SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                   FORM 10K-SB

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

For the fiscal year ended                            Commission file
May 31, 1998                                              number
                                                        000-18097

                        BERNARD HALDANE ASSOCIATES, INC.
                        --------------------------------
             (Exact name of Registrant as specified in its charter)

                          QUANTUM VENTURES GROUP, INC.
                          ----------------------------
                           (Former name of Registrant)

          Florida                                          59-2720407
          -------                                          ----------
(State or other jurisdiction                           (I.R.S. Employer
of incorporation or organization)                       Identification No.)

192 Lexington Avenue, 15th Floor, New York, New York 10016
----------------------------------------------------------
(Address of Principal Executive Offices)

444 Park Avenue South, Suite 503, New York, New York 10016
----------------------------------------------------------
(Former address of principal executive offices)

         Registrant's telephone number:                       (212) 679-3360

                   ==========================================

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

                                                 Name of each exchange
Title of each class                               on which registered
-------------------                               -------------------

     COMMON                                              NONE

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


                                     COMMON

                                (Title of Class)

                                        1

<PAGE>



Indicate by check mark whether the Registrant (i) 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 (ii) has been subject to such filing
requirements for the past 90 days.

                                                        YES   X     NO
                                                            ----       ----

         The aggregate market value of the voting stock held by nonaffiliates of
the Registrant is approximately $1,105,737* (as of July 27, 1998.)

         APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS

         Indicate by check mark whether the Registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                               YES        NO        N/A   X
                                                   ----      ----       ----

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

                           FILL IN BELOW

         Indicate the number of shares outstanding of each of this Registrant's
classes of common stock, as of the latest practical date: 1,148,865 shares of
common stock issued and outstanding as of May 31, 1998. (Includes 199,500
treasury shares.)


                       DOCUMENTS INCORPORATED BY REFERENCE

         Company's Registration Statement filed on Form S-18, File No.
000-18097.

         Annual Report on Form 10-K for the year ended May 31, 1993.

         Annual Report on Form 10-K for the year ended May 31, 1989.


         *Based upon the closing bid price of $2.4375 on July 28, 1998 as
reported by NASDAQ.



                                        2

<PAGE>



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

         (a)      General Development of Business
                  -------------------------------

         Bernard Haldane Associates, Inc. (the "Company") f/k/a Quantum Ventures
Group, Inc. owns the worldwide licensing rights to the Bernard Haldane name and
system of career management. The Bernard Haldane organization operates through
sublicensee offices in the United States, Canada and the United Kingdom,
offering career management, out-placement and job search services under the
Bernard Haldane name. Today there are 77 Bernard Haldane offices operating
throughout the world.

         During the Company's last fiscal year, nine new licensee offices were
opened. Management intends to open additional licensee offices, and where
applicable, offer franchise offices. During this past year the Company advised a
sublicensee that it was in default under the terms and conditions of the
sublicense agreement and as a result the sublicensee agreed to terminate the
sublicense agreement. Concurrently therewith, the Company, through two wholly
owned subsidiaries, assumed operations of the four offices formerly operated by
the sublicensee. The Company has since transferred one of these offices to an
existing sublicensee. Until such time as a new sublicensee is identified, the
Company will continue to operate the remaining three offices, service existing
clients and honor client refund requests.

         Also during this past year a sublicensee owning a total of six offices
in Texas and California left the organization in violation of the sublicensee
agreement. The Company has initiated legal proceedings against this former
sublicensee.

         Management does not anticipate opening any other company owned Haldane
offices at this time. During the past year, the Company opened its second
overseas licensed office in the United Kingdom and the Company intends to 
explore overseas expansion opportunities.

          The Company has also developed a specially designed career management
program to be offered to graduating college students through its wholly owned
subsidiary, First Career Corp. (See the narrative description of Business, Item
1(c) for a more detailed description of the operations of the Company.)

         (b)      Financial Information about Industry Segments
                  ---------------------------------------------

         The Company's primary business activity is providing career management
and advisory services under the Bernard Haldane name.

                                        3

<PAGE>



Bernard Haldane operations generated royalty revenues of $2,411,659 and
generated income before taxes of $275,605, for the Company's last fiscal year.

          The Company also offers career management services to recent college
graduates through its First Career program.




         (c)      Narrative Description of Business
                  ---------------------------------

         The Bernard Haldane system offers its clients a program designed to
prepare and teach its clients a means to achieve individual career advancement
and personal development. The Bernard Haldane system (the "System") instructs
clients on the dynamics of their own human potential and how to cope with
adverse changes in their occupational life through individualized counseling
sessions which normally last from three to twelve weeks.

         Dr. Bernard Haldane earned a P.H.D. in Humanities. In 1946 he developed
a program to assist U.S. military officers in acquiring civilian jobs following
World War II. Dr. Haldane also launched this program in universities in the New
York area. The initial Haldane office was opened in New York in 1947 under the
name "Executive Job Counselors", and by 1948, Dr. Haldane was operating career
management offices in Boston and Washington, D.C. In 1958, Dr. Haldane changed
the Company's name from Executive Job Counselors to Bernard Haldane, which it
and its licensees have used since that time. The current system of licensing
Bernard Haldane offices began in the 1960s, with licensee offices in New York,
Chicago and Philadelphia. The system of Haldane licensee office expanded
significantly in the 1970s and early 1980s.

          In 1986 Dan Bruce, a licensee who operated several Haldane offices,
and the owner and principal shareholder of DRB Ltd., acquired from Career
Productivity Inc., an entity owned by Dr. Bernard Haldane, the principal rights,
names, and methods relating to "Individual Career Counseling Services" on a
worldwide basis, including the name "Haldane" and variations thereof, although
excluding certain activities relating to the personal activities of Dr. Haldane.
In consideration for the transfer of these rights, DRB agreed to pay $14,000 per
month for ten years and $7,000 per month for an additional ten years (the latter
amount to be adjusted beginning the eleventh year by 5% per year to "reflect an
inflation factor". To secure such payments, DRB granted CPI a security interest
in the names, methods, rights, sublicenses, etc. conveyed therewith.

                                        4

<PAGE>



         In September 1989, Career Services Management Corp., now a 100% owned
subsidiary of the Company acquired all of the issued and outstanding shares of
stock of DRB for $1.25 million payable, $1 million at closing and $250,000
pursuant to a promissory note payable to Dan Bruce which provided for payment of
principal and interest at the rate of eight percent (8%) per annum. The
principal balance on the note was to be amortized over a period of ten years
with the entire unpaid principal balance due in 1992. Mr. Bruce has subsequently
extended this note and during the fiscal year ended May 31, 1998, the obligation
was paid in full.

         DRB remains obligated to  make monthly payments of $7,000
per month until July 2006  to B+E Partnership. These payments are
also subject to an annual cost of living adjustment. At the time of
acquisition of DRB Ltd.  these payments were being made by DRB Ltd.
to Career Productivity Inc., whose owner was Dr. Bernard Haldane.
Subsequent thereto, Career Productivity Inc. sold this obligation
due from DRB to B+E Partnership. One of the partners of B+E
Partnership is Dan Bruce, the previous owner of DRB Ltd. The
obligation of DRB to pay B+E Partnership is secured by the Haldane
license. Should DRB default on its obligation, DRB would forfeit
all rights to the use of the Haldane name and system of career
management. Mr. Bruce is not involved in DRB's or the Company's
operations.

         As of May 31, 1998, there were 77 Bernard Haldane offices operating
throughout the United States, Canada and in the United Kingdom. The Company
currently operates three offices which were acquired as a result of the
termination of a sublicensee agreement.(Four offices were originally acquired
and one license has since been transferred to an existing sublicensee.) In
addition, several of the Haldane offices are owned by entities in which Jerold
Weinger, the Company's president and chief executive officer serves as either an
officer, director or shareholder. Any Haldane office opened in a new territory
is subject to payment of a licensing fee to DRB Ltd. at the prevailing licensing
rate.

           Licensees may open additional licensed offices within an
existing territory without payment of any new licensing fees.
Offices purchased from existing licensees were not subject to
payment of any territorial fee to DRB.  (See "Certain
Transactions")



                                        5

<PAGE>



                           THE BERNARD HALDANE SYSTEM

         The Bernard Haldane System (the "System") offers its clients a
sophisticated vocational program which can be utilized for career advancement,
job hunting and self satisfaction. Most clients utilize the program as a means
to facilitate their job search or career development.

Some of the services offered included:

         Appraisal of client's qualifications.
         Development of client's career goals.
         Training clients to establish immediate and long-range
         objectives in relation to career goals.
         Developing a marketing program for the client.
         Developing a program to assist in establishing
         appropriate interview contacts.
         Preparation for interviews.
         Development of effective interview techniques to induce job offers.
         Counseling on salary negotiations and fringe benefits. Assistance in
         reviewing and assessing job offers.
         Future career planning.
         Consultation, as needed concerning organizational, political and
         interpersonal skills related to career advancement. Continued
         assistance for up to three years with client's career development.
         Internet training and/or access to assist client in use of the
         World Wide Web in their job search.

         The System aids the client in developing the skills and tools necessary
to conclude a successful job search. The offices provide professional guidance
through the actual search process and provides assistance until the client has
found a suitable position. The System is taught on an individualized basis with
the client working with a professional career adviser who guides and supports
the client through this process.

         The Bernard Haldane offices will assist and support the client
in three ways; tangibly, psychologically and motivationally.
"Tangibly" includes several aspects, such as researching companies
via computer data bases, annual reports and brochures, so the
client has an understanding of the potential of the company's
background and who possibly to contact.  The client undergoes a
debriefing regarding the interviews he has went on in order to
ascertain what the client has or has not learned.  The client is
advised as to the next appropriate action to take.  The

                                        6

<PAGE>



psychological and motivational support is a combination of the whole process as
it is a part of the procedure to re-motivate the client from the frustrations
and anxieties of the interview process and unemployment. The Bernard Haldane
Office will work and support the client until he/she has accepted the position
of his/her choice within the contractual limitations.

         Each office has the flexibility in the way it may conduct the System.
However, the offices must comply with the overall System guidelines. Once the
client has commenced the new employment and/or position, he/she enters into the
follow-up phase of the program. A client should return to the Haldane office
approximately 90 days after completion of the marketing phase so his career
position can be assessed and to determine the client's attitudes and the way the
client has progressed in to this new position. From this point the client can
draw upon the System and support services when and if needed for the duration of
the contract.

Client Fees

         A typical client pays fees set by the individual office in cash or
based on a payment plan over a period of several months. Fees for the Haldane
program typically cost from $3,500 to $9,500. Fees are payable upon
commencement. Licensee offices may, at their discretion, accept installment
payments. The Company does not provide the sublicensee with financing.

Sub-licensee Fees

         Sub-licensees (those owners/operators of the individually licensed
Haldane offices) typically pay a royalty fee of either 5% or 6% of gross
revenues to DRB. Royalty payments are due only on money actually collected. New
territorial licenses are granted for a term of 20 years. Prospective
sublicensees typically pay a sublicensing fee to DRB of approximately $25,000
for the right to operate a Haldane license in a designated area. This fee may be
paid in full at the time of executing the license or over a period of time.

The Bernard Haldane Operations

         The Haldane offices are generally located in suburban
metropolitan area.  The size of each office varies considerably
from one licensee to another.  Average monthly rents vary
considerably depending upon the city and location of each office.
A typical Haldane office employs two consultants, two advisors, one
administrative receptionist and one client support staffer.  The

                                        7

<PAGE>



consultants and advisors are paid on a commission basis. The administrative
receptionist and client support staffer are paid a salary. However, some offices
may employ more or less according to demand.

         The Company believes it has a good relationship with the independent
sublicensees. The Company coordinates a national advertising program for the
benefit of all offices in the BHA organization and through advertisements in
such publications as the National Business Employment Weekly and The Wall Street
Journal. The Company also provides initial and ongoing seminars for career
advisors and consultants as well as two company newsletters. Some of the
licensee offices utilize television and radio to supplement the present
advertising.

         Jerold Weinger serves as the President, Chairman of the Board and Chief
Executive Officer of the Company and oversees the Haldane operations.

