SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           ---------------------------
                                 Amendment No.1
                                    FORM 10-K/A
[MARK ONE]
[X]                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                   For the fiscal year ended December 31, 2001

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

         For the transition period from _____________ to _____________.

                           Commission File No. 1-10489
                              ---------------------
                                  KIMMINS CORP.
             (Exact name of registrant as specified in its charter)

        FLORIDA                                          59-3598343
(State of Incorporation)                    (I.R.S. Employer Identification No.)

                 1501 SECOND AVENUE, EAST, TAMPA, FLORIDA 33605
    (Address of registrant's principal executive offices, including zip code)

      (Registrant's telephone number, including area code): (813) 248-3878

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                                           Name of Exchange
            Title of Each Class                           on Which Registered
       Common Stock, $.001 par value                             None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                                      NONE

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

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

     As of March 22,  2002 there  were  outstanding  4,872,135  shares of Common
Stock and 1,666,569  shares of Class B common stock.  The aggregate market value
of the voting stock held by  non-affiliates  of the  registrant  as of March 22,
2002, was $494,873.

                         ------------------------------
                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE


<PAGE>

                                  KIMMINS CORP.

                                    FORM 10-K/A

                                TABLE OF CONTENTS

                                                                            Page
                                                                             No.
PART I
     Item 1       Business...................................................3
     Item 2       Properties.................................................8
     Item 3       Legal Proceedings..........................................8
     Item 4       Submission of Matters to a Vote of Security Holders........8

PART II
     Item 5       Market for the Registrant's Common Equity and
                  Related Stockholder Matters................................9
     Item 6       Selected Financial Data...................................10
     Item 7       Management's Discussion and Analysis of Financial
                     Condition and Results of Operations....................11
     Item 7A      Quantitative and Qualitative Disclosures
                     about Market Risk......................................17
     Item 8       Financial Statements and Supplementary Data...............18
     Item 9       Changes in and Disagreements with Accountants
                     on Accounting and Financial Disclosures................45

PART III
     Item 10      Directors and Executive Officers of the Registrant........45
     Item 11      Executive Compensation....................................47
     Item 12      Security Ownership of Certain Beneficial
                     Owners and Management..................................49
     Item 13      Certain Relationships and Related Transactions............50

PART IV
     Item 14      Exhibits, Financial Statement Schedules
                      and Reports on Form 8-K...............................51


                                       2
<PAGE>


     Note: The discussions in this Form 10-K contain forward-looking  statements
that involve  risks and  uncertainties.  Statements  contained in this Form 10-K
that are not historical facts are forward looking statements that are subject to
the safe harbor created by the Private Securities Litigation Reform Act of 1995.
A number of important  factors could cause future  results of Kimmins Corp.  and
its subsidiaries to differ materially and significantly  from those expressed or
implied in past  results and in any forward  looking  statements  made by, or on
behalf  of,  the  Company.  Factors  that  could  cause  or  contribute  to such
differences  include,  but are not limited to, those discussed in "Business" and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  as well as those  discussed  elsewhere  in this Form  10-K.  These
factors  include,  without  limitation,  those  listed in "Risk  Factors" in the
Company's Registration Statement on Form S-1 (File No. 33-12677).

                                     PART I

ITEM 1.  BUSINESS
                                   THE COMPANY

     Kimmins Corp. and its subsidiaries  (collectively,  the "Company")  provide
specialty-contracting  services  in the  south,  mainly  in  Florida,  including
earthwork; infrastructure development;  underground construction; roadwork; site
remediation  services;  facilities  demolition  and  dismantling;  and  asbestos
abatement.  The Company historically operated two business segments: solid waste
management services and specialty contracting  services.  The Company previously
provided solid waste  management  services  through its TransCor Waste Services,
Inc.,  ("TransCor")  subsidiary  to  commercial,  industrial,  residential,  and
municipal  customers in the state of Florida.  As a result of TransCor's sale of
its wholly owned subsidiary  Kimmins Recycling Corp. ("KRC") in August 1998, the
Company no longer provides solid waste management services.

     The Company's specialty contracting services are as follows:

     <<   Earthwork  and  utility  contracting  - Earthwork  activities  include
          commercial and residential site work and earthwork  activities for the
          phosphate mining industry. Utility contracting includes infrastructure
          services  such as  sewer  lines,  water  lines,  and  roads  and  site
          remediation services.

     <<   Industrial  demolition,  dismantling,  and abatement - Dismantling  of
          facilities or structures  includes  draining  liquid wastes from pipes
          and tanks;  asbestos  removal,  cleanup,  disposal,  and reinsulation;
          removal of above- and below-ground tanks; removal and disposal or sale
          of other equipment; and sale of scrap materials.

     The  Company's  services  may be used  individually  or in  combination  as
required  to meet  the  specific  needs of  customers.  The  Company's  business
strategy is to draw upon its contracting  experience to perform complex projects
requiring a broad range of services.  Although  each of the  Company's  business
lines can operate  independently  from the other related  services,  the Company
believes that integration of these services gives it a competitive  advantage by
relieving  the  customer of the burden of  coordinating  activities  of multiple
contractors.

     During its initial years of operation, the Company emphasized,  among other
services  offered,  a broad  range  of  contracting  services.  As the  need for
waste-related  and  specialty  contracting  services  has grown in  response  to
heightened  public concern and government  regulation,  the Company has used its
capabilities  in facilities  demolition and dismantling and in the management of
complex   construction    projects   to   become   increasingly    involved   in
project-oriented activities.

     The  Company's  strategy is to continue to focus on  specialty  contracting
projects for private and governmental  customers.  The Company does not consider
its business to be highly seasonal.


                                       3
<PAGE>



SERVICES

SPECIALTY CONTRACTING:
---------------------

EARTHWORK AND UTILITY CONTRACTING SERVICES

     Since 1988,  the Company has directed its focus  toward  environmental  and
utility contracting,  including  infrastructure and reconstructive service work.
The Company,  through its subsidiary,  Kimmins  Contracting Corp.,  continues to
provide   comprehensive    non-hazardous    contracting   services,    including
infrastructure  services such as water and sewer line installation,  replacement
and repair,  to private and  governmental  customers  primarily  in the state of
Florida. Related infrastructure  development includes road installation,  repair
and widening,  installation,  repair and enhancement of drainage, and wastewater
services.

     Kimmins  Contracting  Corp.  has  broadened its array of services by adding
earthwork  operations.  These  operations are mainly directed toward the private
sector in the state of Florida and include land  reclamation,  dam  construction
and  other  earthwork   operations  for  the  phosphate  mining  industry,   and
residential and commercial site work services.

     As part of its  earthwork  and utility  contracting  services,  the Company
offers a range of services for the removal and disposal of hazardous  materials.
The  services  offered  include  construction  of  containment  systems  and the
excavation and removal of contaminated  material.  The Company has de-emphasized
its hazardous waste services and will only perform these services in conjunction
with other environmental demolition activities.

INDUSTRIAL DEMOLITION, DISMANTLING, AND ABATEMENT SERVICES

     The Company offers  demolition and dismantling of facilities or structures;
asbestos removal;  cleanup,  disposal,  and  reinsulation;  removal of above and
below  ground  storage  tanks;  removal  and  disposal  or  sale  of  industrial
equipment; and the sale of equipment and scrap materials.

     Demolition and dismantling projects result from the closing or retooling of
facilities  due to such factors as  technological  obsolescence  of  facilities,
corporate  mergers and  consolidations  of  operations,  and the  relocation  of
manufacturing  operations  to  low-cost  labor  areas or areas  subject  to less
stringent  regulation,   primarily  in  foreign  countries.  In  addition,  site
remediation,  particularly in the case of environmental contamination of a site,
frequently requires the demolition or dismantling of a contaminated facility.

     Dismantling  is the precise  disassembly of a  manufacturing  or production
facility on a piece-by-piece  basis to recover  equipment as complete  operating
units that can be  reinstalled  at another  location.  Dismantling  enhances the
value of the facility above scrap market  values.  The Company is paid a fee for
dismantling  services and,  usually,  a commission on the sale of  non-relocated
equipment.

     Demolition usually requires wrecking services for which the Company is paid
a fee by the  customer.  In  certain  projects,  the  Company  may also  receive
additional  revenue from selling the scrap material.  The Company's  services in
these areas include  dismantling  large structures  (including  refineries,  and
utility plants); draining liquid wastes from pipes and tanks; removing above and
below-ground  tanks;  cleaning and  disposing  of  contaminated  equipment;  and
controlled demolition.

     Certain  demolition  projects also involve  asbestos  removal,  cleanup and
disposal.  The Company is  continuing  to  de-emphasize  its asbestos  abatement
services and generally  will only perform  these  services in  conjunction  with
other environmental demolition activities.


                                       4
<PAGE>

DISCONTINUED OPERATIONS

SOLID WASTE MANAGEMENT SERVICES:
-------------------------------

     On May 31, 1998, the Company sold its  Jacksonville  area waste  collection
and recycling  operating  assets and certain assets of the Miami  front-end load
and rear-load  commercial waste and recycling business to Eastern  Environmental
Services , Inc.  (EESI).  TransCor adopted a formal plan to dispose of its solid
waste  management  services  operations  on July 17,  1998 by selling its wholly
owned subsidiary KRC to EESI. On August 31, 1998, the Company completed the sale
of the solid  waste  management  services  (SWMS)  operations.  The assets  sold
consisted primarily of accounts receivables,  contracts,  property and equipment
and goodwill.  The selling price was  approximately  $69,400,000  in the form of
cash and EESI common  stock.  On December 31,  1998,  EESI was acquired by Waste
Management,  Inc. (WMI) and the Company received stock of Waste Management, Inc.
in exchange for its EESI stock.  On June 27, 2000,  the Company  received net of
related legal fees, $3,525,000 from WMI as final settlement. This settlement was
for  adjustments  required  under the purchase  agreement and for other disputes
related  to the  sale of the  SWMS  operations.  All WMI  stock  was  sold as of
December 31, 2001.

     The Company,  through its  majority-owned  subsidiary,  TransCor,  formerly
provided solid waste management services to commercial, industrial, residential,
and municipal customers. In connection with such services, the Company owned and
operated fully permitted  construction  and demolition  ("C&D") and transfer and
recycling ("T&R") facilities in four of the largest  metropolitan regions in the
state of Florida; Jacksonville,  Clearwater, Tampa and Miami. In addition to its
T&R operations, the Company collected and disposed of all types of non-hazardous
solid waste for  industrial  and  commercial  customers in its T&R regions.  The
Company  also  provided  residential  garbage  collection  services  for several
municipalities located in Lee and Hillsborough County, Florida. The Company also
engaged,  pursuant to several municipal  contracts,  in the residential curbside
collection of a variety of already  segregated  recyclable forms of solid waste,
including such materials as newspapers, cardboard, plastic, metals, and glass.


PERFORMANCE BONDS

     The  Company is  required  to post  performance  bonds in  connection  with
certain asbestos  abatement,  waste  remediation,  demolition,  and construction
contracts. For the years ended December 31, 2000 and 2001, most of the Company's
revenue was derived from contracts or projects that required the Company to post
performance  bonds.  The Company's  current bonding  capacity for  qualification
purposes  is  $15,000,000  for  individual   projects  and  $30,000,000  in  the
aggregate.  This  capacity  is not  intended  to be  either  a  limitation  or a
commitment  as to  the  Company's  bond  capacity,  but  rather  guidelines  for
qualification  purposes. It is customary for surety bond companies to underwrite
each surety obligation  individually;  therefore, the potential for more or less
capacity exists based on the merits of the obligation. Historically, the Company
has obtained  surety bond  support for  individual  projects in the  $53,000,000
range while the aggregate approached $100 million.


MARKETING

     The  Company's  specialty   contracting  business  results  primarily  from
customers  for  whom  the  Company  has  previously  provided  services,   prior
customer's  references,  and from direct marketing efforts.  In particular,  the
Company believes its national reputation as a leading demolition and dismantling
contractor has  contributed  significantly  to its ability to attract  specialty
service business.

     The Company's  specialty  contracting  subsidiaries  direct their marketing
activities through the home office in Tampa,  Florida. This office is located in
an area with a high concentration of industrial facilities. The Company believes
that  accurate  bidding is crucial in  securing  new  contracting  projects  and
completing them  profitably.  The Company uses  computerized  bidding systems in
conjunction with site visits to develop bids for contracting projects. While bid
price is an important  factor in  obtaining  contracts,  potential  clients also
consider the reputation, experience, safety record and financial strength of the
bidders in awarding contracts.


                                       5
<PAGE>

     The Company also obtains  contracts for its services through the process of
competitive bidding,  purchase orders, or negotiations.  The Company's marketing
efforts include door-to-door sales, monitoring trade journals and other industry
sources  for  bid  solicitations  by  various  entities,   including  government
authorities   and  related   instrumentalities,   and  responding  to  such  bid
solicitations,  which may include  requests for proposals  ("RFPs") and requests
for qualifications  ("RFQs").  The Company also attempts to be included on lists
of qualified  bidders  frequently  contained in RFPs and RFQs. In response to an
RFP or RFQ, the soliciting entity requires a written response within a specified
period.  Generally, in the case of an RFP, a bidder submits a proposal detailing
its qualifications, the services to be provided, and the cost of the services to
the  soliciting  entity;  then,  such  entity,  based on its  evaluation  of the
proposals  submitted,  awards the contract to the successful bidder. In the case
of  an  RFQ,  a  bidder  submits  a  response   describing  its  experience  and
qualifications, the soliciting entity then selects the bidder believed to be the
most qualified, and then negotiates all of the terms of the contract,  including
the cost of the services.


CUSTOMERS

     The primary,  private  customers  for the Company's  specialty  contracting
services  are  corporations  engaged in heavy  manufacturing,  such as phosphate
mining,  commercial and residential  real estate  developers,  as well as public
utilities and federal,  state and local government agencies. For the years ended
December 31, 1999,  2000 and 2001,  the following  table  summarizes the revenue
earned on contracts with  significant  customers that  aggregated  more than 10%
percent of the continuing operations revenues:


                                                  (In thousands)
                                                  --------------
                                        1999             2000            2001
                                        ----             ----            ----
Phosphate mining                   $     14,372    $       8,010   $       7,160
Utility municipal                           -0-            6,025           5,190
Real estate development                     -0-           14,891           7,285
                                      ----------      -----------     ----------
Total from above customers         $     14,372    $      28,926   $      19,635
                                      ==========      ===========     ==========

Percentage of gross revenue               22.7%            47.6%           41.7%
                                      ==========      ===========     ==========


     For the year ended  December  31,  2001,  67.3  percent  and 32.7  percent,
respectively,  of the  Company's  gross  revenue  were  derived from private and
governmental customers,  respectively.  Government contracts,  which represent a
significant  portion of the Company's gross revenue,  are subject to significant
risks  including  legislation  mandating a balanced  budget;  delays in funding;
lengthy  review  processes  for  awarding  contracts;  delay or  termination  of
contracts at the convenience of the government;  and  termination,  reduction or
modification of contracts in the event of changes in the  government's  policies
or because of budgetary constraints.  Furthermore, increased or unexpected costs
could result in losses or reduced profits under  fixed-price  government as well
as commercial contracts.


BACKLOG

     As of December 31, 2001, the Company had a backlog of uncompleted  projects
under contract aggregating  approximately $10,531,000 (compared to approximately
$20,745,000  as of December 31,  2000),  of which  approximately  $9,263,000  is
attributable  to  earthwork  and  utility  contracting  services,  approximately
$217,000  is   attributable  to  demolition  and   dismantling   services,   and
approximately  $1,051,000  is  attributable  to  asbestos  abatement  and  other
services.  The Company  anticipates that it will recognize  approximately 99% of
the revenues from these projects by the end of 2002.

                                       6
<PAGE>

COMPETITION

     The Company  believes  that its ability to offer a broad range of specialty
contracting  services  provides  it  with  significant   competitive  advantage.
Nevertheless,  the Company faces substantial competition from national, regional
and local competitors,  many of which are well established and have much greater
marketing, financial, technological and other resources than the Company.

     The Company  believes the  principal  competitive  factors in the specialty
contracting  services industry are safety,  reputation,  technical  proficiency,
surety bonding capability, managerial experience, price, and breadth of services
offered.


INSURANCE COVERAGE

     The Company currently maintains  comprehensive general liability insurance,
with total coverage of $11,000,000 for any single occurrence and $13,000,000 for
aggregate claims relating to damage to persons or property. These policies cover
all   activities   of  the   Company  and  its   subsidiaries   except  for  its
asbestos-related activities and certain non-asbestos related liabilities such as
pollution  liability  damage  (sudden or  gradual)  caused by the  discharge  or
release  of  any  irritant  or  contaminant.   In  addition,   the  Company  has
comprehensive  general  liability  coverage  that  covers,  among other  things,
specific asbestos-related risks up to $1,000,000.


GOVERNMENT REGULATION

     The Company is subject to an extensive and  frequently  changing  statutory
and regulatory  framework of federal,  state, and local  environmental,  health,
safety, and transportation  authorities,  which imposes  significant  compliance
burdens and risks upon the Company.  The Company  believes it is in  substantial
compliance  with all  material  federal,  state,  and local laws  governing  its
material business operations. Nevertheless,  amendments to existing statutes and
regulations,  adoption  of  new  statutes  and  regulations  and  the  Company's
expansion into other jurisdictions and types of operations could result not only
in the additional risk of noncompliance,  but also in the increase in regulatory
burden that could cause related increases in costs and expenses.

     The federal  regulations of most  importance to the Company are governed by
the Occupational Safety and Health Administration  ("OSHA"), the Mine Safety and
Health Administration ("MSHA"), and the Department of Transportation ("DOT"). We
are  substantially  in compliance  with all  regulations.  The Company  conducts
training  programs and inspections on a regular basis. In addition,  our brokers
and insurance carriers also conduct inspections.


PERMITS AND LICENSES

     Many states  license  such areas of the  Company's  operations  as asbestos
abatement  and  general   contracting.   Licensing  requires  that  workers  and
supervisors receive training from EPA approved and state certified organizations
and pass  required  tests.  The  Company is  currently  licensed  to perform its
services in  approximately a dozen states.  The Company also operates in certain
states  that do not have a special  asbestos  abatement  or general  contracting
license requirement,  however,  these states have adopted regulations  regarding
worker safety with which the Company must comply.

