UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB/A

/X/ Annual Report Under Section 13 or 15 (d) of the  Securities  Exchange Act of
    1934

For the calendar year ended  DECEMBER 31, 1996

/ / Transition Report Under Section 13 or 15 (d) of the Securities  Exchange Act
    of 1934

For the transition period from ______________   to  _________________________

Commission file number     0-23054
                       ---------------

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                 (Name of Small Business Issuer in its Charter)

New York                                                     11-3096379
--------                                                     ----------
State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization                               Identification No.)
450 Park Avenue, Suite 2603, New York, NY                        10022
(Address of principal executive offices)                      (Zip Code)
----------------------------------------                      ----------

Issuer's telephone number, including area code  212-223-0699
                                                ------------

 Securities registered under Section 12 (b) of the Exchange Act:  NONE

 Securities registered under Section 12 (g) of the Exchange Act: Common Stock,
                                                                 par value $.0l
                                                                 per share.

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

                                          / X / YES        / / NO

            Check if there is no disclosure of delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. / /

            The  Registrant's  revenues  for the fiscal year ended  December 31,
1996 were $24,367,112.

            The aggregate market value for the 8,568,081 shares of Common Stock,
$.0l par value per share (the "Common  Stock"),  held by  non-affiliates  of the
Registrant as of November 3, 1997 was approximately $100,674,951.

<PAGE>

ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS:

            Check  whether the  Registrant  has filed all  documents and reports
required  to be filed by Section 12, 13 or 15(d) of the  Exchange  Act after the
distribution of securities under a plan confirmed by a court.

                                            / / YES         / /  NO

APPLICABLE ONLY TO CORPORATE REGISTRANTS

The number of shares of Common  Stock issued and  outstanding  as of November 3,
1997 was 11,319,697.

DOCUMENTS INCORPORATED BY REFERENCE

None

<PAGE>
                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                   Form 10-KSB
                      Calendar Year Ended December 31, 1996

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------


Item 7.    Financial Statements                                            F-1

<PAGE>

ITEM 7. FINANCIAL STATEMENTS


                          Index to Financial Statements


                                                                     PAGE NO.
                                                                     --------

HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARY


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

       CONSOLIDATED FINANCIAL STATEMENTS:
            Balance sheet                                                F-3
            Statements of operations                                     F-4
            Statement of stockholders' equity                            F-5
            Statements of cash flows                                   F-6, F-7
            Notes to consolidated financial statements                 F-8-F-19






                                       F-1

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Stockholders and Board of Directors
Hospitality Worldwide Services, Inc.
New York, New York

We have  audited the  accompanying  consolidated  balance  sheet of  Hospitality
Worldwide Services,  Inc. (formerly Light Savers U.S.A., Inc.) and subsidiary as
of December 31, 1996,  and the related  consolidated  statements of  operations,
stockholders'  equity  and cash  flows for each of the two  years in the  period
ended December 31, 1996. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  Hospitality
Worldwide Services, Inc. and subsidiary as of December 31, 1996, and the results
of its  operations  and its cash  flows for each of the two years in the  period
ended  December 31, 1996,  in  conformity  with  generally  accepted  accounting
principles.




BDO Seidman, LLP



New York, New York

March 21, 1997


                                       F-2

<PAGE>

               HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 1996

                                     ASSETS
<TABLE>
<CAPTION>


CURRENT ASSETS:

<S>                                                                                        <C>
Cash                                                                                       $                   276,191
Accounts receivable, net of allowance for
    doubtful acccounts of $50,000 (Notes 5, 8 and 10)                                                        3,134,841
Current portion of note receivable (Note 3)                                                                     70,000
Costs in excess of billings  (Note 6)                                                                        2,176,907
Prepaid and other current assets                                                                               421,303
                                                                                           ----------------------------
                    Total current assets                                                                     6,079,242
                                                                                           ----------------------------

Property and equipment, less accumulated depreciation of $61,711  (Note 7)                                     142,877
Goodwill, less accumulated amortization of $549,970  (Note 3)                                                6,049,669
Note receivable, less current portion  (Note 3)                                                                280,000
Deferred taxes (Note 9)                                                                                         65,280
Other assets                                                                                                   133,022
                                                                                           ----------------------------
                     Total other assets                                                                      6,670,848
                                                                                           ----------------------------
                                                                                           $                12,750,090
                                                                                           ----------------------------

                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:

Loan payable - bank  (Note 8)                                                               $                1,400,000
Accounts payable  (Note 5)                                                                                   1,175,068
Accrued and other liabilities                                                                                1,897,389
Billings in excess of costs  (Note 6)                                                                          200,802
Income taxes payable                                                                                           297,860
                                                                                           ----------------------------
                    Total current liabilities                                                                4,971,119
                                                                                           ----------------------------

STOCKHOLDERS'  EQUITY  (Notes 13, 14 and 15)
Preferred  stock,  $.01 par value, 3,000,000 shares
      authorized, none issued and outstanding
Common stock, $.01 par value, 20,000,000 shares authorized,
       6,725,655 outstanding, 500,000 shares held in treasury                                                   72,257
Additional paid-in capital                                                                                   8,185,410
Treasury stock                                                                                                (715,000)
Retained Earnings                                                                                              236,304
                                                                                           ----------------------------
                    Total stockholders' equity                                                               7,778,971
                                                                                           ----------------------------

                                                                                            $               12,750,090
                                                                                           ----------------------------
</TABLE>


See accompanying notes to consolidated financial statements.

