THERMOVIEW INDUSTRIES INC, S-1/A, 1999-10-01

THERMOVIEW INDUSTRIES INC
S-1/A, 1999-10-01
LUMBER & OTHER BUILDING MATERIALS DEALERS

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1999

REGISTRATION NO. 333-84571

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

AMENDMENT NO. 1

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
--------------------------

THERMOVIEW INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 5211 61-1325129
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>

1101 HERR LANE, LOUISVILLE, KENTUCKY 40222
(502) 412-5600

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------

STEPHEN A. HOFFMANN, CHIEF EXECUTIVE OFFICER
1101 HERR LANE
LOUISVILLE, KENTUCKY 40222
(502) 412-5600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------

COPIES TO:

C. CRAIG BRADLEY, JR., ESQ. THOMAS J. POLETTI, ESQ.
ALEX P. HERRINGTON, JR., ESQ. KATHERINE J. BLAIR, ESQ.
C. LEWIS BORDERS, ESQ. FRESHMAN, MARANTZ, ORLANSKI, COOPER &
KLEIN
STITES & HARBISON EIGHTH FLOOR, EAST TOWER
SUITE 1800 9100 WILSHIRE BOULEVARD
400 WEST MARKET STREET BEVERLY HILLS, CALIFORNIA 90212
LOUISVILLE, KENTUCKY 40202-3352 TELEPHONE: (310) 273-1870
TELEPHONE: (502) 587-3400 FACSIMILE: (310) 274-8293
FACSIMILE: (502) 587-6391

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
--------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $0.001 par
value......................... 4,025,000 $9.50 $38,237,500 $10,630
Representatives' Warrants....... 350,000 $0.001 $350 $1
Common Stock, $0.001 par
value(3)...................... 350,000 $11.40 $3,990,000 $1,109
Total........................... -- -- $42,227,850 $11,740(4)
</TABLE>

(1) Includes 525,000 shares of Common Stock which the Underwriters have an
option to purchase solely to cover over-allotments, if any.

(2) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(a) under the Securities Act of 1933.

(3) Issuable upon exercise of the Representatives' Warrants.

(4) Includes $5,297 paid by the Registrant in connection with the initial filing
of the Registration Statement on August 5, 1999.

------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

SUBJECT TO COMPLETION. DATED OCTOBER 1, 1999.

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. WE MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>

3,500,000 SHARES

[LOGO]

COMMON STOCK

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

This is a public offering of shares of ThermoView Industries, Inc. All of
the 3,500,000 shares of common stock are being sold by ThermoView Industries,
Inc. ThermoView Industries, Inc. anticipates that the public offering price will
be between $7.50 and $9.50 per share.

The common stock currently trades on the OTC Bulletin Board under the symbol
"TVII." Application has been made for quotation of the common stock on the
Nasdaq National Market under the same symbol. The last reported sale price of
the common stock on the OTC Bulletin Board on September 30, 1999 was $2.50 per
share ($7.50 per share adjusted for a 1-for-3 reverse stock split to be effected
on October 5, 1999).

SEE "RISK FACTORS" BEGINNING ON PAGE 6 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE BUYING SHARES OF THE COMMON STOCK.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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

<TABLE>
<CAPTION>
PER SHARE TOTAL
------------- ---------
<S> <C> <C>
Public offering price............................................... $ $
Underwriting discounts.............................................. $ $
Proceeds, before expenses, to ThermoView Industries, Inc............ $ $
</TABLE>

To the extent that the underwriters sell more than 3,500,000 shares of
common stock, the underwriters have the option to purchase up to an additional
525,000 shares from ThermoView Industries, Inc. at the public offering price
less the underwriting discount.

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

The underwriters expect to deliver the shares on , 1999.

SOUTHWEST SECURITIES EBI SECURITIES CORPORATION

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

PROSPECTUS DATED , 1999.

<PAGE>
[INSIDE FRONT COVER]

The images on the inside front cover page consist of pictures from one of our
product brochures and pictures from our installations. The descriptions of the
pictures are clockwise from the top left-hand corner.

1. A picture of a woman showing the tilt-in feature of one of our windows for
ease of cleaning.

2. A picture of the exterior of a house showing our windows.

3. A picture of a living room with fixed light picture windows.

4. A picture of one of our patio doors.
<PAGE>
PROSPECTUS SUMMARY

WE HAVE SUMMARIZED ALL MATERIAL INFORMATION FROM THIS PROSPECTUS IN THIS
SECTION. THIS SUMMARY MAY NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT
TO YOU. YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION AND OUR FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS
APPEARING ELSEWHERE IN THIS PROSPECTUS.

THERMOVIEW INDUSTRIES
OUR COMPANY

We design, manufacture, sell and install custom vinyl replacement windows
for residential and retail commercial customers. We also sell and install
replacement doors, home textured coatings, vinyl siding, patio decks, patio
enclosures, cabinet refacings and kitchen and bathroom remodeling products. We
finance a portion of our customers' purchases through Key Home Credit, Inc., our
consumer finance subsidiary.

In April 1998, we acquired Thermo-Tilt Window Company, which was established
in 1987. Since that time, we have acquired 12 retail and manufacturing
businesses which have been in operation an average of approximately 10 years. At
June 30, 1999, we had over 1,400 employees and had facilities in 13 states,
primarily in the Midwest and southern California. For calendar 1998, we
generated pro forma consolidated revenues of $102.1 million.

THE REPLACEMENT WINDOW INDUSTRY

Sales of replacement windows have experienced substantial growth in recent
years. According to U.S. Census Bureau and industry statistics:

- domestic expenditures in the replacement window industry were $8.2 billion
in 1998, an increase of 32.3% over 1993;

- over 28.4 million replacement windows were sold in 1998, a 38.5% increase
over 1992 levels; and

- of available replacement windows, vinyl replacement windows are the most
popular, comprising 49.6% of total unit sales in 1998.

OUR BUSINESS STRATEGY

Our goal is to become a leader in the replacement window industry by
building through acquisitions and internal growth a fully integrated nationwide
network of sales, installation and manufacturing subsidiaries. We believe that
our continuing national acquisition strategy capitalizes on the fragmented
nature of the replacement window industry. ThermoView seeks acquisition
candidates with the following characteristics:

- experienced, growth-oriented management;

- strong regional market share; and

- financial performance to increase our earnings and cash flow.

Our potential acquisition targets are typically small, regional companies
that require additional capital for expansion and modernization. In addition,
owners/managers of potential acquisition targets are often receptive to our
consolidation strategy due to the lack of liquidity for owners of privately-held
replacement window businesses. Our goal is to target sales, distribution and
installation companies within 400 miles of a manufacturing plant that we already
own or that we will either acquire or build to service these retail companies.

1
<PAGE>
We believe that our acquisition and integration strategy offers the
following competitive advantages.

EFFICIENT PENETRATION OF NEW MARKETS. We believe that we avoid many of the
costs and risks associated with entering new geographic markets by targeting one
or more leading local or regional companies providing vinyl replacement window
and complimentary business services.

OPPORTUNITY TO LEVERAGE OUR EXISTING CUSTOMER BASE. Our strategy is to
enhance internal sales growth by offering existing customers of our acquired
companies a wider range of products.

OPERATING EFFICIENCIES. We believe that our integration strategy affords us
the ability to achieve operating efficiencies and cost savings through volume
discounts on purchases. Also, we seek to provide a centralized accounting and
administrative function that we believe will enhance our profitability and the
operating efficiencies of our subsidiaries.

RELIABLE AND INEXPENSIVE SERVICING. Through the introduction of our own
manufactured vinyl replacement windows, we will be able to provide our retail
subsidiaries with a common product or products to sell in their markets. By
providing a manufacturing operation that is geographically proximate to our
retail operations, we expect to be able to deliver a completed window for
installation more quickly and with a higher level of operating efficiencies.

ABILITY TO LEVERAGE LOCAL BUSINESS REPUTATIONS. We maintain strong customer
relationships by acquiring sales and installation companies that have strong and
long-standing local reputations, and in most cases, by allowing the companies to
continue to operate under their original names.

INCREASED ABILITY TO OFFER CUSTOMER FINANCING. We believe that Key Home
Credit, our consumer finance subsidiary, affords our customers an additional
means of financing purchases of our products.

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

ABOUT THERMOVIEW INDUSTRIES

We were incorporated in Nevada in December 1987. We reincorporated in
Delaware in May 1998. We have our principal executive offices at 1101 Herr Lane,
Louisville, Kentucky 40222, and our telephone number is (502) 412-5600. Our
World Wide Web site is www.thermoviewinc.com. This prospectus does not
incorporate by reference any information on our Web site.

2
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common stock offered by ThermoView........... 3,500,000 shares

Common stock to be outstanding after this
offering................................... 9,467,909 shares

Use of proceeds.............................. To fund future acquisitions; to repay
indebtedness incurred in connection with a
prior acquisition; and for general corporate
purposes.