Proposed Activities

         The continued success of the Bernard Haldane operations is largely
dependent upon the number and success of local licensees. As a result, Haldane's
strategy is to continue the growth of its current activities through selective
expansion of licensee offices. During the Company's last fiscal year 9 new
licensee offices were opened. A total of $179,556 in territorial licensing fees
were generated from opening these offices. As the value of the Bernard Haldane
name increases, Management hopes to open additional offices in new territories,
especially in Europe, which will pay an initial licensing fee to DRB Ltd. in
addition to the monthly royalty. While there can be no assurance that the
Company will be able to identify prospective licensees who can launch the
Haldane program in Europe, management remains optimistic that the Company will
be able to open licensed offices in Europe and expand operations in the United
Kingdom.

         In conjunction with the planned expansion of licensee offices, DRB has
registered as a franchisor in those states which require registration and offer
franchise offices. (See "Government Regulations".) The Company's franchise
circular has been filed and approved by the New York Attorney General's office.

         Some of the licensee owned offices currently provide out- placement
services to clients. Management has found that many large national and regional
companies require the services of a skilled out-placement company to assist
discharged employees to meet their goals and explore the market place for new
job

                                        8

<PAGE>



opportunities. In furtherance of these objectives, Management has developed an
out-placement service, called OUTFLEX, which is coordinated by the executive
offices and operated through the various licensee offices. Due to the unique
nature of out- placement services, the nationwide Haldane Operations have met
with limited success in the out-placement field. However, individual Haldane
offices have met with varying degrees of profitability in the out-placement
field. There are currently no plans for DRB to actively pursue an out-placement
program.

FIRST CAREER

         Following a 1995 pilot program held at a major northeastern university,
the Company through its wholly owned subsidiary, First Career Corp., opened
three test markets during the first quarter of 1997.

         Conceptually, the First Career program appeals to graduates, and their
parents, who are frustrated in their search for meaningful career starts. First
Career's program is designed to help clients:

         Assess career employment qualifications
         Develop career goals
         Determine immediate objectives and the types of positions for
         which they are most qualified
         Establish realistic long range objectives that afford job
         satisfaction and income potential
         Construct a marketing program and a communications program to establish
         appropriate level contacts and referrals.
         Prepare for interviews
         Develop interview techniques
         Review and assess job offers
         Negotiate salary and fringe benefits following the decision to
         accept a job offer
         A follow-up review designed to assist in internal advancement and
         revalidation of career objectives.

         After testing the program for over six months, it was determined that
the original fee level of $1,950 was unaffordable for prospects. As a result, a
revised program costing $995 was developed. Financing through Marine Midland
Bank was made available to prospects. Recently, First career entered into a
joint venture agreement with Kaplan Educational Centers, a national college
entrance test preparation group with 165 centers nationwide. The agreement
provides for First Career and Kaplan share office/training space and
telemarketing efforts. Joint facilities are currently open in Binghamton and
Syracuse, New York.

                                        9

<PAGE>



First Career is also exploring the possibility of delivering an internet based
program delivery system at a cost of $295 for the client.

         Despite an investment of over $500,000, First Career remains
unprofitable. Management hopes that as operations with the Kaplan Educational
Centers expand and the Company is able to refine its Internet delivery system,
First Career will be able to operate profitably.


Competition
-----------

         Management believes that Bernard Haldane provides a unique service to
its clients which is unmatched by so-called job placement agencies which attempt
to match clients with prospective employees as opposed to the Haldane system
which provides individualized career management services.

         Nationwide there are several large career out-placement agencies
including Drake Beam Moran, Right Associates and Lee Hecht Harrison and
Associates which compete with Haldane to provide corporate out-placement and
counseling services. The focus of these companies is out-placement services
marketed to corporations and not the individual client which is the primary
focus of Haldane.

         The career management and employment service market is highly
fragmented, and no single company possesses a major share of the market.
Although there are hundreds of career management, job placement and employment
service companies, most are very small and operate in a single market.

         The large number of employment services and career management
organizations is a result of the low barriers to entry in the industry. However,
most companies remain small because expansion requires a continued increase in
working capital.

         The competitive structure within each local marketing area is unique.
In most major markets, many of the large job placement publicly traded companies
will be present, and in addition, there will be several large local competitors
which operate only in that market. Competition is also provided by governmental
entities, such as state employment offices.

         The Company's marketing strategy is to promote its services in local
markets primarily through print advertising. Some licensee offices have utilized
radio and television advertising with varying

                                       10

<PAGE>



degrees of success. DRB has prepared television commercials for use by the
individual licensee offices and makes these commercials available at no charge.
Advertising in The Wall Street Journal provides the Haldane system with national
exposure. Each one of the sub-licensee offices, the owner/operators of the
individual licensee offices, contribute to the cost of advertising in the
National Business Employment Weekly.

         Career management agencies in the U.S. are not regulated by
any particular federal laws.  However, some states require
registration and/or licensing.

Government Restrictions
-----------------------

         Career management and job placement organizations have become an
increasingly regulated field, particularly by the states. Several states
prohibit the payment of an advance fee prior to securing a new job. While the
Bernard Haldane system does not advertise as a job placement agency some states
could construe the Haldane operations as falling within their statutory
guidelines and accordingly, restrict operations in that state or, prohibit the
payment of any advance fees. Such regulation may adversely affect the operations
of the licensee offices.

         All Bernard Haldane offices are subject to state and the Federal Trade
Commission's guideline on advertising and unfair and deceptive trade practices.
Prior to the acquisition of DRB, several of these offices were cited for
violations of these provisions. Management believes that the licensee offices
are currently in compliance will all applicable guidelines.

         The Federal Trade Commission and some states may view, the payment of a
royalty fee, the basis of which is the granting of a right to operate a business
using the payee's name, program or system as constituting a franchise
relationship. The fee may be a set sum for the right to operate the business or,
the royalty payment may be based upon the payee's revenues or a combination of
both.

         The Federal Trade Commission has promulgated its own rules regarding
the sale of franchisee locations which are formally entitled "Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures". These rules provide in part that prior to the sale of a franchise,
the franchisor must deliver to the franchisee a disclosure document. Filing of
the franchise documents with the FTC is not required prior to soliciting sales
of the franchise. Certain states may or may not have similar disclosure and/or
registration requirements.

                                       11

<PAGE>



         In those states where the granting of a license for the right to
operate a Bernard Haldane office may constitute a franchise, DRB intends to
enter into franchise agreements with current licensees, and if necessary under
the state statutes, DRB will offer current licensees the right of rescission.
Management is of the opinion that the potential liability for violation of any
state or federal statute relating to the sale of a franchise is not material.
The System of DRB licensed Bernard Haldane offices has been in existence since
the 1960s. A majority of the current sublicensees acquired their license from
DRB Ltd. prior to the Company's acquisition of its Haldane license. Even
assuming any sublicensee has a private right of rescission, the applicable
statute of limitations has expired for these private actions.

Employees
---------

         The Company employs five full time employees. Additional staffing
requirements are handled by temporary staffing agencies.


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

         The Company's executive and corporate offices are currently located at
192 Lexington Avenue, New York, New York 10016. The Company currently leases
approximately 9,800 square feet of space at a cost of approximately $13,900 per
month. The Company subleases approximately 61% of this space, at the same cost
per square foot, to entities in which Mr. Weinger is associated. Net monthly
lease cost to the Company after payment by the subtenants is approximately
$5,400 per month.



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

         A former client of a licensee has filed a complaint against the
sublicensee and the Company. The Company has retained counsel and believes that
this matter can be settled without any adverse impact on the Company's
operations.


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

                                      NONE





                                       12

<PAGE>



                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matter.
------------------------------------------------------------------------------

         (a)      Market Information
                  ------------------

         The Company's common stock is currently traded on the Over the Counter
Bulletin Board under the symbol "BHAL". There is limited trading actively in the
Company's securities and there can be no assurance a regular trading market for
the Company's common stock will be sustained. Previously, the Company's common
stock was traded on the NASDAQ Small Cap Market. During this past year the
Company received a notice from NASDAQ that it failed to meet the increased
listing requirements established by NASDAQ. After receipt of the notice, the
Company filed a request for continued inclusion pursuant to an exception to the
public float, market value of public float and audit committee requirements, as
set forth in NASD Marketplace Rule 4310(c)(7) and 4310(c)(25)(c) pending the
shareholders vote on the proposed going private transaction. This request was
denied and the Company's common stock was delisted from the NASDAQ Small Cap
Market on August 5, 1998. The Company's common stock continues to be traded on
the Over the Counter Bulletin Board.

         The following table sets forth, for the period indicated, the bid price
range of the Company's common stock:

                                               Common Stock

                                         High Bid         Low Bid
                                         --------         -------


1995
----

Quarter Ended February 28, 1995           $2.62           $2.50

Quarter Ended May 31, 1995                $2.25           $2.25

Quarter Ended August 31, 1995             $2.56           $2.43

Quarter Ended November 30, 1995           $2.53           $2.43

1996
----

Quarter Ended February 29, 1996           $2.87           $2.43

Quarter Ended May 31, 1996                $2.56           $2.43

                                       13

<PAGE>



Quarter Ended August 31, 1996             $2.87           $2.43

Quarter Ended November 30, 1996           $2.44           $2.44


1997
----

Quarter Ended February 28, 1997           $2.75           $2.25

Quarter Ended May 31, 1997                $2.62           $2.25

Quarter Ended August 31, 1997             $3.25           $2.31

Quarter Ended November 30, 1997           $2.37           $2.37


1998
----

Quarter Ended February 28, 1998           $3.00           $2.37

Quarter Ended May 31, 1998                $2.87           $2.44

Period Ended July 31, 1998                $2.87           $2.37

(Prices quoted reflect a prior 100:1 reverse stock split and a 4:1 reverse stock
split in May 1992.)

         Such market quotations reflect the high bid and low prices as reflected
by NASDAQ or by prices, without retail mark-up, mark-down or commissions and may
not necessarily represent actual transactions. The following companies serve as
market makers for the Company's securities: Tasin & Co., Carr Securities and
Howe, Barnes Investments Inc.

         (b)      Holders
                  -------

         As of July 31, 1998 there were approximately 1,350 holders of record of
the Company's common Stock.

         (c)      Dividends
                  ---------

         The Company has not paid any cash dividends since its inception and the
Board of Directors does not contemplate doing so in the near future. Any
decisions as to future payment of dividends will depend on the earnings and
financial position of the Company and such other factors as the Board of
Directors deems relevant.



                                       14

<PAGE>







Item 6.  Selected Financial Data
--------------------------------

         Summary of Operations:

         For the Years Ended May 31, 1998, 1997, 1996, 1995 and 1994
<TABLE>
<CAPTION>

                         1998       1997           1996         1995         1994

                                                (Restated)   (Restated)    (Restated)
Revenue

<S>                  <C>          <C>           <C>          <C>            <C>       
Royalty
Income               $2,411,659   $2,480,866    $2,244,818   $1,747,988     $1,214,091


Sublicense
Income               $  179,556   $ 159,697     $   -0-      $  104,214     $   99,625

Consulting           $  208,694   $     640     $   -0-      $   -0-        $   -0-
Income

Other
Income               $   -0-      $  -0-        $  -0-       $   35,400     $   -0-

Interest
Income               $  88,825    $ 106,592     $ 99,621     $   49,785     $   14,062


Total
Revenues             $2,888,734   $2,747,795    $2,344,439    $1,937,387    $1,327,778


Net Income           $  162,070   $ 441,092     $  553,440    $  699,105    $  206,074
                     

Net Income
  per Share of
  Common Stock
      (Basic)           $0.17       $0.48          $0.48         $0.65         $0.20

  (Diluted)             $0.16       $0.45          $0.46         $0.61         $0.20

         Restated for discontinued operations of retail travel agency.
</TABLE>




                                       15

<PAGE>





SUMMARY OF BALANCE SHEET AS OF MAY 31
<TABLE>
<CAPTION>

                         1998         1997         1996         1995         1994
                                                (Restated)   (Restated)   (Restated)

<S>                   <C>          <C>          <C>          <C>          <C>       
CURRENT ASSETS        $2,528,263   $2,538,234   $2,147,294   $2,007,844   $1,128,480

Other Assets          $1,399,935   $1,445,854   $1,277,536   $1,504,467   $1,529,655

TOTAL ASSETS          $3,928,198   $3,984,088   $3,424,830   $3,512,311   $2,658,135



CURRENT LIABILITIES

Account Payable
and other Current
Liabilities           $  221,762   $  356,973   $  149,695   $  213,660   $  157,424

Current Maturities
of Long Term Debt     $   42,437   $  235,240   $  245,956   $  315,951   $  307,065

Other Liabilities     $  622,572   $  512,518   $  555,799   $  591,437   $  702,988

Stockholder's
Equity                $3,041,427   $2,879,357   $2,473,380   $2,391,263   $1,490,658


TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY                $3,928,198   $3,984,088   $3,424,830   $3,512,311   $2,658,135


         Restated for discontinued operations of retail travel agency.
</TABLE>














                                       16

<PAGE>





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


         While the Company remains profitable, generating approximately $275,000
in pre-tax earnings, royalty revenues from licensee offices declined from
$2,480,866 to $2,411,659, the first decline in royalty revenues since the
Company acquired the rights to the Bernard Haldane license. This represents a
decline of approximately 3% in gross royalties. Management does not believe this
decline to represent the start of a trend. During this past year a licensee
operating six offices in Texas and California breached the sublicensee agreement
by failing to pay required royalties. Rather than comply with the terms and
conditions of the sublicense agreement, the sublicensee unilaterally terminated
the agreement. The Company intends to initiate legal proceedings and seek
compensatory and punitive damages. In addition, the Company intends to reopen
offices in these markets vacated by the former licensee. Further limiting
royalty income was the voluntary termination of a second sublicense agreement
encompassing four offices.