                                       F-3
<PAGE>

               HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                             Year Ended December 31,
                                                                                        1996                       1995
                                                                              -------------------------------------------------

<S>                                                                           <C>                       <C>
Net revenues  (Note 12)                                                       $           24,367,112    $            4,980,291

Cost of revenues  (Notes 10 and 12)                                                       18,289,924                 3,823,779
                                                                              -------------------------------------------------

       Gross profit                                                                        6,077,188                 1,156,512

Selling, general and administrative expenses                                               3,218,520                 1,619,189
                                                                              -------------------------------------------------

       Income (loss) from operations                                                       2,858,668                  (462,677)
                                                                              -------------------------------------------------
Other income (expense):

  Interest expense                                                                           (26,101)                  (13,007)
  Interest income                                                                              1,141                   120,257
                                                                              -------------------------------------------------
    Total other income (expense)                                                             (24,960)                  107,250
                                                                              -------------------------------------------------

       Income (loss) before provision for income taxes                                     2,833,708                  (355,427)

Provision for income taxes  (Note 9)                                                         926,325                    25,000
                                                                              -------------------------------------------------

       Income (loss) from continuing operations                                            1,907,383                  (380,427)
                                                                              -------------------------------------------------

Discontinued operations:  (Note 4)

       Loss from discontinued operations                                                     (64,705)                 (336,736)

       Loss on disposal of discontinued operations,
           including provision of $46,000 for operating
           losses during the phase out period                                                  -                      (398,806)

                                                                              -------------------------------------------------
       Loss from discontinued operations                                                     (64,705)                 (735,542)
                                                                              -------------------------------------------------
NET INCOME (LOSS)                                                             $            1,842,678    $           (1,115,969)
                                                                              -------------------------------------------------
PRIMARY:

        Net income (loss) per share
        from continuing operations                                            $                 0.27    $                (0.07)
                                                                              -------------------------------------------------
      Discontinued operations:
        Loss from operations                                                                   (0.01)                    (0.06)
        Loss on disposal                                                                                                 (0.07)
                                                                              -------------------------------------------------
                                                                                               (0.01)                    (0.13)
                                                                              -------------------------------------------------
      Net income (loss) per share                                             $                 0.26    $                (0.20)
                                                                              -------------------------------------------------

Fully Diluted:

      Net Income (loss) per share from continuing operations:                 $                 0.26    $                (0.07)
                                                                              -------------------------------------------------
      Discontinued operations:
        Loss from operations                                                                   (0.01)                    (0.06)
        Loss on disposal                                                                                                 (0.07)
                                                                              -------------------------------------------------
                                                                                               (0.01)                    (0.13)
                                                                              -------------------------------------------------
      Net income (loss) per share                                                               0.25                     (0.20)
                                                                              =================================================
WEIGHTED AVERAGE NUMBER OF COMMON
  AND COMMON EQUIVALENT SHARES OUTSTANDING                                                 7,192,361                 5,653,052
                                                                              -------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       F-4
<PAGE>
               HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARY

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
                                           -----------------------------------------------------------------------------------------

                                               Common Stock
                                               ------------                                            Unrealized
                                           Number                                      Additional        Loss on          Retained
                                             of              Par         Treasury        Paid in        Marketable        Earnings
                                           Shares           Value         Stock          Capital       securities        (deficit)
                                           -----------------------------------------------------------------------------------------

<S>                                         <C>            <C>             <C>           <C>            <C>             <C>
BALANCE, JANUARY 1, 1995                     4,625,655     $   46,257      $        -    $4,590,285     $(52,938)       $  (490,405)

Issuance of 2.5 million shares in
   connection with acquisition (note 3)      2,500,000         25,000               -     3,275,000                               -

Sale of available-for-sale securities                -              -               -             -       52,938                  -

Net loss                                                                                                                 (1,115,969)

                                           -----------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1995                   7,125,655         71,257               -     7,865,285            -         (1,606,374)

Purchase of treasury stock                  (1,000,000)             -      (1,152,500)            -                               -

Sale of treasury stock                         500,000              -         437,500        62,500                               -

Stock issued in settlement of
   service agreements                           75,000            750               -       149,250                               -

Stock options issued for services                                                             44,000

Exercise of stock options and warrants          25,000            250                         64,375

Net income                                           -              -               -             -                       1,842,678
                                           -----------------------------------------------------------------------------------------


BALANCE, DECEMBER 31, 1996                   6,725,655     $   72,257      $ (715,000)   $8,185,410     $      -        $   236,304
                                           ----------------------------------------------------------------------------------------
</TABLE>


                                               Total
                                           Stockholders'
                                               Equity
                                           ----------------

BALANCE, JANUARY 1, 1995                   $    4,093,199

Issuance of 2.5 million shares in
   connection with acquisition (note 3)         3,300,000

Sale of available-for-sale securities              52,938

Net loss                                       (1,115,969)

                                           ---------------
BALANCE, DECEMBER 31, 1995                      6,330,168

Purchase of treasury stock                     (1,152,500)

Sale of treasury stock                            500,000

Stock issued in settlement of
   service agreements                             150,000

Stock options issued for services                  44,000

Exercise of stock options and warrants             64,625

Net income                                      1,842,678
                                           ---------------

BALANCE, DECEMBER 31, 1996                  $   7,778,971
                                           ----------------

See accompanying notes to consolidated financial statements.