Proposed Nasdaq National Market symbol....... TVII
</TABLE>

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

UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS:

- REFLECTS A 2-FOR-1 STOCK SPLIT OF THE COMMON STOCK OF THERMO-TILT WINDOW
COMPANY THAT OCCURRED ON SEPTEMBER 29, 1997;

- REFLECTS THE EXCHANGE OF 1.7393 SHARES OF THERMOVIEW COMMON STOCK FOR EACH
SHARE OF THERMO-TILT COMMON STOCK ON APRIL 15, 1998;

- REFLECTS A 1-FOR-3 REVERSE STOCK SPLIT OF OUR COMMON STOCK TO BE EFFECTED
ON OCTOBER 5, 1999;

- DOES NOT GIVE EFFECT TO 400,000 SHARES OF OUR COMMON STOCK ISSUABLE UPON
CONVERSION OF OUR SERIES C PREFERRED STOCK;

- REFLECTS THE AUTOMATIC CONVERSION OF ALL OUTSTANDING SHARES OF OUR SERIES
A AND SERIES B PREFERRED STOCK INTO 1,126,667 SHARES OF OUR COMMON STOCK
AT THE CLOSING OF THIS OFFERING;

- DOES NOT GIVE EFFECT TO THE ISSUANCE OF UP TO 1,843,905 SHARES OF OUR
COMMON STOCK UPON EXERCISE OF OUTSTANDING STOCK OPTIONS AT A WEIGHTED
AVERAGE EXERCISE PRICE OF $6.57 PER SHARE;

- DOES NOT GIVE EFFECT TO THE ISSUANCE OF UP TO 997,010 SHARES OF OUR COMMON
STOCK UPON EXERCISE OF OUTSTANDING WARRANTS AT A WEIGHTED AVERAGE EXERCISE
PRICE OF $8.49 PER SHARE;

- EXCLUDES AN ADDITIONAL 374,793 SHARES OF OUR COMMON STOCK THAT WE HAVE
RESERVED FOR ISSUANCE AND MAY ISSUE UNDER OUR 1999 STOCK OPTION PLAN;

- DOES NOT GIVE EFFECT TO THE ISSUANCE OF AN INDETERMINATE NUMBER OF SHARES
OF OUR COMMON STOCK WE MUST ISSUE UNDER OUR ACQUISITION AGREEMENTS IF THE
ACQUIRED BUSINESSES SATISFY FINANCIAL TARGETS IN FUTURE PERIODS; AND

- ASSUMES THAT THE UNDERWRITERS DO NOT EXERCISE THEIR OVER-ALLOTMENT OPTION
OR THAT THE REPRESENTATIVES OF THE UNDERWRITERS DO NOT EXERCISE THE
WARRANTS THAT WE WILL GRANT TO THEM TO PURCHASE UP TO 350,000 SHARES OF
OUR COMMON STOCK AT AN EXERCISE PRICE OF $ PER SHARE.

3
<PAGE>

SUMMARY FINANCIAL DATA

The following tables present summary historical and pro forma financial data
for ThermoView. The unaudited pro forma statement of operations data give effect
to all of our acquisitions as if they had occurred on January 1, 1998. We have
presented this pro forma data for informational purposes only, in order to
provide you with some indication of what our business might have looked like if
we had owned all of the acquired companies since January 1, 1998. These
companies may have performed differently if they had actually been combined with
our operations. You should not rely on the unaudited pro forma information as
necessarily being indicative of the historical results that we would have had or
the results that we will experience in the future. Also, because of the
significant impact of our acquisitions on operations in 1998 and 1999, you
should be aware that period-to-period comparisons of historical results may not
be meaningful.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
-------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PRO FORMA PRO FORMA
1996 1997 1998 1998 1998 1999 1999
--------- --------- --------- ----------- --------- ---------- -----------

<CAPTION>
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................... $ 6,641 $ 5,629 $ 37,376 $ 102,115 $ 6,258 $ 50,196 $ 52,698
Cost of revenues earned.................... 3,571 2,889 16,748 48,092 2,719 22,502 23,235
--------- --------- --------- ----------- --------- ---------- -----------
Gross profit............................... 3,070 2,740 20,628 54,023 3,539 27,694 29,463
Selling, general and administrative
expenses................................. 2,634 3,293 20,233 49,427 3,991 25,390 26,941
Stock-based compensation expense........... -- 1 5,509 5,509 -- -- --
Depreciation and amortization.............. 68 69 854 2,258 163 1,442 1,500
--------- --------- --------- ----------- --------- ---------- -----------
Income (loss) from operations.............. 368 (623) (5,968) (3,171) (615) 862 1,022
Interest expense........................... (57) (90) (439) (2,393) (124) (858) (943)
Other income (expense)..................... (47) (19) 69 465 12 100 101
--------- --------- --------- ----------- --------- ---------- -----------
Income (loss) before income taxes.......... 264 (732) (6,338) (5,099) (727) 104 180
Income tax expense (benefit)............... -- (266) (1,135) (497) (210) 423 458
--------- --------- --------- ----------- --------- ---------- -----------
Net income (loss).......................... $ 264 (466) (5,203) (4,602) (517) (319) (278)
---------
---------
Less amount attributable to sole
proprietor............................... 398 -- -- --
Less preferred stock dividends:
Cash..................................... -- 585 785 -- 990 990
Non-cash................................. -- 9,540 9,540 -- 1,464 1,464
--------- --------- ----------- --------- ---------- -----------
Net loss attributable to common
stockholders............................. $ (864) $ (15,328) $ (14,927) $ (517) $ (2,773) $ (2,732)
--------- --------- ----------- --------- ---------- -----------
--------- --------- ----------- --------- ---------- -----------
Basic and diluted loss per common
share(1)................................. $ (3.86) $ (3.07) $ (0.15) $ (0.58) $ (0.57)
--------- ----------- --------- ---------- -----------
--------- ----------- --------- ---------- -----------
Weighted average shares outstanding........ 3,975,236 4,858,134 3,489,862 4,750,323 4,813,120
--------- ----------- --------- ---------- -----------
--------- ----------- --------- ---------- -----------
</TABLE>

<TABLE>
<CAPTION>
AS OF
AS OF JUNE 30, 1999
DECEMBER 31, ----------------------------------------
-------------------- PRO FORMA
1997 1998 ACTUAL PRO FORMA(2) AS ADJUSTED(3)
--------- --------- --------- ------------- --------------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS)
BALANCE SHEET DATA:
Total assets............................................ $ 1,503 $ 50,194 $ 81,221 $ 84,668 $ 107,243
Long-term debt including current maturities............. 527 9,206 24,211 23,592 22,392
Total liabilities....................................... 1,326 15,796 35,882 35,263 34,063
Mandatorily redeemable convertible preferred stock...... -- -- 3,886 3,886 3,886
Stockholders' equity.................................... 177 34,398 41,454 45,520 69,295
</TABLE>

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

(1) We have described the method used to calculate loss per common share in
footnote 2 to our consolidated financial statements for the year ended
December 31, 1998, which appears on page F-21 of this prospectus. The
weighted average shares used in computing pro forma basic and diluted loss
per common share includes the shares issued in connection with acquisitions
as if they were issued on January 1, 1998.

4
<PAGE>

(2) Reflects the issuance on July 8, 1999, of $10.0 million of senior
subordinated debt and a warrant to purchase 555,343 shares of common stock
at $0.03 per share, and the application of the net proceeds therefrom.

(3) Reflects (A) the automatic conversion of all outstanding shares of Series A
and Series B preferred stock into 1,126,667 shares of common stock upon the
closing of this offering, and (B) the sale of 3,500,000 shares of common
stock in this offering at an assumed public offering price of $8.50 per
share, after deducting underwriting discounts and commissions and the
estimated offering expenses payable by us, and the application of the
estimated net proceeds therefrom.

5
<PAGE>
RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, IN ADDITION TO THE
OTHER INFORMATION AND FINANCIAL DATA CONTAINED ELSEWHERE IN THIS PROSPECTUS, IN
EVALUATING AN INVESTMENT IN THE COMMON STOCK. THE TRADING PRICE OF OUR COMMON
STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU COULD LOSE ALL OR PART OF
YOUR INVESTMENT.

RISKS RELATED TO THE MARKET FOR OUR COMMON STOCK

OUR COMMON STOCK MAY BE DIFFICULT TO RESELL

Our common stock has been thinly-traded on the OTC Bulletin Board since
April 16, 1998. Our market price has fluctuated significantly. After this
offering, we propose to trade the common stock on the Nasdaq National Market and
it is likely that the market price of our common stock will continue to be
highly volatile and subject to wide fluctuations. An active public market for
our common stock may not develop or be sustained after this offering. You may
not be able to resell your shares at or above the initial public offering price.
The market price of our common stock is likely to be highly volatile and could
be subject to wide fluctuations.

