.  A  substantial  portion of Steiner's  equipment  sales are
obtained by telephone and fax inquiries originated by the customer or by Steiner
and significant repeat sales are derived from existing customers.

         Steiner seeks to become the single supplier of laundry and dry cleaning
equipment to each of its customers.  Steiner  currently  offers over 30 lines of
commercial laundry, dry cleaning and boiler systems,  along with a comprehensive
parts  inventory  consisting  of over  1,000  parts and  accessories.  Steiner's
product  lines are  offered  under a wide range of price  points to address  the
needs of a diverse  customer  base. By providing  "one-stop"  shopping,  Steiner
believes it is better able to attract and support  potential  customers  who can
choose from Steiner's broad product line.

         Steiner  seeks to establish  customer  satisfaction  by offering (1) an
on-site training and preventive maintenance program performed by factory trained
technicians  and  service  managers;  (2)  design  and  layout  assistance;  (3)
maintenance of a comprehensive  parts and accessories  inventory and same day or
overnight  availability;   and  (4)  competitive  pricing.  Steiner  provides  a
toll-free  support line to resolve  customer service problems and estimates that
it resolves approximately 75% of the service inquiries on the first call.

         Steiner trains its sales and service  employees to provide  service and
customer support.  Steiner uses specialized  classroom  training,  instructional
videos  and  vendor  sponsored  seminars  to  educate  employees  about  product
information.  In addition,  Steiner's technical staff has prepared comprehensive
training manuals, written in English and Spanish,  relating to specific training
procedures. Steiner's technical personnel are continuously updated and retrained
as new technology is developed.  Steiner monitors service technicians' continued
educational  experience  and  fulfillment of  requirements  in order to evaluate
their  competence.   All  of  Steiner's  service   technicians  receive  service
bulletins, service technicians' tips and continued training seminars.

                                       -5-

<PAGE>

         Customers   and   Markets.   Steiner's   customer   base   consists  of
approximately  350  customers  in the United  States,  the  Caribbean  and Latin
America.  Steiner's  customers  include dry  cleaning  chains and  institutions,
cruise lines, and government  agencies.  No customer accounted for more than 10%
of Steiner's revenues on a stand-alone basis during Steiner's fiscal years ended
December 31, 1996 and 1997 or the six months ended June 30, 1998.

         The following table sets forth the approximate geographic  distribution
of Steiner's sales for the six months ended June 30, 1998:


                                           Revenues              % of Total
                                          ---------              ----------

United States                              $5,316,711              68.6%
Latin America                              $1,217,397              15.7%
Caribbean                                  $1,147,918              14.8%
Other                                      $   65,295                .9%
                                           ----------             ------
Total                                      $7,747,321             100%
                                           ==========             =======

         Sources of Supply.  Steiner purchases laundry and dry cleaning systems,
boilers  and  other  products  from a  number  of  manufacturers,  none of which
accounted for more than 20% of its  purchases  for the years ended  December 31,
1996 and 1997 and the six months  ended June 30, 1998.  Steiner has  established
long-standing  relationships with many of the leading laundry,  dry cleaning and
boiler manufacturers. Steiner's management believes these supplier relationships
provide Steiner with a substantial competitive advantage,  including exclusivity
in certain  products and areas and favorable  prices and terms.  Therefore,  the
loss  of  a  major  vendor   relationship   could  affect  Steiner's   business.
Historically,  Steiner has not  experienced  difficulty  in  purchasing  desired
products from its suppliers and believes it has good working  relationships with
its suppliers.

         Competition.  The  laundry  and  dry  cleaning  equipment  distribution
business  is  highly  competitive  and  fragmented  with over 100  full-line  or
partial-line equipment  distributors in the United States.  Steiner's management
believes  that no  distributor  supplies  more  than 6% of the  market  and that
substantially  all such  distributors  are  independently  owned  and,  with the
exception of several regional distributors,  operate primarily in local markets.
Competition is based on price,  product  quality,  delivery and support services
provided  by the  distributor  to the  customer.  In  South  Florida,  Steiner's
principal  domestic market,  Steiner's  primary  competition is derived from two
full-line  distributors  which  operate  out of the Miami  area.  In the  export
market,  Steiner primarily competes with a wholesale  distributor located in the
Northeast and anticipates increased competition from other distributors,  as the
export market grows.  As Steiner  expands the sale of its Aero-Tech  line to its
distributors on a national level, it competes with over a dozen manufacturers of
dry cleaning  equipment  whose  products  are  distributed  nationally.  Steiner
competes by offering an extensive product selection,  value-added services, such
as product inspection and quality assurance, toll-free

                                       -6-

<PAGE>

customer  support line,  reliability,  warehouse  location,  price and, with the
Aero-Tech line, competitive special features and exclusivity.


Metro-Tel's Operations.

         History.  The Metro-Tel was incorporated under the laws of the State of
Delaware on June 30, 1963.  Since its  inception,  Metro-Tel has been engaged in
the  manufacture  and sale of  telephone  test and  customer  premise  equipment
utilized by telephone and telephone  interconnect  companies in the installation
and  maintenance  of  telephone   equipment.   Through  internal   research  and
development and through  acquisition,  Metro-Tel has added various product lines
to its telephone test and customer premise product lines.

         Product Lines. The following table sets forth the approximate net sales
of each of the Metro-  Tel's two  products  lines and of its other  products and
services,  as a group,  and the  percentages  which such sales bear to total net
sales of  Metro-Tel  on a  stand-alone  basis during each of the two years ended
June 30, 1998:


                                       Year Ended June 30,
                        ----------------------------------------------------   

                           1998                         1997       
                           ----                         ----
                          Amount      %                Amount        %
                          ------     ---               ------       --      
                                       (dollars in thousands)
Telephone Test                                                              
Equipment                $3,582       93%               $3,602        93%

Customer Premise                                                         
Equipment                    83        2%                  121         3%

Other Products and                                                       
Services                    174        5%                  160         4%
                         ------      ----               ------       ----
                         $3,839      100%               $3,883       100%

         The downsizing of the Regional Bell Operating Companies ("RBOCs" during
the past several years has reduced the number of Telecom craft personnel who are
potential  users of Metro-Tel's  test equipment  and,  accordingly,  Metro-Tel's
sales.  To reduce the impact that has occurred as a result of the  downsizing of
the RBOCs, through research and development, Metro-Tel has begun introducing new
products  aimed at reducing its dependence on the RBOCs and is entering into new
markets,  principally the public utility and data industry, for its existing and
new products.

         Telephone Test Equipment.  Metro-Tel  manufactures  and sells a line of
telephone test equipment which includes  portable test sets,  which are designed
for use in locating high resistance  faults  resulting from moisture in exchange
cables and by cable splicers on exchange and toll cables for  identification  of
cable wires and other tone-testing purposes; linemen's rotary and/or touch-tone

                                       -7-

<PAGE>

testing  handsets and portable  line test sets for use by telephone  installers,
repairmen and central office personnel;  hand and pole exploring coils which are
used  in  cable  fault  finding;   solid  state   conversion   amplifier   kits;
Volt-Ohmmeter  test sets; and Cable  Hound(R),  a portable  electronic unit that
locates and determines the depth of underground  cable and metal pipes primarily
for the telephone, utility and construction industries.

         In  addition,  Metro-Tel  manufactures  a  line  of  transmission  test
equipment used in telephone  company central office  installations  by operating
companies,  long distance telephone  resellers and large companies who own their
own  networks.  Among these  products are digital and analog  rack-mounted  test
systems,  portable  transmission  test sets, remote test systems and fiber optic
test sets.

         Customer Premise Equipment.  Metro-Tel  manufactures and markets a line
of  telephone  station  and  peripheral   products,   including  telephone  call
sequencers (which answer calls on up to 12 incoming  unattended  lines,  provide
the  caller  with an  appropriate  message  and place  the calls in queue  until
answered by an  attendant)  and a line of digital  announcers  (which  provide a
pre-programmed  message  with  the  ability  to ring  through  at the end of the
message if so desired by the caller).  This product line also  includes a series
of specialty  telephone  products,  including  call diverters  (call  forwarding
devices used both by end-users and in telephone company central offices),  speed
dialers, specialty telephones and amplified handsets for the hearing impaired.

         In addition, Metro-Tel has begun distributing a line of Channel Service
Units/Data Service Units (CSU/DSU) for the data industry. These devices are used
to terminate a digital channel on a customer's premises and enable computer data
to be  transmitted  and received at high speeds over the telephone  line without
the use of a modem.

         Other Products and Services. In addition,  Metro-Tel sells a variety of
accessory  products,  primarily  head sets and alligator  clips.  Metro-Tel also
sells spare parts for its product  lines and  provides  repair  services for its
products.

         Methods of Distribution. Metro-Tel presently sells its products through
its own regional sales managers and sales representatives who assist Metro-Tel's
national telephone equipment distributors. Sales managers are presently based in
Georgia and California. In addition, Metro-Tel maintains an in-house sales staff
at its facilities in Milpitas, California.

         Principal  Customers.  Metro-Tel  is  not  dependent  upon  any  single
customer.  However,  North Supply Company,  a national  distributor of telephone
products,  accounted for  approximately 15% and 19% of Metro-Tel's net sales for
the years ended June 30, 1998 and 1997,  respectively,  but less than 10% of the
consolidated  revenues  on a pro  forma  basis,  assuming  the  Merger  had been
completed at the beginning of the  applicable  year.  Metro-Tel  believes  that,
should it for any reason lose this distributor, Metro-Tel would not be adversely
impacted since these sales would be absorbed by other distributors.

                                       -8-

<PAGE>



         Sources of  Supply.  The basic  materials  used in the  manufacture  of
Metro-Tel's  telephone  test  equipment  and  telephone  station and  peripheral
telephone  equipment consist of electronic  components.  Metro-Tel utilizes many
suppliers and is not dependent on any supplier.  Its raw materials generally are
readily available from numerous suppliers.

         Competition.  Competition  is high with respect to each of  Metro-Tel's
product lines.  However,  as the products contained in such lines are varied and
similar  products  contain varying  features,  neither  Metro-Tel nor any of its
competitors  is a  dominant  factor  in any  product  line  market,  except  for
linemen's  test sets for which  Dracon,  a division  of Harris  Corporation,  is
dominant.

         The principal method of competition for each of Metro-Tel's products is
price and product  features,  with service and warranty having a relatively less
significant  impact.  Metro-Tel  believes  its product  lines are  competitively
priced.  Many of Metro-Tel's  competitors have greater  financial  resources and
have  more  extensive   research  and  development  and  marketing  staffs  than
Metro-Tel.

         Research and Development.  Metro-Tel is regularly engaged in the design
of  new  products  and   improvement  of  existing   products  for  all  of  its
telecommunication  equipment  products lines amount  specifically  allocated and
research  and  development  activities  in  fiscal  1998 and  1997,  principally
salaries, was $228,755 and $238,061,  respectively. All research and development
is  Metro-Tel   sponsored,   except  for  products  designed  for  Metro-Tel  by
unaffiliated  third  parties  compensated  by either a lump-sum  payment or on a
royalty basis.