                                       F-5
<PAGE>
               HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                            YEAR ENDED DECEMBER 31,

                                                                                             1996                     1995
                                                                                  ------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                               <C>                     <C>
  Net income (loss)                                                               $   1,842,678           $   (1,115,969)
  Adjustments to reconcile net income (loss) to net cash
    used for operating activities:
    Depreciation and amortization                                                       404,114                  178,801
    Provision for losses on accounts receivable                                               -                  125,366
    Loss on disposal of discontinued operations                                               -                  398,806
    Realized loss on sale of securities                                                       -                   52,938
    Stock options issued for services                                                    44,000                        -
    Deferred income taxes                                                               (65,280)                       -
    (Increase) decrease in current assets:
      Accounts receivable                                                            (1,548,005)                (539,439)
      Current assets of discontinued operations                                         145,317                 (145,317)
      Costs in excess of billings                                                    (2,047,173)                (129,734)
      Prepaid and other current assets                                                 (290,632)                 182,029
      Increase in other assets                                                          (81,014)                  (9,632)
    Increase (decrease) in current liabilities:
      Accounts payable                                                                  134,481                  495,158
      Accrued and other liabilities                                                     862,204                  360,172
      Billings in excess of costs                                                      (419,772)                (640,175)
      Accrued loss on disposal of discontinued operations                              (398,806)                       -
      Income taxes payable                                                              297,860                        -
                                                                                  ---------------------------------------

NET CASH USED FOR OPERATING ACTIVITIES                                               (1,120,028)                (786,996)
                                                                                  ---------------------------------------



CASH FLOWS FROM INVESTING ACTIVITIES:
     Sale of marketable securities                                                            -                3,047,243
     (Purchase) sale of short term marketable securities                                715,000                 (715,000)
     Cash acquired in connection with acquisition                                             -                  125,966
     Purchase of property and equipment                                                 (65,682)                 (40,819)
                                                                                  ---------------------------------------

NET CASH PROVIDED BY INVESTING ACTIVITIES                                               649,318                2,417,390
                                                                                  ---------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from borrowings on loan payable - bank                                   1,400,000                  455,926
    Repayment of loan payable - bank                                                   (455,926)                       -
    Purchase of  treasury stock                                                      (1,152,500)                       -
    Proceeds from sale of treasury stock                                                500,000                        -
    Note receivable                                                                           -               (2,574,521)
    Proceeds from issuance of common stock                                               64,625                        -
                                                                                  ---------------------------------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES                                    356,199               (2,118,595)
                                                                                  ---------------------------------------

NET DECREASE IN CASH                                                                   (114,511)                (488,201)

CASH, BEGINNING OF PERIOD                                                               390,702                  878,903
                                                                                  ---------------------------------------

CASH, END OF PERIOD                                                               $     276,191           $      390,702
                                                                                  ---------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       F-6
<PAGE>
               HOSPITALITY WORLDWIDE SERVICES, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                    YEAR ENDED DECEMBER 31,

                                                                                   1996                     1995
                                                                        ------------------------------------------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:

Cash paid during the period for:
<S>                                                                        <C>                      <C>
     Interest                                                              $            26,101      $         12,486
     Income taxes                                                                      696,324                     -

NON-CASH TRANSACTIONS:

Fair value (including goodwill) of net assets acquired                                       -             5,450,000
Stock issued for assets acquired                                                             -            (3,300,000)
Note payable for assets acquired                                                             -            (2,150,000)

Issuance of stock for repayment of debt                                                150,000                     -
Repayment of debt from issuance of stock                                              (150,000)                    -

</TABLE>










See accompanying notes to consolidated financial statements.

                                       F-7

<PAGE>
                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1.    ORGANIZATION AND
      BASIS OF PRESENTATION

           Hospitality Worldwide Services,  Inc., formerly known as Light Savers
U.S.A.,  Inc.  (the  "Company")  was  incorporated  in the  State of New York on
October 10, 1991. On August 1, 1995 the Company  acquired  substantially  all of
the assets and  business,  and  assumed  certain  liabilities,  of AGF  Interior
Services, Inc. (d/b/a Hospitality Restorations and Builders),  through its newly
formed  subsidiary  corporation,  Hospitality  Restorations  and Builders,  Inc.
("HRB")  (see Note 3 -  Acquisition  of  Business).  HRB  provides  interior and
exterior cosmetic  renovations and maintenance for leading hotel and hospitality
customers  nationwide.  The acquisition was accounted for as a purchase with the
results of HRB included from the acquisition date.

           The Company previously  manufactured and designed decorative,  energy
efficient lighting fixtures and related products. Sales were mainly to hotels in
the New York  metropolitan  area. In December  1995,  the Company  determined to
focus its resources on its hospitality and restoration  business and discontinue
its lighting business.

           The  consolidated  financial  statements  include the accounts of the
Company and its  wholly-owned  subsidiary,  HRB.  All  significant  intercompany
balances and transactions have been eliminated.