         Further limiting royalty income was the voluntary termination of a
second license agreement encompassing four offices. With clients to service and
no time to interview and investigate prospective purchasers, the Company,
through wholly owned subsidiaries, was required to take over the operations of
these offices. While operating these offices, the Company generated consulting
revenues of approximately $171,000. However, payroll and related costs
associated with the operation of these offices resulted in a significant
operating deficit. During the coming year, management intends to transfer these
offices to existing licensees or other individuals currently within the Haldane
network and to date has transferred one of these offices.

         The Company intends to reestablish its presence in Texas. However,
further expansion in the United States will be limited. Haldane offices are
already open in almost every major metropolitan area in the United States and
Canada. While there will likely be additional expansion into smaller
metropolitan areas, the licensing fee and the royalty revenues which can be
generated will likely be significantly less than the typical Haldane office as
the geographical and demographical market for the Haldane services and products
approach a saturation level.

         In an effort to increase its revenue base, the Company has
opened two licensed offices in the United Kingdom.  Management remains

                                       17

<PAGE>



optimistic that the Company will be able to expand in the overseas market.
However, logistical constraints, operational concerns and familiarization with
local rules and customs will most likely limit a rapid expansion in Europe.

         In an effort to diversify revenues, management identified a new
targeted market and developed a special program for this market, First Career.
First Career provides career management for recently graduated college students.
To date, First Career has incurred losses in excess of $500,000 and there can be
no assurance that management will be able to reverse this trend and market the
program effectively and profitably.

         Last year, the Company's Board of Directors received an offer
from Mr. Weinger, Mrs. Weinger, the wife of Mr. Weinger,  and Mrs.
Nadel, the wife of the Company's former president, to purchase the
shares of stock owned by the outside investors at a cost of $2.75
per share.  In conjunction therewith, the Board of Directors
determined that it would be in the best interests of the company and
the outside shareholders to name two independent directors to the
Company's Board of Directors to consider and vote upon the fairness
of the offer.  On April 25, 1997, Jeffrey Schachter and Gregg Weiss
were elected to the Board of Directors.  In order for the Board to
determine the fairness of the offer, Laidlaw & Co. was retained to
render a fairness opinion in connection with the proposed "going
private" transaction.  On August 11, 1997 Laidlaw & Co. opined that
from a financial point of view , it is their opinion that the public
shareholders would be entitled to receive the sum of $3.00 per
share.  After reviewing the fairness opinion, Mr. and Mrs. Weinger
and Mrs. Nadel increased their offer to purchase the shares of
common stock owned by the public investors to $3.00 per share.
Subsequent thereto, the Board of Directors met and voted to accept
the offer made by Mrs. Nadel and Mr. and Mrs. Weinger.  The offer
will be submitted to a vote of the shareholders.

         Mr. and Mrs. Weinger and Mrs. Nadel (the "Weinger-Nadel Group") formed
Bernard Haldane Acquisition Corp., a Florida corporation ("NEWCO") for the
purpose of merging with and/or combining with the Company. The Weinger-Nadel
Group will contribute 731,670 of their shares of Common Stock in the Company to
NEWCO in exchange for securities of NEWCO. The Weinger-Nadel Groups's proposal
is to be submitted to the vote of the Company's stockholders and will be subject
to their approval. However, members of the Weinger-Nadel Group have, and
therefore, NEWCO, will have a sufficient number of votes to carry stockholder
approval of the proposal. It is anticipated that if such merger or combination
is approved, all stockholders (other than member s of the Weinger-Nadel Group),
will be entitled to receive $3.00 per share for their shares of the Company's
Common Stock or such amount as if found appropriate in

                                       18

<PAGE>



court assessing their rights under Florida law. In furtherance of the
consummation of this transaction, the Company has filed a Preliminary Schedule
14A and Schedule 13E-3 with the Securities and Exchange Commission (the
"Commission"). The Company has responded to comments submitted by the Commission
and anticipates disseminating a proxy statement to all stockholders of record
detailing the proposal, the reasons for same and described stockholder rights.

LIQUIDITY CAPITAL RESOURCES

         As of May 31, 1998 the Company had $2,528,263 in current assets as
compared to $2,538,234 on May 31, 1997.

         Accounts receivable for 1998 total $315,436 as compared to $419,470 in
1997. Notes receivable declined from $600,389 to $537,970. This decline in both
accounts receivable and notes receivable is attributable to increased collection
efforts on the part of the Company. The Company has also recorded prepaid
expenses and other miscellaneous receivables of $185,957 as compared to $60,158
for the prior year.

    Total assets declined from $3,984,088 to $3,928,198. This decline can be
attributable to the amortized cost of the Haldane license and does not reflect
an overall decline in the fair market value of the Company's assets.

         Accounts payable declined from $207,316 to $127,314, a decline of
approximately 39% and total current liabilities declined from $592,213 to
$264,199, a decline of more than 55%.

         Long term debt has increased from $498,839 to $599,135.

         For 1998, cash flow from operating activities totaled $439,613 as
compared to $750,972 in 1997 and $746,509 in 1996.

         The Company believes that its current cash position and working capital
are sufficient to meet its operational requirements for the coming year. Royalty
revenues from licensee offices and the sale of territorial rights to the Bernard
Haldane offices are expected to be sufficient to meet the Company's ongoing
operational expenses. Management does not anticipate the need for any
significant capital expenditures in the coming year which would require any
third party financing. Nor does the Company believe that there is any material
risk of any sublicensee seeking rescission pursuant to any technical violations
of state franchising statutes.



                                       19

<PAGE>







RESULTS OF OPERATION

         The Company reported income from continuing operations before income
taxes of $275,605 on revenues of $2,888,734, and net after tax income of
$162,070. This compares to a net after tax income of $461,092 on revenues of
$2,747,795 for the fiscal year ended May 31, 1997 and net after tax income of
$533,440 on revenues of $2,344,439 for 1996. Royalty income from Haldane offices
decreased from $2,480,866 in 1997, to $2,411,659 in 1998. This decline of almost
3% in royalty revenue is primarily attributable to the departure of two
licensees from the organization. The Company took over the operation of four of
the Haldane offices (one of which has since been sold) and hopes to open new
offices in those territories where the licensee breached the sublicensing
agreement and abandoned the organization. The Company in 1998 reported $208,694
in consulting income after showing only nominal income in 1997 and no income at
all in 1996. Approximately $63,000 of this revenue is attributable to the
operations of First Career and the balance is attributable to revenues earned
from the operation of Haldane offices in those markets where the license was
terminated by Haldane.

         Payroll and related costs continue to increase; rising from $362,554 to
$453,573 to $773,945. This increase can be primarily attributable to increased
costs and expenses associated with the operations, management and oversight of
the Haldane operations in those cities where the Company assumed operations of
the Haldane office as well as costs associated with the operation of First
Career.

         Advertising expenditures increased from $78,544 to $144,699. This
increase in advertising expense is due primarily to costs incurred by both the
company owned Haldane offices and First Career.

         Income before taxes was $275,605 as compared to $752,318 in 1997 and
$841,768 in 1996. Net income after taxes continues to decline, falling from
$533,440 in 1996 to $461,092 in 1997 and $162,070 in 1998. Management attributes
this significant decline in net income to the fact that the Company was not able
to recognize royalty revenues from the operation of the Haldane offices in six
cities located throughout the Southwest and the fact that the Company was forced
to operate four offices when the owner defaulted under the sublicensing
agreement and left the organization. Management hopes to open new licensed
offices throughout the

                                       20

<PAGE>



Southwest and transfer ownership of the Company owned offices to an existing
licensee(s).

         The Company anticipates increases in royalty payments in the coming
year as the existing Haldane offices generate marginal increases in revenues.
However, it is unlikely that the Company will be able to maintain its prior
growth rate as fewer new markets become available and competition in existing
markets becomes increasingly difficult.

         Management remains disappointed with the results of launch of First
Career. While the focus and pricing of the program have been modified, there can
be no assurances that the Company will continue to fund and operate First
Career.


Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------




                                   AS FOLLOWS



                                       21
<PAGE>
<TABLE>
<CAPTION>

                                 BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                                       INDEX

                                               FINANCIAL STATEMENTS








                                                                                                        PAGE
                                                                                                        ----

<S>                                                                                                  <C>
Independent Auditors' Report                                                                             F-2

Consolidated Balance Sheets
   May 31, 1998 and 1997                                                                              F-3 - F-4

Consolidated Statements of Income
   Years Ended May 31, 1998, 1997 and 1996                                                            F-5 - F-6

Consolidated Statements of Changes in Stockholders' Equity
   Years Ended May 31, 1998, 1997 and 1996                                                               F-7

Consolidated Statements of Cash Flows
   Years Ended May 31, 1998, 1997 and 1996                                                            F-8 - F-9

Notes to Consolidated Financial Statements                                                           F-10 - F-26
</TABLE>

                                                        F-1

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors
Bernard Haldane Associates, Inc.


We have audited the accompanying consolidated balance sheets of Bernard Haldane
Associates, Inc. and Subsidiaries as of May 31, 1998 and 1997 and the related
consolidated statements of income, changes in stockholders' equity, and cash
flows for each of the three years in the period ended May 31, 1998. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Bernard Haldane
Associates, Inc. and Subsidiaries as of May 31, 1998 and 1997 and the results of
their operations and their cash flows for each of the three years in the period
ended May 31, 1998, in conformity with generally accepted accounting principles.





                                            /s/ Miller, Ellin & Company, LLP
                                            MILLER, ELLIN & COMPANY, LLP
                                            CERTIFIED PUBLIC ACCOUNTANTS

August 13, 1998
New York, New York

                                       F-2

<PAGE>


<TABLE>
<CAPTION>

                                 BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                            CONSOLIDATED BALANCE SHEETS


                                                      ASSETS


                                                                                                MAY 31,
                                                                                        1998            1997
                                                                                    -------------  ---------
CURRENT ASSETS:
<S>                                                                                  <C>            <C>         
   Cash and cash equivalents                                                         $  1,693,220   $  1,698,099
   Short-term investments                                                                 108,908         55,426
   Accounts receivable - net of allowance for doubtful accounts of $180,000 in
     1998 and $290,000 in 1997 (includes receivables from related parties of
     $100,635
     and $86,413 in 1998 and 1997, respectively)                                          315,436        419,470
   Notes receivable - net of allowance for credit losses of
     $15,000 in 1998 and $24,000 in 1997, current portion)                                 89,855        149,080
   Due from related parties                                                                 8,887         11,001
   Prepaid expenses and miscellaneous receivables                                         185,957         60,158
   Deferred taxes                                                                         126,000        145,000
                                                                                     ------------   ------------

              Total current assets                                                      2,528,263      2,538,234
                                                                                     ------------   ------------

OTHER ASSETS:
   Licenses - net of accumulated amortization of
     $1,870,372 in 1998 and $1,657,917 in 1997                                            787,626        864,611
   Equipment, fixtures and leasehold improvements -
     net of accumulated depreciation of $46,165 in
     1998 and $28,871 in 1997                                                              48,374         50,831
   Security deposits and other                                                            115,820         79,103
   Notes receivable - net of allowance for credit losses of $119,500 in 1998 and
     $41,000 in 1997 (includes receivables from related
     parties of $44,060 and $29,247 in 1998 and 1997, respectively)                       448,115        451,309
                                                                                     ------------   ------------