IF OUR STOCKHOLDERS SELL SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK IN THE PUBLIC
MARKET, THE MARKET PRICE OF OUR COMMON STOCK COULD FALL AND THE SALES COULD
LIMIT OUR ABILITY TO RAISE CAPITAL

If our stockholders sell substantial amounts of our common stock in the
public market following this offering, including shares issued upon the exercise
of outstanding options and warrants or conversion of our Series C preferred
stock, the market price of our common stock could fall. These sales also might
make it more difficult for us to sell equity or equity-related securities in the
future at a time and price that we deem appropriate. Upon completion of this
offering, we will have outstanding 9,467,909 shares of common stock. Including
the 3,500,000 shares being offered hereby, there are 5,136,197 shares that are
freely tradable. The remaining 4,331,712 shares eligible for sale in the public
market are as follows:

<TABLE>
<CAPTION>
NUMBER OF
SHARES DATE
- ---------- --------------------------------------
<C> <S>
1,728,103 90 days after the date of this
prospectus--all of these shares will
be subject to the volume and manner of
sale limitations of Rule 144;
2,404,233 180 days after the date of this
prospectus--1,111,760 of these shares
will be subject to the volume and
manner of sale limitations of Rule
144; and
199,376 At various times commencing 180 days
after the date of this prospectus--all
of these shares will be subject to the
volume and manner of sale limitations
of Rule 144.
</TABLE>

As of September 9, 1999, options to purchase 1,843,905 shares of our common
stock were outstanding and, upon exercise of the options and satisfaction of the
conditions of Rule 144, will become eligible for sale in the public market at
various times. These stock options generally have exercise prices
significantly below the current market price of our common stock. As of
September 9, 1999, warrants to purchase 997,010 shares of our common stock were
outstanding and, upon exercise of the warrants and satisfaction of the
conditions of Rule 144, will become eligible for sale in the public market at
various times. The possible sale of a significant number of these shares may
cause the price of our common stock to fall.

A number of stockholders, option holders and warrant holders, representing
approximately 3,771,587 shares of our common stock, may have the right to
include their shares in registration statements relating to ThermoView's
securities. We have filed a concurrent registration statement on Form S-1 to
register 1,200,000 shares of our common stock to be offered for sale by two
stockholders. These stockholders

6
<PAGE>

have committed to refrain from selling these shares from the closing of this
offering to January 31, 2000. By exercising their registration rights and
causing a large number of shares to be registered and sold in the public market,
these holders may cause the price of the common stock to fall. In addition, any
demand to include these shares in ThermoView registration statements could
reduce the number of ThermoView shares in an offering or cause underwriters not
to commence an offering. Either condition would limit the amount of equity
capital that might otherwise be available to ThermoView.

YOU WILL SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION AND FUTURE DILUTION IS
IMMINENT

The initial public offering price per share will significantly exceed the
net tangible book value deficiency per share. Accordingly, investors purchasing
shares in this offering will suffer immediate and substantial dilution of their
investment. Future dilution will occur from conversions of our Series C
preferred stock and option and warrant exercises. To date, we have granted
options to purchase 1,843,905 shares of our common stock and warrants to
purchase 997,010 shares of our common stock. Many of these options and warrants
contain an exercise price below the current market price for the common stock.
Additionally, many of these options and warrants contain registration rights.

WE MAY NOT PAY CASH DIVIDENDS ON THE COMMON STOCK IN THE FORESEEABLE FUTURE

Our line of credit and subordinated debt documents preclude us from paying
dividends on our common stock. Additionally, the terms of our Series C preferred
stock prevent us from paying dividends on our common stock as long
as the Series C preferred stock is outstanding. We anticipate using future
earnings for acquisitions and our operations. Accordingly, it is unlikely that
we will pay dividends on the common stock in the foreseeable future. However, we
pay a 9.6% dividend on our Series C preferred stock partially in cash and the
remainder in our common stock. Until this offering, we also paid 10% cash
dividends on our Series A and Series B preferred stock until the holders of this
preferred stock converted their preferred stock into our common stock as
required by the terms of our Series A and Series B preferred stock.

RISKS RELATED TO OUR OPERATIONS

WE HAVE A LIMITED OPERATING HISTORY AS A CONSOLIDATED ENTERPRISE

ThermoView was formed in April 1998. We have a limited operating history as
a consolidated enterprise notwithstanding that all of our subsidiaries were
existing businesses prior to their acquisition. Potential investors in our stock
do not have access to the same type of information in assessing us as a
consolidated enterprise as would be available for a company with a longer
history of operations. We may not be profitable and if we become profitable we
may not remain profitable. If we do not obtain profitability, our stockholders
may not recover all or any of their investment.

OUR LOSSES MAY RESULT IN UNDERPERFORMANCE OF THERMOVIEW AND OUR COMMON STOCK

Although our revenues have grown in recent quarters, primarily from
acquisitions, we may continue to suffer losses. If we cannot increase our
revenues and control our costs, we may not achieve profitability. If we do
achieve profitability, we may be unable to sustain or increase profitability on
a quarterly or annual basis in the future. Our continuing losses and failure to
become profitable could result in the underperformance of ThermoView as a viable
business and our common stock.

We incurred a net loss attributable to common stockholders of approximately
$15.3 million for the year ended December 31, 1998, which included stock-based
compensation expense of approximately $4.2 million net of tax and an additional
preferred stock dividend of approximately $9.5 million related to a beneficial
conversion feature. We incurred a net loss attributable to common stockholders
of approximately $2.8 million for the six months ended June 30, 1999. We expect
losses attributable to common stockholders to continue through at least the
fourth quarter of 1999. As

7
<PAGE>

of June 30, 1999, we had an accumulated deficit of approximately $6.4 million.

CONTINUING AND INCREASED EXPENSES COULD CAUSE LOSSES THAT SLOW OUR GROWTH AND
PERFORMANCE

We expect that our costs and expenses will continue to increase in future
quarters, which could cause us to lose money. These costs and expenses related
principally to our acquisition program, financing, and corporate overhead may
require us to slow our acquisition strategy and result in little or no growth.
Consequently, ThermoView's common stock price may then fall or not grow.

WE HAVE A SIGNIFICANT AMOUNT OF GOODWILL, THE AMORTIZATION OF WHICH REDUCES OUR
CURRENT AND FUTURE EARNINGS AND THE IMPAIRMENT OF WHICH IN LATER YEARS MAY
REDUCE OUR FUTURE EARNINGS

As a result of our recent acquisitions, goodwill accounted for 76.8% of our
total consolidated assets at June 30, 1999. At June 30, 1999, our goodwill was
approximately $62.4 million, which exceeded our stockholders' equity of
approximately $41.5 million. Goodwill represents the excess of the aggregate
purchase price paid for the acquisition of companies accounted for as purchases
over the fair value of the net tangible assets of the acquired companies.
Goodwill reduces earnings now and in the future as we amortize it over a 40-year
period on a straight-line basis. In later years, our earnings would be reduced
if our management then determined that any of the remaining balance of goodwill
was impaired caused by insufficient expected future cash flows to recover the
carrying value of the goodwill.

CASH AND NON-CASH DIVIDENDS AND INTEREST RELATED TO RECENT FINANCINGS WILL
INCREASE OUR LOSSES OR REDUCE POTENTIAL NET INCOME

We will suffer losses or reductions in future potential net income as a
result of the 9.6% cash dividends on our Series C preferred stock and the 12%
stated interest payments on our senior subordinated debt. Also, fees and
expenses and the amortization and accretion of the discounts on the Series C
preferred stock and the senior subordinated debt related to detachable stock
warrants issued in connection with the preferred stock and the subordinated debt
will contribute to our losses or lower potential future income.

FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS MAY CAUSE A DROP IN OUR STOCK
PRICE

Our operating results are unpredictable and may fluctuate on a quarterly
basis due to the markets for our products or our operating problems. These
fluctuations may cause a decrease in the price of our common stock. You should
not rely on our results of operations during any quarter as an indication of our
results for a full year or any other quarter. Factors that may affect our
quarterly results include:

- the demand for our replacement windows and window-related products;

- the timing and amount of our costs related to the fabrication, marketing
and sale of our windows and window-related products;

- our ability to identify appropriate acquisitions and acquire them on
favorable terms; and

- our ability to enhance the performance of our acquired companies and
successfully integrate them into our operations.

OUR LINE OF CREDIT AND SUBORDINATED DEBT DOCUMENTS IMPOSE RESTRICTIONS ON US AND
LIMIT OUR OPERATIONS

Our line of credit with PNC Bank and subordinated debt owed to GE Capital
require us to comply with certain affirmative and negative covenants. We must
maintain various financial ratios and these lenders may restrict us from
incurring other debt. We cannot pay dividends on our common stock while the line
of credit and the subordinated debt are outstanding. We are also subject to
other restrictions, including restrictions pertaining to significant corporate
transactions and management changes.

If we default under the line of credit, PNC Bank could, among other items,
cease all advances, accelerate all amounts owed to PNC Bank and increase the
interest rate on the line

8
<PAGE>

of credit. If we default under the subordinated debt documents, GE Capital
could, among other items, accelerate all amounts owed to GE Capital, subject to
the rights of PNC Bank as our senior lender under the line of credit. Under
either the PNC Bank line of credit or the GE Capital subordinated debt, an event
of default could result in the loss of our subsidiaries because of the pledge of
our ownership in all of our subsidiaries to PNC Bank and on a subordinated basis
to GE Capital.

WE MAY LOSE REVENUES AND INCUR SIGNIFICANT COSTS IF OUR SYSTEMS OR MATERIAL
THIRD-PARTY SYSTEMS ARE NOT YEAR 2000 COMPLIANT

Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21(st) century dates from
20(th) century dates. Confusion of dates may bring about system failures or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices or engage
in similar business activities. As a result, many companies' software and
computer systems need to be upgraded or replaced in order to comply with Year
2000 requirements.