         Metro-Tel  intends  to  continue  its  policy  of  reviewing  potential
acquisitions of new product lines,  additional products for its existing product
lines and the enhancement of its production and distribution capabilities.  Such
acquisitions  could lead to the  issuance of notes,  use of the general  working
capital of Metro-Tel and/or issuance of shares of Metro-Tel's capital stock.

Patents and Trademarks

         The Company is the owner of United  States  service mark  registrations
for the names Aero- Tech, Logitrol,  Petro-Star, Aqua Star and Enviro-Star which
are used in connection  with its laundry and dry cleaning  business  lines.  The
Company intends to use and protect these or related service marks, as necessary.
The Company believes its trademarks and service marks have significant value and
are an important factor in the marketing of its products.

         The  Company  has  obtained  a number  of  patents  and has a number of
trademarks  which are used to identify its telephone  test and customer  premise
product  lines.  No patent or  trademark  is  considered  to be  material to the
Company's  telecommunication's product lines. The Company also pays royalties to
third parties under arrangements  permitting the Company to manufacture  various
items in its product lines.

                                       -9-

<PAGE>



Compliance with Environmental and Other Government Laws and Regulations

         Over the past several decades in the United States,  federal, state and
local  governments  have enacted  environmental  protection  laws in response to
public concerns about the environment. A number of industries, including the dry
cleaning and laundry equipment industry,  are subject to these evolving laws and
implementing  regulations.  As a supplier to the  industry,  the Company  serves
customers  who are  primarily  responsible  for  compliance  with  environmental
regulations.  Among the federal laws that the Company believes are applicable to
the industry,  are the Comprehensive  Environmental  Response,  Compensation and
Liability  Act of 1980  ("CERCLA"),  which  provides for the  investigation  and
remediation of hazardous waste sites; The Resource Conservation and Recovery Act
of 1976, as amended ("RCRA"),  which regulates  generation and transportation of
hazardous  waste  as  well  as its  treatment,  storage  and  disposal;  and the
Occupation  Safety and  Health  Administration  Act  ("OSHA"),  which  regulates
exposure  to toxic  substances  and  other  health  and  safety  hazards  in the
workplace.  Most states and a number of  localities  have laws that regulate the
environment  which are at least as  stringent as the federal  laws.  In Florida,
environmental  matters are regulated by the Florida  Department of Environmental
Protection which generally follows the Environmental Protection Agency's ("EPA")
policy in the EPA's  implementation  of CERCLA and RCRA and  closely  adheres to
OSHA's standards.

         Certain of the  Company's  customer  premise  equipment  products  that
connect to public telephone networks need Federal Communications Commission (or,
in the case of foreign sales,  the equivalent  agency in the foreign  country in
which they will be sold)  approval  prior to their sale.  The  Company  does not
believe that compliance with Federal,  state and local  environmental  and other
laws and regulations  which have been adopted have had, or will have, a material
effect on its capital expenditures, earnings or competitive position.

Employees

         The Company  currently  employs 61 employees on a full-time  basis,  of
whom  3  are  executive  management,   15  are  sales  and  marketing,   13  are
administrative and clerical, 7 are engineers and technicians,  19 are engaged in
production and 4 are in warehouse support.  Of the Company's  employees,  29 are
employed  exclusively  with  respect to the  Company's  laundry and dry cleaning
equipment operations,  30 are employed exclusively with respect to the Company's
telecommunications equipment operations and the remainder currently divide their
time between the two operations.  None of the Company's employees are subject to
a collective  bargaining  agreement,  nor has the Company  experienced  any work
stoppages. The Company believes that its relations with employees are excellent.

Foreign and Government Sales

         Steiner's  export  sales  of the  Company's  laundry  and dry  cleaning
business were approximately  $2,400,000 (or 31.4% of this Steiner's revenues for
the six  month  period  ended  June 30,  1998).  Such  export  sales  were  made
principally to Latin America and the Caribbean. See "--Steiner's

                                      -10-

<PAGE>



Operations-Customers  and Markets".  Most of Steiner's  export sales require the
customer to make payment in United States Dollars.

         Metro-Tel's  export sales of the Company's  telephone test and customer
premise  equipment were  approximately  $252,000  (6.5% of this business  line's
revenues) and $189,000 (4.9% of this  Metro-Tel's  line's revenues) in the years
ended  June 30,  1997 and  1998,  respectively.  Such  export  sales  were  made
principally  to Europe,  Canada and South America.  Some of  Metro-Tel's  export
sales are made through  distributors and agents.  All of Metro-Tel's  sales also
require  the  Company to make  payment in United  States  dollars.  Accordingly,
foreign  sales of Steiner and  Metro-Tel  may be affected by the strength of the
United States dollar  relative to the currencies of the countries in which their
customers and competitors are located.  Revenues from sales to the United States
government   (none  of  the   contracts   relating   thereto  being  subject  to
renegotiation  of profits or termination at the election of the  government) are
immaterial.

                                      -11-

<PAGE>



Item 2.                    Properties.
-------                    -----------

         The Company's  executive offices and the main  distribution  center for
its laundry  and dry  cleaning  equipment  products  are housed in three  leased
adjacent facilities totaling approximately 47,000 square feet in Miami, Florida.
The Company  believes its facilities are adequate for its present needs and that
suitable space would be available to accommodate  its future needs.  The Company
currently has three separate  leases on its  facilities in Miami,  Florida and a
lease for its facility in Milpitas,  California.  The following table sets forth
certain information concerning the leases at these facilities:


                                       Approximate                        
Facility                               Sq. Ft.         Expiration
--------                               -------         ----------

Miami, Florida (1)                     27,000         October 2004
Miami, Florida                          8,000        Month to Month
Miami, Florida (2)                     12,000        December, 1999
Milpitas California                    21,500          March, 2002


(1)      Leased from William K.  Steiner,  a director of the Company.  The lease
         includes  a right to renew for term at a rent to be agreed  upon by the
         parties.

(2)      Lease contains one three-year  lease  extension  with  adjustments  for
         changes in the Consumer Price Index.

Item 3.                    Legal Proceedings.
-------                    -----------------

         Not applicable.

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

         As reported in the  Company's  Quarterly  Report or Form 10-QSB for the
quarter  ended  September  30, 1998,  at the  Company's  1998 Annual  Meeting of
Stockholders held on October 29, 1998, the Company's stockholders:

         (a) Approved and adopted an Agreement and Plan of Merger, dated as of
July 1, 1998 (the "Merger Agreement"),  among Metro-Tel,  Metro-Tel  Acquisition
Corp.  ("Subsidiary"),  Steiner,  William K.  Steiner  and  Michael S.  Steiner,
pursuant  to  which,  subsequent  to the  Meeting,  Subsidiary,  a newly  formed
wholly-owned  subsidiary  of Metro-Tel,  was merged with and into Steiner,  as a
result of which, among other things, Steiner became a wholly-owned subsidiary of
Metro-Tel, the stockholders of Steiner became owners of approximately 69% of the
outstanding shares of the

                                      -12-

<PAGE>



Company's  Common Stock and a majority of the members of the Company's  Board of
Directors now consists of designees of Steiner, by a vote of 1,436,079 shares in
favor and 42,848 shares against, with 2,248 shares abstaining and 460,365 broker
non-votes;

         (b) Approved and adopted a proposal to amend the Company's  Certificate
of  Incorporation  to  increase  the number of shares of Common  Stock which the
Company is authorized to issue from 6,000,000 shares to 15,000,000  shares, by a
vote of 1,434,111  shares in favor and 45,793 shares against,  with 2,860 shares
abstaining and 458,776 broker non-votes;

         (c) Approved and adopted a proposal to amend the  Company's  1991 Stock
Option Plan to increase  the number of shares of Common  Stock which the Company
is authorized to issue  thereunder from 250,000 shares to 850,000  shares,  by a
vote of 1,401,367 shares in favor and 66,820 shares against,  with 12,219 shares
abstaining and 461,134 broker non-votes; and

         (d)  Reelected the  Company's  then existing  Board of Directors by the
following votes:

                                                     Votes
                                                     -----
                                       For                        Withheld
                                       ---                        --------
           Michael Epstein             1,906,379                  35,161
           Lloyd Frank                 1,906,379                  35,161
           Venerando J. Indelicato     1,905,657                  35,883
           Michael Michaelson          1,906,379                  35,161

         Pursuant to the Merger Agreement, in addition to William K. Steiner and
Michael S. Steiner,  Stuart Wagner and David Blyer were designated by Steiner to
serve on the Company's Board of Directors.  Venerando Indelicato and Lloyd Frank
continue to serve as directors of the Company and, in accordance with the Merger
Agreement,  Michael Epstein and Michael Michaelson have resigned as directors of
the Company.

                                      -13-

<PAGE>

                                     PART II
                                     -------

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

         The  Company's  Common  Stock  has been  traded  on the  Chicago  Stock
Exchange  under the symbol  "MTF" since  January 11, 1999 and has been quoted on
the Nasdaq  Electronic  Bulletin  Board under the symbol  MTRO since  January 7,
1999.  Prior thereto,  the Company's Common Stock was quoted on the Nasdaq Stock
Market-Small  Cap Market.  The  following  table sets forth the high and low bid
prices for the Company's  Common Stock for each  quarterly  period in the period
July 1, 1997 through January 8, 1998, as reported by Nasdaq,  and thereafter the
high and low sales  prices for the  Company's  Common  Stock as  reported by the
Chicago  Stock  Exchange.  The Nasdaq  quotations  are without  retail  markups,
markdowns or commissions and may not represent actual transactions.

                                                 High                Low
                                                 ----                ---
                     Fiscal 1997
                     -----------
                     First Quarter               1 1/4               1
                     Second Quarter              1 1/4               1
                     Third Quarter               1 1/4               1 1/16
                     Fourth Quarter              1 1/8                 5/8

                     Fiscal 1998
                     -----------
                     First Quarter               1 3/8                11/16
                     Second Quarter              11/2                  7/8
                     Third Quarter               1 3/8                 5/8
                     Fourth Quarter              1 3/4                25/32

                     Fiscal 1999
                     -----------
                     First Quarter               1 3/8                 7/8
                     Second Quarter              3 9/16                5/8
                     Third Quarter (through      3 3/16              2 3/4
                        January 25, 1999)

         No dividends have been paid on the Company's Common Stock during either
of the  last  two  fiscal  years.  Steiner  is a party  to a Loan  and  Security
Agreement  with a  commercial  bank,  loans  under which are  guaranteed  by the
Company and secured by  substantially  all of the assets of the  Company.  Among
other things,  this  agreement  provides that the Company may not declare or pay
dividends if such  payment  would likely cause it to fail to maintain a specific
consolidated  debt  service  ratio  and  ratio of  consolidated  liabilities  to
tangible net worth.

         As of January 25, 1999 there were  approximately  959 holders of record
of the Company's Common Stock.

                                      -14-

<PAGE>

Item 6.           Management's Discussion and Analysis of Steiner's Financial
-------           Condition and Results of Operations
                  -----------------------------------------------------------

General

         On  November  1, 1998  Steiner  was  merged  with and into and became a
wholly-owned  subsidiary  of  the  Company.  As  set  forth  in  Note  9 in  the
accompanying  financial  statements of Steiner, for financial reporting purposes
the Merger is  treated  as the  acquisition  of the  Company  by Steiner  and is
accounted  for  under  the  purchase  method  of  accounting.  Accordingly,  the
Company's  reported  results of operations  for all periods prior to November 1,
1998 reflect only the results of operations of Steiner.