     The Company may need additional licenses to expand its operations. Although
there can be no assurance, based upon the level of training of its employees and
its  experience,  the  Company  currently  believes  that it can obtain all such
required licenses.


                                       7
<PAGE>

EMPLOYEES

     The Company has  approximately  327  employees,  of which 5 are employed in
executive  capacities,  32 in  professional  capacities,  14  in  administrative
capacities,  50 as field  supervisors and 226 in field  operations.  None of the
Company's  employees  are union  members  or covered  by  collective  bargaining
agreements.  The Company has not  experienced  any strikes or work stoppages and
considers its relationship with its employees to be satisfactory.

     The Company,  through its  subsidiaries,  has  implemented  employee safety
programs  that require each  employee to complete a general  training and safety
program.  Training  topics include  approved work  procedures and instruction on
personal safety and the use of protective equipment.  In addition, all employees
engaged  in  asbestos  abatement  activities  are  required  to attend a minimum
three-day to four-day  course  approved by the EPA and  Occupational  Safety and
Health Administration, and all supervisors of abatement projects are required to
attend a 40-hour safety course annually. Moreover, employees are issued detailed
training materials and are required to attend ongoing safety seminars.

     The  Company's  subsidiaries  also  conduct job safety  analysis in the job
bidding  stage.  Besides the  precautions  taken with respect to  projects,  the
Company takes  additional  measures to protect its asbestos and site remediation
workers,  including  providing  them with  additional  protective  equipment and
sponsoring periodic medical examinations.


ITEM 2.  PROPERTIES

     The  Company  owns its  principal  executive  offices  that are  located in
approximately 20,600 square feet of office space at 1501 and 1502 Second Avenue,
East,  Tampa,  Florida  33605.  The offices are subject to a mortgage,  securing
indebtedness evidenced by a promissory note with an outstanding principal amount
at December 31, 2001,  of  approximately  $1,154,000.  This  variable  rate note
matures on October 1, 2004 and  currently  bears  interest at the base rate plus
1/2% (6% at December 31, 2001).

     The Company owns property on 53rd Street in Tampa, Florida. The property is
being used for processing of construction materials and storage of equipment and
supplies.

     The Company's subsidiary, TransCor, owns vacant property on 34th Street and
Clark Street in Tampa.

     The  Company  placed  its new shop in service  during the first  quarter of
2000. The shop is approximately  9,000 square feet and is located at 1617 Second
Avenue East, which is adjacent to the Company's principal executive offices.

     The  Company's  subsidiary,  TransCor,  owns  vacant  property  outside  of
Nashville, Tennessee. The land is undeveloped and listed for sale. This property
is included in property held for sale - non-current.


ITEM 3.  LEGAL PROCEEDINGS

     The Company is involved in various legal actions and claims  arising in the
ordinary  course of its business,  none of which are expected to have a material
adverse effect on the Company's financial position or results of operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

                                       8
<PAGE>

                                     PART II

ITEM 5.  MARKET  FOR  THE  REGISTRANT'S  COMMON  EQUITY  AND RELATED STOCKHOLDER
         MATTERS

     The Company's common stock is currently traded on the National  Association
of Securities Dealers,  Inc., (NASD)  Over-the-Counter (OTC) Bulletin Board. The
Company's  common stock was traded on the New York Stock  Exchange  (NYSE) under
the symbol "KVN" prior to March 1999.

     As a result of the Company no longer meeting the continued listing criteria
of the NYSE,  the Company was delisted from the NYSE after the close of business
on March 1, 1999. On March 10, 1999, the Company's  application for registration
on the NASD Over the Counter  Bulletin  Board (OTCBB) was cleared.  On March 11,
1999 the Company began trading on the OTCBB under the symbol  "KVNM".  The OTCBB
is a regulated  quotation  service that  displays  real-time  quotes,  last-sale
prices, and volume information in over-the-counter  (OTC) equity securities.  An
OTC equity  security  generally  is any  equity  that is not listed or traded on
Nasdaq or a national  securities  exchange.  OTCBB securities  include national,
regional,  and foreign  equity  issues,  warrants,  units,  American  Depository
Receipts  (ADRs)  and  Direct  Participation  Programs  (DPPs).  The  OTCBB is a
quotation medium for subscribing  members,  not an issuer listing  service,  and
should not be confused with the Nasdaq Stock Market. OTCBB securities are traded
by a community of Market  Makers that enter quotes and trade  reports  through a
highly sophisticated  closed computer network,  which is accessed through Nasdaq
Workstation II. The OTCBB is unlike the NYSE in that it:

     o    does not impose listing standards;
     o    does not provide automated trade executions;
     o    does not maintain relationships with quoted issuers; and
     o    does not have the same obligations for Market Makers.

     The following table sets forth for the periods indicated high and low sales
prices of the Company's common stock as reported by the NASD OTCBB:

                       2000                  High           Low
                       ----                  ----           ---
                First Quarter           $    0.7500    $    0.3125
                Second Quarter          $    0.5312    $    0.1900
                Third Quarter           $    0.5000    $    0.2000
                Fourth Quarter          $    0.4375    $    0.2300

                       2001
                First Quarter           $    0.7500    $    0.3100
                Second Quarter          $    0.7000    $    0.4375
                Third Quarter           $    0.7500    $    0.3000
                Fourth Quarter          $    0.4800    $    0.2400

     The closing  stock price for the  Company's  stock on March 12,  2002,  was
$0.3500.  On March 1, 2002 there were approximately 464 holders of record of the
Company's   common  stock.   Certain   record  holders  are  brokers  and  other
institutions holding shares in "street name" for more than one beneficial owner.

Dividends

     The  payment by the Company of  dividends,  if any, in the future is within
the  discretion  of its Board of  Directors  and will depend upon the  Company's
earnings,  capital requirements (including working capital needs), and financial
condition,  as well as other relevant factors.  Certain  agreements  between the
Company  and its lending  institutions  prohibit  the  Company  from paying cash
dividends  without the lenders'  consent.  Other than a three and one-third cent
per share of a common stock cash dividend paid in July 1989, the Company has not
paid any cash dividends since its inception, and the Board of Directors does not
plan to declare or pay any cash dividends in the future.

Recent Sales of Unregistered Securities

     The  following  information  relates to equity  securities  of the  Company
issued or sold during the year ended December 31, 2001, that were not registered
under the Securities Act of 1993, as amended (the "Securities Act").


                                       9
<PAGE>


     The  Company  issued  no  securities  during  2001 that  were  exempt  from
registration under the Securities Act by virtue of Section 4(2) as a transaction
not involving a public offering.

ITEM 6.  SELECTED FINANCIAL DATA

     The following  selected  financial  data are derived from the  consolidated
financial  statements  of Kimmins Corp.  The data should be read in  conjunction
with the consolidated  financial statements,  related notes, and other financial
information included herein.

HISTORICAL OPERATING STATEMENT DATA:
<TABLE>
<CAPTION>
<S>                                         <C>           <C>           <C>             <C>           <C>

                                                                    Years Ended December 31,
                                                                    ------------------------
                                                              (In thousands, except per share data)
                                                              -------------------------------------
                                                 1997          1998          1999            2000          2001
                                                 ----          ----          ----            ----          ----
Gross revenue                               $   102,717   $    74,051    $    63,450    $    60,756   $     47,022
Net revenue                                      80,932        59,302         56,241         52,249         42,299
Operating income (loss)                         (2,524)      (14,850)        (2,202)          4,232           (930)
Income (loss) from continuing operations        (5,611)      (15,088)        (3,340)            471         (5,709)
Income    (loss)    from     discontinued
  operations                                    (2,907)        19,431            -0-          2,390            -0-
Income (loss) from extraordinary items              -0-           -0-            -0-            -0-           (938)
Net income (loss)                           $   (8,518)   $     4,343   $    (3,340)    $     2,861   $     (6,646)

PER SHARE DATA:

Income (loss) from continuing operations
  per share:
     Basic                                  $    (1.30)   $    (3.51)   $     (0.73)    $       .10   $      (1.17)
     Diluted                                $    (1.30)   $    (3.51)   $     (0.73)    $       .10   $      (1.17)
Income    (loss)    from     discontinued
operations
  per share:
     Basic                                  $     (.67)   $      4.52   $        -0-    $       .49   $         -0-
     Diluted                                $     (.67)   $      4.52   $        -0-    $       .49   $         -0-
Income (loss) from extraordinary item
  per share:
     Basic                                  $       -0-   $       -0-   $        -0-    $       -0-   $       (.19)
     Diluted                                $       -0-   $       -0-   $        -0-    $       -0-   $       (.19)
Net income (loss) per share:
     Basic                                  $    (1.97)   $      1.01   $     (0.73)    $       .59   $      (1.36)
     Diluted                                $    (1.97)   $      1.01   $     (0.73)    $       .59   $      (1.36)
Weighted average number of shares of
  common stock used in the calculation:
     Basic                                        4,318         4,297          4,576          4,872          4,872
     Diluted                                      4,318         4,297          4,576          4,872          4,872
Dividends per share                                None          None           None           None           None

HISTORICAL BALANCE SHEET DATA:

                                                                    As of December 31,
                                                                     (In thousands)
                                         1997            1998            1999          2000           2001
                                         ----            ----            ----          ----           ----
Current assets                      $     38,322    $     47,205   $      27,655  $     34,778  $      20,631
Working capital (deficiency)               (633)           6,053         (5,574)         2,046          6,310
Net assets of discontinued
   operations                              7,091             -0-             -0-           -0-            -0-
Total assets                             110,330         114,300          88,614        77,328         50,314
Long term debt                            54,595          50,769          43,767        29,748         24,603
Stockholder's equity                $      9,393    $     14,671   $       7,692  $     12,003  $       9,391

</TABLE>


                                       10
<PAGE>


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

     The Company  conducts its  business in one  segment:  specialty-contracting
services.  This segment provides  comprehensive services including earth moving;
land reclamation and site  preparation;  facilities  demolition and dismantling;
installation  of sewer  lines,  water lines and roads;  excavation,  removal and
disposal of contaminated soil; groundwater treatment; and asbestos abatement.

RESULTS OF OPERATIONS

     The following table sets forth for the periods indicated (i) the percentage
of net revenue  represented by certain items in the financial  statements of the
Company,  and (ii) the percentage change in the dollar amount of such items from
period to period.

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

                                             Percentage of Net Revenue             Percentage Increase (Decrease)
                                              Year Ended December 31,                 Year Ended December 31,
                                              -----------------------                 -----------------------
                                      1999         2000             2001           2000 vs. 1999    2001 vs. 2000
                                      ----         ----             ----           -------------    -------------

Gross revenues                        112.8%        116.3%            111.2%            (4.2%)          (22.6%)
Outside services                       12.8%         16.3%             11.2%             18.0%          (44.5%)
                                    ---------    ----------      ------------     -------------    -------------
Net revenue                           100.0%          100%              100%            (7.1%)          (19.0%)
Cost of revenue earned                 91.1%         83.2%             92.6%           (15.1%)           (9.9%)
                                    ---------    ----------      ------------     -------------    -------------
Gross profit                            8.9%         16.8%              7.4%             74.6%          (64.2%)
Selling, general and
   administrative expenses             12.8%          8.7%              9.6%           (37.2%)          (10.3%)
                                    ---------    ----------      ------------     -------------    -------------
Operating income (loss)               (3.9%)          8.1%            (2.2%)            292.2%         (121.9%)
Income (loss) from marketable
   securities                           4.4%          1.9%           (14.9%)           (59.3%)         (719.8%)
Minority interest in net
   (income) loss of subsidiary        (0.2%)        (0.4%)              0.5%             54.9%           201.3%
Gain (loss) on sale of fixed
   assets                                0.2%          0.0%            (3.3%)          (117.3%)       (8,908.6%)
Interest expense, net                   8.9%          8.2%              7.1%           (14.3%)            29.8%
                                    ---------    ----------      ------------     -------------    -------------
Income (loss) before
   provision for income taxes
   (benefit)                          (8.4%)          1.4%           (27.0%)            115.6%       (1,637.2%)
Provision for income taxes
   (benefit)                          (2.5%)          0.5%           (13.5%)          (119.4%)         2,197.5%
                                    ---------    ----------      ------------     -------------    -------------
Net income (loss) from
   continuing operations              (5.9%)          0.9%           (13.5%)            114.1%       (1,312.5%)
Net income (loss) from
   discontinued operations              0.0%          4.6%              0.0%            100.0%         (100.0%)
Net income (loss) from
   extraordinary items                  0.0%          0.0%            (2.2%)              0.0%         (100.0%)
                                    ---------    ----------      ------------     -------------    -------------

Net income (loss)                     (5.9%)          5.5%           (15.7%)            185.7%         (332.3%)
                                    =========    ==========      ============     =============    =============
</TABLE>

YEAR ENDED DECEMBER 31, 2001, COMPARED TO YEAR ENDED DECEMBER 31, 2000

CONTINUING OPERATIONS

     Net  revenue  for  the  year  ended   December  31,   2001,   decreased  by
approximately $9,950,000 or 19.1 percent to $42,299,000 from $52,249,000 for the


                                       11
<PAGE>

same period in 2000. The decrease is due primarily to decreases in the Company's
demolition  services  ($8,055,000  decrease  in  net  revenue),   mine  services
($2,700,000  decrease in net revenue),  and other services  ($51,000 decrease in
net revenue). These decreases were somewhat offset by increases in the Company's
utility  services  ($856,000  increase  in net  revenue).

     During the year ended December 31, 2001, the Company's  percentage of gross
revenues from private customers remained unchanged from 2000 at 67 percent.

     Outside services, which largely represent subcontractor costs, decreased as
a  percentage  of net  revenue to  approximately  11 percent  for the year ended
December 31, 2001 from approximately 16 percent for the same period in 2000. The
Company will use the services of a  subcontractor  when it determines that it is
more economical to do so than internally providing the services.

     Cost of revenue  earned as a  percentage  of net revenue for the year ended
December 31, 2001 increased to 93 percent from 83 percent for the same period in
2000.  As a result,  the gross  profit for the year ended  December 31, 2001 was
approximately  $3,136,000 (7 percent of net revenue)  compared to $8,764,000 (17
percent of net revenue) for the same period in 2000.  The decrease in the dollar
amount  $5,628,000  and  percentage  of gross  margin (10  percent) is primarily
associated with the Company's  demolition services ($3,557,000 decrease in gross
profit),  utility contracting  services  ($2,055,000  decrease in gross profit),
mining services  ($12,000  decrease in gross profit) and other services  ($4,000
decrease in gross profit).

     Depreciation and amortization decreased to approximately $5,442,000 in 2001
from  approximately  $7,671,000 in 2000. The decrease  relates  primarily to the
sale of some underutilized heavy construction equipment which was sold in 2001.

     Included in the Company's  operating  results for the years ended  December
31, 2000 and 2001 is the activity related to the settlement and/or resolution of
contract claims and unapproved change orders. The "Excess of recovery over cost"
amounts  have been  reserved  for other  claims,  or reduced  by  current  costs
associated with claims. This activity can be summarized as follows:


                                          Years Ended December 31,
                                             2000             2001
                                             ----             ----
Claim recoveries                      $       801,000  $        865,000

Cost of recoveries                           (33,000)         (127,000)
                                         -------------    --------------

Excess of recovery over cost          $       768,000  $        738,000
                                         =============    ==============

     The Company had the following balances recorded relating to contract claims
and unsigned change orders at December 31, 2000 and 2001.


                                             Years Ended December 31,
                                                 2000              2001
                                                 ----              ----
Claims                                    $      9,902,000   $    6,953,000
Unapproved change orders                               -0-              -0-
                                             --------------     ------------
                                          $      9,902,000   $    6,953,000
                                             ==============     ============
Cumulative external claim
   preparation costs included above       $            -0-   $          -0-
                                             ==============     ============

     During  the  year  ended   December   31,   2001,   selling,   general  and
administrative expenses decreased to approximately $4,067,000 (10 percent of net
revenue) from $4,531,000 (9 percent of net revenue) for the same period in 2000.
The  dollar  and  percentage   decrease  are   attributable   to  reductions  in
administrative  costs including salaries and wages, ESOP compensation  expenses,
legal fees, bad debt expense, supplies and bank charges.


     During the year ended December 31, 2001,  the Company  recognized a loss on
disposal  of  equipment  of  approximately  $1.4  million  related  to  sale  of
construction  equipment with an  approximate  book value of  approximately  $5.7
million.  The loss  incurred in 2001 was a byproduct of  management's  effort to
reduce  outstanding  debt. The loss of approximately  $15,000 in 2000 related to
the  sale  of  construction   equipment  with  an  approximate   book  value  of
approximately $3.9 million.




                                       12
<PAGE>


     During 2001, the Company sold its entire portfolio of marketable securities
and recogizned a loss of approximately  $6.3 million.  The largest  component of
the loss was $5.9 million  related to the sale of the  Company's  investment  in
Waste  Management stock  (NYSE:WMI).  The Company acquired this stock in 1999 in
connection with the sale of the assets of its TransCor subsidiary.  In 2000, the
Company  had gains of $1.0  million  in its  portfolio,  related  to the sale of
trading securities.


     Interest  expense,  net of interest  income for the year ended December 31,
2001 was  approximately  $3,006,000 as compared to approximately  $4,285,000 for
the year ended December 31, 2000.  The average amount of debt decreased  between
periods,   since  debt  payments   during  the  year   exceeded   borrowings  by
approximately $17,881,000.

     The Company's  income tax benefit for continuing  operations was calculated
using a rate of  approximately  49 percent for the year ended December 31, 2001.
The Company's  income tax provision for  continuing  operations  was  calculated
using a rate of  approximately  37 percent for the year ended December 31, 2000.
The increase in 2001 is attributed to the tax benefits realized on the carryback
of capital losses sustained in the current year.

     As a result of the  foregoing,  the Company  recorded loss from  continuing
operations of approximately  $5,709,000 for the year ended December 31, 2001, as
compared to income from continuing operations of approximately  $471,000 for the
year ended December 31, 2000.

     On June  27,  2000,  the  Company  received,  net of  related  legal  fees,
$3,525,000  as final  settlement  from  WMI.  This  amount  was for  adjustments
required under the purchase agreement and for other disputes related to the sale
of the SWMS operations.