2.     SUMMARY OF  SIGNIFICANT
       ACCOUNTING POLICIES

ESTIMATES

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

REVENUE RECOGNITION
CONSTRUCTION CONTRACTS

           The Company  recognizes  revenues and earnings on contracts using the
percentage of completion  method,  based primarily on contract costs incurred to
date compared to total estimated contract costs.

           To the extent contracts  extend over one year,  revisions in cost and
profit  estimates  during the course of the work are reflected in the accounting
period in which the facts which require the revision  become  known.  Assets and
liabilities  related to  contracts  are  included in current  assets and current
liabilities in the  accompanying  consolidated  balance  sheet,  as they will be
liquidated  in the  normal  course of  contract  completion,  although  this may
require more than one year.

           At the time a loss on a  contract  becomes  known,  the amount of the
estimated ultimate loss on both short and long-term contracts is accrued.

           Claims (cost recoveries from construction projects) are recorded when
realization is probable and the amount can be reliably estimated.

                                       F-8
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

PROPERTY AND EQUIPMENT

           Property  and  equipment  is  recorded  at  cost  and  shown  net  of
depreciation.  The Company  provides for  depreciation  using the  straight-line
method over estimated useful lives (generally 3-7 years) for financial reporting
purposes, and the accelerated method for income tax reporting purposes.


GOODWILL

           Goodwill is amortized  on a  straight-line  basis over its  estimated
useful life of 17 years. The Company periodically  evaluates goodwill based upon
the expected undiscounted cash flow from the acquired business.

EARNINGS (LOSS) PER SHARE OF COMMON STOCK

           Primary and fully diluted  earnings  (loss) per share of common stock
was computed by dividing the earnings  (loss) by the weighted  average number of
common shares and common stock equivalents outstanding during the period.

INCOME TAXES

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

CASH AND CASH EQUIVALENTS

           The Company  considers all highly liquid debt  instruments  purchased
with a maturity of three months or less to be cash equivalents.

LONG-LIVED ASSETS

           In March  1995,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment of Long-Lived  Assets and for Long-Lived  Assets to be Disposed of" ,
which  requires  that  certain  long-lived  assets be  reviewed  for  impairment
whenever  events or changes in  circumstances  indicate that the carrying amount
may not be  recoverable.  This standard is effective for fiscal years that begin
after December 15, 1995. The Company's adoption of this pronouncement on January
1, 1996 did not have a material impact on the Company's  consolidated  financial
statements.






                                       F-9
<PAGE>
                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

           The carrying values of financial  instruments including cash and cash
equivalents,  accounts  receivable,  loan  payable - bank and  accounts  payable
approximate  fair  value  due  to  the  relatively  short  maturities  of  these
instruments.  Due to the nature of the transaction  and the  relationship of the
parties  involved,  it is not  practical to determine the fair value of the note
receivable.

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",  which allows a choice of either the  intrinsic
value method or the fair value method of accounting  for employee stock options.
The  Company  has chosen to  continue  the use of the  intrinsic  value  method.
Expenses related to stock options issued to nonemployees are accounted for using
the fair value at the date of grant as required by SFAS No. 123.

PRESENTATION OF PRIOR YEAR DATA

           Certain  reclassifications  have been made to conform prior year data
with the current presentation.

3.     ACQUISITION OF BUSINESS

           On August 1, 1995,  the  Company  acquired  substantially  all of the
assets and business and assumed certain liabilities of AGF Interior Services Co.
(d/b/a  Hospitality  Restoration and Builders)  ("AGF") through its newly formed
subsidiary  corporation,  HRB.  HRB  provides  interior  and  exterior  cosmetic
renovations  and  maintenance  for  leading  hotel  and  hospitality   customers
nationwide.

           The aggregate consideration for the acquisition pursuant to the Asset
Purchase   Agreement   which  was  dated  August  1,  1995,   subject  to  final
determination  subsequent to that date, was $5,450,000.  As finally  determined,
the purchase price consists of a $2,150,000  promissory note payable to AGF over
five  years,  bearing  interest  at 8% per  annum  and  2,500,000  shares of the
Company's  common  stock,  delivered to AGF and issued in the name of AGF's sole
stockholder,  Watermark Investments Ltd. ("Watermark"). The acquisition resulted
in  goodwill  of  approximately  $6,600,000,  which  is  being  amortized  on  a
straight-line  basis over its estimated useful life of 17 years. The acquisition
was  accounted  for as a  purchase  with  the  results  of HRB  included  in the
consolidated financial statements from the acquisition date.

           On May 23,  1995,  the Company  loaned AGF  $2,500,000,  secured by a
promissory  note  ("Note  Receivable"),  payable  over five  years  and  bearing
interest at 8% per annum. On April 12, 1996, the Company and Watermark agreed to
offset the $2,150,000  note payable and the $2,500,000 note  receivable,  with a
net balance of $350,000  receivable in 60 equal monthly  installments  at 7% per
annum with payments commencing January 1997.