         Therefore,  results of operations  and financial  position of Metro-Tel
(reflected in periodic  reports filed by Metro-Tel  covering periods ended prior
thereto) and of Steiner  (reflected  herein and in the Company's proxy statement
dated  October 5, 1998)  prior to  November  1, 1998 are not  comparable  to the
consolidated  results of operations of the Company subsequent to such date which
will  reflect the results of  Metro-Tel  (only since such date) and Steiner (for
the entire period). Furthermore, the following discussions and analyses concerns
the results of  operations  and  financial  position of Steiner on a stand-alone
basis as of and for the six months ended June 30, 1997 and 1998. Accordingly, it
is  not  necessarily  indicative  of  the  Company's  (including  Steiner's  and
Metro-Tel's)  results on a consolidated basis that are to be expected for a full
year.

Results of Operations

Comparison of Six Months Ended June 30, 1998 and June 30, 1997

         Net sales  increased by $1,235,875  (19.0%) during the six month period
ending  June 30,  1998  from  the same  period  of 1997.  Sales of dry  cleaning
equipment  decreased  by 12.2% due to a decrease  in the number of dry  cleaning
plants being  opened.  This decrease was offset by increases in sales of laundry
equipment (65.6%), coin laundry equipment (16.9%) and spare parts (11.5%).

         Commissions  and other income  increased by $14,674  (20.2%) during the
six month period of 1998 compared to the same period of 1997.

         Steiner's gross profit margin,  expressed as a percentage of net sales,
decreased  during  the first six months of 1998 to 26.3% from 28.9% for the same
period of 1997. The decrease is mostly  attributable to the change in the mix of
product sales.

         Selling,  general and  administrative  expenses  increased  by $245,660
(15.4%)  during the six month period of 1998,  but as a percentage  of net sales
revenues  decreased  to 23.8% from 24.5%  during the same  period of 1997.  This
increase was primarily due to increases in salaries (10.3%),  telephone expenses
(61.0%) professional fees (22.8%),  conventions (64.4%), maintenance and repairs
(102.8%), commissions (127.6%) and bad debt expenses of $79,730. These increases
were mostly

                                      -15-

<PAGE>

offset  by  reductions  in  insurance  (3.6%)  advertising  (9.7%),  travel  and
promotion (12.8%) and computer (44.2%).

         Other income  increased by $144,030 (from $19,851 to $163,881),  mostly
due to an  increase  in  management  fees from an  affiliated  company.  Steiner
believes that interest expense will increase as a result of increased borrowings
to fund a cash  distribution to  shareholders  prior to completion of the Merger
and its new and expanded and revolving credit and term loan agreement  discussed
below.

         Comparison of Years Ended December 31, 1997 and December 31, 1996.

         Net sales increased by $235,815 (1.7%) in 1997 over 1996.  Sales of dry
cleaning  equipment  decreased  by 16.4% due to a decrease  in the number of dry
cleaning plants being opened.  This decrease in sales of dry cleaning  equipment
was offset by  increases  in sales of laundry  equipment  (4.3%),  coin  laundry
equipment (32.6%) and spare parts (16.8%).

         Steiner's gross profit margin,  expressed as a percentage of net sales,
decreased  to 26.6% in 1997 from 28.2% in 1996.  The  decrease  in gross  profit
margin is mainly attributable to the change in the mix of product sales.

         Commissions  and other income  decreased by $2,091  (1.3%) in 1997 over
1996.

         Selling,  general  and  administrative  expenses  increased  in 1997 by
$76,076  (2.2%)  and as a  percentage  of net sales to 24.6% from 24.5% in 1996.
This increase was primarily due to increases in salaries  (2.0%),  payroll taxes
(23.4%),   commissions   (14.1%)  and  a  one  time  loss   associated  with  an
international transaction.  These increases were largely offset by reductions in
telephone  expense (17.4%),  depreciation and amortization  (13.5%),  convention
expenses  (55.7%),  postage and  freight  (55.2%)  and  maintenance  and repairs
(35.7%).

         Other income  decreased by $120,665  (60.4%) in 1997 over 1996,  mainly
due to a  reduction  in  management  fee income  associated  with an  affiliated
company.


Financial Position and Liquidity

         For the six month period ending June 30, 1998, Steiner's cash increased
by  $196,059.  Of the  cash  generated  by  operating  activities  ($1,573,579),
$444,193  was derived  from net income and $15,621  was  derived  from  non-cash
expenses  for  depreciation  and  amortization  along with  $79,730 for bad debt
expense. Additional cash from operating activities was provided by a decrease in
inventories ($197,145),  a decrease in accounts and lease receivables ($235,331)
and a decrease in other assets  ($65,526).  Steiner's cash also increased due to
an increase in accounts  payable and accrued  expenses  ($450,940)  and customer
deposits ($85,093).  Cash of $15,043 was used by Steiner in investing activities
to purchase capital assets.  Cash of $1,362,477 was used by Steiner in financing
activities for the repayment of debt ($100,000) and to fund a cash  distribution
to  shareholders  ($1,937,477)  which  offset new  borrowing  of  $500,000  from
Steiner's line of credit plus $175,000 borrowed from a related company.

         On November 2, 1998, Steiner entered into a new loan agreement with the
same commercial bank used in its prior financing.  (See Note 11 to the Financial
Statements of Steiner for the six months ended June 30, 1998 and 1997).  Steiner
paid off the outstanding balances on its prior line of credit and term loan with
the  proceeds  from the new  loan.  The new loan  includes  a line of  credit of
$2,250,000  (limited by a borrowing base related to eligible accounts receivable
and  inventories of Steiner) and a term loan of $2,400,000.  Borrowing under the
new  agreement  bear  interest at the bank's prime rate of 2.75% per annum above
the one month LIBOR Market Index Rate.  The line of credit is due on the earlier
of November 2, 1999 or demand.  The term loan is due January 2002. The term loan
requires  monthly  payments of $40,000 plus interest,  commencing  January 1999,
with a $960,000 balloon payment in January 2002. Steiner's obligations under the
line of credit and term loan are  guaranteed by Metro-Tel and secured by pledges
of substantially all of Steiner's and Metro-Tel's  present and future assets and
property,  excluding  real estate.  The agreement  requires the  maintenance  of
certain financial ratios and contains other restrictive covenants.

                                      -16-

<PAGE>



Year 2000 Compliance

         The Company believes that its internal management  information systems,
billing,  payroll and other  information  services are Year 2000 compliant.  The
Company has already upgraded its software programs and carried out certain tests
of its accounts  payable and accounts  receivable files which are date sensitive
and found all systems to operate properly. The Company is not linked by computer
with any of its  customers or vendors.  Orders are received and purchase  orders
are sent by telecopy, telephone, in person or by mail. None of these methods are
date sensitive.



New Accounting Pronouncements  

          In June 1997, the Financial Accounting Standards Board issued SFAS No.
131,  "Disclosures  about  Segments of an Enterprise  and Related  Information,"
which Steiner will adopt as required for all periods  beginning  after  December
15, 1997. This statement  requires the disclosure of certain  information  about
operating  segments in the  financial  statements.  It also requires that public
companies  report certain  information  about their  products and services,  the
geographic areas in which they operate and their major customers.

          The new standard is effective  for  financial  statements  for periods
beginning after December 15, 1997 and requires comparative financial information
for earlier years to be restated. Disclosure is not required for interim periods
during the first year. The adoption of this new standard is not expected to have
a significant impact on Steiner's financial statements.


          SFAS No.  133,  "Accounting  for  Derivative  Instruments  and Hedging
Activities,"  establishes  accounting  and reporting  standards  for  derivative
instruments  and hedging  activities.  It requires that an entity  recognize all
derivatives  as either  assets or  liabilities  in the  statement  of  financial
position and measure those  instruments at fair value. The statement  applies to
all entities and is effective for all fiscal  quarters of fiscal years beginning
after June 15, 1999.  The Company did not engage in  derivative  instruments  or
hedging activities in any periods presented in the financial statements.

                                      -17-

<PAGE>



Item 7.           Financial Statements
-------           --------------------
                                                        Steiner-Atlantic Corp.
                                                Index to Financial Statements



Report of Independent Certified Public Accountants                        

Balance Sheets at December 31, 1997 and June 30, 1998                     

Statements of Income for the years ended December 31, 1996 and 1997
   and for the six months ended June 30, 1997 (unaudited) and 1998        

Statements of Shareholders' Equity for the years ended December 31, 1996
   and 1997 and for the six months ended June 30, 1998                    

Statements of Cash Flows for the years ended December 31, 1996 and
   1997 and the six months ended June 30, 1997 (unaudited) and 1998       

Summary of Accounting Policies                                            

Notes to Financial Statements                                             

                                      18

<PAGE>



Report of Independent Certified Public Accountants


Board of Directors and Shareholders
Steiner-Atlantic Corp.
Miami, Florida


We have audited the accompanying balance sheets of Steiner-Atlantic  Corp. as of
December  31,  1997 and June 30,  1998 and the  related  statements  of  income,
shareholders'  equity  and cash  flows for each of the two  years in the  period
ended  December  31,  1997 and for the six  months  ended June 30,  1998.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of  Steiner-Atlantic  Corp. at
December 31, 1997 and June 30, 1998,  and the results of its  operations and its
cash flows for each of the two years in the period  ended  December 31, 1997 and
for the six months ended June 30, 1998, in conformity  with  generally  accepted
accounting principles.




Miami, Florida                                                  BDO Seidman, LLP
November 13, 1998

                                       19
<PAGE>
                                                          Steiner-Atlantic Corp.
                                                                  Balance Sheets


<TABLE>
<CAPTION>


                                                                           December 31,         June 30,
                                                                               1997               1998


<S>                                                                     <C>                 <C>            
Assets

Current assets
   Cash and cash equivalents                                            $         632,331   $       828,390
   Accounts receivable (Note 7)                                                 1,214,523           981,432
   Current portion of lease receivables (Notes 2 and 7)                           193,562           161,007
   Inventories                                                                  3,108,303         2,911,158
   Other current assets (Note 6)                                                  116,653            67,238
---------------------------------------------------------------------------------------------------------------

Total current assets                                                            5,265,372         4,949,225

Lease receivables - due after one year (Notes 2 and 7)                            214,177           148,651

Property and equipment, at cost - net of accumulated
   depreciation and amortization (Note 3)                                         147,039           146,461
---------------------------------------------------------------------------------------------------------------

                                                                        $       5,626,588   $     5,244,337
===============================================================================================================


Liabilities and Shareholders' Equity

Current liabilities
   Line of credit (Note 5)                                              $         500,000   $     1,000,000
   Accounts payable and accrued expenses (Note 6)                                 869,035         1,494,975
   Customer deposits                                                              304,278           389,371
   Current portion of term loan (Note 5)                                          200,000           200,000
------------------------------------------------------------------------------------------------------------

Total current liabilities                                                       1,873,313         3,084,346
Term loan, less current portion (Note 5)                                          316,613           216,613
------------------------------------------------------------------------------------------------------------

Total liabilities                                                               2,189,926         3,300,959
------------------------------------------------------------------------------------------------------------

Commitments (Notes 6, 8 and 9)
------------------------------------------------------------------------------------------------------------

Shareholders' equity Common stock, $.50 par value:
     Authorized shares - 600,000; issued and
     outstanding 339,500 shares                                                   169,750           169,750
   Retained earnings                                                            1,448,950         1,448,950
   Undistributed shareholders' earnings                                         1,817,962           324,678
------------------------------------------------------------------------------------------------------------

Total shareholders' equity                                                      3,436,662         1,943,378
------------------------------------------------------------------------------------------------------------

                                                                        $       5,626,588   $     5,140,584
============================================================================================================
</TABLE>

See  accompanying  summary  of  significant  accounting  policies  and  notes to
financial statements.