YEAR ENDED DECEMBER 31, 2000, COMPARED TO YEAR ENDED DECEMBER 31, 1999

CONTINUING OPERATIONS

     Net  revenue  for  the  year  ended   December  31,   2000,   decreased  by
approximately  $3,992,000 or 7.1 percent to $52,249,000 from $56,241,000 for the
same period in 1999. The decrease is due primarily to decreases in the Company's
utility  contracting  services  ($8,036,000  decrease in net revenue),  and mine
services ($6,409,000).  These decreases were somewhat offset by increases in the
Company's  demolition services  ($10,386,000  increase in net revenue) and other
services ($67,000 increase in net revenue).

     During the year ended December 31, 2000, the Company's  percentage of gross
revenues from private customers remained unchanged from 1999 at 69 percent.

     Outside services, which largely represent subcontractor costs, increased as
a  percentage  of net  revenue to  approximately  16 percent  for the year ended
December 31, 2000 from approximately 13 percent for the same period in 1999. The
Company will use the services of a  subcontractor  when it determines that it is
more  economical to do so than  internally  providing the services.  The Company
utilized the services of  subcontractors  to a greater  extent  during 2000 than
1999  due  to the  specific  contracts  in  progress  and  the  associated  work
requirements.

     Cost of revenue  earned as a  percentage  of net revenue for the year ended
December 31, 2000 decreased to 83 percent from 91 percent for the same period in
1999.  As a result,  the gross  profit for the year ended  December 31, 2000 was
approximately  $8,764,000 (17 percent of net revenue)  compared to $5,019,000 (9
percent of net revenue) for the same period in 1999.  The increase in the dollar
amount  $3,745,000  and  percentage  of gross  margin (8 percent)  is  primarily
associated with the Company's  demolition services ($2,285,000 increase in gross
profit),  utility contracting  services  ($1,017,000  increase in gross profit),
mining services  ($432,000 increase in gross profit) and other services ($11,000
increase in gross profit).

     Depreciation and amortization decreased to approximately $7,671,000 in 2000
from  approximately  $9,197,000 in 1999. The decrease  relates  primarily to the
sale of some underutilized  heavy construction  equipment which was sold in late
1999 and 2000.

     Included in the Company's  operating  results for the years ended  December
31, 1999 and 2000 is the activity related to the settlement and/or resolution of
contract claims and unapproved change orders. The "Excess of recovery over cost"
amounts  have been  reserved  for other  claims,  or reduced  by  current  costs
associated with claims. This activity can be summarized as follows:

                                          Years Ended December 31,
                                             1999             2000
                                             ----             ----
Claim recoveries                      $     1,400,000  $        801,000

Cost of recoveries                        (1,014,000)          (33,000)
                                         -------------    --------------

Excess of recovery over cost          $       386,000  $        768,000
                                         =============    ==============



                                       13
<PAGE>


     The Company had the following balances recorded relating to contract claims
and unsigned change orders at December 31, 1999 and 2000.

                                              Years Ended December 31,
                                                 1999              2000
                                                 ----              ----
Claims                                    $     10,731,000   $    9,902,000
Unapproved change orders                               -0-              -0-
                                             --------------     ------------
                                          $     10,731,000   $    9,902,000
                                             ==============     ============
Cumulative external claim
   preparation costs included above       $            -0-   $          -0-
                                             ==============     ============

     During  the  year  ended   December   31,   2000,   selling,   general  and
administrative expenses decreased to approximately  $4,531,000 (9 percent of net
revenue)  from  $7,221,000  (13 percent of net  revenue)  for the same period in
1999.  The dollar and  percentage  decrease are  attributable  to  reductions in
administrative  costs including salaries and wages, ESOP compensation  expenses,
legal fees, bad debt expense, supplies and bank charges.

     Interest  expense,  net of interest  income for the year ended December 31,
2000 was  approximately  $4,285,000 as compared to approximately  $5,000,000 for
the year ended December 31, 1999.  The average amount of debt decreased  between
periods,   since  debt  payments   during  the  year   exceeded   borrowings  by
approximately $12,944,000.

     The Company's  income tax expense for continuing  operations was calculated
using a rate of  approximately  37 percent for the year ended December 31, 2000.
The Company's  income tax provision for  continuing  operations  was  calculated
using a rate of approximately 30 percent for the year ended December 31, 1999.

     As a result of the foregoing,  the Company  recorded income from continuing
operations of  approximately  $471,000 for the year ended  December 31, 2000, as
compared to a loss from continuing  operations of  approximately  $3,340,000 for
the year ended December 31, 1999.

     On June  27,  2000,  the  Company  received,  net of  related  legal  fees,
$3,525,000  as final  settlement  from  WMI.  This  amount  was for  adjustments
required under the purchase agreement and for other disputes related to the sale
of the SWMS operations.


LIQUIDITY AND CAPITAL RESOURCES

     Cash  provided  by  (used  in)  operating   activities  was   approximately
$5,426,000,  $7,547,000 and $559,000 for the years ended December 31, 1999, 2000
and 2001.

     During  2001,  the Company  generated  cash from  investing  activities  of
approximately $21,883,000. This amount was primarily the result of cash proceeds
from the sale of marketable  securities of approximately  $14,942,000 as well as
the  net  proceeds  from  the  sale  of  the  investment  in the  apartments  of
$4,637,000.



                                       14
<PAGE>

     The  Company  made  capital   expenditures  of  approximately   $5,029,000,
$4,031,000 and $201,000 in 1999, 2000 and 2001,  respectively.  The expenditures
in 2001 were primarily  related to the acquisition of equipment  associated with
the Company's utility contracting operations. Management believes future capital
expenditures  will be  financed  by  available  cash  resources,  cash flow from
operations and available credit resources, as needed.

     During 2001, the Company used cash in financing activities of approximately
$17,881,000.  The 2001  borrowings  and the related debt payments  resulted in a
decrease in the total  indebtedness of the Company to approximately  $30,802,000
at December 31, 2001 (approximately  $48,623,000 at December 31, 2000).  Current
maturities of total indebtedness amount to approximately  $5,139,000 at December
31, 2001 (approximately $17,875,000 at December 31, 2000). Payments on long term
debt were  approximately  $19,989,000 during 2001. These payments were partially
offset by new borrowings of approximately $2,109,000 during 2001.

     During the years ended  December 31, 2000 and 2001,  the Company's  average
contract  and  trade   receivables   were   outstanding  for  65  and  63  days,
respectively. This improvement is primarily the result of the Company's 2001 mix
of business as well as the concentrated  effort by the senior management team to
accelerate cash collections. The Company anticipates sustaining the current rate
of collection for the year ended December 31, 2002. Management believes that the
number of days outstanding for its receivables approximates industry norms. Part
of the  Company's  contracting  operations  is  subcontracted,  and any delay in
collections of receivables  relating to primary  contracts will generally result
in a delay of payment to subcontractors.

     In addition to the sales  above,  the Company has  discontinued  the use of
certain assets with a net book value of approximately  $4,474,000 and has placed
them for sale. Of these assets,  approximately  $1,800,000  net of $1,177,500 of
deposits  received  relates  to  assets  from the  discontinuance  of a  certain
remediation  business  in  the   specialty-contracting   segment.  In  addition,
approximately  $3,440,000 of construction equipment has been placed as available
for sale. The remaining  balance of  approximately  $411,000  represents the net
book  value of land for sale  located in  Nashville,  Tennessee.  Subsequent  to
December 31, 2000, the Company received  approximately  $4,637,000 from the sale
of its investment in the Apartments.  This amount  represented the book value of
the  Apartments as of February 28, 2001,  and no gain or loss resulted from this
transaction.

     The Company's  current bonding coverage for  non-environmental  projects is
$15,000,000  for  an  individual  project  and  $30,000,000  in  the  aggregate.
Historically,  the  Company  has  obtained  bonding  coverage  in  amounts up to
$8,500,000 for  environmental  projects and  $53,000,000  for  non-environmental
projects.  However,  bonding  coverage is not  guaranteed  on projects up to the
above  limits  because  each  project has its own  distinct  and  separate  bond
requirements,  and it is customary  for surety  bonding  companies to underwrite
each surety obligation individually.  Management believes that bonding coverages
are adequate for the size and scope of projects being performed.

FORWARD-LOOKING INFORMATION

     The  foregoing  discussion  in  "Management's  Discussion  and  Analysis of
Financial  Condition  and  Results  of  Operations"   contains   forward-looking
statements that reflect management's current views with respect to future events
and financial performance. Such statements involve risks and uncertainties,  and
there are certain  important  factors that could cause actual  results to differ
materially  from those  anticipated.  Some of the  important  factors that could
cause actual results to differ  materially from those anticipated  include,  but
are  not  limited  to,  economic  conditions,  weather  conditions,  competitive
factors,  changes  in  market  prices  of the  Company's  investments  and other
uncertainties,  all of which  are  difficult  to  predict  and many of which are
beyond the control of the Company.  Due to such  uncertainties and risk, readers
are cautioned not to place undue  reliance on such  forward-looking  statements,
which speak only as of the date hereof.

EFFECT OF INFLATION

     Inflation has not had, and is not expected to have, a material  impact upon
the Company's  operations.  If inflation increases,  the Company will attempt to
increase its prices to offset its increased expenses. No assurance can be given,
however,  that the Company  will be able to  adequately  increase  its prices in
response to inflation.


                                       15
<PAGE>


QUARTERLY EFFECT OF EXTRAORDINARY ITEM
<TABLE>
<CAPTION>
<S>                                  <C>              <C>                  <C>           <C>

                                          Selected Quarterly Data
                                                (unaudited)
                                    (in thousands except per share data)
                                            First            Second             Third           Fourth
                                           Quarter          Quarter            Quarter         Quarter
                                          ---------        ---------          ---------        --------
  2000:
     Net sales                        $       13,054  $          13,962    $     11,594  $      13,639
     Gross profit                              2,357              2,497           2,092          1,818
     Income (loss) before
        discontinued operations
             Total                               208                  8             422          (167)
             Per share:
                Basic                           0.04               0.00            0.09         (0.03)
                Diluted                         0.04               0.00            0.09         (0.03)
     Net income (loss):
             Total                               208              2,211             422           (20)
             Per share:
                 Basic                          0.04               0.46            0.09         (0.00)
                 Diluted                        0.04               0.46            0.09         (0.00)

  2001:
     Net sales                        $       12,480  $          12,354    $      8,916  $       8,549
     Gross profit                              1,836                783            (21)            538
     Income (loss) before
         discontinued operations
         and extraordinary items:
              Total                            (102)            (5,254)         (1,968)          1,615
              Per share:
                  Basic                         0.02             (1.08)          (0.40)           0.33
                  Diluted                       0.02             (1.08)          (0.40)           0.33
     Net income (loss):
              Total                            (102)            (6,191)  (1)    (1,968)          1,615
              Per share:
                  Basic                         0.02             (1.27)          (0.40)           0.33
                  Diluted                       0.02             (1.27)          (0.40)           0.33

</TABLE>

     (1)  EXTRAORDINARY  ITEM -  During  1989,  Kimmins  Corp.  entered  into an
indemnification agreement with Cumberland to issue a surety bond to an unrelated
contractor.  Kimmins received a fee from the contractor for the indemnification.
In April 1991, the contractor was served with a "Default Termination Notice". On
May 2,  1991,  Cumberland  executed  a  "Takeover  Agreement"  with the Navy and
shortly  thereafter  contracted  with  Kimmins  Corp.  to complete  the original
contract.  During 1991,  the  contractor  sued and settled with  Cumberland  and
Kimmins Corp. for $30,000 in exchange for the right to recover from the Navy for
wrongful  termination.  The original hearing determined wrongful termination and
was appealed by the Navy.  During  2000,  the Federal  Circuit  Court of Appeals
reversed the original decision.  Cumberland then directed the contractor to file
a Petition for Writ of Certiorari to the United States Supreme  Court.  On April
23, 2001,  the Supreme Court of The United  States  entered an order to deny the
writ of certiorari.  As a result, Cumberland demanded payment from Kimmins Corp.
of  $1,851,000.  Payment  of  $1,500,000  was made in full  satisfaction  of the
indemnification on November 15, 2001.


                                       16
<PAGE>

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     During 2001, the Company entered into certain transactions using derivative
financial instruments. As of the end of the year, the Company had no outstanding
derivative financial instruments.  As of December 31, 2001, the Company has debt
of approximately $29,747,000 of which $28,588,000 has a fixed interest rate. The
remaining debt of $1,154,000 has variable interest rates.  However,  an increase
in the rates of 1% would have an effect of only $18,000, exclusive of the effect
of income taxes.  Accordingly,  the Company believes its exposure to market risk
is not material

                                       17
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                                  KIMMINS CORP.
                        INDEX TO FINANCIAL STATEMENTS AND
                          FINANCIAL STATEMENT SCHEDULE

                                                                            Page

Report of Independent Certified Public Accountants...........................19

Consolidated balance sheets at December 31, 2000 and 2001....................20

Consolidated statements of operations for each of the three years
   in the period ended December 31, 2001.....................................22

Consolidated statements of comprehensive income for each
   of the years in the period ended December 31, 2001........................24

Consolidated statements of stockholders' equity for each of the
   three years in the period ended December 31, 2001.........................25

Consolidated statements of cash flows for each of the three years
   in the period ended December 31, 2001.....................................26

Notes to consolidated financial statements...................................27

Financial statement schedule:

Schedule II - Valuation and qualifying accounts..............................45


     All other  schedules  are omitted  since the  required  information  is not
present in amounts  sufficient to require  submission of the schedule or because
the  information  required  is included in the  financial  statements  and notes
thereto.


                                       18
<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




The Board of Directors and Stockholders
Kimmins Corp.

     We have audited the  accompanying  consolidated  balance  sheets of Kimmins
Corp. as of December 31, 2000 and 2001, and the related consolidated  statements
of operations,  comprehensive  income,  stockholders'  equity and cash flows for
each of the three years in the period ended  December 31, 2001.  Our audits also
included the  financial  statement  schedule  listed in the index at Item 14(a).
These financial  statements and schedule are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and the schedule based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the 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 consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
Kimmins Corp. at December 31, 2000 and 2001, and the consolidated results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the Unites  States of America.  Also, in our opinion,  the related  financial
statement  schedule,   when  considered  in  relation  to  the  basic  financial
statements taken as a whole,  presents  fairly,  in all material  respects,  the
information set forth therein.




                               /s/ Ferlita, Walsh & Gonzalez, P.A.

Tampa, Florida
March 22, 2002



                                       19
<PAGE>




                                  KIMMINS CORP.

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                         <C>               <C>

                                                                       December 31,
                                                                       ------------
                                                                   2000              2001
                                                                   ----              ----

Current assets:

   Cash and cash equivalents including restricted cash
      of $1,080,350 and $445,740 in 2000 and 2001,
      respectively                                          $     1,299,769   $      5,861,423
   Marketable securities                                         12,361,268                -0-
   Accounts receivable, net
     Contract and trade                                          10,738,570          8,032,980
     Affiliates                                                     988,043             49,450
   Income tax refundable                                                -0-            207,311
   Costs and estimated earnings in excess of billings on
     uncompleted contracts                                        2,657,353          1,095,561
   Deferred income taxes                                          1,731,119          1,136,948
   Property and equipment held for sale                           4,464,867          3,440,570
   Other current assets                                             536,631            806,487
                                                             --------------    ---------------

     Total current assets                                        34,777,620         20,630,730
                                                             --------------    ---------------


Property and equipment, net                                      25,967,895         11,785,179
Costs and estimated earnings in excess of billings on
   uncompleted contracts                                          7,582,860          5,725,032
Accounts receivable, net contract and trade                       1,878,445          1,228,429
Deferred income taxes                                               632,927          4,380,106
Property held for sale                                              410,681          1,033,182
Note receivable - affiliate                                       1,000,000            604,055
Investment in Cumberland Technologies, Inc. - affiliate           5,077,751          4,927,438
                                                             --------------    ---------------

Total assets                                                $    77,328,179   $     50,314,151
                                                             ==============    ===============

</TABLE>
                   The accompanying notes are an integral part
                   of these consolidated financial statements.


                                       20
<PAGE>

                                  KIMMINS CORP.