              Total other assets                                                        1,399,935      1,445,854
                                                                                     ------------   ------------

TOTAL ASSETS                                                                         $  3,928,198   $  3,984,088
                                                                                     ============   ============
</TABLE>








         The accompanying notes are an integral part of these statements

                                       F-3

<PAGE>


<TABLE>
<CAPTION>

                                 BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                            CONSOLIDATED BALANCE SHEETS



                                       LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                                                MAY 31,
                                                                                        1998            1997
                                                                                    -------------  ---------
CURRENT LIABILITIES:
<S>                                                                                 <C>            <C>          
     Current maturities of long-term debt                                           $      42,437  $     235,240
     Accounts payable                                                                     127,314        207,316
     Accrued expenses and other current liabilities                                        32,135          8,147
     Income taxes payable                                                                  62,313        141,510
                                                                                    -------------  -------------

         Total current liabilities                                                        264,199        592,213
                                                                                    -------------  -------------

OTHER LIABILITIES:
     Long-term debt                                                                       599,135        498,839
     Deferred rent payable                                                                 23,437         13,679
                                                                                    -------------  -------------

                                                                                          622,572        512,518

         Total liabilities                                                                886,771      1,104,731
                                                                                    -------------  -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Common stock ($.00001 par value; 950,000,000 shares
       authorized, 1,148,865 shares issued)                                                    12             12
     Additional paid-in capital                                                         2,761,727      2,761,727
     Retained earnings                                                                    786,126        624,056
                                                                                    -------------  -------------
                                                                                        3,547,865      3,385,795
     Less: Treasury stock (199,500 shares at cost)                                        506,438        506,438
                                                                                    -------------  -------------

         Total stockholders' equity                                                     3,041,427      2,879,357
                                                                                    -------------  -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $   3,928,198  $   3,984,088
                                                                                    =============  =============

</TABLE>





         The accompanying notes are an integral part of these statements

                                       F-4

<PAGE>
<TABLE>
<CAPTION>

                                 BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENTS OF INCOME


                                                                                   YEARS ENDED MAY 31,
                                                                         1998           1997            1996
                                                                     -------------  -------------  -------------
<S>                                                                  <C>            <C>            <C>      
REVENUES:
   Royalty income (includes royalty income
     from related parties of $265,279, $301,394
     and $243,760, respectively)                                     $   2,411,659  $   2,480,866  $   2,244,818
   Consulting income                                                       208,694            640           -
   Interest, dividends and other income                                     88,825        106,592         99,621
   Sub-license income (includes sub-license
     income from related parties of $37,186,
     $41,588 and $-0-, respectively)                                       179,556        159,697           -
                                                                     -------------  -------------  ----------

         Total revenues                                                  2,888,734      2,747,795      2,344,439
                                                                     -------------  -------------  -------------

EXPENSES:
   Payroll and related costs                                               773,945        453,573        362,554
   Other general and administrative                                      1,137,061      1,015,607        703,011
   Amortization                                                            212,455        197,541        197,541
   Bad debt expense                                                        274,677        189,173         97,469
   Advertising                                                             144,699         78,544         73,538
   Interest                                                                 70,292         61,039         68,558
                                                                     -------------  -------------  -------------

         Total expenses                                                  2,613,129      1,995,477      1,502,671
                                                                     -------------  -------------  -------------

INCOME FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                                                     275,605        752,318        841,768

INCOME TAXES                                                               113,535        311,168        328,324
                                                                     -------------  -------------  -------------

INCOME FROM CONTINUING OPERATIONS                                          162,070        441,150        513,444

DISCONTINUED OPERATIONS:
   Income from operations of travel agency
     disposed of (net of income taxes of $-0-,
     $10,000 and $8,000, respectively)                                        -            19,942         19,996
                                                                     -------------  -------------  -------------


NET INCOME                                                           $     162,070  $     461,092  $     533,440
                                                                     =============  =============  =============
</TABLE>





         The accompanying notes are an integral part of these statements

                                       F-5

<PAGE>
<TABLE>
<CAPTION>

                                 BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENTS OF INCOME
                                                    (CONTINUED)








                                                                                   YEARS ENDED MAY 31,
                                                                         1998           1997            1996
                                                                     -------------  -------------  ---------

<S>                                                                       <C>            <C>             <C>
EARNINGS PER SHARE:
   Basic:
     Continuing operations                                                $   .17        $   .46         $  .46
     Discontinued operations                                                  -              .02              .02
                                                                          -------        -------         --------
         Net income                                                       $   .17        $   .48         $  .48
                                                                          =======        =======         ======

   Diluted:
     Continuing operations                                                $   .16        $   .43         $  .44
     Discontinued operations                                                  -              .02            .02
                                                                          -------        -------         ------
         Net income                                                       $   .16        $   .45         $  .46
                                                                          =======        =======         ======

</TABLE>




















         The accompanying notes are an integral part of these statements

                                       F-6

<PAGE>


<TABLE>
<CAPTION>
                                 BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                             CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY





                                      COMMON STOCK,
                                       $.00001 PAR
                                    VALUE, AUTHORIZED      ADDITIONAL           RETAINED
                                   950,000,000 SHARES           PAID-IN         EARNINGS        TREASURY STOCK
                               --------------------------                                    -----------------
                                   SHARES        AMOUNT    CAPITAL              (DEFICIT)      SHARES   AMOUNT        TOTAL
                               -------------  ---------  ------------------  -------------   -------- --------     --------


<S>                             <C>               <C>          <C>             <C>            <C>          <C>             <C>      
BALANCE - MAY 31, 1995          1,148,865         $ 12         $2,761,727      $(370,476)         -     $     -         $2,391,263

Repurchase of common stock           -              -                -              -          179,500    (451,323)       (451,323)

Net income for the year ended
  May 31, 1996                       -              -                -           533,440          -           -            533,440
                                ---------         ----         ----------      ---------       -------  ----------      ----------

BALANCE - MAY 31, 1996          1,148,865           12          2,761,727        162,964       179,500    (451,323)      2,473,380

Repurchase of common stock           -             -                 -              -           20,000     (55,115)        (55,115)

Net income for the year ended
  May 31, 1997                       -             -                 -           461,092          -           -            461,092
                                ---------         ----         ----------      ---------       -------  ----------      ----------

BALANCE - MAY 31, 1997          1,148,865           12          2,761,727        624,056       199,500    (506,438)      2,879,357

Net income for the year ended
  May 31, 1998                       -             -                 -           162,070          -           -            162,070
                                ---------         ----         ----------      ---------       -------  ----------      ----------

BALANCE - MAY 31, 1998          1,148,865         $ 12         $2,761,727        786,126       199,500  $ (506,438)     $3,041,427
                                =========         ====         ==========      =========       =======  ==========      ==========
</TABLE>
















         The accompanying notes are an integral part of these statements

                                       F-7

<PAGE>
<TABLE>
<CAPTION>

                                       BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                             CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                            YEARS ENDED MAY 31,
                                                                                   1998            1997           1996
                                                                               -------------  -------------  -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                             <C>            <C>            <C>        
   Net income                                                                   $    162,070   $   461,092    $   533,440
   Income from discontinued operations                                                  -          (19,942)       (19,996)
   Adjustments to reconcile net income to net cash provided by operating
     activities:
       Expenses (income) not requiring the use of cash:
         Provision for losses on accounts
           and notes receivable                                                      274,677       189,173         97,469
         Depreciation                                                                 17,294         9,322          1,430
         Amortization of licenses                                                    212,455       197,541        197,541
         Gain on sale of office                                                       (2,100)         -              -
         Interest expense - imputed                                                   52,873        45,043         52,048
         Interest income - imputed                                                   (14,886)      (13,167)        (6,403)
         Deferred income taxes                                                        19,000       (62,000)        89,000
       Changes in assets and liabilities:
         Accounts receivable                                                         (30,518)     (210,324)      (141,548)
         Prepaid expenses and miscellaneous receivables                             (125,799)      (50,424)        18,988
         Cash overdraft                                                                 -          (18,044)        18,044
         Accounts payable and other current liabilities                             (135,211)      225,322        (82,009)
         Deferred rent payable                                                         9,758        (1,040)        10,319
         Net assets of discontinued operations                                          -           (1,580)       (21,814)
                                                                                ------------   -----------    -----------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                            439,613       750,972        746,509
                                                                                ------------   -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of short-term investments                                              (108,908)      (55,426)      (302,138)
   Redemption of short-term investments                                               55,426        53,146        699,868
   Decrease in due from related parties                                                2,114        17,038        231,961
   Acquisition of fixed assets                                                       (14,837)      (40,122)       (21,461)
   Acquisition of offices                                                            (48,955)         -              -
   Additions to notes receivable                                                    (192,556)     (690,492)       (20,000)
   Payments of notes receivable                                                      144,074       217,468         63,249
   Security deposits                                                                    -          (18,643)         1,900
   Net assets of discontinued operations                                                -            2,200           (500)
                                                                                ------------   -----------    -----------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                 (163,642)     (514,831)       652,879
                                                                                ------------   -----------    -----------
</TABLE>


         The accompanying notes are an integral part of these statements

                                       F-8

<PAGE>
<TABLE>
<CAPTION>

                                       BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                          (CONTINUED)




                                                                                            YEARS ENDED MAY 31,
                                                                                   1998            1997           1996
                                                                               -------------  -------------  --------------


CASH FLOWS FROM FINANCING ACTIVITIES:
<S>                                                                             <C>            <C>            <C>           
   Principal payments on debt                                                   $   (280,850)  $    (98,000)  $    (168,000)
   Repurchase of common stock                                                           -           (55,115)       (451,323)
                                                                                ------------   ------------   -------------

NET CASH USED IN FINANCING ACTIVITIES                                               (280,850)      (153,115)       (619,323)
                                                                                ------------   ------------   -------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                               (4,879)        83,026         780,065

CASH AND CASH EQUIVALENTS - beginning                                              1,698,099      1,615,073         835,008
                                                                                ------------   ------------   -------------

CASH AND CASH EQUIVALENTS - ending
   (includes cash of discontinued operations of $-0-,
   $55,957 and $78,271, respectively)                                           $  1,693,220   $  1,698,099   $   1,615,073
                                                                                ============   ============   =============


SCHEDULE OF NON-CASH INVESTING
   AND FINANCING ACTIVITIES:
     Receipt of notes receivable on sale of office                              $     14,438   $       -      $        -
                                                                                ============   ============   ==========
     Additional license costs through issuance of long-term debt                $    135,470   $       -      $        -
                                                                                ============   ============   ==========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for:
     Interest                                                                   $     66,292   $     61,039   $      68,558
     Income taxes                                                                    207,302        316,313         238,876
</TABLE>









         The accompanying notes are an integral part of these statements

                                       F-9

                                     <PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Nature of Operations
     --------------------

     Bernard Haldane Associates, Inc. ("Haldane") through its wholly-owned
     subsidiary, DRB Ltd. ("DRB") owns the worldwide licensing rights to the
     Bernard Haldane name and system of career consulting. Haldane is the
     franchiser of 76 career consulting offices operating in the United States,
     Canada and the United Kingdom. First Career Corp. ("FCC"), a wholly-owned
     subsidiary, has developed a specifically designed career consulting program
     for graduating college students. During the year ended May 31, 1998, two
     new wholly-owned subsidiaries, DRB Management and Consulting Services, Inc.
     ("DRB Mgmt.") and Career Advisory and Management Services, Inc. ("Career
     Advisory"), began operating four offices in the United States, one of which
     was sold in May 1998. On May 31, 1996, another subsidiary, Quantum Tours
     International, Inc. ("QT") discontinued its full service travel agency. All
     other subsidiaries are inactive.

     After giving effect to the restatement for discontinued operations,
     Haldane's operations consist of only one business segment, career
     consulting and advisory services.

     Principles of Consolidation
     ---------------------------

     The consolidated financial statements include the accounts of Haldane and
     its subsidiaries. All intercompany accounts and transactions have been
     eliminated in consolidation.

     Cash and Cash Equivalents
     -------------------------

     The Companies consider all highly liquid investments with original
     maturities of three months or less to be cash equivalents.

     Concentrations of Credit Risk
     -----------------------------

     The Companies maintain their cash balances with various financial
     institutions. Accounts at each institution are insured by the Federal
     Deposit Insurance Corporation up to $100,000. Uninsured balances aggregate
     approximately $1,619,000 and $1,615,000 at May 31, 1998 and 1997,
     respectively.