                                     20

<PAGE>
                                                         Steiner-Atlantic Corp.
                                                         Statements of Income

<TABLE>
<CAPTION>


                                                                  Year ended December 31          Six months ended June 30     
                                                                 ------------------------        ------------------------------
                                                                    1996             1997             1997             1998
                                                                                                  (Unaudited)
-------------------------------------------------------------------------------------------------------------------------------

Revenues:

<S>                                                        <C>              <C>              <C>              <C>           
Net Sales                                                    $   13,857,817   $   14,093,632   $    6,511,446   $    7,747,321

Commissions and other income                                        157,900          155,809           72,714           87,388
-------------------------------------------------------------------------------------------------------------------------------

Total                                                            14,015,717       14,249,441        6,584,160        7,834,709
-------------------------------------------------------------------------------------------------------------------------------

Cost of sales                                                     9,953,041       10,344,113        4,628,985        5,712,805

Selling, general and administrative expenses (Note 6)             3,398,345        3,474,421        1,595,932        1,841,592
-------------------------------------------------------------------------------------------------------------------------------

Total                                                            13,351,386       13,818,534        6,224,917        7,554,397
-------------------------------------------------------------------------------------------------------------------------------

Operating Income                                                    664,331          430,907          359,243          280,312
-------------------------------------------------------------------------------------------------------------------------------

Other Income (Expense):
    Interest income                                                 138,426          100,158           55,591           40,390
    Management fee income (Note 6)                                  145,000           40,000                -          150,000
    Interest expense                                                (83,543)         (60,940)         (35,740)         (26,509)
-------------------------------------------------------------------------------------------------------------------------------

Total Other Income                                                  199,883           79,218           19,851          163,881
-------------------------------------------------------------------------------------------------------------------------------

Net Income                                                   $      864,214   $      510,125   $      379,094          444,193
===============================================================================================================================

Net income per share                                         $         2.55   $         1.50   $         1.12   $         1.31

Weighted average number of shares of
    common stock outstanding                                        339,500          339,500          339,500          339,500

Pro forma amounts (unaudited):
    Net income                                               $      864,214   $      510,125   $      379,094          444,193
    Provision for income taxes (Note 4)                             329,935          195,555          144,722          170,939
-------------------------------------------------------------------------------------------------------------------------------

Pro forma net income (unaudited)                             $      534,279   $      314,570   $      234,372   $      273,254
===============================================================================================================================

Pro forma net income per share (unaudited)                   $         1.57   $          .93   $          .69   $          .80

Weighted average number of shares of common stock
outstanding                                                         339,500          339,500          339,500          339,500
===============================================================================================================================
</TABLE>

See  accompanying  summary  of  significant  accounting  policies  and  notes to
financial statements.

                                      21
<PAGE>
                                                          Steiner-Atlantic Corp.
                                              Statements of Shareholders' Equity
                                  For the years ended December 31, 1996 and 1997
                                      and for the six months ended June 30, 1998

<TABLE>
<CAPTION>





                                                                                             Undistributed            Total
                                                                   Common        Retained    Shareholders'    Stockholders'
                                                                    Stock        Earnings         Earnings           Equity
---------------------------------------------------------------------------------------------------------------------------

<S>                                                     <C>             <C>              <C>              <C>           
Balance at December 31, 1995                               $      169,750  $    1,448,950   $    1,813,623   $    3,432,323
Distributions                                                           -               -         (770,000)        (770,000)
Net income                                                              -               -          864,214          864,214
---------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1996                                      169,750       1,448,950        1,907,837        3,526,537
Distributions                                                           -               -         (600,000)        (600,000)
Net income                                                              -               -          510,125          510,125
---------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1997                                      169,750       1,448,950        1,817,962        3,436,662
Distributions                                                           -               -      (1,937,477)       (1,937,477)
Net income                                                              -               -          444,193          444,193
---------------------------------------------------------------------------------------------------------------------------

Balance at June 30, 1998                                   $      169,750  $    1,448,950   $      324,678   $    1,943,378
===========================================================================================================================
</TABLE>

See  accompanying  summary  of  significant  accounting  policies  and  notes to
financial statements.


                                       22                                    
<PAGE>
                                                          Steiner-Atlantic Corp.
                                                        Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                    Years ended December 31,      Six months ended June 30,

                                                                   1996             1997             1997             1998
                                                                                                  (Unaudited)


<S>                                                       <C>              <C>              <C>              <C>           
Cash provided by operating activities:
   Net income                                                $      864,214   $      510,125   $      379,094   $      444,193
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Bad debt expense                                              19,414           21,799                -           79,730
       Depreciation and amortization                                 40,064           34,643           14,622           15,621
       Net changes in operating assets and liabilities:
         (Increase) decrease in:
           Accounts and lease receivables                           331,387         (373,356)         (91,154)         235,331
           Inventories                                             (185,972)          73,249           69,903          197,145
           Other assets                                             167,718          (14,845)         (80,488)          65,526
         Increase (decrease) in:
           Accounts payable and accrued expenses                    (89,415)          70,597          131,436          450,940
           Customer deposits                                        (35,138)         124,406          243,442           85,093
-------------------------------------------------------------------------------------------------------------------------------

Cash provided by operating activities                            1,112,272          446,618          666,855        1,573,579
-------------------------------------------------------------------------------------------------------------------------------

Cash used for investing activities:
   Loan to affiliate                                                     -          (50,000)               -                -
   Capital expenditures                                            (23,850)         (30,406)               -          (15,043)
-------------------------------------------------------------------------------------------------------------------------------

Cash used for investing activities                                 (23,850)         (80,406)               -          (15,043)
-------------------------------------------------------------------------------------------------------------------------------

Cash used for financing activities:
   Borrowings (repayments) under line of credit (net)             (300,000)         500,000                -          500,000
   Payments on term loan                                          (183,334)        (216,720)        (116,666)        (100,000)
   Cash distributions to shareholders                             (770,000)        (600,000)        (200,000)      (1,937,477)
   Borrowings from shareholder                                     250,000                -                -                -
   Repayment of loan from shareholder                             (250,000)               -                -                -
   Borrowings from related company                                       -                -                -          175,000
-------------------------------------------------------------------------------------------------------------------------------

Cash used for financing activities                              (1,253,334)        (316,720)        (316,666)      (1,362,477)
-------------------------------------------------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents                  (164,912)          49,492          350,189          196,059
Cash and cash equivalents at beginning of period                   747,751          582,839          582,839          632,331
-------------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                  $      582,839   $      632,331   $      933,028   $      828,390

Supplemental Information:
   Cash paid for:
     Interest                                               $       83,543   $       60,940   $       35,740   $       26,509
===============================================================================================================================
</TABLE>

See  accompanying  summary  of  significant  accounting  policies  and  notes to
financial statements.


                                       23
<PAGE>


Steiner-Atlantic Corp.
Summary of Significant Accounting Policies
Unaudited with respect to the six months ended June 30, 1997






        Nature of Business          Steiner-Atlantic   Corp.  ("Steiner")  sells
                                    commercial  and  industrial  laundry and dry
                                    cleaning equipment,  boilers and replacement
                                    parts.

                                    Steiner primarily sells to customers located
                                    in the  United  States,  the  Caribbean  and
                                    Latin America.


        Inventories                 Equipment  inventories  are  valued  at  the
                                    lower of cost  (determined  on the  specific
                                    identification basis) or market. Replacement
                                    part  inventories are valued at the lower of
                                    cost or market  determined  on the  first-in
                                    first-out method.


        Property,                   Property and  equipment  are stated at cost.
        Equipment and               Depreciation and amortization are calculated
        Depreciation                on the accelerated or straight-line  methods
                                    for  financial  reporting  purposes  and the
                                    accelerated  method for income tax  purposes
                                    over  lives  of  five  to  seven  years  for
                                    furniture  and equipment and the life of the
                                    lease for leasehold improvements.


        Income Taxes                Steiner  has  elected  to be  taxed  as an S
                                    Corporation  under applicable  provisions of
                                    the  Internal   Revenue  Code.   Under  such
                                    election,   shareholders  include  Steiner's
                                    income  in  their  own  federal  income  tax
                                    returns. Accordingly, Steiner is not subject
                                    to income taxes.

                                    The pro forma  provisions  for income  taxes
                                    and  net  income  assume  that  Steiner  was
                                    subject to income tax.

                                    For the  purpose of the pro forma  provision
                                    for income  taxes,  Steiner  has adopted the
                                    provisions   of   Statement   of   Financial
                                    Accounting  Standards (SFAS) 109, Accounting
                                    for Income Taxes for all periods  presented.
                                    Under the asset and liability method of SFAS
                                    109,   deferred  taxes  are  recognized  for
                                    differences  between financial statement and
                                    income tax bases of assets and liabilities.


        Statement of                For   purposes  of  this   statement,   cash
        Cash Flows                  equivalents   include   all  highly   liquid
                                    investments    purchased    with    original
                                    maturities of three months or less.

                                       24
<PAGE>


Steiner-Atlantic Corp.
Summary of Significant Accounting Policies
Unaudited with respect to the six months ended June 30, 1997






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


        Earnings                    Per  Share  Net  income  and pro  forma  net
                                    income  per share are based on the  weighted
                                    average  number of  shares  of common  stock
                                    outstanding during each period.


        Fair Value of               The Company's financial  instruments consist
        Financial                   principally  of cash,  accounts  receivable,
        Instruments                 leases  receivables,  accounts  payable  and
                                    accrued  expenses,  line of credit  and term
                                    loan. The carrying amounts of such financial
                                    instruments  as  reflected  in  the  balance
                                    sheet approximate their estimated fair value
                                    as of December  31, 1997 and June 30,  1998.
                                    The estimated fair value is not  necessarily
                                    indicative  of the amounts the Company could
                                    realize in a current  market  exchange or of
                                    future earnings or cash flows.          


        New Accounting              In  June  1997,  the  Financial   Accounting
        Pronouncements              Standards   Board   issued   SFAS  No.  131,
                                    "Disclosures about Segments of an Enterprise
                                    and Related Information," which Steiner will
                                    adopt as required for all periods  beginning
                                    after  December  15,  1997.  This  statement
                                    requires   the    disclosure    of   certain
                                    information about operating  segments in the
                                    financial statements.  It also requires that
                                    public companies report certain  information
                                    about  their  products  and  services,   the
                                    geographic  areas in which they  operate and
                                    their major customers.