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S>                                                                 <C>               <C>

                                                                             December 31,
                                                                          2000              2001
                                                                          ----              ----
Current liabilities:
Accounts payable - trade                                            $     7,109,471   $     4,420,104
Accounts payable - affiliate                                                462,447           162,340
Income tax payable                                                          509,958               -0-
Accrued expenses                                                          5,857,807         2,835,202
Billings in excess of costs and estimated earnings on
   uncompleted contracts                                                    916,529         1,264,721
Current portion of long-term debt                                        17,875,227         5,138,682
Related party debt                                                              -0-           500,000
                                                                      --------------    --------------
      Total current liabilities                                          32,731,439        14,321,049


Long-term debt                                                           29,747,515        24,603,329
Related party debt                                                        1,000,000           560,000
Commitments and contingencies (Note 16)
                                                                      --------------    --------------
      Total liabilities                                                  63,478,954        39,484,378
                                                                      --------------    --------------
Minority interest in subsidiary                                           1,846,438         1,438,361
Stockholders' equity:
   Common stock, $.001 par value; 32,500,000 shares
      authorized; 5,072,397 shares issued; 4,872,135 shares
      outstanding as of December 31, 2000 and 2001, respectively              5,072             5,072
   Class B common stock, $.001 par value; 10,000,000
       shares authorized, 2,291,569 shares issued and 1,666,569
       outstanding as of December 31, 2000 and 2001, respectively             1,667             1,667
   Preferred stock, $.001 par value; 1,000,000 shares authorized;
       -0- shares issued; -0- shares outstanding as of December
       31, 2000 and 2001, respectively                                          -0-               -0-
   Capital in excess of par value                                        20,178,848        20,308,312
   Unrealized loss on securities (net of tax)                            (3,910,624)           (5,186)
   Retained earnings (deficit)                                           (3,426,284)      (10,072,561)
                                                                      ---------------   ---------------
                                                                         12,848,679         10,237,304
Less treasury stock (200,262 shares)                                      (845,892)          (845,892)
                                                                      ---------------   ---------------


      Total stockholders' equity                                         12,002,787          9,391,412
                                                                      ---------------    ---------------

Total liabilities and stockholders' equity                          $    77,328,179   $     50,314,151
                                                                       ==============    ===============
</TABLE>


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


                                       21
<PAGE>
                                  KIMMINS CORP.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

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


                                                                            Years Ended December 31,
                                                                            ------------------------
                                                                     1999             2000               2001
                                                                     ----             ----               ----

Gross revenue                                                 $     63,450,166  $     60,756,258  $     47,021,929
Outside services, at cost                                           (7,209,407)       (8,507,702)       (4,722,891)
                                                              ----------------  ----------------  ----------------

Net revenue                                                         56,240,759        52,248,556        42,299,038

Cost of revenue earned                                              51,221,637        43,484,729        39,163,284
                                                                ---------------   ---------------   ---------------

Gross profit                                                         5,019,122         8,763,827         3,135,754

Selling, general and administrative expenses                         7,221,222         4,531,329         4,066,098
                                                                ---------------   ---------------   ---------------

Operating income (loss)                                             (2,202,100)        4,232,498          (930,344)

Minority interest in net (income) loss of subsidiary                  (131,369)         (203,485)          206,212

Gain (loss) on disposal of property and equipment                       90,431           (15,627)       (1,407,775)

Income (loss) from marketable securities (including
   approximately $51,000, $32,000 and $19,000 of dividends
   for the years ended December 31, 1999, 2000, and 2001,
   respectively)                                                     2,495,029         1,015,657        (6,294,815)

Interest expense (net of interest income of approximately
    $182,000, $184,000, and $137,000 for the years
    ended December 31, 1999, 2000, and 2001, respectively)          (5,000,457)       (4,285,285)       (3,006,442)
                                                                ---------------   ---------------   ---------------

Income (loss) before income taxes, discontinued operations,
   and extraordinary item                                           (4,748,466)          743,758       (11,433,164)

Provision for income tax expense (benefit)
   Current                                                                 -0-           404,479          (257,970)
   Deferred                                                         (1,408,389)         (131,559)       (5,466,417)
                                                                ---------------   ---------------   ---------------
                                                                    (1,408,389)          272,920        (5,724,387)
                                                                ---------------   ---------------   ---------------

Income (loss) before discontinued operations and
    extraordinary item                                              (3,340,077)          470,838        (5,708,777)

Discontinued operations:
Gain on sale of discontinued solid waste division in 2000,
   net of tax of $1,134,982                                                -0-         2,390,018               -0-
                                                                ---------------   ---------------   ---------------

Income (loss) before extraordinary item                             (3,340,077)        2,860,856        (5,708,777)

Extraordinary item:

Loss on payment of indemnification
    agreement with related party, net of tax benefit $562,500              -0-               -0-          (937,500)
                                                                ---------------   ---------------   ---------------

Net income (loss)                                             $     (3,340,077)  $     2,860,856  $     (6,646,277)
                                                                ===============   ===============   ===============
</TABLE>


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


                                       22
<PAGE>

                                  KIMMINS CORP.

                CONSOLIDATED STATEMENTS OF OPERATIONS, CONTINUED
<TABLE>
<CAPTION>
<S>                                                                    <C>              <C>            <C>


                                                                                 Years Ended December 31,
                                                                                 ------------------------
                                                                             1999             2000           2001
                                                                             ----             ----           ----
Share data:
   Basic and diluted income (loss) per share from continuing
     operations                                                        $      (0.73)    $         .10  $      (1.17)
                                                                          ===========      ===========    ===========

   Basic and diluted income per share from discontinued operations     $        0.00    $         .49  $        0.00
                                                                          ===========      ===========    ===========

   Basic and diluted loss per share from extraordinary item            $        0.00    $        0.00  $       (.19)
                                                                          ===========      ===========    ===========

   Total basic and diluted income (loss) per share                     $      (0.73)    $         .59  $      (1.36)
                                                                          ===========      ===========    ===========

Weighted average number of shares outstanding used in computations:
   Basic and diluted                                                       4,575,545        4,872,135      4,872,135
                                                                          ===========      ===========    ===========

</TABLE>


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


                                       23
<PAGE>
                                  KIMMINS CORP.

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
<S>                                             <C>               <C>                   <C>

                                                               Year Ended December 31,
                                                               -----------------------
                                                      1999                2000                2001
                                                      ----                ----                ----

Net income (loss)                               $  (3,340,077)     $      2,860,856     $  (6,646,277)

Net unrealized gain (loss) on investments,
   net of tax                                      (5,484,654)            2,623,717          3,565,293

Net (income) loss realization                        (513,000)          (1,025,000)            559,000

Less minority interest                                 403,615            (127,443)          (200,132)

Allocable share of investee's (Cumberland)
   net unrealized gain (loss)                           70,656               40,421           (18,723)
                                                   ------------       --------------       ------------

Comprehensive income (loss).                    $  (8,863,460)     $      4,372,551     $  (2,740,839)
                                                   ============       ==============       ============

</TABLE>


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

                                       24
<PAGE>


                                  KIMMINS CORP.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


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

                                                                                                              Unearned
                                                                                                              Employee
                                                                                                            Compensation
                                                                                                                from
                                                                                                               Employee
                                         Common Stock      Class B Common Stock   Capital of     Retained       Stock
                                         ------------      --------------------   Excess of      (Deficit)    Ownership
                                      Shares      Amount     Shares     Amount    Par Value       Earnings    Plan Trust
                                      ------      ------     ------     ------    ---------       --------    ----------

Balance at December 31, 1998         4,447,397   $  4,447   2,291,569   $  2,292  $19,114,603    $(2,947,063) $ (840,000)

Net loss                                                                                          (3,340,077)
Conversion of Class B common
   stock to common stock               625,000        625   (625,000)      (625)
Employee compensation from
   Employee Stock Ownership                                                                                       840,000
   Trust
Unrealized loss on marketable
   securities, net of tax
Change in ownership percentage
   of subsidiary due to treasury
   stock purchased by subsidiary                                                    1,089,469
Purchase of Treasury Stock, at
   cost
                                    ----------   -------- ----------- ----------  -----------    ------------  -----------
Balance at December 31, 1999         5,072,397   $  5,072   1,666,569  $   1,667  $20,204,072    $(6,287,140) $       -0-

Net income                                                                                          2,860,856
Unrealized gain on marketable
   securities, net of tax
Change in ownership percentage
   of subsidiary due to treasury
   stock purchased by subsidiary                                                     (25,224)
Purchase of Treasury Stock, at
   cost

                                    ----------   -------- ----------- ----------  -----------    ------------ -----------
Balance at December 31, 2000         5,072,397   $  5,072   1,666,569   $  1,667  $20,178,848    $(3,426,284) $       -0-

Net loss                                                                                          (6,646,277)
Unrealized gain on marketable
   securities, net of tax
Change in ownership percentage
   of subsidiary due to treasury
   stock purchased by subsidiary                                                     129,464

Balance at December 31, 2001
                                    ----------  --------- ----------- ----------  -----------  -------------- ------------
                                     5,072,397  $   5,072   1,666,569   $  1,667  $20,308,312  $ (10,072,561) $       -0-
                                    ==========  ========= =========== ==========  ===========  ==============  ===========
</TABLE>

<TABLE>
<CAPTION>
<S>                             <C>             <C>              <C>
                                   Unrealized
                                 Gain/(Loss) on                      Total
                                   Marketable        Treasury     Stockholders'
                                   Securities         Stock          Equity
                                ---------------  -------------    --------------

Balance at December 31, 1998       $    101,064      (764,263)    $   14,671,080

Net loss                                                             (3,340,077)
Conversion of Class B common
   stock to common stock                                                     -0-
Employee compensation from
   Employee Stock Ownership
   Trust                                                                 840,000
Unrealized loss on marketable
   securities, net of tax           (5,523,383)                      (5,523,383)
Change in ownership percentage
  of subsidiary due to treasury
  stock purchased by subsidiary                                        1,089,469
Purchase of Treasury Stock, at
  cost                                                (45,522)          (45,522)
                                    -----------       --------       -----------
Balance at December 31, 1999        (5,422,319)      (809,785)       $ 7,691,567

Net income                                                             2,860,856
Unrealized gain on marketable
   securities, net of tax             1,511,695                        1,511,695
Change in ownership percentage
  of subsidiary due to treasury
  stock purchased by subsidiary                                         (25,224)
Purchase of Treasury Stock, at
  cost                                                (36,107)          (36,107)
                                    ----------        --------      ------------
Balance at December 31, 2000      $ (3,910,624)      (845,892)     $  12,002,787

Net loss                                                             (6,646,277)
Unrealized gain on marketable
  securities, net of tax              3,905,438                        3,905,438
Change in ownership percentage
  of subsidiary due to treasury
  purchased by subsidiary                                                129,464

Balance at December 31, 2001
                                   -----------      ----------      ------------
                                    $   (5,186)      (845,892)      $  9,391,412
                                   ===========      ==========      ============

</TABLE>



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


                                       25
<PAGE>


                                                   KIMMINS CORP.

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
<S>                                                                 <C>                 <C>               <C>
                                                                                   Years Ended December 31,
                                                                            1999               2000               2001
                                                                    ------------------  ----------------- -----------------
Cash flows from operating activities:
   Net income (loss)                                                 $     (3,340,077)   $      2,860,856  $     (6,646,277)
   Adjustments to reconcile net income (loss) to cash provided by
       operating activities:
      Extraordinary loss                                                          -0-                -0-            937,500
      Gain on sale of discontinued operations                                     -0-        (2,390,018)                -0-
      Depreciation and amortization                                         9,197,195          7,671,016          5,442,432
      Provision for uncollectible accounts                                     40,000                -0-                -0-
      Minority interest in earnings (losses) of subsidiary                    131,369            203,485          (206,212)
      (Gain) loss on sale of marketable securities                        (2,509,849)        (1,025,307)          6,294,815
      (Gain) loss on disposal of equipment                                   (90,431)             15,627          1,407,775
      Equity in losses (earnings) of equity investees                          24,693          (100,558)            (6,052)
      (Increase) decrease in:
          Employee Stock Ownership Trust                                      840,000                -0-                -0-
          Accounts receivable                                               5,028,654            867,660          3,394,199
          Costs & earnings > billings                                       2,310,662        (2,002,503)          3,419,620
          Deferred income tax asset                                       (1,408,389)          2,258,459        (6,784,690)
          Other current assets                                                 76,771          (484,903)          (269,856)
          Income tax refundable                                              (23,973)            262,130          (207,311)
          Accrued interest - related party debt                                   -0-                -0-           (60,000)
      Increase (decrease) in:
          Accounts payable                                                (3,460,481)          (656,130)        (2,972,475)
          Income tax payable                                                      -0-          1,134,982          (509,958)
          Accrued expenses                                                    415,924            361,495        (3,022,605)
          Costs & earnings < billings                                     (1,806,545)        (1,429,448)            348,192
                                                                       ---------------     --------------    ---------------


Net cash provided by operating activities                                   5,425,523          7,546,843            559,097

Cash flows from investing activities:
   Purchase of marketable securities                                      (9,251,186)          (980,047)        (2,161,483)
   Purchase of TransCor stock                                             (1,201,706)            (2,550)           (36,511)
   Proceeds from sale of marketable securities                             12,658,534          3,725,322         14,941,626
   Proceeds from sale of Apartments investment                                    -0-                -0-          4,636,910
   Proceeds from note receivable - affiliate                                      -0-                -0-            395,945
   Purchase of property and equipment                                     (5,028,601)        (4,030,843)          (201,173)
   Proceeds from sale of equipment                                          5,888,273          8,240,534          4,307,974
                                                                       ---------------     --------------    ---------------

Net cash provided by investing activities                                   3,065,314          6,952,416         21,883,288

Cash flows from financing activities:
   Proceeds from related party debt                                               -0-                -0-            500,000
   Payments on related party debt                                                 -0-                -0-          (500,000)
   Repayments of Employee Stock Ownership Plan                              (809,498)                -0-                -0-
   Purchase of treasury stock                                                (45,522)           (36,107)                -0-
   Proceeds from long-term debt                                             8,223,772          1,289,858          1,608,538
   Payments on long-term debt                                            (17,524,662)       (14,647,443)       (19,489,269)
                                                                       ---------------     --------------    ---------------

Net cash used in financing activities                                    (10,155,910)       (13,393,692)       (17,880,731)

Net increase (decrease) in cash and cash equivalents                      (1,665,073)          1,105,567          4,561,654

Cash at beginning of year                                                   1,859,275            194,202          1,299,769
                                                                       ---------------     --------------    ---------------

Cash at end of year                                                 $         194,202   $      1,299,769  $       5,861,423
                                                                       ===============     ==============    ===============
</TABLE>



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

                                       26
<PAGE>

                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION  -  Kimmins  Corp.  and its  subsidiaries  (collectively,  the
"Company")  operate one business segment:  specialty-contracting  services.  The
Company  provides  specialty-contracting  services  in the  southeastern  United
States,  primarily Florida,  including  earthwork;  infrastructure  development;
underground   construction;   roadwork;   site  remediation   services  such  as
excavation, removal and disposal of contaminated soil; facilities demolition and
dismantling;  and asbestos abatement.  The Company formerly provided solid waste
management  services  through its  subsidiary,  TransCor  Waste  Services,  Inc.
("TransCor").


     PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include
the accounts of Kimmins Corp. and its  subsidiaries,  including  TransCor,  a 95
percent  owned  subsidiary.  All material  intercompany  transactions  have been
eliminated.


     USE OF ESTIMATES - The  preparation  of financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

     CONCENTRATIONS  OF CREDIT RISK - Financial  instruments  which  subject the
Company to  concentrations of credit risk consist primarily of trade receivables
in the state of Florida and cash  equivalents.  Trade  receivables are comprised
primarily  of  amounts  due from  specialty  contracting  contracts.  Credit  is
extended  based  on  an  evaluation  of  the  customer's   financial  condition.
Collateral is generally not  required,  however,  the Company has the ability to
file  for a  mechanic's  lien to  protect  its  interest  in  contract  accounts
receivable.  Credit losses are provided for in the financial statements and have
been within management's expectations.

     The  Company's  cash account  balances  are insured by the  F.D.I.C.  up to
$100,000 per bank. The Company's  cash balances on deposit  exceeded the balance
insured by the  F.D.I.C.  in the amount of $-0- and  $5,023,000  at December 31,
2000 and 2001, respectively.

     CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on hand,
on deposit with financial  institutions,  cash in interest  bearing accounts and
certificates of deposit with maturities of 90 days or less.

     ACCOUNTS  RECEIVABLE  -  CONTRACT  AND  TRADE,   includes  $12,617,000  and
$9,261,000 net of allowance for doubtful accounts of approximately  $488,000 and
$422,000,  respectively, at December 31, 2000 and 2001. The Company's policy for
allowance for doubtful accounts is to provide for specific  accounts  considered
to be uncollectible.

     MARKETABLE   SECURITIES  -  Prior  to  December  31,  2001,  the  Company's
investments  in  marketable  securities  consisted  primarily of common stock of
Waste  Management,  Inc.  (WMI),  received  as a result  of the sale of  Kimmins
Recycling  Corp., and other common stocks of public  corporations.  During 2001,
the Company also traded  covered  options of WMI. As of December  31, 2001,  the
Company had sold its entire portfolio balance.  For the years ended December 31,
1999, 2000 and 2001,  income (loss) from marketable  securities is summarized as
follows:


                                   1999             2000              2001
                                   ----             ----              ----
Realized gains (losses)        $   2,460,000     $    999,500    $  (6,298,000)
Dividends                             51,000           32,000           19,000
Portfolio management fees            (16,000)         (15,500)         (16,000)
                                ------------      ------------    ------------
                               $   2,495,000     $   1,016,000   $  (6,295,000)
                                ============      ============    ============


                                       27
<PAGE>
                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Prior to their reclassification to the trading securities category in 2001,
and in  accordance  with  Statement of Financial  Accounting  Standards No. 115,
"Accounting  for  Certain  Investments  in  Debt  and  Equity  Securities,"  the
marketable securities were classified as available-for-sale securities and their
underlying  unrealized gains or losses,  net of tax, were reported as a separate
component of stockholders'  equity,  along with the Company's allocable share of
its equity method  investee's  reported  unrealized gains or losses  (Cumberland
Technologies,  Inc.,).  The  balance of the net  unrealized  gains and  (losses)
account is summarized as follows:

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

                                                                 2000          2001
                                                                 ----          ----
   Unrealized gains (losses), net of tax               $   (4,201,000)   $         -0-
   Minority interest's allocable share                        276,000              -0-
   Share of Cumberland's unrealized gains (losses),
      net of tax                                               14,000           (5,186)
                                                          ------------    -------------
                                                       $   (3,911,000)   $      (5,186)
                                                          ============    =============
</TABLE>


     INVESTMENTS   -  The   Company's  31  percent   investment   in  Cumberland
Technologies,  Inc.  (Cumberland)  is accounted  for using the equity  method of
accounting.  The original  carrying amount in excess of the underlying equity in
Cumberland is being  amortized over 20 years,  the estimated  useful life of the
intangible.

     INCOME  TAXES - The Company  accounts  for income taxes using the asset and
liability  method pursuant to Statement of Financial  Accounting  Standards 109,
"Accounting  for Income Taxes" (SFAS No. 109).  Under this method,  deferred tax
assets  and  liabilities   are  recognized  for  the  future  tax   consequences
attributable to differences  between the financial statement carrying amounts of
existing  assets and liabilities  and their  respective tax bases.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered  or settled.  Under SFAS No. 109, the effect on deferred tax assets
and  liabilities  of a change in tax rates is recognized in income in the period
that includes the enactment date.

     CONTRACTS AND REVENUE  RECOGNITION - Contracts generally range from 6 to 12
months in duration,  and earnings from contracting operations are reported under
the  percentage-of-completion  method  for  financial  statement  purposes.  The
estimated  earnings for each contract  reflected in the  accompanying  financial
statements  represent  the  percentage  of estimated  total  earnings that costs
incurred to date bear to estimated total costs,  based on the Company's  current
estimates.  With  respect to contracts  that extend over one or more  accounting
periods,  revisions in costs and earnings  estimates are reflected in the period
the  revisions  become known.  When current  estimates of total  contract  costs
indicate a loss,  provision is made for the entire  estimated loss in the period
indications  of  a  loss  become  known.   The  estimates  can  be  affected  by
uncertainties,  such as weather  related delays,  and it is reasonably  possible
that a change in estimate could occur in the near term.