     The Companies' short-term investments include certificates of deposit of
     financial institutions with high credit ratings, which mature within one
     year. This investment policy limits the Companies' exposure to
     concentrations of credit risk.

     DRB sells franchises to individuals and corporations for both cash and
     notes. In the event of default in payment of the notes or royalties, DRB
     can repossess the office. DRB has historically experienced losses and has
     provided allowances against its notes and royalty receivables.

                                      F-10

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Equipment, Fixtures and Leasehold Improvements
     ----------------------------------------------

     Equipment and fixtures are being depreciated on an accelerated basis over
     lives of five to seven years. Leasehold improvements are being amortized
     over the lives of the leases.

     Deferred Rent Payable
     ---------------------

     Deferred rent payable represents the excess of recognized rent expense over
     scheduled lease payments which will be credited to future operations.

     Revenue Recognition
     -------------------

     DRB through its sale of franchise offices recognizes revenues (sub-license)
     at the time the contract is completed and when no further services are
     required. DRB also recognizes royalty revenue based on a percentage (5% to
     6%) of gross collections of counseling fees by the franchisee or the
     minimum royalty fee, whichever is greater. Allowances for doubtful accounts
     have been provided for potential losses. FCC, DRB Mgmt. and Career Advisory
     recognize consulting revenue based on collections, rather than when the
     contract is entered into, due to the uncertain nature of collectibility of
     the contract fees.

     QT recognized revenue when the tour commenced. Revenue received prior to
     the commencement of the tour was deferred and recorded as unearned revenue.

     Intangible Assets
     -----------------

     The Bernard Haldane licenses acquired (approximately $1,200,000) are being
     amortized over a ten year period using the straight-line method. The cost
     of acquisitions in excess of fair value of assets acquired which has been
     allocated to licenses (approximately $1,385,000, which has been adjusted in
     1998 for an inflation factor in the acquisition notes) is being amortized
     over the greater of a twenty year period (the general term of the
     sub-license) or 5% of royalty income and 50% of sub-licensing income for
     that particular year.

     Advertising Costs
     -----------------

     All costs associated with advertising and promotion are expensed in the
     year incurred.

                                      F-11

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Foreign Exchange
     ----------------

     DRB converts its foreign currency transactions at budgeted rates which
     historically approximate the actual exchange rates for balance sheet and
     statement of income items. The amount of foreign currency exchange gains
     and losses are insignificant to the consolidated financial statements.

     Impairment of Long-Lived Assets
     -------------------------------

     Effective June 1, 1996, the Companies adopted Statement of Financial
     Accounting Standards No. 121 (SFAS No. 121), "Accounting for the Impairment
     of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", which
     requires that long-lived assets and certain identifiable intangibles to be
     held and used by an entity be reviewed for impairment whenever events or
     changes in circumstances indicate that the carrying value of an asset may
     not be recoverable. The Companies believe that no material impairment
     existed as of May 31, 1998.

     Earnings Per Share
     ------------------

     In February 1997, the Financial Accounting Standards Board issued Statement
     of Financial Accounting Standards No. 128 (SFAS No. 128), "Earnings Per
     Share" which is effective for periods ending after December 15, 1997. The
     Companies have adopted this new standard for the year ended May 31, 1998.
     Prior period earnings per share were restated to conform to this new
     pronouncement.

     Stock Options
     -------------

     In October 1995, the Financial Accounting Standards Board issued Statement
     of Financial Accounting Standards No. 123 (SFAS No. 123), "Accounting for
     Stock-Based Compensation." The Companies have adopted the disclosure-only
     provisions of SFAS No. 123 but apply Accounting Principles Board Opinion
     No. 25 (APB Opinion No. 25), "Accounting for Stock Issued to Employees" and
     related interpretations in accounting for granting of stock options.

     Realizability of a Deferred Tax Asset
     -------------------------------------

     The Companies have recorded a deferred tax asset of $126,000 as of May 31,
     1998. Realization is dependent on generating sufficient taxable income.
     Although realization is not assured, management believes it is more likely
     than not that all of the deferred tax asset will be realized. The amount of
     the deferred tax asset considered realizable, however, could be reduced in
     the near term if future taxable income is not sufficient.

                                      F-12

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Use of Estimates in the Preparation of Financial Statements
     -----------------------------------------------------------

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

     Reclassifications
     -----------------

     Certain reclassifications have been made to the consolidated financial
     statements for the years ended May 31, 1997 and 1996 in order to conform
     with the current year's presentation.


NOTE 2 - ACQUISITIONS/DISPOSITIONS

     In 1989, Haldane acquired 80% of the outstanding shares of Career Services
     Management Corp. ("CSM") for $800. CSM acquired 100% of DRB for $1,250,000
     consisting of $1,000,000 in cash and a note payable of $250,000. The
     balance of the note was fully paid in March 1998. On February 2, 1995,
     Haldane acquired the remaining 20% of the outstanding shares of CSM for
     75,000 shares of its own common stock. CSM is currently inactive.

     In April 1995, Haldane sold approximately 96% of its 80% investment in
     Andover Equities Corp. ("Andover"). The sale consisted of cash and notes
     (see Note 3). During the year ended May 31, 1998, the notes receivable were
     deemed uncollectible and written off as bad debts. Haldane's investment in
     Andover which represents approximately a 3% ownership is carried at cost
     and is insignificant.

     The acquisitions were accounted for using the purchase method of
     accounting. The purchase price was allocated to the assets acquired and
     liabilities assumed based on their estimated fair values.

                                      F-13

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 3 - NOTES RECEIVABLE
<TABLE>
<CAPTION>
     Notes receivable at May 31, consist of the following:

                                                                                    1998           1997
                                                                                -------------  -------------
<S>                                                                               <C>            <C>       
     Various non-interest bearing notes receivable in connection
       with the sale of sub-licenses                                              $  221,400     $  177,300
     LaSalle Consulting - receivable in equal monthly installments
       of $2,097 through April 2002, with interest at 24% per annum                   64,336         72,909
     Note receivable - employee/stockholder in equal monthly
       installments of $608 through April 2001, including
       interest at 6% per annum                                                       19,444          9,444
     Notes receivable in connection with the sale of Andover stock,
       originally due April 1997, written off in May 1998                               -            30,000
     Note receivable - sub-licensee in equal monthly installments of
       $1,000 through December 1997, $2,000 from January 1998 through December
       1998 and $3,000 from January 1999 through December 2002 with a final
       payment of approximately $1,800
       in January 2003 including interest at 7% per annum                            168,795        176,795
     Note receivable in equal monthly installments of $5,000 through
       2001 with interest at 7% per annum                                            195,000        215,000
     Note receivable - sub-licensee, in connection with the sale of the
       Oklahoma City office, in equal monthly installments of $1,000 commencing
       January 2000 through April 2001, with a final
       payment of $1,500 in May 2001                                                  17,500           -
     Note receivable in equal monthly installments of $200 through
       March 1998 with the balance due April 1999, with interest at
       8% per annum; secured by stock in an affiliated company                        33,030         34,130
                                                                                  ----------     ----------
                                                                                     719,505        715,578
     Less:  Unamortized discounted interest imputed at 7% to 8.5%
                  on the above non-interest bearing notes                             47,035         50,189
                                                                                  ----------     ----------
                                                                                     672,470        665,389
     Less:  Allowance for credit losses on the above notes (see below)               134,500         65,000
                                                                                  ----------     ----------
                                                                                     537,970        600,389
     Less:  Current portion                                                           89,855        149,080
                                                                                  ----------     ----------
                                                                                  $  448,115     $  451,309
                                                                                  ==========     ==========
</TABLE>

                                                       F-14
<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 3 - NOTES RECEIVABLE (CONTINUED)

     The amounts due over the next five years, net of imputed interest of
     $47,035 and allowance for credit losses of $134,500, are as follows:

                  Year Ending May 31,
                  -------------------

                          1999                            $   89,855
                          2000                                83,324
                          2001                               122,423
                          2002                                76,665
                          2003                                45,018
                          Subsequent                         120,685
                                                          ----------
                                                          $  537,970
                                                          ==========

     The Companies utilize Statement of Financial Accounting Standards No. 114,
     "Accounting by Creditors for Impairment of a Loan," (SFAS No. 114) and
     Statement of Financial Accounting Standards No. 118 "Accounting by
     Creditors for Impairment of a Loan - Income Recognition and Disclosures"
     (SFAS No. 118) which requires that impaired loans be measured based on the
     present value of expected future cash flows discounted at the loan's
     effective interest rate or at market price or the fair value of the
     collateral if the loan is collateral dependent. Notes receivable at May 31,
     consist of the following:

                                                          1998         1997
                                                          ----         ----

           Notes receivable - impaired                 $  527,255   $  406,492
           Less: Allowance for credit losses              134,500       65,000
                                                       ----------   ----------
                                                          392,755      341,492
           Notes receivable - not impaired
              and no allowance for credit losses          145,215      258,897
                                                       ----------   ----------
                                                       $  537,970   $  600,389
                                                       ==========   ==========

     Changes in the allowance for credit losses for the years ended May 31, are
as follows:

                                           1998           1997           1996
                                      -------------  -------------   -----------

        Balance - beginning of year     $   65,000      $ 35,000       $  19,000
        Additions                           73,310        30,000          16,000
        Direct write-offs                   (3,810)         -               -
                                        ----------      --------       ---------
        Balance - end of year           $  134,500      $ 65,000       $  35,000
                                        ==========      ========       =========


     The Companies recognize interest income on impaired loans on actual cash
     received with interest imputed at 8 1/2%.

     The average recorded investment in impaired loans and the interest income
     recognized during the years ended May 31, 1998 and 1997 were approximately
     $467,000 and $29,000 and $265,000 and $24,000, respectively.

                                      F-15

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 4 - LONG-TERM DEBT
<TABLE>
<CAPTION>
     Long-term debt at May 31, consists of the following:

                                                                                     1998          1997
                                                                                 ------------  ------------
<S>                                                                              <C>           <C>         
         B&E Partnership - payable in monthly installments of $7,000 through
           June 2006. Commencing July 1997, monthly payments are adjusted
           annually by a rate of 5% to reflect an inflation factor. Secured by a
           license
           agreement.  This note is non-interest bearing.                        $    891,694  $    756,000
         Dan R. Bruce - principal amount of $200,000 due February
           1998 with interest due in monthly payments of $1,333.
           The note is secured by a license agreement and
           bears interest at an annual rate of eight percent.                            -          200,000
                                                                                 ------------  ------------

                  Total debt obligations                                              891,694       956,000

           Less:  Unamortized discounted interest imputed at eight
                     percent on the above non-interest bearing loan.                  250,122       221,921
                                                                                 ------------  ------------

                  Total present value of debt                                         641,572       734,079

           Less:  Current portion                                                      42,437       235,240
                                                                                 ------------  ------------
                                                                                 $    599,135  $    498,839
                                                                                 ============  ============
</TABLE>
     Long-term debt as of May 31, 1998 is payable as follows:

                    Year Ending May 31,

                          1999                                 $   42,437
                          2000                                     50,743
                          2001                                     59,979
                          2002                                     70,232
                          2003                                     81,599
                          Subsequent                              336,582
                                                               ----------
                                                               $  641,572

                                      F-16

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 5 - COMMITMENTS AND CONTINGENCIES

     Leases

     Haldane leases its executive offices in New York City under two separate
     leases. Both leases have terms of ten years, one expiring in September
     2005, and the other expiring in October 2006. Approximately 61% of the
     space is sublet to related entities. FCC leases office space in Syracuse,
     New York for a term of one year expiring in April 1999.

     The following is a schedule by years of future minimum rental payments and
     sublease income under these leases (rounded to thousands):

                                              Minimum
                                              Rental           Sublease
          Year Ending May 31,                Payments           Income

                1999                       $    174,000        $  101,000
                2000                            163,000           101,000
                2001                            181,000           112,000
                2002                            186,000           115,000
                2003                            186,000           115,000
                Subsequent                      493,000           303,000
                                           ------------        ----------
                                           $  1,383,000        $  847,000
                                           ============        ==========

     Rent expense, net of rental income of approximately $103,000, $96,000 and
     $30,000, charged to operations for the years ended May 31, 1998, 1997 and
     1996 amounted to approximately $117,000, $48,000, and $31,000,
     respectively.