                                    The new standard is effective  for financial
                                    statements  for  periods   beginning   after
                                    December 15, 1997 and  requires  comparative
                                    financial  information  for earlier years to
                                    be restated.  Disclosure is not required for
                                    interim  periods  during the first year. The
                                    adoption   of  this  new   standard  is  not
                                    expected  to have a  significant  impact  on
                                    Steiner's financial statements.


                                       25                                  

<PAGE>


Steiner-Atlantic Corp.
Summary of Significant Accounting Policies
Unaudited with respect to the six months ended June 30, 1997






                                    SFAS No.  133,  "Accounting  for  Derivative
                                    Instruments    and   Hedging    Activities,"
                                    establishes    accounting    and   reporting
                                    standards  for  derivative  instruments  and
                                    hedging  activities.  It  requires  that  an
                                    entity  recognize all  derivatives as either
                                    assets or  liabilities  in the  statement of
                                    financial   position   and   measure   those
                                    instruments  at fair  value.  The  statement
                                    applies to all entities and is effective for
                                    all   fiscal   quarters   of  fiscal   years
                                    beginning  after June 15, 1999.  The Company
                                    did not engage in derivative  instruments or
                                    hedging  activities in any periods presented
                                    in the financial statements.

Interim Financial                   The financial  statements for the six months
Statements                          ended June 30,  1997 are  unaudited.  In the
                                    opinion  of   management,   such   financial
                                    statements     include    all    adjustments
                                    (consisting   only   of   normal   recurring
                                    accruals)  necessary for a fair presentation
                                    of  financial  position  and the  results of
                                    operations.  The results of  operations  for
                                    interim    periods   are   not   necessarily
                                    indicative of the results to be expected for
                                    the full year.


                                       26
<PAGE>
                                                          Steiner-Atlantic Corp.
                                                   Notes to Financial Statements
                    Unaudited with respect to the six months ended June 30, 1997






1.      General                     On   July   1,   1998,    Metro-Tel    Corp.
                                    ("Metro-Tel")  and  Steiner-Atlantic   Corp.
                                    ("Steiner") entered into a merger agreement,
                                    whereby   Metro-Tel  will  acquire  all  the
                                    issued  and  outstanding  shares of  capital
                                    stock of Steiner in exchange  for  4,720,954
                                    shares of Metro-Tel. In addition,  Metro-Tel
                                    will  issue  up to  500,000  shares  of  its
                                    common  stock  or  grant   options  for  the
                                    purchase  of up to  500,000  shares  of  its
                                    common stock to  shareholders  and employees
                                    of  Steiner.   On  November  1,  1998,   the
                                    transaction was consummated.

                                    For  financial  accounting  purposes,   this
                                    transaction  will  be  accounted  for  as  a
                                    reverse acquisition of Metro-Tel by Steiner.


2.  Lease Receivables               Lease   receivables   result  from  customer
                                    leases of equipment under arrangements which
                                    qualify as  sales-type  leases.  At June 30,
                                    1998,  annual future lease payments,  net of
                                    deferred   interest  ($57,164  at  June  30,
                                    1998),   due  under  these   leases  are  as
                                    follows:

                                    Year ending June 30,                        
                                    ------------------------------------------- 
                                                                                
                                    1999                    $         161,007   
                                    2000                               68,026   
                                    2001                               41,659   
                                    2002                               24,016   
                                    2003                               12,628   
                                    Thereafter                          2,322   
                                    ------------------------------------------- 
                                                                                
                                                            $         309,658   
                                    =========================================== 
                                                                                
                                    

                                    


                                     28
<PAGE>
                                                         Steiner-Atlantic Corp.
                                                  Notes to Financial Statements
                   Unaudited with respect to the six months ended June 30, 1997


3.      Property and           Major  classes  of  property  and  equipment
        Equipment              consist of the following:
        
                                                      December 31, June 30,
                                                         1997         1998 
                               --------------------------------------------
                                                                           
                               Furniture and equipment $ 433,535  $ 448,578
                               Leasehold improvements    237,682    237,682
                               Total cost                671,217    686,260
                                                                                
                               Less accumulated depreciation                    
                                   and amortization      524,178   539,799
                               -------------------------------------------------
                                                                                
                                                       $ 147,039  $146,461
                               =================================================



4.      Income Taxes                The  following  are  the  components  of pro
        (Unaudited)                 forma income tax provision:
       




                                        Year Ended              Six Months Ended
                                       December 31,                  June 30,   
                                                                                
                                       1996         1997        1997      1998  
                     -----------------------------------------------------------
                                                                                
                     Current                                                    
                         Federal  $ 279,616   $  189,074   $ 131,487  $  143,910
                         State       47,864       32,366      22,508      24,536
                     -----------------------------------------------------------
                                                                                
                                    327,480      221,440     153,995     168,446
                     -----------------------------------------------------------
                                                                                
                     Deferred                                                   
                         Federal      2,096      (22,102 )    (7,918)      2,129
                         State          359       (3,783 )    (1,355)        364
                     -----------------------------------------------------------
                                                                                
                                      2,455      (25,885 )    (9,273)      2,493
                                                                                
                     Total        $ 329,935   $  195,555   $ 144,722  $  170,939
                     ===========================================================
                     
                                    The pro forma  provision  for  income  taxes
                                    represents  the estimated  income taxes that
                                    would have been  reported  had  Steiner  not
                                    been an S  Corporation  and had been subject
                                    to Federal and state income taxes.

                                    The  reconciliation  of pro forma income tax
                                    computed  at  the  United   States   federal
                                    statutory  tax  rate of 34% to the  proforma
                                    provision for income taxes is as follows:


                                     29
<PAGE>
                                                          Steiner-Atlantic Corp.
                                                   Notes to Financial Statements
                    Unaudited with respect to the six months ended June 30, 1997







                                                                                
                                          Year Ended            Six Months Ended
                                         December 31,                June 30,   
                                                                                
                                          1996        1997      1997       1998 
           ---------------------------------------------------------------------
                                                                                
           Tax at the United States                                             
               statutory rate        $ 293,833   $ 173,443 $ 128,892  $ 153,826 
                                                                                
           State income taxes, net of                                           
               federal benefit          31,827      18,865    13,961     16,374 
                                                                                
           Other                         4,275       3,247     1,869        739 
           ---------------------------------------------------------------------
                                                                                
           Total                     $ 329,935   $ 195,555 $ 144,722  $ 170,939 
           =====================================================================
                                                                                
                                    If Steiner  was subject to income  taxes,  a
                                    deferred  tax  liability  would be recorded,
                                    through a charge to operations,  for the tax
                                    effect of cumulative  temporary  differences
                                    between  financial and tax  reporting.  Such
                                    deferred tax liability  results  principally
                                    from temporary  differences  relating to the
                                    allowance   for   doubtful    accounts   and
                                    depreciation  and  would  have  amounted  to
                                    approximately  $20,000 at June 30,  1998 had
                                    Steiner  been  subject to federal  and state
                                    taxes at such date.


                                      30
<PAGE>
                                                          Steiner-Atlantic Corp.
                                                   Notes to Financial Statements
                    Unaudited with respect to the six months ended June 30, 1997






5.      Credit Agreement            The credit  agreement with a commercial bank
                                    includes a line of credit of $2,250,000  and
                                    a term  loan  initially  of  $1,000,000.  At
                                    December 31, 1997 and June 30, 1998, Steiner
                                    had  available  lines of  credit  (including
                                    outstanding  letters of credit)in the amount
                                    of $1,750,000 and $1,250,000.  respectively,
                                    and    owed     $516,613    and    $416,613,
                                    respectively,  under the term loan. The term
                                    loan  is  due  in  60  monthly  payments  of
                                    $16,667,  plus interest through August 2000.
                                    The line of credit  is due on demand  and is
                                    available for working  capital  purposes and
                                    the issuance of import letters of credit and
                                    bankers  acceptances.  Borrowings  under the
                                    agreement bear interest at the prime rate (8
                                    1/2% at  December  31,  1997  and  June  30,
                                    1998),   are   collateralized   by   all  of
                                    Steiner's   assets,   and   are   personally
                                    guaranteed   by   the   shareholders.    The
                                    agreement  requires  maintenance  of certain
                                    financial    ratios   and   contains   other
                                    restrictive covenants.  On November 2, 1998,
                                    Steiner  refinanced  its line of credit  and
                                    term loan (see Note 11).

                                    At  December  31,  1997 and  June 30,  1998,
                                    Steiner  had  outstanding  letters of credit
                                    aggregating  approximately  $35,000  and $0,
                                    respectively.


6.      Related Party               During the years ended December 31, 1996 and
        Transactions                1997 and the six months  ended June 30, 1997
                                    and 1998, Steiner charged management fees of
                                    $145,000,    $40,000,   $0   and   $150,000,
                                    respectively,  to  a  company  under  common
                                    ownership.  At December 31, 1997, $50,000 is
                                    due from such  company  and is  included  in
                                    other  current  assets  in the  accompanying
                                    balance  sheet.  During  1998,  the  related
                                    company made a non-interest  bearing advance
                                    of $325,000,  payable on demand, to Steiner.
                                    At June 30,  1998,  $175,000  is due to such
                                    company and is included in accounts  payable
                                    and  accrued  expenses  in the  accompanying
                                    balance sheet.

                                    Steiner  leases  warehouse  and office space
                                    from a shareholder  under an operating lease
                                    which  expires  in  October  2004,  with  an
                                    option  to renew for an  additional  10 year
                                    period.  Minimum  future rental  commitments
                                    under this  lease  approximate  $90,000  per
                                    annum through October 2004.


                                      31
<PAGE>
                                                          Steiner-Atlantic Corp.
                                                   Notes to Financial Statements
                    Unaudited with respect to the six months ended June 30, 1997






7.      Concentrations of           Steiner  places its excess cash in overnight
        Credit Risk                 deposits   with  a  large   national   bank.
                                    Concentration of credit risk with respect to
                                    trade and lease  receivables  is limited due
                                    to a large  customer  base.  Trade and lease
                                    receivables  are  generally   collateralized
                                    with equipment sold.


8.      Commitment                  Steiner leases  additional  warehouse  space
                                    under two operating leases.  One lease is on
                                    a monthly  basis and the other lease expires
                                    in  December  1999,  with an option to renew
                                    for an additional three year period. Minimum
                                    future rental commitments under these leases
                                    approximate  $50,000 a year.  Rent  expense,
                                    including  rentals paid to related  parties,
                                    aggregated  $138,768  and  $141,700  for the
                                    years ended  December  31, 1996 and 1997 and
                                    $71,650  and  $70,850  for six months  ended
                                    June 30, 1997 and 1998, respectively.


9.      Deferred                    Steiner  adopted  a  participatory  deferred
        Compensation                compensation   plan   wherein   it   matches
        Plan                        employee   contributions  up  to  1%  of  an
                                    eligible employee's yearly compensation. All
                                    employees are eligible to participate in the
                                    plan  after  one  year of  service.  Steiner
                                    provided  for  $7,368  and  $10,792  for the
                                    years ended  December  31, 1996 and 1997 and
                                    $5,260 and  $5,735 for the six months  ended
                                    June 30,  1997 and  1998,  respectively,  in
                                    contributions.  The plan is tax exempt under
                                    Section 401(k) of the Internal Revenue Code.
                                   