We have established procedures for evaluating and managing the risks and
costs associated with this problem and currently expect that our computer
systems will be Year 2000 compliant by December 31, 1999. However, many of our
third-party suppliers utilize operating systems which may be impacted by Year
2000 complications. We are in the latter phases of the assessment of our systems
and our third-party suppliers as to the Year 2000 compliance of their systems.
The failure of our internal computer systems or of third-party equipment or
software to operate without Year 2000 complications could require us to incur
significant unanticipated expenses to remedy any problems and could expose us to
claims for losses incurred by our customers due to Year 2000 complications. The
defense of any of these claims could require us to incur substantial costs and
would divert management's time and attention from other aspects of our business.
In addition, we are subject to external forces that might generally affect
industry and commerce, such as utility company Year 2000 compliance failures and
related service interruptions.

OUR OPERATIONS, ACQUISITIONS AND FUTURE DIRECTION WILL SUFFER FROM THE LOSS OF
OUR KEY EXECUTIVES

If we were to lose the services of our executive officers Stephen A.
Hoffmann, Nelson E. Clemmens and Charles L. Smith without adequate replacements,
we will suffer from a lack of leadership in our acquisition strategy, financial
future planning and operations management. This management gap would cause
potential revenue reduction and operating cost increases.

SINCE OUR CONSUMER FINANCE DIVISION HAS LIMITED CAPITAL AND THERMOVIEW RETAIL AS
ITS SOLE CUSTOMER SOURCE, ITS COSTS MAY CAUSE IT TO OPERATE AT A LOSS

Our consumer finance division competes with companies within the industry
such as Ditech Funding Corporation and Bank One, NA, that have greater resources
available for funding of lending activity at rates more favorable than the
consumer finance division can receive. The consumer finance division relies upon
the generation of loan applicants from the operation of ThermoView's retail
business. A decrease in ThermoView's retail sales will decrease the availability
of loan applicants for the consumer finance division. Additionally, consumer
finance businesses operate in a highly regulated environment. The fixed costs of
this division for employee benefits and government compliance, combined with the
lack of capital to generate loans and the dependence on ThermoView for customers
may cause this division to operate at a loss.

RISKS RELATED TO THE REPLACEMENT WINDOW INDUSTRY

OUR FAILURE TO ACQUIRE COMPANIES ON FAVORABLE TERMS AND TO INTEGRATE THEM INTO
OUR OPERATIONS MAY INCREASE EXPENSES, CAUSE LOSSES AND DISTRACT MANAGEMENT FROM
OUR OPERATIONS

Our ability to acquire companies on favorable terms, to enhance their
performance

9
<PAGE>

and to integrate them into ThermoView will affect our growth and financial
performance. We may compete for acquisition candidates with companies that have
significantly greater financial and other resources than we do. We may not be
able to identify suitable acquisition candidates. The past results of operations
of companies that we may acquire may not be indicative of future results.

When we buy companies, we initially rely on their separate accounting and
information systems. We may experience difficulties in integrating a company's
functions and systems. These difficulties could disrupt our ongoing business,
distract our management and employees, increase our expenses and result in
losses or reduced profitability.

WE WILL NEED TO RAISE SUBSTANTIAL FUNDS FOR ACQUISITIONS

We will need additional sources of financing to undertake all of the planned
acquisitions under our current business model during the next 12 months. After
this twelve month period, we will need additional financing to consummate
acquisitions and to pay other acquisition related liabilities, including payment
of seller notes and future earned cash to sellers of acquired companies. We may
require financing sooner if we pursue acquisitions not contemplated in our
current business model. Any required additional financing may not be available
on terms favorable to us, or at all. If adequate funds are not available on
acceptable terms, we may be unable to fund additional acquisitions, successfully
promote our products or develop new or enhanced products, any of which would
lower our revenues and net income, if we achieve profitability in the future. If
we raise additional funds by issuing equity securities, stockholders may
experience dilution of their ownership interest and the newly issued securities
may have rights superior to those of the common stock. If we issue or incur debt
to raise funds, we may be subject to additional limitations on our operations.

WITH THE GREATER NAME RECOGNITION AND RESOURCES OF SOME OF OUR COMPETITORS, WE
MAY LOSE POTENTIAL REVENUE AND HAVE DECREASED PRESENCE IN THE MARKET UNDER OUR
ACQUISITION PROGRAM

A limited number of our competitors have longer operating histories, greater
name recognition, larger customer bases and greater financial, technical and
marketing resources than we do. These resources may allow them to respond more
quickly than we can to new or emerging technologies and changes in customer
requirements. It may also allow them to devote greater resources than we can to
the development, promotion and sale of their products. Our competitors may also
engage in more extensive research and development, undertake more far-reaching
marketing campaigns and adopt more aggressive pricing policies. The results to
us could be fewer acquisition opportunities and the loss of potential revenue.

The market for our products is highly competitive and it is very fragmented
at the manufacturing and retail levels. We expect competition to continue to
increase because our markets pose no substantial barriers to entry. To the
extent one of our competitors undertakes a consolidation program, our
competition would increase further.

WE MAY SUFFER LOST POTENTIAL REVENUE FROM OUR INABILITY TO SATISFY CURRENT AND
FUTURE GOVERNMENTAL REGULATIONS

Government regulations related to in-home sales, telemarketing and consumer
financing may prevent us from engaging in business in some jurisdictions.
Consequently, we will lose potential customers and revenue from these areas.

ANTI-TAKEOVER PROVISIONS AFFECTING US COULD PREVENT OR DELAY A CHANGE OF CONTROL

Provisions of our restated certificate of incorporation and bylaws and
provisions of applicable Delaware law may discourage, delay or prevent a merger
or other change of control that a stockholder may consider favorable. Our Board
of Directors has the authority to issue up to 50,000,000 shares of its preferred
stock and to determine the price and the terms, including

10
<PAGE>
preferences and voting rights, of those shares without stockholder approval. To
date, our Board of Directors has issued 3,386,000 shares of our preferred stock
in three series. Additionally, we have a classified Board of Directors whereby
directors serve staggered three-year terms. Our Certificate of Incorporation
requires a supermajority vote of the common stockholders to remove or modify
this staggered board. Furthermore, we require advance notice for stockholder
proposals and director nominations. These items could:

- have the effect of delaying, deferring or preventing a change of control
of ThermoView;

- discourage bids for our common stock at a premium over the market price;
or

- cause the market price of our common stock to fall.

We are subject to certain Delaware laws that could delay, deter or prevent a
change of control of ThermoView. One of these laws prohibits us from engaging in
a business combination with any interested stockholder for a period of three
years from the date the person became an interested stockholder, unless certain
conditions are met. In addition, certain provisions of our certificate of
incorporation and bylaws could discourage takeover attempts or make it more
difficult for stockholders to change management.

11
<PAGE>
FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere in this prospectus constitute
forward-looking statements. These statements involve risks and uncertainties
about ThermoView and its business, including, among other things:

- the successful implementation of our business plan and growth strategies;

- our ability to identify and acquire attractive acquisition candidates;

- our ability to successfully integrate our past and future acquisitions;
and

- anticipated economic and demographic trends affecting the replacement
window industry generally, and our business in particular.

Specific factors which could cause our actual results to differ materially
from those expressed or implied by such forward-looking statements are discussed
under "Risk Factors" and elsewhere in this prospectus.

In some cases, you can identify forward-looking statements by words such as
"may," "will," "should," "could," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue" or the negative of such
terms or other comparable language.

Although we believe that the expectations and assumptions reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We undertake no duty to update
any of the forward-looking statements after the date of this prospectus.

12
<PAGE>
USE OF PROCEEDS

We estimate that our net proceeds from the sale of shares in this offering
will be approximately $23,775,000, or $27,791,250 if the underwriters exercise
their over-allotment option in full, at an assumed initial public offering price
of $8.50 per share and after deducting estimated underwriting discounts and
commissions and our estimated offering expenses of $3,000,000.

We intend to use $1.2 million of the net proceeds from this offering to
repay outstanding indebtedness owed to two former shareholders of Precision
Window Mfg., Inc. This indebtedness, which bears interest at 5% per annum and
matures concurrently with this offering, represents a portion of the deferred
purchase price for Precision. We will use the remaining net proceeds to fund a
portion of the costs of future acquisitions of primarily retail vinyl
replacement window businesses and for working capital and general corporate
purposes. We expect to fund the remaining costs of future acquisitions through a
combination of seller debt, additional stock issuances and borrowings under an
expanded line of credit which we intend to negotiate with our primary bank
lender. Although our management has identified a number of potential
acquisitions and frequently holds informal discussions with potential sellers,
we currently have no agreements, commitments or understandings with respect to
any potential acquisitions. Pending the application of the net proceeds as
described above, we intend to invest the proceeds in short-term interest-bearing
securities.