           The following pro forma consolidated  financial  information has been
prepared to reflect the  acquisition  of the assets and business of AGF. The pro
forma financial  information is based on the historical  financial statements of
the Company and AGF,  and should be read in  conjunction  with the  accompanying
footnotes.  The accompanying pro forma operating  statements are presented as if
the transaction occurred January 1, 1995. The pro forma financial information is
unaudited  and is not  necessarily  indicative  of what the  actual  results  of
operations  of the Company  would have been  assuming the  transaction  had been
completed as of January 1, 1995, and neither is it necessarily indicative of the
results of operations for future periods.


                                      F-10
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

            YEAR ENDED DECEMBER 31                               1995
       -------------------------------------------------------------------------
                                                              (unaudited)

            Net sales                                         $7,159,035

            Loss from continuing operations                   (1,225,475)

            Net loss                                          (1,961,017)

            Loss per share from continuing
            operations                                              (.18)

            NET LOSS PER SHARE                                      (.28)
       -------------------------------------------------------------------------

           The above  unaudited  pro forma  statements  have  been  adjusted  to
reflect the amortization of goodwill,  as generated by the  acquisition,  over a
17-year period, interest income on the $350,000 note receivable,  elimination of
the  interest  income  on the  $2,500,000  funds  used in  connection  with  the
acquisition and the 2,500,000 shares issued as consideration in the transaction.
The impact of outstanding  stock options was not included in the  calculation of
net loss per share since the effect would be antidilutive.

4.     DISCONTINUED OPERATIONS

           In December  1995,  the Company  determined to focus its resources on
its hospitality and restoration  business and discontinue its lighting business.
On February 26, 1996, the Company entered into a divestiture  agreement with its
former President. In accordance with the agreement,  the Company disposed of the
lighting business,  together with its accounts  receivable,  inventory and fixed
assets  to  the  former  President,   who  also  assumed  certain   liabilities.
Additionally,  in accordance with the agreement, the following occurred: (i) the
Company repurchased 500,000 shares of common stock from the former President for
$250,000 with a market value of $437,500;  (ii) the Company  retained the former
President  as a  consultant  for a three  year  period  at an  annual  salary of
$100,000,  (iii) the  former  President  granted  to the  Company  the option to
purchase an additional  1,000,000  shares of common stock over a two year period
at a 33% discount from the average  trading price for the prior 20 trading days,
but not below certain  minimum set prices.  The agreement also provides that the
former President has the ability to request the Company to purchase the relevant
optioned  shares at a 50%  discount to market.  If the Company does not purchase
the relevant  optioned shares,  the option will be canceled with respect to such
shares. In 1995 the Company incurred a loss on disposal of discounted operations
of $398,806,  which primarily  includes the present value of the consulting fees
payable to the former  President and a provision of $46,000 for operating losses
during the phase out period.  Revenues of the lighting business segment for 1995
was $530,000.  In 1996, the Company incurred additional losses from discontinued
operations of $64,705.

5.    ACCOUNTS RECEIVABLE/ACCOUNTS PAYABLE

           Accounts  receivable  include  retainages  amounting  to  $585,149 on
contracts  which are  collectible  upon the  acceptance  by the  owner,  and are
anticipated to be collected in their entirety in 1997.

           The Company  withholds a portion of payments  due  subcontractors  as
retainages ($181,528 at December 31, 1996). The subcontractor  balances are paid
when the Company collects its retainages receivable.


                                      F-11
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



6.   COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

           Billings on  uncompleted  contracts in excess of costs and  estimated
earnings represent deferred revenue and consist of:

        DECEMBER 31, 1996
--------------------------------------------------------------------------------

        Costs incurred on uncompleted contracts           $  19,962,133

        Estimated earnings                                    7,027,729

        Billings to date                                    (25,013,757)
--------------------------------------------------------------------------------

        Costs on uncompleted contracts in excess
        of billings and estimated earnings                $   1,976,105
--------------------------------------------------------------------------------

        Included  in the  accompanying  consolidated
        balance sheet  under  the following captions:

        Costs and estimated earnings in excess of
        billings on uncompleted contracts                 $  2,176,907

        Billings in excess of costs and estimated
        earnings on uncompleted contracts                    (200,802)
--------------------------------------------------------------------------------

                                                         $  1,976,105
================================================================================

7.      PROPERTY AND EQUIPMENT

      Major classes of property and equipment consist
      of the following:

      DECEMBER 31, 1996
--------------------------------------------------------------------------------

      Furniture and fixtures                             $      52,048
      Office equipment                                         134,153
      Leasehold improvements                                    18,387
--------------------------------------------------------------------------------
                                                               204,588
      Less: Accumulated depreciation                           (61,711)
--------------------------------------------------------------------------------
                                                             $ 142,877
--------------------------------------------------------------------------------

8.    LOAN PAYABLE - BANK

           In 1996,  the Company  secured a line of credit  ("line") with Marine
Midland Bank of New York.  The line  provides for  borrowings  up to $2 million,
with interest at prime +1/2% (8.75% at December 31, 1996) and is  collateralized
by all  Company  assets.  At December  31,  1996 the Company had an  outstanding
balance of $1.4 million on the line.