                                   

10.     Export Sales                Net   sales   includes   export   sales   to
                                    nonaffiliated  customers  as follows for the
                                    years ended  December  31, 1996 and 1997 and
                                    for the six months  ended June 30,  1997 and
                                    1998:


                                   Year Ended                 Six Months Ended  
                                  December 31,                    June 30,      
                                                                                
                                  1996           1997       1997      1998  
                                                          (Unaudited)   
            --------------------------------------------------------------------
                                                                                
            Caribbean     $  1,345,301   $  1,793,076   $   365,591  $ 1,147,918
                                                                                
            Latin America    1,314,838      1,595,797       500,976    1,217,397
                                                                                
            Other              381,528        560,639       245,256       65,295
            --------------------------------------------------------------------
                                                                                
                          $  3,041,667   $  3,949,512   $ 1,111,823  $ 2,430,610
            ====================================================================
                                                                                
            

                                     32
<PAGE>
                                                         Steiner-Atlantic Corp.
                                                  Notes to Financial Statements
                    Unaudited with respect to the six months ended June 30, 1997





11.     Subsequent                  On November 2, 1998,  Steiner entered into a
        Events                      new loan agreement with the same  commercial
                                    bank used in its current financings. Steiner
                                    paid  off the  outstanding  balances  on the
                                    existing  line of credit  and term loan with
                                    the proceeds from the new loan. The new loan
                                    includes a line of credit of $2,250,000  and
                                    a term loan of $2,400,000.  Borrowings under
                                    the  agreement  bear  interest  at 2.75% per
                                    annum above the one month LIBOR Market Index
                                    Rate.  The  line  of  credit  is  due on the
                                    earlier of November  2, 1999 or demand.  The
                                    term loan is due January 2002. The term loan
                                    requires  monthly  payments of $40,000  plus
                                    interest,  commencing  January  1999  with a
                                    $960,000  balloon  payment in January  2002.
                                    The  agreement   requires   maintenance   of
                                    certain  financial ratios and contains other
                                    restrictive covenants.



                                      33


<PAGE>

Item 8.       Changes in and Disagreements with Accountants on
-------       Accounting and Financial Disclosure.
              ------------------------------------------------

         On  January  4, 1999,  the  Company  selected  BDO  Seidman,  LLP ("BDO
Seidman") to replace  Grant  Thornton LLP ("Grant  Thornton")  as the  Company's
independent public accountants. BDO Seidman has acted as independent accountants
for Steiner,  which became a wholly-owned  subsidiary of the Company pursuant to
the Merger. The Company believes that the change to BDO Seidman as the Company's
independent accountants will centralize the audit of the Company's and Steiner's
consolidated financial statements.  The decision to change auditors was approved
by the Audit Committee of the Board of Directors.

                                      -34-

<PAGE>



         Grant Thornton's report on the financial  statements of the Company for
each of the past two  fiscal  years  did not  contain  any  adverse  opinion  or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles.

         During the Company's two most recent fiscal years,  and the  subsequent
interim period through January 4, 1999, there were no  disagreements  with Grant
Thornton  on  any  matter  of  accounting  principles  or  practices,  financial
statement disclosure,  or auditing scope or procedure,  which disagreements,  if
not  resolved to the  satisfaction  of Grant  Thornton,  would have caused Grant
Thornton  to make  reference  to the  subject  matter  of the  disagreements  in
connection  with their audit report with respect to financial  statements of the
Company either individually or consolidated with Steiner.

         During the Company's two most recent fiscal years,  and the  subsequent
interim  period  through  January 4,  1999,  Grant  Thornton  did not advise the
Company of any of the items listed in Item 304(a)(1)(iv)(B) of Regulations S-K.


                                    PART III
                                    --------

Item 9.       Directors, Executive Officers, Promoters and Control Persons;
-------       Compliance with Section 16(a) of the Exchange Act.
              -------------------------------------------------------------

         The following  information  is presented with respect to the background
of each of the directors and executive officers of the Company:

         Michael S. Steiner,  43, has been President and Chief Executive Officer
of the Company since the  effectiveness of the Merger on November 1, 1998 and of
Steiner  since 1988.  Mr.  Steiner has been a director of the Company  since the
effectiveness of the Merger on November 1, 1998.

         William K. Steiner, 68, has been Chairman of the Board of Steiner since
he founded Steiner in 1960. Mr. Steiner has been a director of the Company since
the effectiveness of the Merger on November 1, 1998.

         Venerando J. Indelicato, 65, was President of the Company from December
1967 until October 31, 1998 and has been Treasurer and Chief  Financial  Officer
of the Company since December 1969.

         Lloyd  Frank,  73,  has been a member of the law firm of Parker  Chapin
Flattau & Klimpl since 1977.  Mr. Frank has been a director of the Company since
1977. The Company  retained  Parker Chapin Flattau & Klimpl during the Company's
last fiscal year and is retaining that firm during the Company's  current fiscal
year. Mr. Frank is also a director of Park Electrochemical Corp.



                                      -35-

<PAGE>



         David  Blyer,  38, has served as a director  of the  Company  since the
effectiveness  of the  Merger on  November  1,  1998.  Mr.  Blyer has been Chief
Executive  Officer and President of Vento  Software,  since he  co-founded  that
company in 1994.  Vento  Software  develops  software for  specialized  business
application.  Before founding Vento Software, Mr. Blyer served as Senior Account
Manager of the South Florida and Caribbean regions for Tandem Computers.

         Stuart  Wagner,  67, has served as a director of the Company  since the
effectiveness  of the  Merger on  November  1, 1998 and has been  retained  as a
consultant  for  Diversitech  Corp.  since 1997.  From 1975 to 1997,  Mr. Wagner
served as President of Wagner Products Corp., a manufacturer  and distributor of
products in the HVAC industry, a company which he founded.

         Mr. Michael S. Steiner is the son of Mr. William K. Steiner.  There are
no other family  relationships among any of the directors and executive officers
of  the  Company.   All  directors  serve  until  the  next  annual  meeting  of
stockholders  and until  the  election  and  qualification  of their  respective
successors. All officers serve at the pleasure of the Board of Directors.

              The  following  information  is  presented  with  respect  to  the
background of each person who is not an executive officer but who is expected to
make a significant contribution to the Company:

         Osvalso  Rubio, 36, serves as Vice  President and Director of Sales for
the Export Department of Steiner since joining Steiner in May 1993.

         Ronald  London,  66, serves as Vice  President  and primarily  overseas
sales of the retail Dry-cleaning  Equipment  Department of Steiner since joining
Steiner in September 1992.

         Jerry Kotacka, 54, serves as Corporate  Secretary and Director of Sales
of the Laundry  Equipment  Department of Steiner  since joining  Steiner in June
1983.

         Howard Perera, 46, has served as the Company's Director of Engineering,
engaged in the design and development of new  telecommunications  products since
joining the Company in September 1993.

         Jon D. Robinette,  41, has, since July 1995,  served as General Manager
of the Company's  telecommunications  operations,  responsible  for managing and
coordinating  operations in the Company's Milpitas,  California facility.  Prior
thereto,   Mr.  Robinette  served  as  Operations   Manager  for  the  Company's
telecommunications operations from October 1984.


                                      -36-

<PAGE>

Item 10.      Executive Compensation.
--------      -----------------------

         The following table sets forth information  concerning the compensation
of Venerando J.  Indelicato,  Metro-Tel's  Chief  Executive  Officer and Richard
Wildman,  Metro-Tel's  Executive  Vice  President,  Metro-Tel's  only  executive
officers prior to the Merger whose cash  compensation  exceeded  $100,000 during
the  Company's  year ended June 30,  1998,  for  services in all  capacities  to
Metro-Tel during the years ended June 30, 1998, 1997 and 1996.

<TABLE>
<CAPTION>
                                                              Long-Term                      
                                    Annual Compensation      Compensation 
                                    -------------------      -------------                   
                                                                            All Other
Name and Principal Position       Year        Salary          Options#    Compensation
---------------------------       ----        ------          --------    ------------   

<S>                             <C>       <C>                <C>          <C>      
Venerando J. Indelicato           1998      $172,676(1)          --          $9,000(2)
   President and Chief            1997        $172,676           --          $9,000
   Executive Officer              1996        $172,640           --          $9,000

Richard Wildman                   1998      $152,423(3)          --          $9,000(2)
   Executive Vice President       1997       $  94,711         50,000        $5,038

--------------------------------
</TABLE>


(1)      The Company is a party to an employment  agreement with Mr.  Indelicato
         which, as amended in connection with the Merger, provides for a revised
         annual  salary of  $175,000  commencing  October 30,  1998,  subject to
         increase  and  bonuses  in the  discretion  of the  Company's  Board of
         Directors.  Mr. Indelicato's  employment agreement may be terminated by
         him or by the  Company at any time after  December  31, 1999 on 90 days
         notice.

(2)      "All  Other   Compensation"   for  fiscal  1998  includes  (i)  $6,000,
         representing the Company's contribution allocated to Messrs. Indelicato
         and Wildman under the Company's  Profit Sharing Plan in fiscal 1998 and
         (ii) $3,000,  which was the Company's  matching  contribution in fiscal
         1998 to Messrs.  Indelicato's and Wildman's deferred compensation under
         the Company's  Profit  Sharing Plan  pursuant to Section  401(k) of the
         Internal Revenue Code of 1986, as amended.

(3)      The Company is a party to a letter  agreement with Mr. Wildman pursuant
         to which Mr.  Wildman has been serving as Executive  Vice  President of
         the Company at an annual salary of $150,000.  Mr.  Wildman  resigned as
         Executive Vice President effective January 29, 1999.

         Since November 1, 1998,  the effective  date of the Merger,  Michael S.
Steiner has received an annual  salary at the rate of $175,000 from the Company.
During the years ended  December 31, 1995,  1996 and 1997 and for the six months
ended June 30, 1998,  Michael Steiner received a salary from Steiner at the rate
of $150,000 per year.  During those periods each of Michael  Steiner  (Steiner's
Chief Executive Officer) and William Steiner (Chairman of the Board of Directors
of  Steiner)  were paid  bonuses  of  400,000,  400,000,  400,000  and  200,000,
respectively,  which were withheld for tax payments.  As a result of the Merger,
these bonuses will no longer be paid.

                                      -37-

<PAGE>



1998 Fiscal Year-End Option Values

         No  options  were  granted  to Mr.  Indelicato  or Mr.  Wildman  during
Metro-Tel's year ended June 30, 1998 and neither Mr.  Indelicato nor Mr. Wildman
acquired shares upon the exercise of stock options during Metro-Tel's year ended
June 30, 1998. The following  table contains  information  concerning the number
and value, at June 30, 1998, of unexercised  options held by Messrs.  Indelicato
and Wildman:

                               
                                                              Value of
                                  Number of                   Unexercised
                                  Unexercised                 In-the-Money
                                  Options Held at             Options Held at
                                  Fiscal Year-End             Fiscal Year-End
                                  (Exercisable/               (Exercisable/
Name                              Unexercisable)              Unexercisable)(1)
----                              ---------------             ----------------

Venerando J. Indelicato           50,000/0                    $14,125/$0

Richard Wildman                   12,500/37,500               $ 4,297/$12,891

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


(1)      At fiscal year end,  the market  value of such shares (the mean between
         the low bid and high  asked  quotations  on the  Nasdaq  Stock  Market)
         exceeded the exercise price of the underlying shares.