DIVIDEND POLICY

ThermoView has not declared or paid any cash dividends on its common stock
and does not expect to pay any cash dividends on our common stock in the
foreseeable future. Our agreements with our senior lender and our subordinated
debtholder prohibit us from paying dividends on our common stock. Any future
change in our dividend policy will be made at the discretion of our Board of
Directors and will depend on a number of factors, including:

- our future earnings;

- capital requirements;

- contractual restrictions;

- financial condition; and

- future prospects.

We have paid all dividends owing on our preferred stock to date. Subsequent
to this offering, we will not owe dividends on the Series A and B preferred
stock as we will convert the Series A and B preferred stock to common stock at
that time. We will continue to pay 70% of the dividends on our 9.6% Series C
preferred stock in cash and the remainder in our common stock after the offering
and until conversion of the Series C preferred stock.

13
<PAGE>
PRICE RANGE OF COMMON STOCK

Our common stock is currently traded on the OTC Bulletin Board under the
symbol "TVII." The OTC Bulletin Board is a regulated quotation service that
displays real-time quotes, last-sale prices and volume information in
over-the-counter equity securities. We have not previously registered our common
stock under either the Securities Act of 1933 or the Securities Exchange Act of
1934, nor have we currently listed our common stock on any exchange or had it
quoted on The Nasdaq Stock Market. We have applied for quotation of our common
stock on the Nasdaq National Market.

The following table sets forth, for the quarterly periods indicated, the
high and low closing sale prices per share for the common stock as reported on
the OTC Bulletin Board and as adjusted to reflect a 1-for-3 reverse stock split
to be effected on October 5, 1999. Our common stock commenced trading on the OTC
Bulletin Board on April 16, 1998. Prior to that time, no active trading market
existed for the common stock. The OTC Bulletin Board market quotations reflect
inter-dealer prices, without retail mark up, mark down or commission and may not
necessarily represent actual transactions.

<TABLE>
<CAPTION>
PRICE RANGE
--------------------
HIGH LOW
--------- ---------
<S> <C> <C>
CALENDAR YEAR 1998
Second Quarter (from April 16, 1998)....................................... $ 32.25 $ 25.50
Third Quarter.............................................................. 27.75 23.25
Fourth Quarter............................................................. 25.08 15.00
CALENDAR YEAR 1999
First Quarter.............................................................. $ 28.50 $ 14.64
Second Quarter............................................................. 24.75 10.68
Third Quarter.............................................................. 14.81 5.72
</TABLE>

On September 30, 1999, the last reported sale price of the common stock on
the OTC Bulletin Board was $2.50 per share ($7.50 per share adjusted for the
1-for-3 reverse stock split). The initial public offering price of our common
stock will not necessarily bear any direct relationship to the trading prices on
the OTC Bulletin Board prior to this offering. Please see "Underwriting" for a
discussion of factors to be considered in determining the initial public
offering price.

As of September 9, 1999, there were 302 holders of record of our stock
consisting of 236 common stockholders, 63 Series A preferred stockholders, one
Series B preferred stockholder and two Series C preferred stockholders.

14
<PAGE>
CAPITALIZATION

The following table sets forth, as of June 30, 1999, the capitalization of
ThermoView:

- on an actual basis;

- on a pro forma basis to give effect to the issuance of $10.0 million of
senior subordinated debt and warrant on July 8, 1999, and the application
of the net proceeds therefrom; of the approximate $9.3 million of net
proceeds from the senior subordinated debt, approximately $4.1 million
related to the value of a warrant issued in connection with the financing
was accounted for as paid-in capital; and

- on a pro forma as adjusted basis to reflect the automatic conversion of
all outstanding shares of our Series A and Series B preferred stock into
1,126,667 shares of common stock upon the closing of this offering and to
give effect to the sale of 3,500,000 shares of common stock in this
offering at an assumed initial public offering price of $8.50 per share,
after deducting underwriting discounts and commissions and the estimated
offering expenses payable by ThermoView, and the application of the
estimated net proceeds therefrom as described under "Use of Proceeds."

This information should be read together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and ThermoView's
financial statements and the notes relating to those statements appearing
elsewhere in this prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------------ ------------ ------------
<S> <C> <C> <C>
Long-term debt, excluding current portion.............................. $ 23,716,858 $23,097,639 $ 21,897,639
Mandatorily redeemable Series C convertible preferred stock, $0.001 par
value; 25,000 shares authorized; 6,000 shares issued and
outstanding.......................................................... 3,885,680 3,885,680 3,885,680

Stockholders' equity:
Preferred stock, 50,000,000 shares authorized:
Series A, $0.001 par value; 2,980,000 shares issued and outstanding
actual and pro forma; no shares outstanding pro forma as
adjusted......................................................... 2,980 2,980 --
Series B, $0.001 par value; 400,000 shares issued and outstanding
actual and pro forma; no shares outstanding pro forma as
adjusted......................................................... 400 400 --
Common stock, $0.001 par value; 100,000,000 shares authorized actual,
pro forma and pro forma as adjusted; 4,831,120 shares issued and
outstanding actual and pro forma and 9,457,787 shares issued and
outstanding pro forma as adjusted(1)............................... 4,831 4,831 9,458
Paid-in capital...................................................... 47,831,409 51,897,889 75,671,642
Accumulated deficit.................................................. (6,385,523) (6,385,523) (6,385,523)
------------ ------------ ------------
Total stockholders' equity........................................... 41,454,097 45,520,577 69,295,577
------------ ------------ ------------
Total capitalization............................................... $ 69,056,635 $72,503,896 $ 95,078,896
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

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

(1) Excludes 3,240,915 shares of common stock which ThermoView may issue after
this offering upon the exercise of outstanding options and warrants and the
conversion of our Series C preferred stock, and 374,793 additional shares of
common stock which we have reserved for issuance and may issue under our
1999 stock option plan.

15
<PAGE>
DILUTION

The pro forma net tangible book value deficiency of ThermoView's common
stock as of June 30, 1999, was $(16,849,253), or $(2.83) per share. Pro forma
net tangible book value deficiency per share is equal to the amount of
ThermoView's total stockholders' equity less intangible assets, divided by the
pro forma number of shares of common stock outstanding as of June 30, 1999. The
pro forma number of shares of common stock outstanding as of June 30, 1999
includes 1,126,667 shares of common stock to be issued upon conversion of the
Series A and Series B preferred stock at the closing of this offering.

Assuming that ThermoView sells the 3,500,000 shares of common stock in this
offering at an assumed initial public offering price of $8.50 per share, after
deducting the underwriting discounts and commissions and the estimated offering
expenses payable by ThermoView, and after applying the estimated net proceeds as
set forth in "Use of Proceeds," the pro forma net tangible book value at June
30, 1999, would have been $6,925,747, or $0.73 per share. This represents an
immediate increase in pro forma net tangible book value of $3.56 per share to
existing stockholders and an immediate dilution of $7.77 per share to investors
purchasing shares in this offering. Dilution represents the difference between
the amount per share paid by new investors in this offering and the pro forma
net tangible book value per share of common stock immediately after the
offering. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $ 8.50
Pro forma net tangible book value deficiency per share as of
June 30, 1999............................................. $ (2.83)
Pro forma increase in net tangible book value per share
attributable to new investors............................. 3.56
---------
Pro forma net tangible book value per share after the
offering.................................................. 0.73
---------
Pro forma dilution per share to new investors............... $ 7.77
---------
---------
</TABLE>

The following table summarizes, on a pro forma basis as of June 30, 1999,
differences between existing stockholders and the new investors purchasing
shares in this offering in:

- the total number of shares of common stock and Series A and Series B
preferred stock purchased from ThermoView;

- the total consideration paid to ThermoView; and

- the average price per share paid to ThermoView:

<TABLE>
<CAPTION>
SHARES TOTAL
PURCHASED CONSIDERATION
----------------------- -------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Existing stockholders............................... 5,957,787 63% $ 42,899,166 59% $ 7.20
New investors in this offering...................... 3,500,000 37 29,750,000 41 8.50
---------- ----- ------------- -----
Total............................................. 9,457,787 100.0% $ 72,649,166 100.0%
---------- ----- ------------- -----
---------- ----- ------------- -----
</TABLE>

None of the foregoing tables or calculations assume that any options or
warrants outstanding as of June 30, 1999, or issued between that date and the
date of this prospectus, will be exercised or any shares of Series C preferred
stock will be converted. If all options and warrants outstanding on the date of
this prospectus were exercised and all shares of Series C preferred stock were
converted on the date of the closing of this offering, investors purchasing
shares in this offering would suffer total dilution of $6.03 per share.

16
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

The following tables present selected historical and pro forma statement of
operations and balance sheet financial data for ThermoView. On April 15, 1998,
ThermoView acquired all of the outstanding stock of Thermo-Tilt Window Company.
Prior to that date, ThermoView was a development stage corporation and had no
business operations since its incorporation. For accounting and financial
statement presentation purposes, Thermo-Tilt is deemed to be the acquirer. The
historical statement of operations data for the period January 1, 1998 through
April 15, 1998 and the historical financial data as of and for each of the years
ended December 31, 1994 through 1997 reflect only the operations of Thermo-Tilt.
Since April 15, 1998, we have acquired 12 retail and manufacturing businesses.
These acquisitions have been accounted for as purchase transactions and,
accordingly, the results of operations of the acquired businesses are included
in the historical financial data since their respective acquisition dates.