     Change orders are  modifications  to an original  contract that effectively
change the scope  and/or  price of the  contract.  They may  include  changes in
specifications  or  design,   method  or  manner  of  performance,   facilities,
equipment, materials, site, or period for completion of the work. Certain change
orders may be priced under the terms of the  contract.  Other change  orders are
unpriced; that is, the work to be performed is defined;  however, the adjustment
to the contract price is negotiated subsequent to performance.  Finally, in some
cases,  both scope and price of a change order may be  unapproved or in dispute.
Accounting for change orders depends on the underlying circumstances,  which may
differ for each change order  depending on the customer,  the contract,  and the
nature of the change.  The Company  evaluates each change order according to its
characteristics and the circumstances in which they occur.

     Contract  revenue and  associated  profit are  recognized for change orders
that have been approved by the customer and the contractor  regarding both scope
and price to the extent performance related to the change order has occurred.


                                       28
<PAGE>

                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Accounting  for change  orders,  where  either scope or price have not been
determined,  depends on careful consideration of the underlying  characteristics
and the  circumstances  in which they occur.  For all  unpriced  change  orders,
recovery is deemed  probable if the terms of the  contracts or other  applicable
legal principles  provide a legal basis for  recoverability,  the costs incurred
are objective and  verifiable,  and,  finally,  all future events  necessary for
recovery are more likely than not to occur. The Company  considers the following
factors in  evaluating  whether  recovery is probable:  the  customer's  written
approval  of the  scope  and/or  price of the  change  order,  the  objectivity,
verifiability,  and  reasonableness of underlying  accounting  documentation for
change order costs, and the Company's experience in negotiating change orders in
similar instances.

     The  following  guidelines  are utilized by the Company in  accounting  for
change  orders under which  either the scope or price have not been  approved by
the customer.

     A.   Costs directly  attributable to change orders whose scope and/or price
          is not  determinable  are charged directly to operations in the period
          in which the costs are incurred if it is not  probable  that the costs
          will be recovered through a change in the contract price.

     B.   If it is probable that the costs will be recovered through a change in
          the  contract  price,  the  costs  are  treated  as costs of  contract
          performance  in the period in which  they are  incurred  and  contract
          revenue  is  recognized  to the  extent of the costs  incurred.  Costs
          incurred  in excess of  amounts  that are  probable  of  recovery  are
          charged directly to operations when incurred.

     C.   In the case of change  orders  that are  approved  as to scope but not
          price,  profit  recognition  is deferred  until  receipt of the priced
          change order.

     Contract  claims are amounts  incurred  by the Company  related to contract
changes that are unapproved as to both scope and price, or are directly disputed
or contested as to either, by the customer.  Claims are amounts in excess of the
agreed upon  contract  price (or amounts not included in the  original  contract
price)  that are due to  customer-caused  delays,  errors in  specification  and
designs,  contract  terminations,  or other causes of  unanticipated  additional
costs. The Company recognizes  contract revenue relating to claims to the extent
of its costs  incurred  only if it is  probable  that the claim  will  result in
additional  contract  revenue and if the amount of contract  revenue and related
costs can be reliably  estimated.  Those two  requirements  are satisfied by the
existence of all of the following conditions:

     A.   Thecontract  or other  applicable  legal  principles  provides a legal
          basis for the claim;  or a legal  opinion has been  obtained,  stating
          that the Company is entitled to recover  amounts under the contract or
          other applicable legal principles.

     B.   Additional costs are caused by  circumstances  that were unforeseen at
          the  contract  date  and are not the  result  of  deficiencies  in the
          contractor's performance.

     C.   Costs incurred by the Company that are  associated  with the claim are
          identifiable and reasonable in view of the work performed.

     D.   The evidence supporting the claim is objective and verifiable.

     In evaluating the probability of recovery and the estimation of the amounts
that will be recovered,  the Company consults with outside consultants and legal
counsel as the claims progress through the stages of negotiations, actual filing
of formal  claims,  and/or  litigation.  Legal  counsel has been engaged for the
majority of the claims, both in number and recorded amounts.

                                       29
<PAGE>


                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Except  in rare  circumstances,  claim  preparation  and  legal  costs  are
expensed  as  incurred.  Exceptions  include  instances  in which  the  contract
document  provides  for their  recovery  or legal  costs are  incurred to pursue
approved settlements by court ruling, binding arbitration, and otherwise. In all
instances  where such  amounts are  recorded,  it is  probable  that the amounts
associated  with claim  preparation  and legal  costs will be  recovered.  As of
December 31, 2000 and 2001, no claim preparation and legal costs were deferred.

     Fees arising from services other than contracting activities are recognized
when the negotiated services are provided.

     BACKLOG - As of December 31, 2001, the Company had a backlog of uncompleted
projects  under  contract  aggregating  approximately  $10,531,000  (compared to
approximately  $20,745,000  as of December  31,  2000),  of which  approximately
$9,263,000  is  attributable  to  earthwork  and utility  contracting  services,
approximately  $217,000 is attributable to demolition and dismantling  services,
and  approximately  $1,051,000 is attributable  to asbestos  abatement and other
services.  The Company  anticipates that it will recognize  approximately 99% of
the revenues from these projects by the end of 2002.

     NEW  ACCOUNTING  PRONOUNCEMENTS  - In June 1998,  the Financial  Accounting
Standards Board issued Statement No. 133, Accounting for Derivative  Instruments
and Hedging  Activities.  The Financial  Accounting  Standards  Board has issued
Statement No. 137 Accounting for Derivative Instruments and Hedging Activities -
Deferral of the effective date of SFAS No. 133, which delays the  implementation
date of SFAS 133 for one year,  to fiscal years  beginning  after June 15, 2000.
The Statement requires the companies to recognize all derivatives on the balance
sheet at fair  value.  Derivatives  that are not hedges must be adjusted to fair
value through income.  If the derivative is a hedge,  depending on the nature of
the hedge,  changes in the fair value of  derivatives  are either offset against
the change in fair  value of assets,  liabilities  or firm  commitments  through
earnings or  recognized in other  comprehensive  income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be  immediately  recognized  in  earnings.  Because of the  Company's
minimal use of derivatives, management does not anticipate the Statement to have
a significant effect on earnings or the financial position of the Company.

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  141.  "Business  Combinations"  and  SFAS  No.  142,  "Goodwill  and  Other
Intangible Assets".  SFAS No. 141 addresses  financial  accounting and reporting
for all  business  combinations  and  requires  that all  business  combinations
entered into subsequent to June 2001 be recorded under the purchase method. This
statement  also  addresses  financial  accounting and reporting for goodwill and
other intangible assets acquired in a business combination at acquisition.  SFAS
No. 142 addresses  financial  accounting  and reporting  for  intangible  assets
acquired  individually  or with a group of other  assets  at  acquisition.  This
statement  also  addresses  financial  accounting and reporting for goodwill and
other intangible assets subsequent to their acquisition.

     These  statements were adopted by the Company on January 1, 2002.  Goodwill
amortization  will  cease as of  December  31,  2001,  and the  Company  will be
required  to complete  an  impairment  test of the  remaining  goodwill  balance
annually (or more frequently if impairment indictors arise). The Company has not
yet determined the financial  impact the adoption of these  pronouncements  will
have on its  financial  position or results of  operations.  As of December  31,
2001, the Company has goodwill of approximately  $2,472,000,  net of accumulated
amortization,   related  to  the   acquisition   of  Cumberland  and  recognized
approximately  $165,000 of  amortization  expense  during 2001. The valuation of
this goodwill will be subject to an impairment test at the date of adoption. The
Company  will  complete the first step of the  impairment  test by June 30, 2002
and, if necessary, will complete the second step by December 31, 2002.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144 addresses financial
accounting and reporting for the impairment of long-lived  assets. The statement
supersedes SFAS No. 121,  "Accounting for the Impairment of Long-Live Assets and
for  Long-Lived  Assets to Be Disposed  Of", and the  accounting  and  reporting
provisions of APB Opinion No. 30. SFAS No. 144 removes  goodwill from its scope,
as goodwill is addressed in the impairment  test described  above under SFAS No.
142. The Company will adopt SFAS No. 144 on January 1, 2002. The adoption is not
expected to have a material effect on the Company's financial position,  results
of operations or cash flows.


                                       30
<PAGE>

                                 KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     RECLASSIFICATION  -  Certain  amounts  in the 1999  and  2000  consolidated
financial statements have been reclassified to conform to the 2001 presentation.

2.   SUPPLEMENTAL STATEMENTS OF CASH FLOWS INFORMATION

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

                                                                     Years Ended December 31,
                                                                     ------------------------
                                                               1999              2000              2001
                                                               ----              ----              ----
     Cash paid:
        Interest                                        $      4,982,000   $      4,469,000   $     3,030,000
        Income taxes                                    $         24,869   $        139,000   $       368,000
     Non-cash investing and financing activity:
     Unrealized gain/(loss) on marketable securities    $     (9,278,000)  $      2,198,000   $     6,684,000
     Transfer between A/P - affiliate and note
        receivable - affiliate                          $           -0-    $        207,083   $        86,000

</TABLE>

3.   RELATED PARTY TRANSACTIONS

     Mr. Francis M. Williams,  the Company's President and majority stockholder,
also controls Cumberland Technologies, Inc. (Cumberland) (see Footnote 9 for the
Company's  investment in  Cumberland),  a publicly  traded property and casualty
insurance company that provides insurance for specialty sureties and performance
and payment bonds for contractors.  Through Cumberland, the Company has obtained
performance  and payment bonds in  connection  with certain of its contracts and
projects.  There  were no such  fees  paid to  Cumberland  for the  years  ended
December 31, 1999, 2000 and 2001.

     On November 10, 1998, the Company loaned $1,000,000 to Cumberland, which is
evidenced by a convertible term note, which was due November 10, 2001. Quarterly
interest payments are due beginning January 1, 1999 at a rate of one half of one
percent over the prime rate established by Bank of America.  The Company has the
right to convert the principal amount of the note into shares of common stock of
Cumberland at $3.00 per share. In 2001, the terms of the note were extended with
a new due date of November  10, 2002.  All other terms  remained the same as the
original note. The balance of the convertible term note at December 31, 2000 and
2001 is $1,000,000 and $604,055, respectively. During 2000 and 2001, the Company
recorded approximately $96,000 and $69,000,  respectively, of interest income on
its note from Cumberland.

     Qualex, Inc., a subsidiary of Cumberland, provided professional services to
the Company,  during 2000 and 2001. The Company recorded  approximately $220,000
and $86,000,  respectively for these services. During 2000 and 2001, the Company
offset interest receivable of approximately  $96,000 and $56,000,  respectively,
on the $1,000,000  note  receivable due from  Cumberland  against the payable to
Qualex, Inc.

     The  Company  recorded  bond  fees  payable  to  officers,   who  are  also
shareholders of the Company,  of  approximately  $50,000 and $52,000 during 2000
and 2001, respectively, although only $58,000 were paid in 2001.

     Mr. Francis M. Williams,  the Company's President and majority stockholder,
Mr. John V. Simon, Jr.,  President of Kimmins  Contracting Corp., and Mr. Joseph
M.  Williams,  the  Company's  Secretary and Treasurer are partners in an entity
called JFJ Investments (JFJ).  During 2001, the Company was provided no services
by JFJ and all  outstanding  balances  due to JFJ were paid as of  December  31,
2001.

     Effective  with the sale of Kimmins  Recycling  during  1998,  the  Company
accrued $1,000,000 payable to Mr. Francis M. Williams for a 10-year  non-compete
agreement.  On  December  31, 2000 Mr.  Williams  agreed to accept a 6% interest
bearing  promissory note that matures on December 31, 2005. The Company paid Mr.
Francis  M.  Williams   $500,000  on  this  note.   The  payment   consisted  of
approximately  $440,000  principle  and $60,000 of interest.  Mr.  Williams then
loaned the Company $500,000 in the form of a demand note.


                                       31
<PAGE>

                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     During 2001, the Company made payments to Cumberland for an indemnification
agreement  on a  bonding  issue  that  was  entered  into  in  1989.  Due to the
conditions  of the  indemnification  agreement,  the Company was required to pay
approximately  $1,850,000 to Cumberland,  and settled for $1,500,000 on November
15, 2001. (See  Extraordinary  Footnote 21). The remaining  balance has been set
aside as a reserve for claims. The case will be appealed.

     The  Company  performed  miscellaneous  construction  work for the  Kimmins
Terrier Foundation,  a private foundation controlled by Mr. Francis M. Williams.
Of the approximately  $28,000 of work performed in 2001 for the Foundation,  all
but approximately $500 was billed.

     Mr. Francis M. Williams,  the Company's President and majority stockholder,
purchased a backhoe from the Company in 2001.  The purchase  price was in excess
of the net book  value of the asset  and the  proceeds  were used to reduce  the
Company's payable to Mr. Williams.

     The following is a summary of the related  party  accounts  receivable  and
accounts payable at December 31, 2000 and 2001:

<TABLE>
<CAPTION>
     <S>                                              <C>                 <C>
               Accounts Receivable                              2000              2001
               -------------------                              ----              ----
           Cumberland Holdings                         $      (25,264)    $      (11,993)
           Cumberland Technologies                               1,067              1,067
           Qualex                                                3,342              3,342
           Terrier Foundation                                      -0-             11,800
           Advances to Employees                                59,941             11,341
           KVN ESOP                                             33,893             33,893
           Cumberland Real Estate Holdings                     900,000                -0-
           Cumberland Property Management                        6,544                -0-
           Summerbreeze                                          5,167                -0-
           Sunshadow                                             5,353                -0-
                                                          -------------      -------------
                                                       $       988,043    $        49,450
                                                          =============      =============

               Accounts Payable                                 2000              2001
               ----------------                                 ----              ----
           Francis M. Williams                         $       148,823    $       120,554
           Joseph M. Williams                                      -0-                680
           John V. Simon, Jr.                                      -0-              8,076
           Qualex Consulting Group                             218,488              1,995
           Cumberland Casualty                                     100             29,783
           Kimmins Terrier Foundation                            1,252              1,252
           Surety Specialists                                    6,734                -0-
           JFJ Investments                                      87,050                -0-
                                                          -------------      -------------
                                                       $       462,447    $       162,340
                                                          =============      =============
</TABLE>




                                       32
<PAGE>

                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
           <S>                                           <C>                 <C>
                                                                      December 31,
                                                                ------------------------
                                                                2000                2001
                                                                ----                ----
           Contract and trade:
              Billed contract receivables
                Completed and uncompleted contracts       $     8,491,514     $    5,930,861
                Retainage                                       1,888,701          1,590,478
              Unbilled contract receivables                     2,306,800          1,806,730
              Trade receivables                                   417,941            355,036
                                                            --------------      -------------
                                                               13,104,956          9,683,105
           Less allowance for doubtful accounts                 (487,941)          (421,696)
                                                            --------------      -------------
                                                               12,617,015          9,261,409
           Less noncurrent portion                            (1,878,445)        (1,228,429)
                                                            --------------      -------------
           Net accounts receivable -
              contract and trade                          $    10,738,570     $    8,032,980
                                                            ==============      =============
</TABLE>

     All unbilled  receivables  relate to work performed or material  shipped by
the  balance  sheet  date and are billed as soon as  administratively  feasible.
Accounts  receivable not expected to be collected within one year of the balance
sheet date are  classified as  non-current.  At December 31, 2000 and 2001,  the
non-current portion of accounts receivable were all claim related.

5.   OTHER CURRENT ASSETS

     The majority of the change in the other current  assets account during 2000
and 2001 was a result of the  Company's  cash  collateral  deposit  payments  of
approximately  $383,000  and  $204,000,  respectively,  in  connection  with the
Company's  workers'  compensation  insurance.  The balance of the other  current
assets  account at December 31, 2000 and 2001,  was  approximately  $537,000 and
$806,000, respectively.

6.   COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS

<TABLE>
<CAPTION>
      <S>                                                          <C>                 <C>
                                                                                December 31,
                                                                           2000               2001
                                                                           ----               ----


      Expenditures on uncompleted contracts                         $     27,051,091    $    30,940,515
      Estimated earnings on uncompleted contracts                          4,297,052          4,102,029
                                                                      ---------------     --------------
                                                                          31,348,143         35,042,544
      Less actual and allowable billings on uncompleted
         contracts                                                        29,607,319         35,211,704
                                                                      ---------------     ---------------
                                                                           1,740,824           (169,160)
      Recorded claims on completed contracts                               7,582,860          5,725,032
                                                                      ---------------     --------------
                                                                    $      9,323,684    $     5,555,872
                                                                      ===============     ==============
      Costs and estimated earnings in excess of billings on
         uncompleted contracts                                      $      2,657,353    $     1,095,561
      Billings in excess of costs and estimated earnings on
         uncompleted contracts                                              (916,529)        (1,264,721)
                                                                      ----------------    ---------------
                                                                           1,740,824           (169,160)
      Recorded claims on completed contracts                               7,582,860          5,725,032
                                                                      ---------------     --------------
                                                                    $      9,323,684    $     5,555,872
                                                                      ===============     ==============
</TABLE>


     During  2000  and  2001,  the  Company  settled  claims  that  resulted  in
approximately  $768,000 and  $758,000,  respectively,  in excess of the recorded
amount. The excess recoveries have been reserved for other claims, or reduced by
current costs associated with claims.


                                       33
<PAGE>

                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     As of  December  31,  2000 and 2001,  the costs and  estimated  earnings in
excess  of  billings  on  uncompleted  contracts  includes  the  Company's  cost
associated with unapproved or disputed  contract change orders and costs claimed
from  customers  on  completed   contracts  of   approximately   $7,583,000  and
$5,725,000, respectively. During the performance of these contracts, the Company
encountered site conditions that differed from bid specifications.  As a result,
the Company  incurred  additional  labor and equipment  costs in performing  the
contract.  By their  nature,  recovery  of these  amounts  is often  subject  to
negotiation  with  the  customer  and,  in  certain  cases,  resolution  through
litigation.  As a result,  the recovery of these  amounts may extend  beyond one
year.  The portions at December 31, 2000 and 2001,  that were not expected to be
collected within twelve months are classified as a non-current asset.

7.   PROPERTY AND EQUIPMENT HELD FOR SALE

     As a result of management's  decision to cease  operations in the northeast
and to de-emphasize the performance of certain environmental services within the
specialty-contracting  segment,  the Company  decided to sell its  transportable
incineration  system.  A purchase  agreement for the sale of the incinerator for
$1,800,000  was  executed  in  February  1998.  The  sale  of the  transportable
incineration system will be completed upon full receipt of the purchase price by
the Company.  As of December 31, 2001, the Company had received $1,177,500 which
has been netted  against the carrying  value of the asset  resulting in $622,500
being included in long-term "property held for sale" at December 31, 2001.