Compensation of Directors

         Each  non-employee  director  receives  a  fee  of  $5,000  per  annum.
Directors are also reimbursed for out-of-pocket  expenses incurred in connection
with  performing  their duties.  In the event that the Board of Directors  holds
more than four meetings  during a fiscal year in addition to its meeting held on
the date of the Annual Meeting of Stockholders,  each director receives $750 for
each such additional meeting such director attends.

         Pursuant to the Company's 1994  Non-Employee  Director Stock Plan, each
non-employee  director of the Company  serving on August 24, 1994 was granted an
option to purchase  10,000 shares of the Company's  Common Stock and each person
who subsequently becomes a non-employee director is also to be granted an option
to purchase  10,000  shares of the Company's  Common Stock at an exercise  price
equal to 100% of the fair market value of the Company's Common Stock on the date
of grant.  Each  option is for a term of ten  years and vests  over a  four-year
period  commencing  one year after the date of grant (with vesting  credit given
for any  service  on the  Board of  Directors  prior to the date of  grant).  In
accordance  with this Plan,  Messrs.  David  Blyer and Stuart  Wagner  were each
granted  options to purchase  10,000 shares of the  Company's  Common Stock upon
becoming directors on November 1, 1998, the effective date of the Merger.

                                      -38-

<PAGE>



Item 11.          Security Ownership of Certain Beneficial Owners and Management
--------          --------------------------------------------------------------

         The following  table sets forth  information,  as at December 31, 1998,
with respect to the shares of Common Stock which are  beneficially  owned by (i)
any person  (including any "group",  as that term is used in Section 13(d)(3) of
the  Securities  Exchange  Act of 1934),  who is known to the  Company to be the
beneficial owner of more than five percent of the Company's  outstanding  Common
Stock,  (ii)  the  executive  officers  of the  Company  named  in  the  Summary
Compensation Table under the caption "Executive Compensation", below, (iii) each
director of the Company and (iv) all  executive  officers  and  directors of the
Company as a group:


                                Amount and Nature of              Percent
Beneficial Owner              Beneficial Ownership (1)          of Class (2)
----------------              ------------------------          -----------

Michael S. Steiner                   2,360,477                   34.3%
290 N.E. 68 Street
Miami, Florida 33138
William K. Steiner                   2,360,477                   34.3%
290 N.E. 68 Street
Miami, Florida 33138
Venerando J. Indelicato                259,150(3)                 3.7%
12307 Marblehead Drive
Tampa, FL 33626
Richard Wildman                         23,750(4)                 *
Lloyd Frank                             32,625(5)                 *
David Blyer                                -0-                    *
Stuart Wagner                              -0-(6)                 *
Executive officers and               5,036,479(7)                72.2%
directors as a group
(7 persons)

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


1.       Except as noted in the  following  footnotes,  all  beneficially  owned
         shares are owned with sole voting and investment power.

2.       Asterisk indicates less than one percent.

3.       Includes 432 shares owned jointly with his wife,  Madeline  Indelicato,
         and 50,000  shares which are not  outstanding  but which are subject to
         issuance upon exercise of presently  exercisable options granted to Mr.
         Indelicato under the Company's 1991 Stock Option Plan. Excludes 136,219
         shares (2.0% of the Company's



                                      -39-

<PAGE>



         outstanding  Common Stock) owned  beneficially by his wife, as to which
         Mr. Indelicato disclaims beneficial ownership.

4.       Includes  18,750 shares which are not outstanding but which are subject
         to issuance  upon  exercise  of the  portion of options  granted to Mr.
         Wildman under the Company's  1991 Stock Option Plan which are presently
         exercisable within 60 days.

5.       Includes  20,000 shares which are not outstanding but which are subject
         to issuance  upon  exercise of presently  exercisable  options  granted
         pursuant to stock option contracts between the Company and Mr. Frank as
         non-employee  director which were approved by  stockholders  and 10,000
         shares which are not outstanding but which are subject to issuance upon
         exercise  of  presently  exercisable  options  granted  pursuant to the
         Company's 1994 Non-Employee Director Stock Option Plan. Excludes 21,494
         shares  owned by Mr.  Frank's  wife,  as to which Mr.  Frank  disclaims
         beneficial ownership.

6.       Excludes  5,000  shares  owned by Mr.  Wagner's  wife,  as to which Mr.
         Wagner disclaims beneficial ownership.

7.       Includes  98,750 shares which are not outstanding but which are subject
         to issuance upon exercise of the portion of options which are presently
         exercisable  or  exercisable  within 60 days after  December  31, 1998.
         Excludes  162,713  shares  (2.4% of the  Company's  outstanding  Common
         Stock) owned by spouses of certain executive officers and directors, as
         to which each such executive officer and director disclaims  beneficial
         ownership.

Item 12.          Certain Relationships and Related Transactions.
--------          -----------------------------------------------

         During the years  ended  December  31, 1996 and 1997 and the six months
ended June 30, 1998,  Steiner charged  management fees of $145,000,  $40,000 and
$175,000,  respectively,  to a company under common ownership.  In addition,  at
June 30, 1997,  $75,000 was due to Steiner from that  company.  During the years
ended  December 31, 1996 and 1997 and the six months  ended June 30,  1998,  the
related  company  made  non-interest  bearing  advances of $17,423,  $50,000 and
$325,000,  payable on demand, to Steiner.  At June 30, 1998, $175,000 was due to
that company. The advance has been subsequently repaid.

         Steiner leases warehouse and office space from William K. Steiner under
a lease which expires in October  2004,  with an option to renew the lease for a
ten year  period.  The lease  provides  for an  annual  rental  of  $83,200.  In
addition,  the Company is  obligated  to pay sales tax on the rent,  real estate
taxes, utilities, insurance and certain other expenses for the facility. Steiner
and the  Company  believe the terms of this lease are at least as  favorable  as
could be obtained from unaffiliated third parties.

         Prior to the Merger,  Steiner was taxed  under  subchapter  S under the
Internal Revenue Code of 1986, as amended,  pursuant to which all of the profits
of Steiner have



                                      -40-

<PAGE>



been recognized directly by Michael Steiner,  President, Chief Executive Officer
and a stockholder  of Steiner,  and William  Steiner,  the other  stockholder of
Steiner.  During the years ended  December  31, 1996 and 1997 and the six months
ended June 30,  1998,  Steiner  paid to each of Michael  Steiner  and William K.
Steiner $385,000,  $300,000 and $968,739 as "subchapter S distributions",  which
represented amounts needed to pay taxes on Steiner's current earnings, reimburse
them for taxes paid in prior years and other distributions of profits.

Item 13.            Exhibits and Reports on Form 10-KSB.

                    (a)    Exhibits

2(a)                Agreement  of  Merger  dated as of July 1,  1998  among  the
                    Company,   Metro-Tel  Acquisition  Corp.,   Steiner-Atlantic
                    Corp.,   William  K.   Steiner  and   Michael  S.   Steiner.
                    Incorporated  by  reference  to Exhibit A of the  definitive
                    Proxy  Statement of the Company filed with the Commission on
                    October 5, 1998 (File No. 0-9040).

3(a)(1)             Certificate of Incorporation  of the Company,  as filed with
                    the  Secretary of State of the State of Delaware on June 30,
                    1963.  (Incorporated  by reference to Exhibit  4.1(a) to the
                    Company's Current Report on Form 8-K dated (date of earliest
                    event reported) October 29, 1998.)

3(a)(2)             Certificate of Amendment to the Certificate of Incorporation
                    of the Company,  as filed with the Secretary of State of the
                    State  of  Delaware  on March  27,  1968.  (Incorporated  by
                    reference to Exhibit 4.1(b) to the Company's  Current Report
                    on Form 8-K dated (date of earliest event reported)  October
                    29, 1998.)

3(a)(3)             Certificate of Amendment to the Certificate of Incorporation
                    of the Company,  as filed with the Secretary of State of the
                    State of  Delaware on  November  4, 1983.  (Incorporated  by
                    reference to Exhibit 4.1(c) to the Company's  Current Report
                    on Form 8-K dated (date of earliest event reported)  October
                    29, 1998.)

3(a)(4)             Certificate of Amendment to the Certificate of Incorporation
                    of the Company,  as filed with the Secretary of State of the
                    State of  Delaware on  November  5, 1986.  (Incorporated  by
                    reference to Exhibit 4.1(d) to the Company's  Current Report
                    on Form 8-K dated (date of earliest event reported)  October
                    29, 1998.)

3(a)(5)             Certificate  of Change of Location of Registered  Office and
                    of Agent,  as filed with the Secretary of State of the State
                    of Delaware on December 31, 1986. (Incorporated by reference
                    to Exhibit  4.1(e) to the Company's  Current  Report on Form
                    8-K dated  (date of  earliest  event  reported)  October 29,
                    1998.)


                                      -41-

<PAGE>



3(a)(6)           Certificate  of  Ownership  and  Merger of Design  Development
                  Incorporated into the Company,  as filed with the Secretary of
                  State of the State of Delaware on June 30, 1998. (Incorporated
                  by reference to Exhibit 4.1(f) to the Company's Current Report
                  on Form 8-K dated (date of earliest  event  reported)  October
                  29, 1998.)

3(a)(7)           Certificate  of  Amendment  to the  Company's  Certificate  of
                  Incorporation  as  filed  with the  Secretary  of State of the
                  State of  Delaware  on  October  30,  1998.  (Incorporated  by
                  reference to Exhibit 4.1(g) to the Company's Current Report on
                  Form 8-K dated (date of earliest event  reported)  October 29,
                  1998.)

4(a)(1)           Loan and  Security  Agreement  dated  November 2, 1998 between
                  Steiner-Atlantic   Corp.   and  First  Union   National  Bank.
                  (Incorporated  by reference to Exhibit 4.2(a) to the Company's
                  Current  Report  on Form 8-K  dated  (date of  earliest  event
                  reported) October 29, 1998.)

4(a)(2)           Guaranty and Security  Agreement dated November 2, 1998 by the
                  Company in favor of First Union National  Bank.  (Incorporated
                  by reference to Exhibit 4.2(b) to the Company's Current Report
                  on Form 8-K dated (date of earliest  event  reported)  October
                  29, 1998.)

 10(a)(1)(i)      Lease  dated  April  1,  1991   between  the  Company  and  CB
                  Institutional   Fund  VII  with   respect  to  the   Company's
                  facilities  at  240  South   Milpitas   Boulevard,   Milpitas,
                  California.  (Exhibit  10(a)(2) to the Company's Annual Report
                  on Form  10-K  for the year  ended  June  30,  1991,  File No.
                  0-9040).