                                      F-12
<PAGE>


                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

9.      PROVISION FOR INCOME TAXES

      Provision for income taxes consists of the following:
                                                   Year ended December 31,
                                                   1996              1995
             ----------------- --------------- ----------------------------
             Current:
                      Federal                     $  620,929       $  25,000
                      State                          370,676               -
                                               -----------------   -----------
                                                     991,605          25,000

             Deferred:
                      Federal                        (65,280)              -
             -------------------------------------------------------------------
                                                  $  926,325       $  25,000
             ----------------- --------------- ---------------------------------


           The following is a reconciliation of the Company's income taxes based
on the statutory rate and the actual provision for income taxes:

                                                    Year ended December 31,
                                                    1996               1995
--------------------------------------------------------------------------------

Statutory Federal income tax @ 34%             $ 963,640            $(120,845)

Increase (decrease) resulting from:

      Reduction of valuation allowance          (339,120)                   -

      State and local taxes, net of Federal
      tax benefit                                239,027              16,500

      Nondeductible goodwill amortization
      and expenses                               56,861               28,000

      Increase in valuation allowance                 -              101,345

      Other                                       5,917                    -
================================================================================
Provision for income taxes                    $ 926,325            $  25,000
================================================================================

           The  deferred tax asset  represents  expenses  accrued for  financial
reporting purposes not deductible for tax purposes in 1995. Due to the Company's
profitability  in 1996,  and an  assessment  that  operations  will  continue to
generate  taxable  income,  the deferred tax asset is  recognized in the current
year.



                                      F-13
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The  primary  tax effects of the  temporary  differences  which give rise to the
Company's net deferred tax asset at December 31, 1996 and 1995 are as follows:

      December 31,                              1996               1995
      --------------------------------------------------------------------------

      Accrued liabilities                    $  87,280           $ 169,000

      Goodwill amortization                    (22,000)             (6,000)

      Net operating loss carryforwards               -             176,120

      Valuation allowance                            -            (339,120)
                                           -------------------------------------
                                           $    65,280           $       -
                                           -------------------------------------


10.      RELATED PARTY TRANSACTIONS

           The Company hired Interstate  Interior  Services  ("Interstate") as a
subcontractor  on certain of its  projects.  The  President of Interstate is the
sister of one of the  Company's  officers.  During 1996 and from August 1, 1995,
the date of the  Acquisition,  to December  31,  1995,  the Company paid fees of
$172,786 and $712,137, respectively, to Interstate.

           During 1996, the Company performed renovation services for Watermark,
the  Company's  major  shareholder.  As of December 31, 1996,  the Company had a
receivable  of $492,824 from  Watermark,  which was collected in full during the
first quarter of 1997.

11.      COMMITMENTS

         (A)    LEASE COMMITMENTS

           The Company  leases office space in New York,  California and Florida
which expire at various dates through 2007.

The aggregate  future minimum lease payments due under  operating  leases are as
follows:

        DECEMBER 31
--------------------------------------------------------------------------------
        1997                              $      158,404
        1998                                     285,174
        1999                                     242,020
        2000                                     212,318
        2001                                     212,318
        Thereafter                             1,121,931
        ------------------------------------------------------------------------
                                            $  2,232,165
================================================================================

      Rent expense for 1996 and 1995 was $120,534 and $88,000, respectively.


                                      F-14
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      (B)   EMPLOYMENT AGREEMENTS

           The Company has two three-year employment agreements and one two year
employment  agreement with management  personnel which call for aggregate annual
compensation  of  $565,000,  one  expiring  on April  1998 and two  expiring  on
February 1999.

12.     MAJOR CUSTOMERS AND  SUBCONTRACTOR

           Most of the Company's customers are in the hospitality  industry with
a few of them  accounting  for a substantial  portion of annual  revenues.  As a
result,  the trade accounts  receivable and costs in excess of billings  subject
the Company to  concentration  of credit  risk.  As of December  31,  1996,  two
customers  accounted for  approximately  80% and 65% of accounts  receivable and
costs in excess of billings, respectively.

           The two largest  customers of the Company for the year ended December
31,  1996  accounted  for 49%  and 31% of net  revenues,  and the  four  largest
customers for the year ended  December 31, 1995 accounted for 23%, 19%, 18%, and
14% of net revenues.

           During 1996, 35% of the Company's cost of revenues were costs charged
by one subcontractor.

13.      STOCKHOLDERS' EQUITY

           On January  26,  1994,  the  Company  completed  its  initial  public
offering  ("IPO") of  1,437,500  shares of common  stock at a price of $3.00 per
share less an underwriter's discount of 10%. This included an additional 187,500
shares purchased by the underwriter on an over-allotment option grant, which was
exercised  simultaneously  with the completion of the offering.  Proceeds of the
IPO, net of commissions  of $431,250 and other related  expenses of $486,958 (of
which $265,016 was recorded in 1993 as deferred costs), were $3,394,292.

           The  underwriter   received   warrants  to  purchase  125,000  shares
exercisable  at $3.60 per share for a period of four years  commencing  one year
from the effective  date of the IPO.  Additionally,  the Company  reimbursed the
underwriter  on a  non-accountable  basis for its expense in the amount of 3% of
the gross proceeds of the IPO. Upon the closing of the IPO, the Company  entered
into a three-year  financial  consulting agreement with the underwriter pursuant
to which the underwriter shall receive a consulting fee of $27,333 per year from
the  effective  date.  The total  three-year  fee of $82,000  was prepaid on the
closing date of the IPO. During 1996, 12,500 warrants were exercised.