The selected historical financial data for ThermoView as of December 31,
1996, 1997 and 1998 and for each of the three years in the period ended December
31, 1998, have been derived from the audited financial statements of ThermoView
included elsewhere in this prospectus. The selected historical financial data as
of June 30, 1999 and for the six months ended June 30, 1998 and 1999 and the
selected historical financial data as of December 31, 1994 and 1995 and for each
of the two years in the period ended December 31, 1995 have been derived from
unaudited financial statements. All unaudited information has been prepared on
the same basis as the audited financial statements and, in the opinion of
ThermoView, reflect all adjustments consisting of normal recurring adjustments,
necessary for a fair presentation of such data. The interim results for the
six-month period ended June 30, 1999 are not necessarily indicative of results
for the entire year.

The following unaudited pro forma statement of operations data with respect
to the year ended December 31, 1998 and the six months ended June 30, 1999, give
effect to each of our acquisitions, as if all transactions had occurred on
January 1, 1998. We have presented this pro forma data for informational
purposes only, in order to provide you with some indication of what our business
might have looked like if we had owned all of the acquired companies since
January 1, 1998. These companies may have performed differently if they had
actually been combined with our operations. You should not rely on the unaudited
pro forma information as necessarily being indicative of the historical results
that we would have had or the results that we will experience in the future.

The following data should be read in conjunction with:

- the information set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations;"

- our consolidated financial statements and the related notes thereto and
our unaudited pro forma consolidated financial statements and the related
notes thereto included elsewhere in this prospectus; and

- the financial statements of the companies other than TD Windows, Inc.
which we have acquired since April 15, 1998, which are included elsewhere
in this prospectus.

17
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------- ------------------------------------
PRO FORMA PRO FORMA
1994 1995 1996 1997 1998 1998 1998 1999 1999
------ ------ ------ ------ ----------- ----------- ---------- ----------- -----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................... $4,973 $5,870 $6,641 $5,629 $ 37,376 $ 102,115 $ 6,258 $ 50,196 $ 52,698
Cost of revenues earned..... 1,931 2,126 3,571 2,889 16,748 48,092 2,719 22,502 23,235
------ ------ ------ ------ ----------- ----------- ---------- ----------- -----------
Gross profit................ 3,042 3,744 3,070 2,740 20,628 54,023 3,539 27,694 29,463
Selling, general and
administrative expenses... 2,677 3,316 2,634 3,293 20,233 49,427 3,991 25,390 26,941
Stock-based compensation
expense................... -- -- -- 1 5,509 5,509 -- -- --
Depreciation and
amortization.............. 45 74 68 69 854 2,258 163 1,442 1,500
------ ------ ------ ------ ----------- ----------- ---------- ----------- -----------
Income (loss) from
operations................ 320 354 368 (623) (5,968) (3,171 ) (615) 862 1,022
Interest expense............ (16) (16) (57) (90) (439) (2,393 ) (124) (858) (943 )
Other income (expense)...... (20) (8) (47) (19) 69 465 12 100 101
------ ------ ------ ------ ----------- ----------- ---------- ----------- -----------
Income (loss) before income
taxes..................... 284 330 264 (732) (6,338) (5,099 ) (727) 104 180
Income tax expense
(benefit)................. -- -- -- (266) (1,135) (497 ) (210) 423 458
------ ------ ------ ------ ----------- ----------- ---------- ----------- -----------
Net income (loss)........... $ 284 $ 330 $ 264 (466) (5,203) (4,602 ) (517) (319) (278 )
------ ------ ------
------ ------ ------
Less amount attributable to
sole proprietor........... 398 -- -- --
Less preferred stock
dividends:
Cash...................... -- 585 785 -- 990 990
Non-cash.................. -- 9,540 9,540 -- 1,464 1,464
------ ----------- ----------- ---------- ----------- -----------
Net loss attributable to
common stockholders....... $ (864) $ (15,328) $ (14,927 ) $ (517) $ (2,773) $ (2,732 )
------ ----------- ----------- ---------- ----------- -----------
------ ----------- ----------- ---------- ----------- -----------
Basic and diluted loss per
common share(1)........... $ (3.86) $ (3.07 ) $ (0.15) $ (0.58) $ (0.57 )
----------- ----------- ---------- ----------- -----------
----------- ----------- ---------- ----------- -----------
Weighted average shares
outstanding............... 3,975,236 4,858,134 3,489,862 4,750,323 4,813,120
----------- ----------- ---------- ----------- -----------
----------- ----------- ---------- ----------- -----------
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
AS OF DECEMBER 31, --------------------------------------
------------------------------------- PRO FORMA
1994 1995 1996 1997 1998 ACTUAL PRO FORMA(2) AS ADJUSTED(3)
----- ----- ------ ------ ------- ------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets................ $ 548 $ 567 $ 859 $1,503 $50,194 $81,221 $84,668 $107,243
Long-term debt including
current maturities........ 227 224 322 527 9,206 24,211 23,592 22,392
Total liabilities........... 947 908 1,089 1,326 15,796 35,882 35,263 34,063
Mandatorily redeemable
convertible preferred
stock..................... -- -- -- -- -- 3,886 3,886 3,886
Stockholders' equity
(deficit)................. (399) (341) (230) 177 34,398 41,454 45,520 69,295
</TABLE>

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

(2) Reflects the issuance on July 8, 1999 of $10.0 million of senior
subordinated debt and a warrant to purchase 555,343 shares of common stock
at $0.03 per share and the application of the net proceeds therefrom.

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
INFORMATION SET FORTH UNDER "SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA"
AND OUR FINANCIAL STATEMENTS AND THE ACCOMPANYING NOTES THERETO INCLUDED
ELSEWHERE IN THIS PROSPECTUS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER
SIGNIFICANTLY FROM THE RESULTS, EXPECTATIONS AND PLANS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE,
BUT ARE NOT LIMITED TO, THOSE DISCUSSED UNDER "RISK FACTORS."

OVERVIEW

On April 15, 1998, we acquired all of the outstanding stock of Thermo-Tilt
Window Company in exchange for 3,120,000 shares of our common stock, which
represented 90% of ThermoView's then outstanding common stock. Thermo-Tilt is
deemed to be the acquirer for accounting purposes.

BUSINESS SEGMENTS

Our subsidiaries have separate management teams and infrastructures and
operate in three reportable operating segments: retail, manufacturing and
financial services.

RETAIL. Our retail segment consists of our subsidiaries that design, sell
and install custom vinyl replacement windows, doors and related home improvement
products to commercial and retail customers. Our retail segment derives its
revenues from the sale and installation of thermal replacement windows, storm
windows and doors, patio decks, patio enclosures, vinyl siding and other home
improvement products. Our retail segment recognizes revenues on the completed
contract method. A contract is considered complete when the customer accepts the
work. Gross profit in the retail segment represents revenues after deducting
product and installation labor costs.

MANUFACTURING. Our manufacturing segment consists of our subsidiaries that
manufacture and sell vinyl replacement windows to our retail segment and to
unaffiliated customers. Sales from the manufacturing segment to our retail
segment are becoming a larger percentage of our manufacturing revenues, growing
on a pro forma combined historical basis from 35% in 1996 to 46% in 1998. We
expect this trend to continue as we further supply our retail subsidiaries with
windows produced in our manufacturing plants. Our manufacturing segment
recognizes revenues when products are shipped. Gross profit in the manufacturing
segment represents revenues after deducting product costs (primarily glass,
vinyl and hardware), window fabrication labor and other manufacturing expenses.

FINANCIAL SERVICES. Our financial services segment is in a start-up phase
and finances credit sales of our retail segment.

You should refer to footnote 14 to our financial statements for the year
ended December 31, 1998, which appears on page F-33 of this prospectus, and to
footnote 7 to our unaudited financial statements for the six months ended June
30, 1999, which appears on page F-42 of this prospectus, for additional
financial information about each of our business segments.

19
<PAGE>
OUR ACQUISITIONS

Since April 15, 1998, we have acquired 12 retail and manufacturing
businesses. The following table presents information regarding the consideration
paid for each acquired company:

<TABLE>
<CAPTION>
COST OF ACQUIRED COMPANY
----------------------------------------------
STOCK ISSUED
(COMMON STOCK EXCEPT
AS NOTED IN (1)
BELOW)
--------------------
DATE OF CASH AND
ACQUIRED COMPANY ACQUISITION PAYABLES SHARES VALUE TOTAL COST
- ---------------------------------------------- ------------ ----------- --------- --------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
RETAIL SEGMENT:
American Home Developers Co., Inc............. April 1998 $ 1,202 259,058 $ 5,316 $ 6,518
Primax Window Co.............................. April 1998 1,583 180,725 3,425 5,008
The Rolox Companies........................... April 1998 3,820 374,058 7,255 11,075
American Home Remodeling...................... July 1998 3,192 122,415 2,537 5,729
Five Star Builders, Inc....................... July 1998 1,551 116,667 2,215 3,766
NuView Industries, Inc........................ July 1998 1,190 725 13 1,203
Leingang Siding and Window, Inc............... August 1998 2,900 29,255 377 3,277
Thomas Construction, Inc.(1).................. January 1999 11,056 500,475 3,500 14,556
The Thermo-Shield Companies................... March 1999 4,544 185,006 2,625 7,169
----------- --------- --------- -----------
Total of retail segment..................... 31,038 1,768,384 27,263 58,301

MANUFACTURING SEGMENT:
TD Windows, Inc............................... May 1998 311 -- -- 311
Thermal Line Windows, L.L.P.(2)............... August 1998 4,670 50,003 644 5,314
Precision Window Mfg., Inc.................... January 1999 3,063 37,351 450 3,513
----------- --------- --------- -----------
Total of manufacturing segment.............. 8,044 87,354 1,094 9,138
----------- --------- --------- -----------
Total....................................... $ 39,082 1,855,738 $ 28,357 $ 67,439
----------- --------- --------- -----------
----------- --------- --------- -----------
</TABLE>

- ---------

(1) Stock issued in connection with the acquisition of Thomas Construction, Inc.
includes 400,000 shares of Series B preferred stock valued at $2,000,000.
All other shares and values represent common stock.