*10(a)(1)(ii)     Second  Amendment to Lease dated  November 1, 1998 between the
                  Company   and   The   Realty   Associates   Fund   III,   L.P.
                  (successor-in-interest  to CB  Institutional  Fund  VII)  with
                  respect  to the  Company's  facilities  at 240 South  Milpitas
                  Boulevard, Milpitas, California.

*10(a)(2)         Lease dated  October 6, 1995 between  Steiner and William,  K.
                  Steiner with respect to Steiner's  facilities located 290 N.E.
                  68th Street, 297 N.E. 67st and 277 N.E. 67 St. Miami, Florida.

 10(b)(1)(i+)     Employment  Agreement  dated July 1, 1981  between the Company
                  and  Venerando  J.  Indelicato.  (Exhibit  10(b)(1)(i)  to the
                  Company's Annual Report on Form 10-KSB for the year ended June
                  30, 1995, File No. 0- 9040).

 10(b)(1)(ii)+    Amendment No. 1 dated July 1, 1983 to the Employment Agreement
                  dated  July 1, 1981  between  the  Company  and  Venerando  J.
                  Indelicato.



                                      -42-

<PAGE>



                  (Exhibit  10(b)(1)(ii) to the Company's  Annual Report on Form
                  10-KSB for the year ended June 30, 1995, File No. 0-9040).

*10(b)(1)(iii)+   Amendment  No.  2 dated  October  30,  1998 to the  Employment
                  Agreement dated July 1, 1981 between the Company and Venerando
                  J. Indelicato.

 10(b)(2)+        Letter agreement dated August 29, 1996 between the Company and
                  Richard A. Wildman, a former executive officer of the Company.
                  (Exhibit  10(b)(2)  to the  Company's  Annual  Report  on Form
                  10-KSB for the year ended June 30, 1997, File No. 0-9040).

 10(c)(1)+        The   Company's   1991  Stock   Option   Plan,   as   amended.
                  (Incorporated  by reference  to Exhibit 99.3 to the  Company's
                  Current  Report  on Form 8-K  dated  (date of  earliest  event
                  reported) October 29, 1998.)

  10(c)(2)(a)+    The Company's 1984 Non-Employee Director Stock Option Plan, as
                  amended.  (Exhibit  10(d)(2) to the Company's Annual Report on
                  Form 10-K for the year ended June 30, 1987, File No. 0-9040).

 10(c)(2)(b)+     The Company's  1994  Non-Employee  Director Stock Option Plan.
                  (Exhibit A to the Company's  Proxy Statement dated October 14,
                  1994 used in connection with the Company's 1994 Annual Meeting
                  of Stockholders, File No. 0-9040).

  10(c)(3)+       Form of Stock  Option  Agreement  dated June 25, 1991  entered
                  into between the Company and each of Sheppard  Beidler (option
                  has  since  expired),  Lloyd  Frank  and  Michael  Michaelson,
                  together with a schedule  identifying the details in which the
                  actual  agreements  differ  from the exhibit  filed  herewith.
                  (Exhibit  10(c)(4) to the Company's Annual Report on Form 10-K
                  for the year ended June 30, 1991, File No. 0- 9040).

 10(c)(4)+        Form of Stock Option  Agreement dated May 4, 1993 entered into
                  between the Company and each of Sheppard Beidler,  Lloyd Frank
                  and Michael Michaelson,  together with a schedule  identifying
                  the  details in which the actual  agreements  differ  from the
                  exhibit  filed  herewith.  (Exhibit  10(c)(4) to the Company's
                  Annual Report on Form 10-KSB for the year ended June 30, 1993,
                  File No. 0-9040).

*27               Financial Data Schedule.



                                      -43-

<PAGE>



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

*        Filed  herewith.   All   other  exhibits  are  incorporated  herein  by
         reference  to  the  filing  indicated  in  the  parenthetical reference
         following the exhibit description.

+        Management contract or compensatory plan or arrangement.

                    (b)    Reports on Form 8-K

                           None


                                      -44-

<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.

                                            METRO-TEL CORP.

Dated: February 16, 1999

                                              By:  /s/ Michael S. Steiner
                                                   -----------------------------
                                                   Michael S. Steiner
                                                   President and Chief Executive
                                                   Officer

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

Signature                        Capacity                                         Date
---------                        --------                                         ----

<S>                           <C>                                             <C>                                            
/s/ Michael S. Steiner           President, Chief Executive Officer               February 16, 1999
------------------------         (Principal Executive Officer)  
Michael S. Steiner               and Director                   
                                 
/s/ William K. Steiner
------------------------         Director                                         February 16, 1999
William K. Steiner

/s/ Venerando J. Indelicato
------------------------         Chief Financial Officer                          February 16, 1999
Venerando J. Indelicato          (Principal Financial and Accounting
                                 Officer) and Director
/s/ Lloyd Frank
------------------------         Director                                         February 16, 1999
Lloyd Frank

------------------------         Director                                         February 16, 1999
Stuart Wagner

------------------------         Director                                         February 16, 1999
David Blyer

</TABLE>


                                      -45-

<PAGE>



                                  EXHIBIT INDEX


Exhibit 
Number            Description
--------          -----------


2(a)(1)           Agreement  of  Merger  dated as of July 1,  1998  between  the
                  Company  and  Steiner-  Atlantic  Corp.  (Exhibit  2.01 to the
                  Company's Current Report on Form 8-K dated July 6, 1998).

3(a)(1)           Copy of Certificate of Incorporation of the Company,  as filed
                  with the  Secretary  of State of the State of Delaware on June
                  30, 1963. (Exhibit 1.1 to the Company's Registration Statement
                  on Form 10, File No. 0-9040).

3(a)(2)           Copy  of  Certificate  of  Amendment  to  the  Certificate  of
                  Incorporation  of the Company,  as filed with the Secretary of
                  State of the State of Delaware on March 27, 1968. (Exhibit 1.2
                  to the Company's  Registration  Statement on Form 10, File No.
                  0-9040).

3(a)(3)           Copy  of  Certificate  of  Amendment  to  the  Certificate  of
                  Incorporation  of the Company,  as filed with the Secretary of
                  State of the State of Delaware  on November 4, 1983.  (Exhibit
                  3(a)(3) to the Company's Annual Report on Form 10- KSB for the
                  year ended June 30, 1995, File No. 0-9040).

3(a)(4)           Copy  of  Certificate  of  Amendment  to  the  Certificate  of
                  Incorporation  of the Company,  as filed with the Secretary of
                  State of the State of Delaware  on November 5, 1986.  (Exhibit
                  3(a)(4) to the Company's Annual Report on Form 10- KSB for the
                  year ended June 30, 1995, File No. 0-9040).

3(a)(5)           Copy of Certificate of Change of Location of Registered Office
                  and Agent,  as filed with the  Secretary of State of the State
                  of Delaware  on December  31,  1986.  (Exhibit  3(a)(5) to the
                  Company's Annual Report on Form 10-KSB for the year ended June
                  30, 1995, File No. 0-9040).

3(b)(1)           Copy  of  By-Laws  of the  Company.  (Exhibit  3(b)(1)  to the
                  Company's Annual Report on Form 10-KSB for the year ended June
                  30, 1996, File No. 0-9040).



                                      -46-

<PAGE>



10(a)(1)(i)       Lease  dated  April  1,  1991   between  the  Company  and  CB
                  Institutional   Fund  VII  with   respect  to  the   Company's
                  facilities  at  240  South   Milpitas   Boulevard,   Milpitas,
                  California.  (Exhibit  10(a)(2) to the Company's Annual Report
                  on Form  10-K  for the year  ended  June  30,  1991,  File No.
                  0-9040).

*10(a)(1)(ii)     Second  Amendment to Lease dated  November 1, 1998 between the
                  Company   and   the   Realty   Associates   Fund   III,   L.P.
                  (Successor-in-Interest  to CB Institutional  VII) with respect
                  to the Company's  facilities at 240 South Milpitas  Boulevard,
                  Milpitas, California.

*10(a)(2)         Lease dated  October 6, 1995 between  Steiner and William,  K.
                  Steiner with respect to Steiner's  facilities located 290 N.E.
                  68th Street, 297 N.E. 67st and 277 N.E. 67 St. Miami, Florida.

10(b)(1)(i)+      Employment  Agreement  dated July 1, 1981  between the Company
                  and  Venerando  J.  Indelicato.  (Exhibit  10(b)(1)(i)  to the
                  Company's Annual Report on Form 10-KSB for the year ended June
                  30, 1995, File No. 0-9040).

10(b)(1)(ii)+     Amendment No. 1 dated July 1, 1983 to the Employment Agreement
                  dated  July 1, 1981  between  the  Company  and  Venerando  J.
                  Indelicato.  (Exhibit  10(b)(1)(ii)  to the  Company's  Annual
                  Report on Form 10-KSB for the year ended June 30,  1995,  File
                  No. 0-9040).

*10(b)(1)(iii)+   Amendment  No.  2 dated  October  30,  1998 to the  Employment
                  Agreement dated July 1, 1998 between the Company and Venerando
                  J. Indelicato.

10(b)(2)+         Letter agreement dated August 29, 1996 between the Company and
                  Richard A. Wildman.  (Exhibit 10(b)(2) to the Company's Annual
                  Report on Form 10-KSB for the year ended June 30,  1997,  File
                  No. 0-9040).

10(c)(1)+         The Company's 1991 Stock Option Plan. (Exhibit 10(c)(1) to the
                  Company's Annual Report on Form 10-KSB for the year ended June
                  30, 1996, File No. 0- 9040).

10(c)(2)(a)+      The Company's 1984 Non-Employee Director Stock Option Plan, as
                  amended.  (Exhibit  10(d)(2) to the Company's Annual Report on
                  Form 10-K for the year ended June 30, 1987, File No. 0-9040).

10(c)(2)(b)+      The Company's  1994  Non-Employee  Director Stock Option Plan.
                  (Exhibit A to the Company's  Proxy Statement dated October 14,
                  1994 used in connection with the Company's 1994 Annual Meeting
                  of Stockholders, File No. 0-9040).

  10(c)(3)+       Form of Stock  Option  Agreement  dated June 25, 1991  entered
                  into between the Company and each of Sheppard  Beidler (option
                  has  since  expired),  Lloyd  Frank  and  Michael  Michaelson,
                  together with a schedule identifying the details in which



                                      -47-

<PAGE>


                  the actual  agreements differ from the exhibit filed herewith.
                  (Exhibit  10(c)(4) to the Company's Annual Report on Form 10-K
                  for the year ended June 30, 1991, File No. 0-9040).

  10(c)(4)+       Form of Stock Option  Agreement dated May 4, 1993 entered into
                  between the Company and each of Sheppard Beidler,  Lloyd Frank
                  and Michael Michaelson,  together with a schedule  identifying
                  the  details in which the actual  agreements  differ  from the
                  exhibit  filed  herewith.  (Exhibit  10(c)(4) to the Company's
                  Annual Report on Form 10-KSB for the year ended June 30, 1993,
                  File No. 0-9040).

*27               Financial Data Schedule.


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

*                 Filed herewith.  All other exhibits are incorporated herein by
                  reference  to  the  filing  indicated  in  the   parenthetical
                  reference following the exhibit description.

+                 Management contract or compensatory plan or arrangement.




                                      -48-