     Licensing
     ---------

     In those states where the granting of a license for the right to operate a
     Haldane office may constitute a franchise arrangement, DRB intends to
     register as a franchisor. DRB may also be subject to regulatory sanctions
     in these states for failing to register as a franchisor prior to the
     granting of a franchise license. DRB intends to enter into franchise
     agreements with current licensees, and if necessary under the state
     statutes, DRB will offer current licensees the right of rescission.
     Management is of the opinion that the potential liability for violation of
     any state or federal statute relating to the sale of a franchise and in the
     aggregate is not material to the consolidated financial statements. The
     Companies to date have incurred approximately $58,000 of legal costs in
     connection with this matter. The Companies expect to incur no additional
     costs of any significance relating to this matter.

                                      F-17

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 5 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     Consulting Agreements
     ---------------------

     On August 1, 1995, Haldane entered into a consulting agreement with a
     company whose president was Haldane's former president, for a period of
     five years. Compensation under the agreement is as follows: $62,000 the
     first year, $69,000 the second year, $74,000 the third year, $83,000 the
     fourth year and $90,000 the fifth year. In addition, Haldane agreed to
     provide to the consultant a leased automobile and reimburse all approved
     expenses. For the years ended May 31, 1998, 1997 and 1996, Haldane recorded
     compensation expense of $73,167, $67,832 and $51,667, respectively.

     Tax Contingencies
     -----------------

     During fiscal 1997, the Internal Revenue Service commenced audits of the
     Companies' consolidated federal tax returns for the years ended May 31,
     1995 and 1996 and is questioning the deductibility of amortization taken on
     intangible assets. The outcome of the audits cannot be readily determined,
     however, it is not expected to have a material impact on the Companies'
     consolidated financial statements. In addition, in June 1998, the Companies
     were notified by the State of New York that the consolidated New York State
     tax returns for the years ended May 31, 1995, 1996 and 1997 have been
     selected for audit. Management believes that the outcome of such audits
     would have no material effect on the Companies' consolidated financial
     statements.

     Going Private
     -------------

     In February 1998, the Companies filed an application to withdraw its common
     shares from the public market. Such application is under review by the
     Securities and Exchange Commission.

     Certain of the Companies' stockholders offered to purchase the shares of
     common stock owned by the public investors at $3 per share, which
     represents the valuation made by a financial advisory company in its
     fairness opinion. The number of shares to be purchased is 217,695 shares or
     $653,085.

                                      F-18

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 6 - COMMON STOCK OPTIONS

     The stock option transactions for the three fiscal years ended May 31, 1998
are summarized as follows:
<TABLE>
<CAPTION>

                                                                                         Weighted-
                                                                                          Average
                                                                        Number           Exercise         Total
                                                                       of Shares           Price          Price
                                                                       ---------           -----          -----
<S>                                                                       <C>            <C>            <C>
       Outstanding - May 31, 1995 (exercisable at a price of
         $.25 to $3.50 per share)                                         326,000        $   2.26       $  737,250
       Granted at $2.50 per share                                          60,000            2.50          150,000
                                                                       ----------                       ----------

       Outstanding - May 31, 1996 (exercisable at a price of
         $.25 to $3.50 per share)                                         386,000            2.30          887,250
       Granted at $2.50 per share                                          60,000            2.50          150,000
       Terminated                                                        (161,000)           2.95         (474,750)
                                                                       ----------                       ----------

       Outstanding - May 31, 1997 and 1998 (exercisable at
         a price range of $.25 to $2.50 per share)                        285,000            1.97       $  562,500
                                                                       ==========                       ==========

       Exercisable Options -
         May 31, 1996                                                     386,000        $   2.30       $  887,250
         May 31, 1997                                                     285,000            1.97          562,500
         May 31, 1998                                                     285,000            1.97          562,500
</TABLE>
     During the years ended May 31, 1998, 1997 and 1996, options to acquire -0-,
     60,000 and 60,000 shares, respectively, were granted to directors and
     employees of the Companies at market value.

     The Companies apply APB Opinion No. 25 in accounting for its stock options
     and, accordingly, no compensation cost has been recognized for stock
     options in the consolidated financial statements. Had the Companies
     determined compensation expense for stock options granted based on the
     method presented by SFAS No. 123, net income and earnings per share would
     have been changed to the pro forma amounts indicated below:
<TABLE>
<CAPTION>

                                                                                     Year Ending May 31,
                                                                               1998         1997         1996
                                                                           -----------  -----------  -----------

<S>                                                                         <C>          <C>           <C>      
              Net income - as reported                                      $  162,070   $  461,092    $ 533,440
              Net income - pro forma                                        $  162,070   $  416,092    $ 497,440
              Earnings per share - basic - as reported                            $.17         $.48         $.48
              Earnings per share - basic - pro forma                              $.17         $.44         $.45
              Earnings per share - diluted - as reported                          $.16         $.45         $.46
              Earnings per share - diluted - pro forma                            $.16         $.41         $.43
</TABLE>

                                      F-19

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 6 - COMMON STOCK OPTIONS (CONTINUED)

     The fair value of the stock options used to compute proforma net income and
     earnings per share disclosures is the estimated present value at grant date
     using the Black-Scholes option-pricing method with the following weighted
     average assumptions for 1997 and 1996: expected volatility of 11.9% and
     3.8%; a risk-free interest rate of 6.7% and 6.8% and an expected holding
     period of 10 and 7 years, respectively.


NOTE 7 - TREASURY STOCK

     In October 1995, March and June 1996, the Board of Directors authorized
     Haldane to repurchase outstanding shares of its common stock at fair market
     value from various shareholders. As of May 31, 1998 and 1997, Haldane
     repurchased 199,500 shares, (20,000 and 179,500 shares during the years
     ended May 31, 1997 and 1996, respectively), at fair market value with
     prices ranging from $2.49 to $2.75 per share.


NOTE 8 - INCOME TAXES

     Deferred Income Taxes
     ---------------------

     The Companies utilize Statement of Financial Accounting Standards No. 109,
     "Accounting for Income Taxes," which requires the use of the liability
     method of accounting for income taxes. The liability method measures
     deferred income taxes by applying enacted statutory rates in effect at the
     balance sheet date to the differences between the tax bases of assets and
     liabilities and their reported amounts in the financial statements. The
     resulting deferred tax asset or liability is adjusted to reflect changes in
     tax laws as they occur.

     Deferred income taxes reflect temporary differences in reporting assets and
     liabilities for income tax and financial accounting purposes. The deferred
     tax assets of $126,000 and $145,000 as of May 31, 1998 and 1997 (consisting
     solely of allowances for doubtful accounts and credit losses) are shown as
     current assets in the consolidated balance sheets. No valuation allowance
     has been provided.

                                      F-20

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 8 - INCOME TAXES (CONTINUED)

     Income Taxes
     ------------

     Provision for income taxes for the years ended May 31, consists of the
following:
<TABLE>
<CAPTION>
                                                                              1998         1997        1996
                                                                          ----------   ----------   ----------

<S>                                                                       <C>          <C>          <C>       
         Current:
           Federal                                                        $   66,803   $  267,457   $  163,448
           State and local                                                    27,732      105,711       75,876
                                                                          ----------   ----------   ----------
                                                                              94,535      373,168      239,324

         Deferred:
           Federal                                                            14,000      (51,000)      93,000
           State and local                                                     5,000      (11,000)      (4,000)
                                                                          ----------   ----------   ----------
                                                                          $  113,535   $  311,168   $  328,324
                                                                          ==========   ==========   ==========
</TABLE>
     Reconciliation of statutory rate to effective income tax rate on continuing
     operations for the years ended May 31, is as follows:
<TABLE>
<CAPTION>

                                                                            1998         1997          1996
                                                                          ---------   ----------   -----------

<S>                                                                           <C>          <C>          <C>  
         At federal statutory rates                                           34.0%        34.0%        34.0%
         Effect of:
             State income taxes, net of federal benefit                        8.1          8.2          7.9
             Permanent differences                                             1.3          1.2           .7
             Tax benefit of operating loss carryforwards                       -            -           (2.6)
             Overaccrual of prior year taxes                                  (2.2)        (2.0)        (1.0)
                                                                           -------     --------      -------

                      Total                                                   41.2%        41.4%        39.0%
                                                                           =======     ========      =======
</TABLE>
     The Companies file consolidated tax returns and had available at May 31,
     1995 unused operating loss carryforwards of approximately $400,000 for
     income tax reporting purposes which were utilized to offset 1996 taxable
     income. The only significant differences between income tax and financial
     reporting are the allowances for doubtful accounts and credit losses.

                                      F-21

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 9 - RETIREMENT PLANS

     The Companies have simplified employee pension (SEP) agreements with all
     full-time employees who are at least twenty-one years old and have
     performed services for at least three of the preceding five years. Such
     agreements provide for discretionary contributions by the employer. For the
     years ended May 31, 1998, 1997 and 1996, the Companies contributed $36,000,
     $21,000 and $29,750, respectively.


NOTE 10 - GEOGRAPHIC AREAS

     The Companies earned royalty income and sub-licensee income from five
     Canadian franchisees and one franchisee located in the United Kingdom for
     the years ended May 31, as follows:
<TABLE>
<CAPTION>

                                                       Royalty Income             Sub-Licensee Income
                                          ---------------------------------------------------------------------
                                              1998         1997         1996        1998       1997       1996 
                                          -----------  -----------   -----------  --------   --------   -------

<S>                                       <C>          <C>           <C>          <C>                   <C>    
         Canada                           $   167,594  $   201,148   $   158,572  $          $ 18,559   $   -  
                                          ===========  ===========   ===========  ========   ========   =======
         United Kingdom                   $    36,292  $    12,123   $      -     $ 37,186   $   -      $   -  
                                          ===========  ===========   ===========  ========   ========   =======
</TABLE>

     All other revenues are from United States sources.

     Included in accounts receivable and notes receivable at May 31, are amounts
     owed by the Canadian and United Kingdom franchisees, as follows:
<TABLE>
<CAPTION>

                                                                    Accounts Receivable      Notes Receivable
                                                                  ----------------------  ----------------------
                                                                     1998         1997       1998         1997
                                                                  ---------     --------  ---------     --------
<S>                                                               <C>           <C>       <C>           <C>     
         Canada                                                   $  57,191     $ 78,047  $   4,895     $ 15,963
                                                                  =========     ========  =========     ========
         United Kingdom                                           $  38,481     $  2,189  $  37,186     $   -   
                                                                  =========     ========  =========     ========
</TABLE>


NOTE 11 - RELATED PARTY TRANSACTIONS

     As of May 31, 1998, 1997 and 1996, a principal officer and director of
     Haldane owned and operated offices as follows:

                                                  1998       1997       1996
                                                ---------  ---------  ------

                  Canada                              5         5          5
                  United States                       2         2          4
                  United Kingdom                      2         1        -  
                                                   ----      ----       ----
                        Total offices                 9         8          9
                                                   ====      ====       ====

                                      F-22

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996





NOTE 11 - RELATED PARTY TRANSACTIONS (CONTINUED)

     During 1997, three United States offices were transferred to an unrelated
     existing owner of other Haldane offices and two new offices were acquired;
     one in the United States and one in the United Kingdom.

     During 1998, one new office in the United Kingdom was acquired.

     From time to time the Companies advance funds to several entities whose
     officer and director is also an officer and director of Haldane. The
     average monthly balance during fiscal 1998 and 1997 of such advances
     amounted to approximately $377,000 and $373,000, respectively. At both May
     31, 1998 and 1997, the balance of such advances was $-0-. In addition, at
     May 31, 1998 and 1997, the Companies were owed approximately $8,900 and
     $11,000, respectively, for miscellaneous reimbursable expenses from these
     entities.

     Interest earned on advances for the years ended May 31, 1998 and 1997 at 8%
     per annum amounted to approximately $30,000 for each year.


NOTE 12 - DISCONTINUED OPERATIONS

     On May 31, 1996, Haldane adopted a plan to terminate its travel agency
     operations which ceased in February 1997.

     The operating results of the travel agency segment for the years ended May
     31, 1998, 1997 and 1996 are shown separately in the accompanying
     consolidated income statement. Net revenues of the travel agency segment
     for 1998, 1997 and 1996 amounted to $-0-, $67,027 and $95,474,
     respectively.

     At May 31, 1998 and 1997, there were no net assets remaining from the
     travel agency operations.

     There was no gain or loss on disposal of this segment.