     The Company  has a plan to dispose of  approximately  $3,441,000  (net book
value) of construction equipment within the next year. The depreciation on these
items was stopped at December  31, 2001 and these  assets were  reclassified  as
current property held for sale.

     The Company also has real estate for sale in  Nashville,  Tennessee,  which
has a net book value of  approximately  $411,000.  This  amount is  included  in
long-term "property held for sale" as management does not expect the property to
be disposed of within the next twelve months.

8.   PROPERTY AND EQUIPMENT

                                                  December 31,
                                             2000              2001
                                             ----              ----
     Land                            $     1,058,234     $   1,058,234
     Buildings and improvements            2,891,804         2,891,804
     Construction equipment               50,457,355        24,341,962
     Furniture and fixtures                  523,367           550,340
                                       -------------     -------------
                                          54,930,760        28,842,340
     Less accumulated depreciation       (28,962,865)      (17,057,161)
                                       --------------   ---------------

     Net property and equipment       $   25,967,895    $   11,785,179
                                       ==============   ===============

     Property and equipment is recorded at cost.  Depreciation is provided using
the straight-line method over estimated useful lives ranging from 3 to 30 years.
Depreciation expense was approximately $8,630,000, $7,104,000 and $5,211,000 for
the years ended December 31, 1999, 2000 and 2001, respectively.

9.   INVESTMENTS  IN CUMBERLAND  TECHNOLOGIES,  INC.,  SUMMERBREEZE  APARTMENTS,
     LTD., AND SUNSHADOW APARTMENTS, LTD.

     CUMBERLAND - In 1988, Cumberland Casualty & Surety Company ("CCS") issued a
10 percent  interest  bearing  surplus  debenture to the Company in exchange for
$3,000,000.  In 1992,  such  debenture was assigned to Cumberland  Technologies,
Inc.  ("Cumberland"),  a holding  company that provides,  among other  services,
reinsurance  for  specialty  sureties  and  performance  and  payment  bonds for
contractors.  Cumberland entered into a term note agreement with the Company for
the outstanding  amount of the debenture,  including accrued interest.  Interest
accrued on the term note was  $506,755 at December  31, 1995  ($372,066  in 1996
prior to the conversion discussed below).

                                       34
<PAGE>

                                 KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On November 5, 1996, the Company received  1,723,290  shares, or 30 percent
of the  outstanding  common  stock,  of Cumberland in exchange for the term note
from affiliate. The Cumberland common stock had a fair market value of $3.00 per
share on the date of the  exchange,  based upon the quoted  market  price.  This
investment is accounted for under the equity method. The amount of $3,300,000 in
excess  of the  underlying  equity  was  attributed  to  goodwill  and is  being
amortized over twenty years.  Cumberland is a publicly traded corporation and at
December 31, 2001, the market value of the  Cumberland  common stock held by the
Company  was  approximately  $1,637,000  based on a stock  price of $.95.  As of
December  31,  2000  and  2001,  the  Company's  balance  in its  equity  method
investment  in  Cumberland  was   approximately   $5,078,000   and   $4,927,000,
respectively.  The unamortized goodwill balance was approximately $2,637,000 and
$2,472,000 at December 31, 2000 and 2001, respectively.

     The  Company  has  evaluated  the  balance  in  its  equity  investment  in
Cumberland  at December  31,  2001.  Under the tests  outlined  in FAS-121,  the
Company believes that evaluating the fair value of the investment in the "quoted
market price in active  markets" is not an accurate test of the fair value,  due
to the extremely low trading volume of the stock.  FAS-121 also identifies using
"estimates  based on  valuation  techniques  to  determine  the fair value." The
Company  evaluated the fair value of its investment in Cumberland  using some of
these techniques.  This evaluation supported the current fair value. The Company
also considered  Cumberland's  historical financial performance as well as their
future  projected  income  levels.  The  Company  has the  intent to retain  its
investment in Cumberland  for the  long-term.  At December 31, 2001, the Company
believes that there should be no value  adjustment to the carrying  value of the
Cumberland investment.

     The  following  is a summary of the  financial  position of  Cumberland  at
December 31, 2000 and 2001:

<TABLE>
<CAPTION>
<S>                                                 <C>                     <C>
                                                    December 31, 2000        December 31, 2001
                                                    -----------------        -----------------

Cash and cash equivalents                           $         694,000        $       2,654,000
Investments in various marketable securities                9,955,000               10,174,000
Accounts receivable - trade, net                            3,821,000                4,615,000
Reinsurance recoverable                                     4,910,000                4,485,000
Intangibles                                                 1,115,000                  534,000
Other                                                       3,815,000                3,442,000
                                                   ---------------------    -------------------
   Total assets                                    $       24,310,000        $      25,904,000
                                                   =====================    ===================

Policy liabilities and accruals                    $       10,961,000        $      11,675,000
Long-term debt                                              2,103,000                1,256,000
Other                                                       3,359,000                5,143,000
                                                   ---------------------    --------------------
   Total liabilities                                       16,423,000               18,074,000

Stockholders' equity                                        7,887,000                7,830,000
                                                   ---------------------    --------------------

   Total liabilities and stockholders' equity      $       24,310,000        $      25,904,000
                                                   =====================    ====================

</TABLE>

     During  the  years  ended   December   31,  2000  and  December  31,  2001,
Cumberland's operating results included revenue of approximately $14,425,000 and
$16,461,000. During the same periods, Cumberland recognized net income (loss) of
approximately  $1,042,000 and ($29,000),  respectively.  The Company's equity in
this net income  amounted  to  approximately  $297,000  and $1,000 for the years
ended  December  31, 2000 and 2001,  respectively.  In  addition,  approximately
$165,000  of  amortization  expense was  recorded by the Company  related to the
investment in both 2000 and 2001.


                                       35
<PAGE>



                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     APARTMENTS - In March of 2001, the  Partnership's  properties were sold and
the  Company  received  approximately  $4,637,000  as  its  distributive  equity
interest  preference on complete  liquidation.  For the years ended December 31,
2000 and 2001,  respectively,  the Company recorded  approximately  $397,000 and
$106,000 of net losses from its share of the Apartment's  operations,  including
goodwill  amortization.  The Company's  2001 net loss from  Apartments  includes
approximately  $3,802,000 in net income from  operations and the Company's share
of the  Partnership's  gain on  sale,  $67,000  of  goodwill  amortization,  and
$3,841,000 loss on disposal of investment.

10.  ACCRUED EXPENSES

                                                       December 31,
                                                  2000             2001
                                                  ----             ----
Accrued insurance                              $ 2,868,175     $   1,514,074
Accrued interest                                   113,049            13,546
Accrued property taxes                           2,054,726           669,095
Accrued salaries, wages and payroll taxes          725,736           567,802
Other                                               96,121            70,685
                                               ------------    --------------
Total accrued expenses                         $ 5,857,807     $   2,835,202
                                               ============    ==============

11.      LONG-TERM DEBT


<TABLE>
<CAPTION>
      <S>                                                                         <C>               <C>
                                                                                           December 31,
                                                                                      2000              2001
                                                                                      ----              ----
      Notes payable, principal and interest payable in eleven monthly payments of
         $500,000 and one monthly payment of $1,500,000 each year plus a balloon
         payment due upon maturity at October 7, 2006,
         of $835,830, interest at 8.10%, collateralized by equipment.              $ 37,653,614     $  28,521,545


      Notes payable, principal and interest payable in monthly installments
         through October 2003, interest at varying rates up to 9.3%,
         collateralized by equipment.                                                 4,150,181            66,147

      Line of credit secured by Waste Management shares due and payable upon
         demand, interest payable at lender's base rate of
         LIBOR plus 0.75%.                                                            4,314,566               -0-

      Mortgage notes, principal and interest payable in monthly installments
         through December 1, 2004, interest at varying rates up to prime plus
         1.25%, collateralized by land and
         buildings.  The interest rate at December 31, 2001 is 6.00%.                 1,504,381         1,154,319
                                                                                  --------------   ---------------

      Total debt                                                                     47,622,742        29,742,011
      Less current portion                                                          (17,875,227)      (5,138,682)
                                                                                  --------------   ---------------

      Net long-term debt                                                           $ 29,747,515     $  24,603,329
                                                                                  ==============   ===============
</TABLE>


                                       36


<PAGE>

                                KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Annual  principal  maturities  subsequent  to  December  31,  2001,  are as
follows:

                2002                  $      5,138,682
                2003                         5,584,630
                2004                         6,294,484
                2005                         6,192,249
                2006                         6,531,966
                                         --------------
                                      $     29,742,011
                                         ==============


     The  Company's  outstanding  letter of  credit  facility  of  approximately
$430,000  is  secured  by  a  restricted  cash  account  at  a  local  financial
institution. At December 31, 2000 and 2001, there were no borrowings outstanding
against the letter of credit facility.

     The Company  established loan and collateral  account agreements with firms
holding the Company's  marketable  securities  during 1999 and 2000.  The margin
lines of  credit  provide  cash  advances  to the  Company  and are based on the
current value of the Waste  Management  shares and other  marketable  securities
held by the Company.  At December 31, 2001,  this margin line was closed out and
all Waste Management shares held by the Company were sold.

12.  LEASING ARRANGEMENTS

     The Company  rents  equipment  and  machinery as needed,  as well as office
space, under operating leases for varying periods not to exceed one year. Rental
expense for the years ended December 31, 1999, 2000, and 2001, was approximately
$7,741,000,  $5,466,000 and  $4,369,000,  respectively.  Since 1998, some of the
heavy  construction  equipment  previously  leased was  purchased by the Company
which is the primary reason for the significant and continued  decreases in 2000
and 2001 rental expense.

     The Company formerly leased some of its heavy construction  equipment under
capital  leases.  The  economic  substance  of each lease is that the Company is
financing the acquisition of the assets through the lease, and  accordingly,  it
was recorded in the  Company's  assets and  liabilities.  For the years 2000 and
2001, the Company had no leases that were recorded as a capital lease.

13.  PENSION AND OTHER BENEFIT PLANS

     Stock Option Plan. The Company  originally  reserved  975,000 shares of its
common stock for issuance  upon the exercise of options to be granted  under the
Company's  1987 Stock Option Plan (the Company  Plan).  The exercise price of an
incentive  stock option  granted under the Company Plan may not be less than the
fair market  value of the common  stock at the time the option is  granted.  The
exercise  price of a  non-qualified  stock option granted under the Company Plan
may be any amount  determined  by the Board of  Directors  but not less than the
fair market value of the common stock on the date of the grant.  Options granted
under the Company Plan must, in general, expire no later than ten years from the
date of the grant.

     The Company's Plan has the option to acquire an aggregate of 975,000 shares
of common  stock that may be  granted  to  employees,  officers,  directors  and
consultants  of the Company.  The Plan  authorizes  the Board of Directors  (the
"Board")  to issue  incentive  stock  options  ("ISOs"),  as  defined in Section
422A(b) of the Internal  Revenue Code,  and stock options that do not conform to
the requirements of that Code section ("Non-ISOs").  The Board has discretionary
authority to  determine  the types of stock  options to be granted,  the persons
among those eligible to whom options will be granted, the number of shares to be
subject to such options,  and the terms of the stock option agreements.  Options
may be exercised in the manner and at such times as fixed by the Board,  but may
not be exercised after the tenth anniversary of the grant of such options.


                                       37
<PAGE>


                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         The following table summarizes the transactions for the three years
ended December 31, 2001 relating to the Plan:

                                                              Weighted
                                          Number of            Average
                                            Shares         Exercise Price
                                            ------         --------------
Outstanding December 31, 1998                257,599     $            3.56
   Granted                                   699,099                   .27
   Exercised                                     -0-                   -0-
   Canceled                                (236,266)                  3.56
                                         ------------      ----------------

Outstanding December 31, 1999                720,432                  0.36
   Granted                                   321,976                   .25
   Exercised                                     -0-                   -0-
   Canceled                                  (3,000)                   .25
                                         ------------      ----------------
Outstanding December 31, 2000              1,039,408                  0.33
   Granted                                       -0-                   -0-
   Exercised                                     -0-                   -0-
   Canceled                                  (7,500)                   .25
                                         ------------      ----------------
Outstanding December 31, 2001              1,031,908     $            0.33
                                         ------------      ----------------
Exercisable December 31, 2001                560,293     $            0.37
                                         ============      ================

     The following table summarizes  information about stock options at December
31, 2001:

<TABLE>
<CAPTION>
<S>              <C>                    <C>               <C>              <C>                    <C>
                 Options Outstanding                                          Options Exercisable
                 -------------------                                          -------------------
                                           Weighted
                                           Average
                   Number Outstanding     Remaining            Weighted     Number Exercisable          Weighted
    Range of        at December 31,      Contractual           Average              at                   Average
 Exercise Price           2001               Life           Exercise Price   December 31, 2001        Exercise Price
 --------------           ----               ----           --------------   -----------------        --------------

      $4.50              3,333                 5               $   4.50            3,337              $     4.50
      $3.94             10,000                 6               $   3.94           10,000              $     3.94
      $2.62              8,000                 6               $   2.62            8,000              $     2.62
      $0.28            420,000                 8               $   0.28          252,000              $     0.28
      $0.25            590,575                 9               $   0.25          286,960              $     0.25
                   ------------                                             -------------
                     1,031,908                                                   560,293
                   ============                                             =============
</TABLE>

     Pro forma information regarding net income (loss) and earnings per share is
required by SFAS No. 123, which also requires that the information be determined
as if  the  Company  had  accounted  for  its  employee  stock  options  granted
subsequent to December 31, 1993,  under the fair value method of that Statement.
The fair value for these  options  was  estimated  at the date of grant  using a
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions for 1999, 2000 and 2001;  risk-free interest rates of 5.5 percent; a
dividend yield of zero;  volatility  factors of the expected market price of the
Company's  common  stock  based on  historical  trends;  and a  weighted-average
expected life of the options of seven years.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating  the fair value of traded  options that have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee stock options have  characteristics





                                       38
<PAGE>


                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

significantly  different from those of traded options and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is amortized to expense over the options' vesting period.  The Company's
pro forma information is as follows:

<TABLE>
<CAPTION>
<S>                                                        <C>             <C>               <C>
                                                                 1999             2000              2001
                                                                 ----             ----              ----
Proforma net income (loss) attributable to stockholders    $  (3,371,264)  $      2,833,431   $   (6,680,441)
Proforma income (loss) per common share:
      Basic and diluted                                    $       (.074)  $            .58   $        (1.37)
</TABLE>

     Savings and  Profit-Sharing  Plan.  The Company offers a savings and profit
sharing plan (the "401(k) Plan"),  which qualifies under Sections 401(a) and (k)
of the Code.  Employees  of the  Company and  certain  affiliates  who have been
employed  for a  specified  period of time are  eligible to  participate  in the
401(k) Plan. All contributions  made by the employees vest immediately.  Amounts
contributed  by the Company vest 20 percent  after three years of service and 20
percent each year thereafter.  To accommodate the 2002 EGTRRA requirements,  the
vesting schedule for Company  Contributions  has been amended to vest 20 percent
after two years of service  and 20 percent  each year  thereafter.  The  Company
contributed approximately $42,000, and $48,000 in 2000, and 2001, respectively.

14.  INCOME TAXES

     As of December 31, 2000 and 2001, the Company had  consolidated  income tax
net  operating   loss  ("NOL")   carryforwards   for  federal  tax  purposes  of
approximately   $4,200,000   and   $17,177,000,   respectively.   The  remaining
consolidated   federal  tax  NOL   carryforward   of  $17,177,000   will  expire
approximately  one-half in 2012 and  one-half in 2019  through 2021 if not used.
The Company had alternative  minimum tax credit  carryforwards  of approximately
$1,063,000 and $746,000  available at December 31, 2000 and 2001,  respectively,
to reduce future federal regular income taxes.  The AMT credit  carryforwards do
not expire.  Charitable contribution  carryforwards of approximately $349,000 at
December 31, 2001 expire 2003 through 2006.

     Prior to August 15, 1998,  TransCor  and the Company were not  permitted to
file consolidated  income tax returns because the Company owned less than 80% of
TransCor. On August 15, 1998, the Company acquired an additional 6% of the stock
of TransCor,  raising its ownership  above 80% thereby  permitting the filing of
consolidated tax returns prospectively.

     The   components  of  the  provision  for  income  taxes   (benefits)   are
attributable to continuing operations as follows:
<TABLE>
<CAPTION>
<S>              <C>                <C>               <C>
                         1999              2000               2001
                         ----              ----               ----
Current          $             -0-  $        404,479   $      (257,970)
Deferred               (1,408,389)         (131,559)        (5,466,417)
                    ---------------    --------------     --------------
                 $     (1,408,389)  $        272,920   $    (5,724,387)
                    ===============    ==============     ==============
</TABLE>




                                       39
<PAGE>



                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Deferred income taxes reflect the net tax effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
<S>                                                   <C>                <C>
                                                                    December 31,
                                                              2000                2001
                                                              ----                ----
Deferred tax assets:
   Net operating loss carryforwards                    $     1,576,574     $     6,441,403
   Unrealized losses on marketable securities                2,520,200                 -0-
   Allowance for doubtful accounts                              26,250              24,998
   Deferred costs for tax expensed for books                   633,794             517,255
   Florida AMT tax credit carryforward                          62,917              26,917
   Federal AMT tax credit carryforwards                      1,000,000             719,242
   Accrued workers compensation                              1,008,158             567,778
   Uncompleted long-term contracts                             341,062             328,530
   Tax revenue deferred for books                              258,390               2,227
   Tax over book basis in equity method investee                   -0-              66,941
                                                          -------------       -------------
                                                             7,427,345           8,695,291
                                                          -------------       -------------

Deferred tax liabilities:
   Book over tax basis in equity method investee             (236,674)                 -0-
   Excess of tax over book depreciation                    (4,826,625)         (3,178,237)
                                                          -------------       -------------
                                                           (5,063,299)         (3,178,237)
                                                          -------------       -------------
Net deferred tax asset (liability)                           2,364,046           5,517,054
Less current net deferred asset                              1,731,119           1,136,948
                                                          -------------       -------------
   Net non-current deferred tax asset (liability)      $       632,927     $     4,380,108
                                                          =============       =============
</TABLE>

     As  reflected  above,  the Company has recorded a net deferred tax asset of
$2,364,046  and  $5,517,054  at  December  31,  2000  and  2001,   respectively.
Management  has  determined  that a  valuation  allowance  is not  necessary  at
December  31, 2000 and 2001,  because it is expected  that the net  deferred tax
assets will be realized  through  future profits in operations and settlement of
pending claims. The amount of the net deferred tax assets considered realizable,
however,  could change in the near future if estimates of future  taxable income
during the carryforward period are changed.