(2) Includes the acquisition of North Country Thermal Line, Inc. in November
1998 for $277,926 cash and 20,973 shares of common stock valued at $270,000.

We have accounted for our acquisitions as purchase transactions and,
accordingly, the results of operations of the acquired businesses have been
included in the consolidated historical financial statements since the
respective acquisition dates. As a result of our recent acquisitions, goodwill
accounts for 76.8% of our total consolidated assets at June 30, 1999. At June
30, 1999, our goodwill was approximately $62.4 million. Goodwill represents the
excess of the aggregate purchase price paid for the acquisition of companies
accounted for as purchases over the fair value of the net tangible assets of the
acquired companies. Goodwill reduces earnings now and in the future as we
amortize it over a 40-year period on a straight-line basis.

The terms of nine of our acquisition agreements provide for additional
consideration to be paid if the acquired entities' results of operations exceed
certain targeted levels, generally for a period of three years subsequent to the
acquisition dates. Targeted levels are generally set at the annual earnings of
the acquired entities before interest and taxes, allowing for the add back of
salaries and other costs that will not be incurred on a post-acquisition basis.
The additional consideration is paid in cash and with

20
<PAGE>
shares of our common stock, and is recorded when earned as additional purchase
price. Goodwill is increased for any additional purchase price.

RECENT FINANCINGS

In April 1999, we sold shares of our Series C preferred stock for $6.0
million and issued a warrant to purchase 400,000 shares of our common stock at
$21.00 per share. We have accounted for the portion of the proceeds equal to an
estimated $2.0 million from this mandatorily redeemable Series C preferred stock
allocable to the warrants as paid-in capital. We will amortize the resulting
discount as additional preferred stock dividends from the issuance date to
October 2000, the earliest redemption date. Since the conversion price of the
Series C preferred stock at the issuance date was less than the market price of
our common stock, preferred dividends include approximately $1.2 million in the
second quarter of 1999. The stated 9.6% dividend on the Series C preferred stock
comprised of 70% cash and 30% of our common stock amounts to $576,000 per annum
based on the currently outstanding number of shares of our Series C preferred
stock. The stated dividend will reduce our earnings for so long as the Series C
preferred stock remains outstanding. The additional dividends related to the
warrants and the accretion of preferred stock issuance costs together
aggregating $1.6 million per annum will reduce our earnings until October 2000.
In August 1999 we amended the exercise price of the warrant to $18.00 per share
in exchange for a commitment of the holders to refrain from selling any of our
securities from the closing of the offering to January 31, 2000. We will account
for the estimated increase in fair value of the warrants as the result of the
exercise price change in an aggregate amount of approximately $180,000 as
additional dividends on the Series C preferred stock from August 1999 through
January 2000.

In July 1999, we borrowed $10.0 million under a 12% senior subordinated note
due in July 2002. In connection with the loan, we issued to our subordinated
debt lender a warrant to purchase 555,343 shares of common stock at $0.03 per
share until July 2007. We will account for the portion of the proceeds from this
loan equal to approximately $4.4 million allocable to the warrant as paid-in
capital with the resulting discount amortized as additional interest over the
term of the loan. The stated 12% interest on the subordinated note to our
subordinated debt lender amounts to $1.2 million per annum. The discount related
to the warrants deemed as interest on the note and the amortization of debt
issuance costs together amount to approximately $1.6 million per annum. These
amounts will reduce our earnings until we retire the subordinated note.

HISTORICAL RESULTS OF OPERATIONS

The following historical results of operations for the years ended December
31, 1996 and 1997 represent the operations of Thermo-Tilt. The financial
information for the six month periods ended June 30, 1998 and 1999 and the year
ended December 31, 1998 includes Thermo-Tilt plus the results of operations of
the companies acquired by us after April 15, 1998 from their respective dates of
acquisition.

Due to the significant impact of the acquisitions on our operations, the
historical results of operations and period-to-period comparisons may not be
meaningful or indicative of future operating results. The addition of revenues,
expenses and other components of operations associated with the

21
<PAGE>
acquisitions are the principal reasons for the significant differences when
comparing results of operations between periods:

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------- ------------------
1996 1997 1998 1998 1999
------- ------- --------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues................................ $ 6,641 $ 5,629 $ 37,376 $ 6,258 $ 50,196
Cost of revenues earned................. 3,571 2,889 16,748 2,719 22,502
------- ------- --------- ------- --------
Gross profit............................ 3,070 2,740 20,628 3,539 27,694

Selling, general and administrative
expenses.............................. 2,634 3,293 20,233 3,991 25,390
Stock-based compensation expense........ -- 1 5,509 -- --
Depreciation and amortization........... 68 69 854 163 1,443
------- ------- --------- ------- --------

Income (loss) from operations........... 368 (623) (5,968) (615) 861
Interest expense........................ (57) (90) (439) (124) (858)
Other income (expense).................. (47) (19) 69 12 101
------- ------- --------- ------- --------

Income (loss) before income taxes....... 264 (732) (6,338) (727) 104
Income tax (benefit).................... -- (266) (1,135) (210) 423
------- ------- --------- ------- --------

Net income (loss)....................... $ 264 (466) (5,203) (517) (319)
-------
-------
Less amount attributable to sole
proprietor............................ 398 -- -- --
Less preferred stock dividends:
Cash.................................. -- 585 -- 990
Non-cash.............................. -- 9,540 -- 1,464
------- --------- ------- --------
Net loss attributable to common
stockholders.......................... $ (864) $ (15,328) $ (517) $ (2,773)
------- --------- ------- --------
------- --------- ------- --------
</TABLE>

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO JUNE 30, 1999

REVENUES. Revenues increased from $6.3 million for the six months ended
June 30, 1998 to $50.2 million for the six months ended June 30, 1999. This
increase represents revenues from acquisitions made subsequent to April 15,
1998.

GROSS PROFIT. Gross profit, which represents revenues less cost of revenues
earned, increased from $3.5 million for the six months ended June 30, 1998 to
$27.7 million for the six months ended June 30, 1999 from acquisitions made
subsequent to April 15, 1998. Cost of revenues earned includes the cost of
glass, vinyl, hardware, fabrication labor and manufacturing overhead for the
manufacturing segment. For the retail segment cost of revenues earned includes
the cost of vinyl windows, doors, textured coating, vinyl siding, and other home
improvement products purchased plus installation costs and other indirect
materials and labor.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased from $4.0 million in the six months ended June
30, 1998 to $25.4 million in the six months ended June 30, 1999. This increase
results from acquisitions made subsequent to April 15, 1998 and the commencement
of corporate activities. Selling, general and administrative expenses include
sales commissions, advertising expenses, rent expense and other general and
administrative expense. Expenses related to corporate operating activities which
commenced on April 15, 1998 are included primarily in general and administrative
expenses.

22
<PAGE>

DEPRECIATION AND AMORTIZATION. Depreciation and amortization of $1.4
million for the six months ended June 30, 1999 represents primarily depreciation
and amortization on acquisitions made after April 15, 1998.

INTEREST EXPENSE. Interest expense of $858,000 for the six months ended
June 30, 1999 represents primarily interest cost on additional borrowings to
finance the acquisitions made after April 15, 1998.

INCOME TAX BENEFIT. The benefit for income taxes for the six months ended
June 30, 1999, differs from the amount computed by applying the statutory U.S.
Federal income tax rate to loss before income taxes primarily as a result of
state taxes and non-deductible goodwill amortization. The tax benefit for the
six months ended June 30, 1998, is closer to the expected tax rate since there
was nominal non-deductible goodwill for the six months ended June 30, 1998. As
of June 30, 1999, ThermoView had deferred income tax assets of $1.6 million. We
believe it is more likely than not that our future taxable income will enable us
to realize these deferred income tax assets.

CASH DIVIDENDS. The cash dividends of $990,000 for the six months ended
June 30, 1999 relates to dividends on our Series A and B preferred stock as well
as our mandatorily redeemable Series C convertible preferred stock.

NON-CASH DIVIDENDS. Non-cash dividends of $1.5 million for the six months
ended June 30, 1999 relate primarily to a beneficial conversion feature of the
mandatorily redeemable Series C convertible preferred stock issued in April
1999.