           In March 1996 in accordance  with the divestiture  agreement  between
the Company and its former President,  the Company repurchased 500,000 shares of
Common Stock for $250,000 with a market value of $437,500.

           In April 1996,  the Company  consummated  a private  placement of the
500,000 shares of Common Stock for aggregate gross proceeds of $500,000.

           In September  1996,  the Company  issued  75,000 shares to two former
consultants to the discontinued lighting business in settlement of the unexpired
portion of their service agreements.

           In October 1996, in accordance with the divestiture agreement between
the Company and its former  President,  the Company  repurchased  an  additional
500,000 shares of Common Stock for $715,000.


                                      F-15
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


           On February 28, 1996, the Company  engaged a financial  advisor until
December 31, 1997. As compensation for such engagement,  the Company granted the
financial  advisor a five-year option to purchase 500,000 shares of common stock
at an exercise  price of $2.00 per share and agreed to pay a retainer of $10,000
per month for at least one year.

           On January 15, 1997, the financial  advisor exercised 200,000 options
resulting in $400,000 of additional capital to the Company.

14.    STOCK OPTION PLAN

           At December 31, 1996, the Company has three stock option plans, which
are described below. As permitted by Statement of Financial Accounting Standards
No. 123,  the Company  applies APB Opinion 25,  "Accounting  for Stock Issued to
Employees",  and related  interpretations in accounting for the plans. Under APB
Opinion 25, when the exercise  price of the  Company's  employee  stock  options
equals  the  market  price of the  underlying  stock on the  date of  grant,  no
compensation cost is recognized.

           During 1994, the Company's Board of Directors adopted a non-statutory
stock  option plan for  purposes of issuance of shares of the  Company's  common
stock to certain key employees or consultants.  With respect thereto, options to
purchase  85,000  shares at $1.275 per share have been granted and are currently
exercisable.  Of the options,  75,000  expire in four years and 10,000 expire in
two years. The stock option plan was retired,  and there are no shares available
for grant.  Additionally,  during 1995 the  Company  granted  75,000  options at
$1.275 per share which are currently exercisable and expire in four years.

           On September 26, 1996, the Company's  Board of Directors  adopted the
1996 Stock Option Plan (the  "Plan") for the purpose of  providing  incentive to
the officers and employees of the Company who are primarily  responsible for the
management and growth of the Company.  Each option granted  pursuant to the Plan
shall be designated  at the time of grant as either an "incentive  stock option"
or as a  "non-qualified  stock option".  The Company has granted  924,000 shares
under the Plan at a grant price of $2.75 per share,  of which 2,500  shares have
been exercised, and 462,000 are currently exercisable.  The term for each option
granted is determined by the Stock Option Committee, which is composed of two or
more members of the Board of Directors,  provided the maximum length of the term
of each option  granted  will be as more than ten years.  At December  31, 1996,
776,000 shares were available for grant.

           On September 26, 1996, the Company's Board of Directors adopted,  and
the  shareholders  approved,  the 1996 Outside  Directors Stock Option Plan (the
"Outside  Directors'  Plan") for the purpose of securing for the Company and its
shareholder the benefits arising from stock ownership by its outside  directors.
Subject to shareholder  approval,  each outside  director who becomes an outside
director  after  March 1, 1996 shall  receive the grant of an option to purchase
15,000 shares of Common Stock.  To the extent that shares of common stock remain
available for the grant of options under the Outside  Directors  Plan on April 1
of each year, beginning on April 1, 1997, each outside director shall be granted
an option to purchase  10,000 shares of common stock.  Options granted under the
Outside  Directors  Plan  shall  be  exercisable  in  three  equal  installments
beginning on the first  anniversary  of the grant date.  The Company has granted
options to purchase  60,000 shares under the Outside  Directors' Plan at a grant
price of $2.75  per  share,  of which  none are  currently  exercisable.  Of the
options, 20,000 are exercisable in even increments each of the next three years.

           FASB  Statement  123,   "Accounting  for  Stock-Based   Compensation"
requires the Company to provide pro forma  information  regarding net income and
earnings per share as if compensation  cost for the Company's stock option plans
had been determined in accordance with the fair value-based method prescribed in


                                      F-16
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FASB Statement 123. The Company estimates the fair value of each stock option at
the  grant  date by  using  the  Black-Scholes  option-pricing  model  with  the
following  weighted-average  assumptions  used  for  grants  in 1995  and  1996,
respectively:  no  dividends  paid for all years;  expected  volatility  of 40%;
risk-free interest rate of 6.41%; and expected lives of 2 years.

           Under the accounting  provisions of FASB Statement 123, the Company's
net  income and  earnings  per share  would  have been  reduced to the pro forma
amounts indicated below.