                                      F-23

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996



NOTE 13 - EARNINGS PER SHARE

     Net Earnings Per Common
       and Common Equivalent Share
     -----------------------------

     Earnings per share for the years ended May 31, were calculated using the
     modified treasury stock method as follows:
<TABLE>
<CAPTION>

                                                                         1998           1997            1996
                                                                     -------------  -------------  ---------
<S>                                                                   <C>            <C>            <C>         
     Numerator
     ---------
       Income from continuing operations                              $    162,070   $    441,150   $    513,444

       Impact of potential common shares                                      -              -              -
                                                                      ------------   ------------   ---------

       Income available to common stockholders
         after assumed conversion of dilutive securities              $    162,070   $    441,150   $    513,444
                                                                      ============   ============   ============

       Income from discontinued operations                            $       -      $     19,942   $     19,996
                                                                      ============   ============   ============

     Denominator
     -----------
       Weighted average number of common shares
         outstanding used in basic EPS                                     949,365        950,903      1,105,442

       Impact of potential common shares:
         Stock options                                                      64,662         69,532         62,503
                                                                      ------------   ------------   ------------

       Weighted number of common share and dilutive
         potential common shares used in dilutive EPS                    1,014,027      1,020,435      1,167,945
                                                                      ============   ============   ============

     Basic EPS
     ---------
       Continuing operations                                               $   .17        $   .46         $  .46
       Discontinued operations                                                 -              .02            .02
                                                                           -------        -------         ------
                  Net income                                               $   .17        $   .48         $  .48
                                                                           =======        =======         ======

     Diluted EPS
     -----------
       Continuing operations                                               $   .16        $   .43         $  .44
       Discontinued operations                                                 -              .02            .02
                                                                           -------        -------         ------
                  Net income                                               $   .16        $   .45         $  .46
                                                                           =======        =======         ======
</TABLE>

     Options to purchase 225,000 shares of common stock, at prices ranging from
     $2.50 to $3.50 per share, were outstanding during the year ended May 31,
     1996, but were not included in the computation of diluted EPS because the
     options' exercise prices were greater than the average market price for the
     common shares.

                                      F-24

<PAGE>



                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996




NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS

     The amounts at which cash, accounts receivable, notes receivable, due from
     related parties, accounts payable, current liabilities and long-term debt
     are presented in the balance sheets approximate their fair value.


NOTE 15 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>

                                                            1st            2nd           3rd             4th
                                                       ----------      ----------    ---------       ----------
     1998
     ----

<S>                                                    <C>             <C>           <C>             <C>       
       Revenues                                        $  798,628      $  718,300    $  605,895      $  765,911
                                                       ==========      ==========    ==========      ==========
       Income (loss) from operations
         before income taxes                           $  266,025      $  189,129    $  (94,785)     $  (84,764)
       Income taxes                                       110,000          76,800        43,276          29,989
                                                       ----------      ----------    ----------      ----------
       Net income (loss)                               $  156,025      $  112,329    $  (51,509)     $  (54,775)
                                                       ==========      ==========    ==========      ==========

       Net earnings (loss) per common share:
         Basic:
           Continuing operations                          $   .16         $   .12       $  (.05)         $ (.06)
           Discontinued operations                            -               -             -               -
                                                          -------         -------       -------          ------
                  Net income (loss)                       $   .16         $   .12       $  (.05)         $ (.06)
                                                          =======         =======       =======          ======

         Diluted:
           Continuing operations                          $   .15         $   .11       $  (.05)         $ (.05)
           Discontinued operations                            -               -             -               -
                                                          -------         -------       -------          ------
                  Net income (loss)                       $   .15         $   .11       $  (.05)         $ (.05)
                                                          =======         =======       =======          ======

       Market price per share:
         High                                             $  3.25         $  3.00       $  3.00          $ 3.00
         Low                                                 2.25            2.31          2.19            2.38
</TABLE>

                                      F-25

<PAGE>


                BERNARD HALDANE ASSOCIATES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 1998, 1997 AND 1996





NOTE 15 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>

                                                            1st            2nd           3rd             4th
                                                       ----------      ----------    ----------      -----------
     1997
     ----
<S>                                                    <C>             <C>           <C>             <C>       
       Revenues                                        $  649,981      $  687,556    $  649,042      $  761,216
       Income from continuing operations
         before income taxes                              264,999         248,111       146,257          92,951
       Income taxes                                       106,000          99,000        43,368          62,800
       Income from continuing operations                  158,999         149,111       102,889          30,151
       Income (loss) from discontinued
         operations                                       (10,241)         28,204           (21)          2,000
       Net income                                         148,758         177,315       102,868          32,151

       Net earnings (loss) per share:
         Basic:
           Continuing operations                          $   .17         $   .16       $   .11          $  .03
           Discontinued operations                           (.01)            .03           -               -
                                                          -------         -------       -------          ----
                  Net income                              $   .16         $   .19       $   .11          $  .03
                                                          =======         =======       =======          ======

         Diluted:
           Continuing operations                          $   .16         $   .15       $   .10          $  .03
           Discontinued operations                           (.01)            .03           -               -
                                                          -------         -------       -------          ----
                  Net income                              $   .15         $   .18       $   .10          $  .03
                                                          =======         =======       =======          ======

       Market price per share:
         High                                             $  2.87         $  2.44       $  2.75          $ 2.50
         Low                                                 2.43            2.44          2.25            2.25

     There were no dividends for either year.
</TABLE>

                                      F-26

<PAGE>



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

                                      NONE

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

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

Name                         Age    Position
----                         ---    --------

Jerold P. Weinger            53     President, Chief Executive
                                    Officer, Treasurer and Director

Jeffrey G. Klein             43     Secretary and Director

Jeffrey Schachter            48     Director

Gregg Weiss                  41     Director


         Jerold P. Weinger was elected as a director of the Company in May of
1989 and currently serves as the Company's President, Chief Executive Officer,
Treasurer and Chairman of the Board. In September 1991, 266 Washington
Associates, a New York real estate general partnership in which Mr. Weinger
serves as one of the general partners, filed a voluntary petition in bankruptcy
with the United States Bankruptcy Court for the eastern district of New York.
This action was subsequently dismissed. Since March 1992, Mr. Weinger has served
as the vice president and director of several different privately held companies
which operate Bernard Haldane licensed offices. Since November 1991, Mr. Weinger
has also served as the Chairman of the Board of Lauren & Associates, a New York
based entity engaged as a temporary employment agency. Since 1994, Mr. Weinger
served as Chairman of the Board of Prime Time Staffing, Inc., a New York based
company engaged in information technology and consulting. Lauren & Associates
and Prime Time Staffing have since merged and conduct business under the name
"Dynax Solutions, Inc." Mr. Weinger serves as Chairman of the Board of Directors
of Dynax Solutions. Since June 1987, Mr. Weinger has served as vice president of
STAT Staffing Inc., a New Jersey corporation which provides temporary nursing
care to institutions. From February 1987 until June 1989, Mr. Weinger has served
as the Vice President, Secretary and Director of Euromed, Inc., a New Jersey
based company. During this time he also served as Vice President of Euromed's
wholly-owned operating subsidiary, C.M.S. Europe Limited, which distributed
medical products in Europe. From 1984 until December 31, 1987, Mr.

                                       22

<PAGE>



Weinger was associated with Brooks Weinger Robbins & Leeds Inc. ("Brooks"),
formerly a registered broker-dealer, and from January 1987 until January 1988,
served as Chief Executive Officer of such firm.

         On or about January 1987, an action was commenced in United States
District Court for the Southern District of New York [87 Civil 593
(RWS)(U.S.D.C., S.D.N.Y.)] by the Securities and Exchange Commission ("SEC")
against, inter alia, Jerold Weinger.

     The SEC action alleged that Mr. Weinger violated Section 17(a) of the
Securities Act of 1933, as amended (the "1933 Act"), and Sections 10(b) and
15(c) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
Rules 10(b)-5, 10(b)-6 and 15(c)-2 thereunder, in connection with certain
initial public offerings in which Mr. Weinger had participated as an employee of
Brooks, Hamburger, Satnick, Inc., formerly a registered-dealer. (Brooks,
Hamburger, Satnick Inc. is not a predecessor to Brooks, Weinger, Robbins & Leeds
Inc.) On or about January 1987, without admitting or denying any of the SEC
allegations, Mr. Weinger consented to the entry of a Final Judgement of
Injunction enjoining Mr. Weinger from further violations of said Sections 17(a),
10(b) and 15(c) and Rules 10b-5, 10b-6 and 15cl-2.

     On February 9, 1987, the SEC issued an Order Instituting Public
Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to
Sections 15(d) and 19(h) of the Securities Exchange Act of 1934 (File No.
3-6790) against Jerold Weinger et al. The allegations against Mr. Weinger
included willfully violating Section 17(a) of the 1933 Act, Section 10(b) of the
1934 Act and Rules 10b-5 and 10b-6 thereunder, as well as willfully aiding and
abetting violations of Section 15(c) of the 1934 Act and Rule 15cl-2 thereunder.
Without admitting or denying the SEC allegations, Mr. Weinger consented to the
entry of an Order suspending him from association with any broker, dealer,
investment company, investment advisor or municipal securities dealer in any
capacity for a consecutive 90 day period (which period has expired).

     On January 4, 1989, the District Business Conduct Committee for
District No. 12 of the National Association of Securities Dealers,
Inc. ("NASD") filed a complaint (No. NY-7010) before the NASD
against Jerold P. Weinger et al. The Complaint alleges that Mr.
Weinger, while associated with Brooks Weinger violated Article III,
Section 1 of the NASD's Rules of Fair Practice by his failure to
become registered as a general securities principal (notwithstanding
that he was registered as a financial and operations principal at
such time), despite his alleged active engagement in the management
of the firm's investment banking and securities business. Without
admitting or denying any of the allegations contained in the

                                       23

<PAGE>



Complaint, Mr. Weinger has agreed to the entry of an order requiring Weinger
take and pass the Series 24 General Securities Principal examination prior to
applying for association with any NASD member and, that Mr. Weinger is suspended
in all capacities from association with any NASD member for a period of ninety
(90) days which period has since expired.

         Mr. Weinger received a B.B.A. from Pace University and a M.S.
from Brooklyn College.

         Jeffrey G. Klein, has served as Secretary and a Director of the Company
since its inception. Mr. Klein is a practicing attorney in Boca Raton, Florida.
From 1986-1989, Mr. Klein served as president and a Director of Unity Publishers
Corp., a publisher of financial newsletters. During this time, Unity was giving
away shares of stock in publicly held companies as a gift for subscribing to its
newsletter. Some states and the Securities and Exchange Commission have deemed
this to be a prohibited transaction and in those states, the newsletter and Mr.
Klein are subject to Cease and Desist Orders in reference to the distribution of
the stock as a gift for subscribing to the newsletter. Unity was named as a
Defendant in an action brought by the Securities and Exchange Commission and is
a signator to a Final Judgment of Permanent Injunction. From 1986 through 1988,
Mr. Klein also served as Secretary and Director of Capital Investment
Development Corp., a company which went public pursuant to a "Blind Pool"
offering. From January 1985 through 1986, Mr. Klein served as in-house counsel
to First Commonwealth Financial Corp., InfoData, Inc. and Newsletter Management
Corp., all of which were located in Boca Raton, Florida. From 1983 through 1985,
Mr. Klein was affiliated with the law offices of Gerald Beyer, Esq., Fort
Lauderdale, Florida, and during 1983, Mr. Klein was employed by Arthur Andersen
& Co., Fort Lauderdale, Florida. Prior thereto, Mr. Klein was a practicing
attorney in Pittsburgh, Pennsylvania. Mr. Klein received his J.D. and M.B.A.
degrees from the University of Pittsburgh and a B.A. from Boston University.

         Jeffrey Schachter, was elected a director of the Company in April,
1997. Since 1976 he has served as the president of Silver Enterprises Refining,
Inc., a Cliffwood, New Jersey based company involved in the commercial
extraction of silver from photographic film. Mr. Schachter holds a Bachelor's
degree from Lehman College
in the Bronx, New York.

         Gregg Weiss, was elected a director of the Company in April 1997, Mr.
Weiss is an attorney practicing in New York City concentrating in the areas of
taxation, trusts and estate planning. In 1991 Mr. Weiss founded the firm of
Gardner & Weiss. Prior thereto, Mr. Weiss was associated with several different
law firms

                                       24

<PAGE>



and from 1981 -1984 Mr. Weiss worked for the Internal Revenue Service at the
Office of Chief Counsel. Mr. Weiss received an L.L.M. in Taxation from New York
University, a J.D. degree from Hofstra University and a B.S. in Accounting from
State University of New York at Albany.