     Factors  causing the effective  tax rate to differ from the statutory  rate
are as follows:

                                                  Years Ended December 31,
                                                  ------------------------
                                               1999        2000        2001
                                               ----        ----        ----

Statutory federal rate                         (34.0%)       34.0%     (34.0%)
State income taxes net of federal benefit       (3.5%)        3.5%      (3.5%)
Excess tax deductions (non-timing related)        0.0%        0.0%      (2.6%)
Nondeductible expenses                            1.5%        1.3%        1.8%
Changes in estimates                            (1.5%)        0.0%      (4.3%)
Other                                             7.8%      (5.9%)      (6.0%)
                                             ----------  ----------  ----------
     Effective tax rate                        (29.7%)       32.9%     (48.6%)
                                             ==========  ==========  ==========

                                       40
<PAGE>



                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


15.  STOCKHOLDERS' EQUITY

     The  Company's  Class B common  stock has the same voting  rights as common
stock and is not entitled to participate in cash dividends.  Upon liquidation or
dissolution of the Company,  the holders of common stock are entitled to receive
up to $9.00 per  share,  after  which the  holders  of Class B common  stock are
entitled to receive up to $9.00 per share. Thereafter,  all assets remaining for
distribution  will be  distributed  pro rata to the holders of common  stock and
Class B common stock.  The right to convert Class B common stock to common stock
occurs in any fiscal year in which the Company  achieves net earnings equal to a
specified  amount per the Class B common stock conversion  agreement  (currently
$.84 per share),  which is calculated by adding the total shares  outstanding at
fiscal  year end to the  number of shares  that  could be  converted  during the
fiscal year.

     The holders of the Class B common stock will  thereafter  have the right to
convert up to 625,000  shares of Class B common  stock  into  common  stock on a
share for share basis as follows.  Each cumulative  incremental  increase in net
earnings in any subsequent  year of $.21 per share above the specified  level of
earnings  previously  obtained will afford holders the right to convert up to an
additional  625,000  shares of Class B common stock into common stock on a share
for share basis. Holders of Class B common stock will not be entitled to convert
more than 625,000 of such shares in any fiscal year unless the Company  achieves
earnings  of $1.44 per share of common  stock in any  fiscal  year,  which  will
entitle holders to convert all shares of Class B common stock into common stock.
In addition, conversion occurs if a sale of part of the Company's business as to
which  there  is  a  bona  fide  offer  to  purchase   would  have  resulted  in
convertibility  of  any  of the  outstanding  Class  B  common  stock  and it is
determined  by the Board of  Directors  of the  Company  not to  approve  such a
transaction,  then,  upon  request of the holder or holders of a majority of the
outstanding  Class B common stock, the number of shares thereof which would have
become convertible had the transaction  occurred,  would become  convertible.  A
similar provision  provides that if there is an independent  valuation of a part
of the business of the Company such that if such part of the business were sold,
the result would allow conversion of all outstanding Class B common stock and if
the Board of Directors of the Company does not authorize such sale,  then,  upon
request of the holder or holders of a majority of the outstanding Class B common
stock, the outstanding Class B common stock would become convertible.  No shares
of Class B common stock became  eligible for conversion into common stock during
the years ended December 31, 2000 or 2001.

     Based on 1998  earnings,  625,000  shares  of Class B common  stock  became
eligible  for  conversion  into common  stock.  The 625,000  Class B shares were
converted to common stock in 1999.

     As a result of TransCor's sale of KRC to EESI in August 1998, the Company's
net income for the year ended December 31, 1998 exceeded the threshold amount of
$.84 per share.  Thus,  during 1999, the holder of the Class B common stock, Mr.
Francis M. Williams converted 625,000 Class B shares into common stock.

     The Company has authorized  1,000,000  shares of preferred stock with a par
value of $.001, none of which is presently outstanding. Such preferred stock may
be issued in series and will have such designations,  rights,  preferences,  and
limitations as may be fixed by the Board of Directors.

     During the year ended December 31, 2001, the Company  acquired no shares of
treasury  stock.  At December 31, 2001,  the balance of the  Company's  treasury
stock was $845,892.

16.  COMMITMENTS AND CONTINGENCIES

     The Company is involved in various legal actions and claims  arising in the
ordinary course of its business. After taking into consideration legal counsel's
evaluation  of such actions and claims,  management is of the opinion that their
outcome will not have a material  adverse effect on the  consolidated  financial
position of the Company.

                                       41
<PAGE>




                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     During 2000, the Company entered into a three-year  "Club Seat"  membership
agreement with a local sports venue,  for a total of  approximately  $40,000 per
year. Part of the cost of the agreement is shared with the Company's  affiliate,
Cumberland Technologies, Inc.

17.  FOURTH QUARTER ADJUSTMENTS

     During the fourth quarter of 2000, the Company evaluated its self insurance
accounts and determined that they were over reserved by approximately  $125,000.
The  reserve  for  insurance  claims was  accordingly  reduced by $125,000 as of
December  31,  2000.  The company  recorded  $1,500,000  for an  indemnification
agreement, in the fourth quarter of 2001. (See Footnote 21: Extraordinary Item.)

18.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  following  estimated  fair value  amounts have been  determined  using
available market information and appropriate valuation  methodologies.  However,
considerable  judgment is necessarily  required in  interpreting  market data to
develop the estimates of fair value. Accordingly, the estimates presented herein
are not necessarily  indicative of the amounts that the Company could realize in
a current  market  exchange.  The use of  different  market  assumptions  and/or
estimation  methodologies may have a material effect on the estimated fair value
amounts.

     CASH,  ACCOUNTS  RECEIVABLE,  NOTE  RECEIVABLE  -  AFFILIATE,  AND ACCOUNTS
PAYABLE.  The carrying amount  reported in the balance sheet for cash,  accounts
receivable, and accounts payable approximates their fair value.

     LONG-TERM  DEBT.  The  fair  values  of the  Company's  long-term  debt are
estimated using  discounted cash flow analyses,  based on the Company's  current
incremental  borrowing  rates for similar types of borrowing  arrangements.  The
carrying value of the Company's long-term debt approximates the fair value.



                                       42
<PAGE>



                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19.  EARNINGS (LOSS) PER SHARE

     As required by FASB  Statement No. 128, the following  table sets forth the
computation  of basic and diluted  earnings per share:

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

                                                                                Years Ended December 31,
                                                                   1999                2000              2001
                                                                   ----                ----              ----
Numerator:
----------

Income (loss) from continuing operations                      $   (3,340,077)    $       470,838   $    (5,708,777)
Adjustment for basic earnings per share                                   -0-                -0-                -0-
                                                                --------------     --------------    ---------------
Numerator for basic earnings per share -
   Income (loss) available to common stockholders
   from continuing operations                                 $   (3,340,077)    $       470,838   $    (5,708,777)

Effect of dilutive securities
Numerator for diluted earnings per share-
Income (loss) from continuing operations                      $   (3,340,077)    $       470,838   $    (5,708,777)
Income (loss) from discontinued operations                                -0-          2,390,018                -0-
Income (loss) from extraordinary items                                    -0-                -0-          (937,500)
                                                                --------------     --------------    ---------------
Income (loss) applicable to common stockholders
   after assumed conversions                                  $   (3,340,077)    $     2,860,856   $    (6,646,277)
                                                                ==============     ==============    ===============

Denominator:
-----------

Denominator for basic earnings per share -
   weighted-average shares                                          4,575,545          4,872,135          4,872,135
Effect of dilutive securities
Stock options                                                             -0-                -0-                -0-
Dilutive potential common shares                                          -0-                -0-                -0-
                                                                --------------     --------------    ---------------
Denominator for diluted earnings per share - adjusted
   weighted-average shares and assumed conversions                  4,575,545          4,872,135          4,872,135
                                                                ==============     ==============    ===============

Basic and diluted income (loss) per share from
   continuing operations                                      $         (.73)    $           .10   $         (1.17)
                                                                ==============     ==============    ===============
Basic and diluted income per share from
   discontinued operations                                                -0-                .49                -0-
                                                                ==============     ==============    ===============
Basic and diluted loss per share from extraordinary item                  -0-                -0-              (.19)
                                                                ==============     ==============    ===============
Total basic and diluted income (loss) per share               $         (.73)    $           .59   $         (1.36)
                                                                ==============     ==============    ===============

Weighted average number of shares outstanding used in computations:
   Basic and diluted                                                4,575,545          4,872,135          4,872,135
                                                                ==============     ==============    ===============
</TABLE>

     Unexercised options to purchase approximately 154,000,  361,000 and 563,000
shares of common stock for 1999, 2000, and 2001, respectively, were not included
in the  computations  of diluted loss per share  because the assumed  conversion
would be antidilutive.

                                       43
<PAGE>



                                  KIMMINS CORP.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20.  DISCONTINUED OPERATIONS

     On  June  27,  2000,  the  Company  received  net of  related  legal  fees,
$3,525,000  from WMI as final  settlement.  This  settlement was for adjustments
required under the purchase agreement and for other disputes related to the sale
of the SWMS operations.  This amount net of tax of $1,135,000 has been reflected
on the Statement of Operations as Income from Discontinued Operations.

21.  EXTRAORDINARY ITEM

     During 1989, Kimmins Corp.  entered into an indemnification  agreement with
Cumberland to issue a surety bond to an unrelated contractor. Kimmins received a
fee from the Contractor for the indemnification. In April 1991, the contract was
served with a "Default Termination Notice". On May 2, 1991,  Cumberland executed
a "Takeover  Agreement"  with the Navy and shortly  thereafter  contracted  with
Kimmins Corp. to complete the original  contract.  During 1991,  the  contractor
sued and settled with  Cumberland  and Kimmins Corp. for $30,000 in exchange for
the  right to  recover  from the Navy for  wrongful  termination.  The  original
hearing  determined  wrongful  termination and was appealed by the Navy.  During
2000,  the Federal  Circuit  Court of Appeals  reversed the  original  decision.
Cumberland  then  directed  the  contractor  to  file a  Petition  for  Writ  of
Certiorari to the United States  Supreme  Court.  On April 23, 2001, the Supreme
Court of The United States entered an order to deny the writ of certiorari. As a
result, Cumberland demanded payment from Kimmins Corp. of $1,851,000. Payment of
$1,500,000 was made in full satisfaction of the  indemnification on November 15,
2001.



                                       44
<PAGE>



                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                         ALLOWANCE FOR DOUBTFUL ACCOUNTS
<TABLE>
<CAPTION>
<S>                                 <C>              <C>              <C>               <C>
                                                         Additions
                                       Balance at       Charged to        Deductions
                                        Beginning        Costs and           from          Balance at
            Description                 of Period        Expenses       Allowances (a)   End of Period
            -----------                 ---------        --------       --------------   -------------

Year ended December 31, 2001         $  487,941       $       -0-      $    (66,245)     $    421,696
Year ended December 31, 2000         $  551,355       $       -0-      $    (63,414)     $    487,941
Year ended December 31, 1999         $  739,223       $   40,000       $   (227,868)     $    551,355
</TABLE>

(a)  This amount represents additional  collections of the St. Lucie receivables
     which  were  fully  reserved  as well  as the  write-off  of  uncollectible
     accounts in 1998 and 1999.

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

     As reported in Kimmins Corp. Current Report on Form 8-K, filed November 18,
1999,  Kimmins has changed its  accountants.  On November 11, 1999, the Board of
Directors of the Company  approved the engagement of Ferlita,  Walsh & Gonzalez,
P.A. as its independent auditors for the fiscal year ending December 31, 1999 to
replace  the firm of Ernst & Young LLP,  who were  dismissed  as auditors of the
Company  effective  November 11,  1999.  The reports of Ernst & Young LLP on the
Company's financial statements for the past two years did not contain an adverse
opinion or a  disclaimer  of opinion  and were not  qualified  or modified as to
uncertainty,  audit scope, or accounting principles.  The Company had authorized
Ernst & Young LLP to  discuss  the  results  of the past two years  audits  with
Giunta, Ferlita & Walsh.

     In  connection  with the  audits of the  Company's  consolidated  financial
statements  for  each  of the two  years  ended  December  31,  1998  and in the
subsequent interim periods,  there we no disagreements with Ernst & Young LLP on
any  matters  of  accounting   principles  or  practices,   financial  statement
disclosure  or  auditing  scope and  procedures  which,  if not  resolved to the
satisfaction  of Ernst & Young LLP,  would have caused Ernst & Young LLP to make
reference to the matter in their report.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The directors and executive officers of the Company are as follows:

     Name                  Age   Position
     ----                  ---   --------
     Francis M. Williams   60    President, Chief Executive Officer and Director
     Karl Burgin           55    Vice President
     Joseph M. Williams    45    Secretary and Treasurer
     Michael Gold          53    Director
     R. Donald Finn        58    Director

     All  directors of the Company hold office until the next annual  meeting of
stockholders and the election and qualification of their successors. Officers of
the Company are elected  annually by the Board of  Directors  and hold office at
the discretion of the Board of Directors.

     Francis M.  Williams  has been  President  and Chairman of the Board of the
Company  since its  inception and Chairman of the Board of Directors of TransCor
since  November  1992.  For more than five years  prior to  November  1988,  Mr.
Williams  was the Chairman of the Board and Chief  Executive  Officer of Kimmins
Corp. and its  predecessors  and sole owner of K Management Corp. From June 1981
until  January  1988,  Mr.  Williams  was also the  President  and a Director of
College Venture Equity Corp., a small business investment company.  Mr. Williams
has also been a Director of the National  Association of Demolition  Contractors
and a member of the  Executive  Committee of the Tampa Bay  International  Trade
Council.

                                       45
<PAGE>

     Karl Burgin has been Chief Financial  Officer of the Company since May 2001
and has been employed by the Company as its Controller  since January 2000. From
July 1998 until November 1999, Mr. Burgin served as Chief  Financial  Officer of
Laker Airways, Inc. and Star Air Tours, Inc. From December 1994 until June 1998,
Mr Burgin was a  self-employed  Financial  Consultant.  From December 1991 until
November 1994, Mr. Burgin served as Chief Financial  Officer of Integrated Waste
Services, Inc. From October 1984 until November 1991, Mr. Burgin served as Chief
Financial  Officer of Reger Capital Corp.  Prior to September  1984,  Mr. Burgin
served in various financial  capacities for public and private companies engaged
in the construction, waste disposal, and real estate development businesses.

     Joseph M.  Williams  has been the  Secretary  and  Treasurer of the Company
since October 1988.  Since  September  1997, Mr. Williams has been President and
Chief  Executive  Officer of TransCor.  Since November  1991,  Mr.  Williams has
served as President and has been a Director of Cumberland Technologies,  Inc., a
holding  company  whose  wholly  owned  subsidiaries   provide  reinsurance  and
specialty  sureties and  performance  and payment  bonds.  Since June 1986,  Mr.
Williams has served as President  and Vice  President and has been a Director of
Cumberland  Real  Estate  Holdings,  Inc.,  the  corporate  general  partner  of
Sunshadow  Apartments,  Ltd.  ("Sunshadow")  and Summerbreeze  Apartments,  Ltd.
("Summerbreeze"),  both of which are limited partnerships. Mr. Williams has been
employed by the Company and its subsidiaries in various capacities since January
1984.  From  January  1982 to  December  1983,  he was the  managing  partner of
Williams and Grana,  a firm engaged in public  accounting.  From January 1978 to
December 1981, Mr.  Williams was employed as a senior tax accountant  with Price
Waterhouse & Co. Joseph M. Williams is the nephew of Francis M. Williams.

     Michael Gold has been a Director of the Company since  November  1987.  For
more than the last five years, Mr. Gold has been a partner in the Niagara Falls,
New York law firm of Gold and Gold.

     R. Donald Finn has been a Director of the Company since  November 1992. For
more than the last five  years,  Mr.  Finn has been a partner in the Law Firm of
Gibson,  McAskill & Crosby  located in  Buffalo,  New York,  where Mr.  Finn has
practiced law for more than the last 25 years.

     Set forth  below is  information  regarding  certain key  employees  of the
Company:

     John V.  Simon  Jr.,  has been  President  and  General  Manager of Kimmins
Contracting Corp.,  responsible for supervising utility construction,  since May
1981,  and served as a Vice  President  of the Company  from 1981 until  October
1988. From January 1978 to May 1981, Mr. Simon owned Simon Construction Company,
a company that performed site work and utilities and demolition projects.

     Section  16(a)  Beneficial  Ownership  Reporting  Compliance.  Pursuant  to
Section  16(a)  of the  Securities  Exchange  Act of 1934 and the  rules  issued
thereunder,  the  Company's  executive  officers and  directors  and any persons
holding more than 10 percent of the Company's  common stock are required to file
with the  Securities  and Exchange  Commission  and the New York Stock  Exchange
reports of their initial ownership of the Company's common stock and any changes
in ownership of such common stock. Specific due dates have been established, and
the Company is required to disclose in its Annual  Report on Form 10-K and Proxy
Statement  any  failure  to file such  reports  by these  dates.  Copies of such
reports are required to be furnished to the Company.  Based solely on its review
of  the  copies  of  such  reports   furnished   to  the  Company,   or  written
representations that no reports were required, the Company believes that, during
2001, all of its executive  officers  (including the Named Executive  Officers),
directors and persons  owning more than 10 percent of its common stock  complied
with the Section 16(a) requirements,  except that Mr. Burgin filed one late Form
3.