                                               1996              1995
                                             ---------         ----------
           Net income (in thousands)
                 As reported                 $  1,843         $  (1,116)
                 Pro forma                   $  1,583         $  (1,182)

           Primary earnings per share
                 As reported                $    0.26         $   (0.20)
                 Pro forma                  $    0.22         $   (0.21)

           The following  table  contains  information  on stock options for the
three year period ended December 31, 1996.
<TABLE>
<CAPTION>

                                                                         Exercise              Weighted
                                                    Option            price range               average
                                                    shares              per share        exercise price
--------------------------------------------------------------------------------------------------------
<S>                                              <C>              <C>                            <C>
Outstanding, January 1, 1994                             -                      -                     -
Granted                                             85,000                 $1.275                $1.275
Exercised                                                -                      -                     -
Canceled                                                 -                      -                     -
--------------------------------------------------------------------------------------------------------
Outstanding, December 31, 1994                      85,000                 $1.275                $1.275
Granted                                             75,000                 $1.275                $1.275
Exercised                                                -                      -                     -
Canceled                                                 -                      -                     -
--------------------------------------------------------------------------------------------------------
Outstanding, December 31, 1995                     160,000                 $1.275                $1.275
Granted                                          1,484,000         $2.00 to $2.75                 $2.50
Exercised                                          (2,500)                  $2.75                 $2.75
Canceled                                                 -                      -                     -
--------------------------------------------------------------------------------------------------------
Outstanding, December 31, 1996                   1,641,500        $1.275 to $2.75                 $2.38
--------------------------------------------------------------------------------------------------------


Exercisable at year-end
      1994                                         85,000                  $1.275                $1.275
      1995                                        120,000                  $1.275                $1.275
      1996                                      1,120,000          $2.00 to $2.75                 $2.21

                                                                       1996 Stock          1996 Outside
                                                1994 Plan             Option Plan        Directors Plan
                                                ---------             -----------        --------------
Available for future grants
      1994                                              -                       -                     -
      1996                                              -                 776,000                     *
</TABLE>


                                      F-17
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


                                                Exercise price           Exercise price          Total
                                              less than market          equal to market        options
                                              ----------------          ---------------        -------
Weighted-average fair value of:
<S>                                                         <C>                   <C>            <C>
      Options granted in 1995                                -                    $0.60          $0.60
      Options granted in 1996                                -                    $0.82          $0.82
</TABLE>


The following table summarizes  information  about stock options  outstanding at
December 31, 1996.
    Range of exercise prices                          $1.275-$2.75
    Outstanding options
          Number outstanding
               at December 31, 1996                      1,641,500
          Weighted-average remaining
               contractual life (years)                       4.30
          Weighted-average exercise price                    $2.38

    Exercisable options
          Number outstanding
               at December 31, 1996                      1,120,000
          Weighted-average exercise price                    $2.21

*The plan does not state a maximum number of shares available for grant.


15.   SUBSEQUENT EVENT


           On January 10, 1997, the Company  acquired the Leonard Parker Company
and  affiliates  ("LPC"),  a  leading  purchasing  company  for the  hospitality
industry  that acts as an agent for the  purchase of goods and  services for its
customers  which include major hotels and management  companies  worldwide.  The
purchase price of approximately  $12,000,000 consisted of 1,250,000 newly issued
Common  Stock of the  Company  and $5  million  par  value of  newly  issued  6%
convertible preferred stock of the Company, convertible into 1,000,000 shares of
common stock not earlier that January 1, 1998.

           This  acquisition  will be accounted for using the purchase method of
accounting.  Based on a preliminary  valuation,  the acquisition  will result in
goodwill of approximately  $12,000,000.  The pro forma financial  information is
based on the historical  financial statements of the Company and LPC, and should
be read in conjunction  with the  accompanying  footnotes.  The following  table
presents,  on a pro forma  basis,  a  condensed  consolidated  balance  sheet at
December 31, 1996,  giving  effect to the  acquisition  as if it had occurred on
that date.



                                      F-18
<PAGE>

                      HOSPITALITY WORLDWIDE SERVICES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


--------------------------------------------------------------------------------
              -----------------------------------------------------------
                                                                      Pro Forma
                                                              December 31, 1996
              (Unaudited)
              -----------------------------------------------------------------
              Current assets                          $              13,763,000
              Net property, plant and equipment                       1,129,000
              Goodwill - net                                         18,050,000
              Other assets                                              573,000
                                                      --------------------------
                                                      $              33,515,000
                                                      --------------------------

              Current liabilities                     $              13,667,000
              Long-term debt                                            109,000

              Stockholder's equity                                   19,739,000
                                                      --------------------------
                                                      $              33,515,000
              ------------------------------------------------------------------

           The Company's  consolidated  statement of operations will not include
the results of  operations  of LPC until the year 1997.  The following pro forma
results are  unaudited  and are not  necessarily  indicative  of what the actual
results of operations  of the Company  would have been assuming the  transaction
had been  completed  as of  January  1,  1995,  and  neither  is it  necessarily
indicative of the results of operations for future periods.
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------
                                                                   Year Ended
                                                                  December 31,
(Unaudited)                                                  1996               1995
----------------------------------------------------------------------------------------

<S>                                                       <C>             <C>
Net Sales                                                 $83,067,000     $  52,302,000
Net income (loss) from continuing operations
    applicable to common shares                           $ 1,435,000     $  (2,376,000)
Net income (loss) per share from continuing operations    $      0.17     $       (0.28)
-------------------------------------------------------------- -------------------------
</TABLE>

           The above  unaudited  pro forma results have been adjusted to reflect
the  amortization  of goodwill as generated by the  acquisition,  over a 30 year
period, LPC's officers  compensation based on employment agreements entered into
at the date of  acquisition,  dividends of 6% on preferred  stock and additional
income taxes on LPC's pro forma income.









                                      F-19