         Directors of the Company hold their offices until the next annual
meeting of the Company's stockholders and until their successors have been duly
elected and qualified or until their earlier resignation, removal from office or
death. There are no committees of the Board of Directors.

     Officers of the Company serve at the pleasure of the Board of Directors.

ITEM 11.  Executive Compensation
--------------------------------

          Mr. Weinger, the Company's President, oversees the Bernard Haldane
operations and in consideration thereof, receives annual compensation of
$225,000 and devotes his full time to the operations of the Company. The Company
has established a Simplified Employee Benefit Plan, (the "Plan"). During the
past year Mr. Weinger received $30,000 pursuant to this Plan. The terms and
conditions of Mr. Weinger's employment are reviewed annually by the Board of
Directors.

          Mr. Klein has received compensation from the Company of
approximately $46,000 for legal services rendered.  For a period of
five months Mr. Weiss and Mr. Schachter received $2,000 per month in
consideration for their services on the Board of Directors and
acting as consultants to the Company.

         The following table sets forth the compensation of the company's two
(2) officers for the last three (3) fiscal years:














                                       25

<PAGE>






                               ANNUAL COMPENSATION


NAME
AND PRINCIPAL                          ANNUAL                     LONG TERM
POSITION                         YEAR  COMPENSATION               COMPENSATION
-------------------------------------------------------------------------------


JEROLD WEINGER,
PRESIDENT                       1998      $252,916
                                1997      $215,00    (1)               (2)
                                1996      $222,500   (1)               (2)
                                                                               




JEFFREY KLEIN
SECRETARY                       1998      $ 46,000
                                1997      $ 44,000                     (2)
                                1996      $ 40,000                     (2)


(1)      Includes $30,000, $15,000 and $22,500 pursuant to the Company's
Simplified Employee Benefit Plan in 1998, 1997 and 1996.


(2) During the year ended May 31, 1997, Mr. Weinger and Mr. Klein were granted
options to purchase 25,000 and 5,000 shares of the Company's common stock at an
exercise price of $2.50 per share. During the year ended May 31, 1996, Mr.
Weinger and Mr. Klein were granted options to purchase 25,000 and 5,000 shares
of the Company's common stock at an exercise price of $2.50 per share. There
were no stock options granted for the year ended May 31, 1998.




                                       26

<PAGE>



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




     The following table sets forth certain information regarding the Company's
Common Stock beneficially owned on July 31, 1998 (i) by each person who is known
by the Company to own beneficially more than 5% of the Company's Common Stock,
(ii) by each of the Company's Directors, and (iii) by all executive officers and
Directors as a group.*

Renee Nadel                                 270,000                28.44%(4)
7885 Ayr Court
Boca Raton, Florida
33496

Jeffrey G. Klein (3)                          5,000                Less than 1%
23123 State Road 7, Suite 350B
Suite 350B
Boca Raton, Florida  33428

Lilli Weinger                               287,750                30.31%(4)
4 Woodgreen Place
Rockville Center, NY 11570

Jerold P. Weinger (1)(2)(3)                 132,520                13.96%(4)
192 Lexington
15th Floor
New York, New York  10016

All executive officers
and Directors as a
Group (2 persons) (2)(3)                    137,520                14.46%(4)
------------------------------
    *As of June 30, 1998

(1) Does not give effect to shares of stock owned by the children of Mr. Weinger
whose ownership he disclaims.

(2) Does not give effect to those shares owned by Lilli Weinger, the spouse of
Jerold Weinger.

(3) Does not give effect to shares of stock issuable to Mr. Weinger and Mr.
Klein upon exercise of stock options. (See Certain Transactions). Mr. Weinger
has been granted options to purchase a total of 120,000 shares of stock. Mr.
Klein has been granted the options to purchase a total of 22,500 shares of the
Company's common

                                       27

<PAGE>



stock. Assuming exercise of the foregoing options, the respective share of
ownership would be 26.60% for Mr. Weinger and would be 2.90% for Mr. Klein. Any
stock options not exercised by the effective date of the proposed merger between
Bernard Haldane Acquisition Corp. and Bernard Haldane Associates, Inc. will be
terminated.


(4) Does not take into account 199,500 shares of treasury stock.


Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

         During the year ended May 31, 1998, Ms. Nadel, Ms Weinger, Mr. Weinger
as well as any retirement accounts controlled by Mr. Weinger agreed to transfer
their equity interest in the Company on a 1:1 basis for shares of common stock
in Bernard Haldane Acquisition Corp. and as a result, Bernard Haldane
Acquisition Corp. will own approximately 77% of the issued and outstanding
shares of common stock of the Company.

         During the year ended May 31, 1996, pursuant to a resolution of the
Board of Directors, the Company redeemed from the shareholders, a total of
179,500 shares of the Company's common stock at an average cost of between $2.49
and $2.53 per share, including 5,000 shares of common stock owned by Jeffrey
Klein. During 1997 an additional 20,000 shares were redeemed at an average cost
of $2.75 per share.

         No stock options were granted to any employees during 1998.

         During the year ended 1997, a majority of the Company's shareholders
pursuant to a recommendation of the Board of Directors granted Mr. Weinger and
Mr. Klein options to purchase 25,000 and 5,000 shares of common stock of the
Company at an exercise price of $2.50 per share. Options to purchase 25,000
shares of common stock at an exercise price of $2.50 per share was granted to
Windsor Consulting Inc., a key consultant, and options to purchase 5,000 shares
of common stock at a price of $2.50 per share was granted to Donna Quartiero, a
key employee.

         On May 31, 1996, a majority of the Company's shareholders pursuant to a
recommendation of the Company's Board of Directors, granted the Company's two
officers, Mr. Weinger and Mr. Klein, options to purchase 25,000 shares, and
5,000 shares respectively, of the Company's common stock at an exercise price of
$2.50 per share. The Company also granted options for 25,000 shares of the
Company's common stock to Windsor Consulting Inc., and 5,000 shares of common

                                       28

<PAGE>



stock to Donna Quartiero. The options were granted to the foregoing at an
exercise price of $2.50 per share. The exercise price represented the average
between the low and high bid for the Company's common stock on May 31, 1996.

         On May 31, 1995, a majority of the Company's shareholders pursuant to a
recommendation of the Board of Directors, granted to the Company's officers,
including Joel Nadel, the Company's former president, and Donna Quartiero,
options to purchase shares of the Company's common stock at an exercise price of
$2.50 per share. The exercise represented the average between the low and high
bid for the Company's common stock on May 31, 1995. A total of 25,000 options
were granted to both Mr. Nadel and Mr. Weinger, and 7,500 options were granted
to Mr. Klein and Ms. Quartiero. The options are issuable for a period of ten
years from the date of issuance.

         On September 3, 1993, the Company's Shareholders pursuant to a
recommendation of the Board of Directors, granted to the company's officers and
Donna Quartiero, a key employee, options to purchase shares of the Company's
common stock at an exercise price of $1.75. The exercise price represented the
average between the low and high bid for the Company's common stock on September
3, 1994 the date of issuance. A total of 20,000 options were granted to Mr.
Nadel and Mr. Weinger and 5,000 options were issued to Mr. Klein and Ms.
Quartiero. The options are exercisable for a period of ten years from the date
of issuance. Previous thereto on December 18, 1990, Messieurs Nadel, Weinger and
Klein were issued options to purchase 25,000, 25,000 and 5,000 shares
respectively at an exercise price of $.25 per share. Also on December 18, 1990,
options to purchase 5,000 shares of the Company's common stock at an exercise
price of $.25 per share were issued to Donna Quartiero and Phillip Nadel.

         All stock options and exercise price thereof reflect at 4:1 reverse
split.

         In April 1995, The Company sold 14,000,000 of its shares of Andover
Equities Corp. to a group of four individual investors for cash and notes
totaling $35,000. No payments have been made on these notes and as a result the
notes have been written off.

         In February 1995, the Company acquired the remaining 20% of the
outstanding shares of common stock of Career Services Management Corp. in
exchange for the issuance of a total of 75,000 shares of the Company's common
stock. Of these 75,000 shares, 45,000 shares have been redeemed pursuant to the
Company's stock redemption program at an average cost of $2.50 per share.




                                       29

<PAGE>




                                     PART IV


Item 14.  Exhibits, Financial Statements Schedule and Reports on Form 8-K
-------------------------------------------------------------------------

         (a)      Documents filed as part of this report

                  (1)      Financial Statements.

                           Reports of Independent Certified Public Accountants.

                           Comparative Consolidated Balance Sheets - as of May
                           31, 1998 and May 31, 1997.

                           Comparative Consolidated Statement of
                           Operations for the years ended May 31, 1998, 1997,
                           1996 and 1995.

                           Comparative Consolidated Statements of Changes in
                           Stockholders' Equity for the years ended May 31, 
                           1998, 1997 and 1996.

                           Comparative Consolidated Statements of Cash Flows for
                           the Years ended May 31, 1998, 1997 and 1996.

                           Notes to Financial Statements.

                  (2)      Financial Statements Schedule.

                           All schedules for which provision is made in
                           applicable regulations and regulations of the 
                           Securities and Exchange Commission are not required 
                           under the related instructions or are inapplicable 
                           and therefore have been omitted.



                                       30

<PAGE>

(3) Exhibits
<TABLE>
<CAPTION>

                           DESCRIPTION                                 INCORPORATED
                                                                       BY REFERENCE TO
<S>                        <C>                                         <C>
Exhibit #                  Description of Exhibit

3(a)                       -Certificate of Incorporation*              Exhibit 3(a) filed as part of the
                                                                       Company's Registration Statement
                                                                       on Form S -18 ,File No. 000-18097 .

(b)                        -By-Laws*                                   Exhibit 3(b) filed as part of the
                                                                       Company's Registration Statement
                                                                       on Form S-18, File No. 000-18097.

4(a)                       -Form of certificate                        Exhibit 4(a) filed as part of the
                           evidencing shares of Common                 Company's Registration Statement
                           Stock.                                      on Form S-18, File No. 000-18097.

(b)                        -Form of Class A Redeemable                 Exhibit 4(b) filed as part of the
                           Common Stock Purchase Warrant*              Company's Registration Statement
                                                                       on Form S-18, File No. 000-18097.

(c)                        -Form of Class B Redeemable                 Exhibit 4(c) filed as part of the
                           Common Stock Purchase Warrant*              Company's Registration Statement
                                                                       on Form S-18, File No. 000-18097.

(d)                        -Form of Class C Redeemable                 Exhibit 4(d) filed as part of the                    
                           Common Stock Purchase Warrant.*             Company's Registration Statement
                                                                       on Form S-18, File No. 000-18097.

(e)                        -Form of Warrant Agency                     Exhibit 4(e) filed as part of the 
                           Agreement between Registrant                Company's Registration  Statement
                           and American Stock Transfer Co.*            on  Form S-18,  FileNo. 000-18097.

(f)                        -Form of Warrant issued by                  Exhibit 4(f) filed as part of the
                           Registrant to Brooks, Weinger,              Company's Registration Statement
                           Robbins and Leeds Inc.*                     on Form S-18, File No.000-18097.

                                       31

<PAGE>




                           

10(a)                      -Letter of Intent between                   Exhibit 10(e) Annual Report on Form 10-      
                           Registrant and DRB, Ltd.***                 K for the year ended May 31, 1989.

(b)                        -Stock Purchase Agreement                   Exhibit 10(F) Annual Report on Form 10- 
                           between Career Service                      K for the year ended May 31, 1989.
                           Management Corp. and D.R.B.
                           Ltd.****

22                         -Subsidiaries of Registrant                 Filed as an Exhibit herewith
</TABLE>


(c)      Reports on Form 8-K
         -------------------

         No report on Form 8-K was filed during the three month period ended May
31, 1997.

                                                        32

<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, thereunto duly authorized.


BERNARD HALDANE ASSOCIATES, INC.




By:
   ----------------------
         JEROLD WEINGER
      PRESIDENT/TREASURER

DATED:


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has ben signed below on those dates by the following persons on
behalf of this Registrant in the capacities indicate.



By:
   ----------------------------
         JEROLD WEINGER
   PRESIDENT/TREASURER/DIRECTOR

DATED:



   ----------------------------
       JEFFREY G. KLEIN
      SECRETARY/DIRECTOR

DATED:





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