                                       46
<PAGE>


ITEM 11.   EXECUTIVE COMPENSATION

     Summary  Compensation  Table.  The following table provides certain summary
information  concerning  compensation  paid or  accrued by the  Company  and its
subsidiaries  to the Chief Executive  Officer and all other  executive  officers
whose salary and bonus  exceeded  $100,000 for the year ended  December 31, 2001
(the "Named Executives"):

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S>                            <C>        <C>         <C>               <C>              <C>                       <C>

                                                                                         Long Term Compensation
                                                                                                Awards
                                           Annual Compensation                                Securities
          Name and                                                      Other Annual           Underlying              All Other
     Principal Position         Year         Salary          Bonus      Compensation        Options/SAR's (#)       Compensation(1)
     ------------------         ----         ------          -----      ------------        -----------------       ---------------

Francis M. Williams             2001      $   125,000  $       50,000       $-0-                    -0-          $             2,239
   Chairman of the Board        2000          125,000  $       50,000       $-0-                    -0-          $             1,250
   President and                1999          126,345  $       50,000       $-0-                420,000          $             1,775
   Chief Executive Officer


John V. Simon, Jr.              2001     $    125,008  $          -0-       $-0-                    -0-          $             2,239
   President of Kimmins         2000     $    125,008  $          -0-       $-0-                100,000          $             1,262
   Contracting Corp.            1999     $    126,353  $          -0-       $-0-                 21,333     (2)  $             1,612

</TABLE>

     (1)  Represents the Company's contribution to the employee's account of the
          Company's  401(k) Plan and premiums  paid by the Company for term life
          insurance and long-term disability.  These plans, subject to the terms
          and conditions of each plan, are available to all employees.

     (2)  Reflects  21,333  options  granted  during 1999 upon  cancellation  of
          21,333 options originally granted in 1997.

          Grant of Options. During 1999, 420,000 options were granted to Francis
     M. Williams in recognition of his  performance.  During 2000,  options were
     granted to Mr. Simon and other management personnel in recognition of their
     performance.  During 2001, no options were granted.  No stock  appreciation
     rights (SARs) have been granted by the Company.

          Aggregated  Option/SAR  Exercises in Last Fiscal Year and Fiscal Year-
     End  Option/SAR  Values.  The  following  table  summarizes  the net  value
     realized on the  exercise  of options in 2000 and the value of  outstanding
     options as of December 31, 2000, for the Named Executives.


               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
<S>                       <C>                <C>               <C>                             <C>
                                                                                                    Value of
                                                                                                  Unexercised
                                                                  Number of Securities            In-the-Money
                                                                 Underlying Unexercised         Options/SARs at
                               Shares                                Options/SARs at            Year-End ($) (1)
                              Acquired           Value                Year-End (#)                Exercisable/
          Name             on Exercise (#)    Realized ($)      Exercisable/Unexercisable        Unexercisable
          ----             ---------------    ------------      -------------------------        -------------
Francis M. Williams              -0-              $-0-               252,000/168,000               $-0-/$-0-
Joseph M. Williams               -0-              $-0-               108,000/105,333             $1,080/$1,053
John V. Simon, Jr.               -0-              $-0-                83,000/88,666                $830/$887

</TABLE>

(1)  Value is calculated using the Company's closing stock price on December 31,
     2001,   per   share,   less   the   exercise   price   for   such   shares.




                                       47
<PAGE>

     Compensation  Committee  Interlocks and Insider  Participation.  During the
year ended December 31, 2001, Mr. Francis M. Williams,  the Company's  President
and Chairman of the Board of Directors,  served as President and Chairman of the
Board of Directors of TransCor,  and Mr. Karl Burgin  served as Chief  Financial
Officer of the Company and TransCor.

     Compensation  of Directors.  During the year ended  December 31, 2001,  the
Company paid non-officer  Directors an annual fee of $5,000 and $1,000 per board
meeting  attended.  Directors  are  reimbursed  for all  out-of-pocket  expenses
incurred in attending Board of Directors and committee meetings.

Stock Option and Other Plans

1987 STOCK OPTION PLAN

     The  Company  adopted a stock  option plan (the  "Plan")  pursuant to which
975,000 shares of common stock were originally  reserved for issuance to persons
upon exercise of options  designated as "incentive  stock  options,"  within the
meaning of Section 422A of the Internal  Revenue code of 1986 (the "Code"),  and
non-qualified stock options. The purpose of the Plan is to attract,  retain, and
motivate  officers and other  full-time  employees  of the Company,  and certain
other persons  instrumental  to the success of the Company,  and to provide them
with a means to acquire a proprietary interest in the Company.

     The Plan is administered by a committee  consisting of three members of the
Board of  Directors.  The exercise  price of an incentive  stock option  granted
under the Plan may not be less than the fair market value of the common stock at
the time the option is granted  (110 percent of fair market value in the case of
an incentive  stock option granted to an employee owning more than 10 percent of
the voting stock of the Company).  The exercise price of a  non-qualified  stock
option  granted  under  the Plan may be any  amount  determined  by the Board of
Directors  but not less than the fair  market  value of the common  stock on the
date of the grant.  Options  granted under the Plan must, in general,  expire no
later  than ten years  from the date of the grant  (five  years from the date of
grant in the case of an  incentive  stock option  granted to an employee  owning
more than 10 percent of the voting stock of the Company). All options granted to
date  provide  that the  grantees'  rights vest over five years from the date of
grant. See Item 12 for Named Executives holding options at December 31, 2001.

SAVINGS AND PROFIT-SHARING PLAN

     The Company offers a savings and profit  sharing plan (the "401(k)  Plan"),
which  qualifies  under  Sections  401(a) and (k) of the Code.  Employees of the
Company and certain  affiliates who have been employed for a specified period of
time are eligible to participate in the 401(k) Plan. All  contributions  made by
the  employees  vest  immediately.  Amounts  contributed  by the Company vest 20
percent  after three years of service and 20 percent  each year  thereafter.  To
accommodate  the 2002  EGTRRA  requirements,  the vesting  schedule  for Company
Contributions has been amended to vest 20 percent after two years of service and
20 percent each year thereafter.



                                       48
<PAGE>



ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth the number of shares of the Company's
common stock beneficially owned as of March 15, 2002, by (i) persons known by
the Company to own more than 5 percent of the Company's outstanding common
stock, (ii) by each Named Executive and director of the Company, and (iii) all
executive officers and directors of the Company as a group:

<TABLE>
<CAPTION>
<S>                           <C>                     <C>                            <C>           <C>
                                                                                                   Percent of
                                                                                     Percent       Total
Name and Address of                                                                  of            Voting
Beneficial Owner(1)            Title of Class          Number of Shares              Class         Power
-------------------            --------------          ----------------              -----         -----

Francis M. Williams            Common Stock                   2,693,238               55.3%
                               Class B Common Stock           1,666,569     (2)      100.0%          66.7%

Joseph M. Williams             Common Stock                     296,220     (3)        6.1%           3.9%

John V. Simon, Jr.             Common Stock                     142,554     (4)        2.9%           1.7%

Michael Gold                   Common Stock                      28,923     (5)           *              *

Donald Finn                    Common Stock                      18,254     (6)           *              *

Karl Burgin                    Common Stock                       4,000     (8)           *              *

All executive officers and     Common Stock                   3,133,189  (2)(3)       64.4%
directors as a group                                                     (5)(7)
(five persons)
                               Class B Common Stock           1,666,569     (8)       100.0%          73.4%
</TABLE>

(1)  The  addresses of all officers  and  directors of the Company  above are in
     care of the Company at 1501 Second Avenue, East, Tampa, Florida 33605.

(2)  Includes  2,385,319  shares  owned  directly  by Mr.  Francis M.  Williams;
     includes  168,000  shares  issuable upon exercise of currently  exercisable
     stock options;  48,908 shares owned by Mr.  Williams'  wife;  30,493 shares
     held by Mr.  Williams as Trustee for his wife and  children;  24,626 shares
     held by Mr. Williams as Custodian under the Florida Uniform Gifts to Minors
     Act for his children; 1,066 shares held by Kimmins Realty Investment, Inc.,
     which is owned 100 percent by Mr.  Williams;  and 34,826 shares held by the
     Company's 401(k) Plan of which Mr. Williams is fully vested.

(3)  Includes  51,500 shares owned by Mr.  Joseph M.  Williams;  108,000  shares
     issuable upon exercise of currently exercisable stock options; 5,500 shares
     held by Mr.  Williams as trustee for his children;  131,220  shares held by
     the  Company's  401K plan of which Mr.  Williams is a trustee of the 401(k)
     Plan with shared voting and investment power.

(4)  Includes  1,500 shares owned by Mr.  Simon;  83,000  shares  issuable  upon
     exercise of currently  exercisable stock options; and 58,054 shares held by
     the Company's 401(k) plan of which Mr. Simon is fully vested.

(5)  Includes 1,150 shares owned by Mr. Gold;  5,775 shares  currently  owned by
     Mr.  Gold's  wife;  2,898 held by Mr. Gold as trustee for Mr.  Gold's minor
     children; and 19,100 shares issuable upon exercise of currently exercisable
     stock options.

(6)  Includes  5,154 shares owned by Mr. Finn;  and 13,100 shares  issuable upon
     exercise of currently exercisable stock options.



                                       49
<PAGE>


(7)  Includes  303,799  shares  issuable upon exercise of currently  exercisable
     stock  options;  92,880 shares held by the  Company's  401(k) Plan of which
     certain  officers of the Company are fully vested;  and 131,220 shares held
     by the  Company's  401(k) Plan of which the  Secretary  of the Company is a
     trustee.

(8)  Includes  4,000  shares that may be  purchased  by Mr.  Burgin  pursuant to
     immediately exercisable options.

     *Less than one percent.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Mr. Francis M. Williams,  the Company's President and majority stockholder,
also  controls  Cumberland,  a property  and  casualty  insurance  company  that
provides  insurance for specialty sureties and performance and payment bonds for
contractors.  Through  Cumberland,  the Company  has  obtained  performance  and
payment bonds in connection with certain of its contracts and projects. The fees
that the Company paid for these  services for the years ended  December 31, 1997
and 1998, were approximately  $43,000 and $29,000,  respectively.  There were no
related fees paid to Cumberland for the years ended December 31, 2000 and 2001.

     The  Company  recorded  bond fees  payable to  officers  of the  Company of
approximately  $50,000  and $52,000  during 2000 and 2001.  During 2000 and 2001
approximately $10,000 and $58,000 of those fees were paid respectfully.

     On November 5, 1996, the Company  received  1,723,290  shares of Cumberland
common stock in exchange for the term note of  $5,169,870  due from  Cumberland.
The  Cumberland  common  stock had a fair market value of $3.00 per share on the
date of the exchange,  based upon the quoted market  price.  This  investment is
accounted for under the equity method,  and the Company's interest in Cumberland
represents an ownership share of approximately 31 percent.  At December 31, 2000
and 2001,  the market value of the  Cumberland  common stock held by the Company
(based on the non-actively traded stock price) was approximately  $2,585,000 and
$1,637,000, respectively.

     On November  10,  1998,  TransCor  loaned  $1,000,000  to  Cumberland.  The
TransCor loan to Cumberland is evidenced by a convertible term note which is due
November 10, 2001.  At this date an agreement was entered into that extended the
note,  the new due date being  November 10, 2002.  All other terms  remained the
same as the original note. Quarterly interest payments are due beginning January
1,  1999 at a rate of one  half of one  percent  over the  rate  established  by
NationsBank. TransCor has the right to convert the principal amount of note into
shares of common stock of Cumberland at $3.00 per share.

     On August 14, 1998,  the Company  acquired an additional  297,200 shares of
common stock in TransCor from Francis M. Williams, President and Chief Executive
Officer.  The  acquisition  increased the Company's  ownership  percentage to 81
percent  from 74 percent and results in the ability to  consolidate  the Company
and TransCor for federal income tax purposes on a prospective basis.

     Qualex,  which is  controlled  by Mr.  Francis M.  Williams,  provides some
services,  including  legal  counsel to the Company.  During 2000 and 2001,  the
Company recorded  approximately $220,000 and $165,000,  respectively,  for these
services.

     Effective  with the sale of Kimmins  Recycling  during  1998,  the  Company
accrued $1,000,000 payable to Mr. Francis M. Williams for a 10-year  non-compete
agreement. In 1999 and 2000, the accrual amount remained unchanged. In 2001, the
Company paid Mr.  Francis M. Williams  $500,000  which in turn he loaned back to
the Company payable by the Company in the form of a demand note.

     Mr. Francis M. Williams,  the Company's President and majority stockholder,
Mr. John V. Simon, Jr.,  President of Kimmins  Contracting Corp., and Mr. Joseph
M.  Williams,  the  Company's  Secretary and Treasurer are partners in an entity
named JFJ Investments  (JFJ).  During 2000, JFJ loaned $90,000 to the Company of
which  $65,000 was owed as of December  31,  2000.  In  addition,  JFJ  provided
$38,000 of services to the Company  during 2000 which were unpaid as of December
31, 2000. In 2001,  JFJ provided no services to the Company and all  outstanding
balances due were paid.


                                       50
<PAGE>

                                     PART IV

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

(a)  List of documents filed as part of this Report

     1.   Financial Statements

          - Report of Independent Certified Public Accountants
          - Report of Independent Certified Public Accountants
          - Consolidated balance sheets at December 31, 2000 and 2001
          - Consolidated statements of operations for each of the three years
              in the period ended December 31, 2001
          - Consolidated statements of comprehensive income for each of the
              three years in the period ended December 31, 2001
          - Consolidated statements of stockholders' equity for each of the
              three years in the period ended December 31, 2001
          - Consolidated statements of cash flows for each of the three years
              in the period ended December 31, 2001
          - Notes to consolidated financial statements

     2.  Financial Statement Schedule

         II-  Valuation and Qualifying Accounts

     All other  Schedules  are omitted  since the  required  information  is not
present or is not present in amounts  sufficient  to require  submission  of the
Schedules,  or because the  information  required  is included in the  financial
statements and notes thereto.

          3. The following documents are filed as exhibits to this Annual Report
on Form 10-K:

          2.1       -Plan and Agreement of Merger  (incorporated by reference to
                    Appendix A to the Company's  definitive  Proxy Statement for
                    its 1999 Annual  Meeting of  Stockholders,  dated August 16,
                    1999,  filed with the  Commission  on August  16,  1999 (the
                    "Proxy Statement").

          3.1       -Articles of Incorporation  of the Registrant  (incorporated
                    by reference to Appendix B to the Proxy Statement).

          3.2       -Bylaws of the Registrant  (incorporated by reference to the
                    Registrant's  Current  Report on Form 8-K dated  October 19,
                    1999 as filed with the Securities and Exchange Commission).

          10.1(1)   -Stock Option Plan

          10.2(1)   -Form of Stock Option Agreement for Executives

          10.3(2)   -The Apartments Partnership Agreements

          10.4(2)   -Term  Notes  for  equipment   financed   with   Caterpillar
                    Financial Services

          10.5(3)   -Stock Purchase  Agreement dated August 14, 1998 between the
                    Company and Francis M. Williams

          10.6(4)   -Stock  Purchase  Agreement  between  TransCor  and  Eastern
                    Environmental Services dated July 17, 1998

          10.7(5)   -Second   Amended  and  Restated  Loan   Agreement   between
                    Registrant and SouthTrust Bank, NA

          10.8(5)   -Amendment to Second Amended and Restated Loan Agreement

          16.1      -Letter re change in Certifying Accountant  (incorporated by
                    reference to Exhibit 99.1 of the Registrant's Current Report
                    on Form  8-K  dated  November  18,  1999 as  filed  with the
                    Securities and Exchange Commission).


          21        -Subsidiaries of the Registrant (Previously filed).


          23.1      -Consent of Ferlita, Walsh & Gonzalez, PA

1 Previously filed on June 29, 1989, as part of Registrant's  Form S-8, File No.
33-29612,  and incorporated  herein by reference  thereto.



                                       51
<PAGE>

2    Previously filed on July 2, 1998 as part of the Registrant's  Annual Report
     on Form 10-K for the year ended  December  31, 1997,  File No.  1-10489 and
     incorporated herein by reference thereto.

3    Previously  filed  on April  15,  1999 as part of the  Registrant's  Annual
     Report on Form 10-K for the year ended December 31, 1998,  File No. 1-10489
     and incorporated herein by reference thereto.

4    Previously filed as part of TransCor's  amended Form 8-K, File No. 1-11822,
     filed on August 4, 1998.

5    Previously filed on April 4, 2000 as part of the Registrant's Annual Report
     on Form 10-K for the year ended December 31, 2000,  File No.  001-10489 and
     incorporated herein by reference thereto.

(b)  Reports on Form 8-K.




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<PAGE>



                                   SIGNATURES


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


                                   KIMMINS CORP.



Date:   January 6, 2003            By:/s/ Francis M. Williams
       ----------------------         -----------------------------------
                                      Francis M. Williams
                                      President


     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.


Date:   January 6, 2003             /s/ Francis M. Williams
       ----------------------       -----------------------------------
                                    Francis M. Williams
                                    President and Director
                                    (Chief Executive Officer)

Date:  January 6, 2003              /s/ Joseph M. Williams
      -----------------------       -----------------------------------
                                    Joseph M. Williams
                                    Secretary/Treasurer

Date:  January 6, 2003              /s/ Karl Burgin
       ----------------------       -----------------------------------
                                    Karl Burgin
                                    Vice President and Chief Financial Officer
                                    (Principal Accounting and Financial Officer)

Date:  January 6, 2003              /s/ Michael A. Gold
       ---------------------        -----------------------------------
                                    Michael A. Gold, Director

Date:  January 6, 2003              /s/ R. Donald Finn
       --------------------         -----------------------------------
                                    R. Donald Finn, Director





                                       53
<PAGE>


         KIMMINS CORP., CERTIFICATION FOR QUARTERLY REPORT ON FORM 10-K


I, Karl Burgin, certify that:

1.   I have reviewed this annual report on Form 10-K of Kimmins Corp.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

Date:    January 6, 2003           /s/ Karl Burgin
                                   ---------------------------------------------
                                   Karl Burgin, Chief Financial Officer



                                       54
<PAGE>





           KIMMINS CORP., CERTIFICATION FOR ANNUAL REPORT ON FORM 10-K


I, Francis M. Williams, certify that:

1.   I have reviewed this annual report on Form 10-K of Kimmins Corp.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of material  fact or omit to state a material  fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material  respects the financial  condition,  results of operation and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     annual report;

Date:    January 6, 2003            /s/ Francis M. Williams
                                    --------------------------------------------
                                    Francis M. Williams
                                    Chairman of the Board, President and
                                    Chief Executive Officer



                                       55