1997 COMPARED TO 1998

REVENUES. Revenues increased from $5.6 million in 1997 to $37.4 million in
1998 from acquisitions made subsequent to April 15, 1998.

GROSS PROFIT. Gross profit increased from $2.7 million in 1997 to $20.6
million in 1998 from acquisitions made subsequent to April 15, 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased from $3.3 million in 1997 to $20.2 million in
1998. This increase results from acquisitions made subsequent to April 15, 1998,
and the commencement of corporate activities which added $2.1 million to
selling, general and administrative expenses for 1998.

STOCK-BASED COMPENSATION EXPENSE. In 1998, we recorded total stock-based
compensation expense of approximately $5.5 million in connection with
stock-based compensation. We do not expect to record significant additional
compensation expense for these items in future years.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization of $854,000
for 1998 represent primarily depreciation and amortization on acquisitions made
after April 15, 1998.

INTEREST EXPENSE. Interest expense of $439,000 for 1998 represents
primarily interest cost on additional borrowings to finance the acquisitions
made after April 15, 1998.

INCOME TAX BENEFIT. The loss before income taxes in 1998 includes $2.3
million of non-deductible stock-based compensation expense, $464,000 of
non-deductible goodwill and $272,000 of non-deductible merger and acquisition
costs. Accordingly, the $1.1 million of 1998 income tax benefit is lower than
what would be expected by applying the statutory rate to the $6.3 million of
loss before income taxes.

PREFERRED STOCK DIVIDENDS. The cash dividends of $585,000 in 1998 represent
dividends paid on our Series A preferred stock. We also recorded non-cash
dividends of approximately $9.5 million associated with the issuance of our
Series A preferred stock. Our Series A preferred stock is convertible into

23
<PAGE>
shares of our common stock at a price which we determined to be below the fair
market value of the common stock on the date of issuance.

1996 COMPARED TO 1997

REVENUES. Revenues decreased from $6.6 million in 1996 to $5.6 million in
1997 primarily as a result of Thermo-Tilt's decision to de-emphasize one of its
regional sales operations.

GROSS PROFIT. Gross profit for 1997 was $2.7 million, or 48.7%, compared to
$3.1 million, or 46.2%, for 1996. The improvement in gross profit percentage of
2.5% is primarily due to vendor price reductions.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased from $2.6 million in 1996 to $3.3 million in
1997. This increase is primarily attributed to fees and expenses incurred
relative to Thermo-Tilt's merger with ThermoView.

INCOME TAX BENEFIT. Thermo-Tilt was operated as a sole proprietorship in
1996 and the first half of 1997. In July 1997, Thermo-Tilt was incorporated and
elected to be taxed as a "C" corporation. The sole proprietor's return for
periods prior to July 1, 1997 reflected the taxable income or loss for the
enterprise. From July 1, 1997 through December 31, 1997, the pre-tax loss
related to the "C" corporation was $1.1 million with a related tax benefit of
$266,000. This is lower than expected due to non-deductible merger fees and
expenses in 1997.

AMOUNT ATTRIBUTABLE TO SOLE PROPRIETOR. The $398,000 in 1997 represents
income earned by the sole proprietor of Thermo-Tilt from January 1, 1997 through
June 30, 1997.

PRO FORMA REVENUES AND GROSS PROFIT

We have presented pro forma revenues and gross profit on a combined
historical basis for the six month periods ended June 30, 1998 and 1999 and for
the years ended December 31, 1996, 1997 and 1998. We have not presented any pro
forma financial information below the gross profit line, since much of the
pre-acquisition financial data below gross profit is significantly impacted by
compensation packages of the former owners of these companies. We negotiate and,
in many cases, significantly revise compensation packages in connection with our
acquisitions of these businesses.

Our pro forma results for any period are not necessarily indicative of
future results because, among other things, the acquired companies were not
under common control or management prior to their acquisition. The timing and
magnitude of acquisitions, assimilation costs and seasonal nature of the
industry may cause an increase or decrease in our revenues and expenses.

24
<PAGE>

PRO FORMA REVENUES FOR THE SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO JUNE
30, 1999

The following table presents revenues for each of our acquired companies and
total pro forma revenues for the six months ended June 30, 1998 and 1999:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
ACQUIRED COMPANY 1998 1999
- -------------------------------------------------------------------------- --------- ---------
(IN THOUSANDS)
<S> <C> <C>
RETAIL SEGMENT:
Thermo-Tilt Window Company................................................ $ 2,512 $ 2,189
American Home Developers Co., Inc......................................... 1,948 2,186
Primax Window Co.......................................................... 3,221 3,353
The Rolox Companies....................................................... 5,638 5,894
American Home Remodeling.................................................. 3,344 (1)
Five Star Builders, Inc.(1)............................................... 3,350 8,428
NuView Industries, Inc.(2)................................................ 2,479 2,733
Leingang Siding and Window, Inc........................................... 2,437 2,048
Thomas Construction, Inc.................................................. 12,305 12,724
The Thermo-Shield Companies............................................... 6,670 9,657
--------- ---------
Total pro forma revenues of retail segment.............................. 43,904 49,212

MANUFACTURING SEGMENT:
T. D. Windows, Inc........................................................ 428 789
Thermal Line Windows, L.L.P.(3)........................................... 2,649 3,337
Precision Window Mfg., Inc................................................ 3,206 3,641
--------- ---------
Total pro forma revenues of manufacturing segment....................... 6,283 7,767
Intersegment eliminations and other....................................... (3,027) (4,281)
--------- ---------
Total pro forma revenues................................................ $ 47,160 $ 52,698
--------- ---------
--------- ---------
</TABLE>

- ---------

(1) American Home Remodeling merged into Five Star Builders, Inc. effective
December 31, 1998. Five Star Builders, Inc. has recently changed its name to
ThermoView of California, Inc.

(2) NuView Industries, Inc. has changed its name to ThermoView of Missouri, Inc.

(3) Thermal Line Windows, L.L.P. is now Thermal Line Windows, Inc.

Total pro forma revenues for the six months ended June 30, 1999 were $52.7
million compared to $47.2 million for the comparable prior year period.

RETAIL SEGMENT. Pro forma revenues in our retail segment increased $5.3
million, with the following companies reporting the most significant
fluctuations:

- American Home Remodeling and Five Star Builders together accounted for a
$1.7 million increase in revenues. This resulted from increases in window
contracts adding to their textured coating business and price increases.

- Thermo-Shield's revenue increased $3.0 million due to a contract with a
major home improvement chain to provide sales leads that resulted in
significant growth in window contracts.

MANUFACTURING SEGMENT.

- Precision Window reported a $435,000 increase in revenue in 1999, with
higher sales to Primax, Rolox and NuView Industries.

25
<PAGE>

- Thermal Line Windows reported a $688,000 increase in revenues in 1999 due
to the increased sales to a major customer.

PRO FORMA GROSS PROFIT FOR THE SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO
JUNE 30, 1999

The following table presents gross profit for each of our acquired companies
and total pro forma gross profit for the six months ended June 30, 1998 and
1999:

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------
1998 1999
-------------------------------- --------------------------------
GROSS PERCENT OF GROSS PERCENT OF
ACQUIRED COMPANY PROFIT REVENUES PROFIT REVENUES
- -------------------------------------- ----------- ------------------- ----------- -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
RETAIL SEGMENT:
Thermo-Tilt Window Company............ $ 1,413 56.3% $ 1,085 49.6%
American Home Developers Co., Inc..... 935 48.0 1,018 46.6
Primax Window Co...................... 1,840 57.1 1,920 57.3
The Rolox Companies................... 3,205 56.8 3,488 59.2
American Home Remodeling.............. 2,081 62.2 (1) (1)
Five Star Builders, Inc. (1).......... 2,357 70.4 5,921 70.3
NuView Industries, Inc. (2)........... 1,514 61.1 1,464 53.6
Leingang Siding and Window, Inc....... 728 29.9 704 34.4
Thomas Construction, Inc.............. 5,841 47.5 6,218 48.9
The Thermo-Shield Companies........... 3,655 54.8 5,212 54.0
----------- --- ----------- ---
Total pro forma gross profit of
retail segment.................... 23,569 53.7 27,030 54.9

MANUFACTURING SEGMENT:
T. D. Windows, Inc.................... 116 27.1 83 10.5
Thermal Line Windows, L.L.P.(3)....... 905 34.2 1,100 33.0
Precision Window Mfg., Inc............ 517 16.1 839 23.0
----------- --- ----------- ---
Total pro forma gross profit of
manufacturing segment............. 1538 24.5 2,022 26.0
Intersegment eliminations and other... 14 -- 25 --
----------- --- ----------- ---
Total pro forma gross profit........ $ 25,121 53.3% $ 29,077 55.2%
----------- --- ----------- ---
----------- --- ----------- ---
</TABLE>

- ---------

(1) American Home Remodeling merged into Five Star Builders, Inc. effective
December 31, 1998. Five Star Builders, Inc. has recently changed its name to
ThermoView of California, Inc.

(2) NuView Industries, Inc. has changed its name to ThermoView of Missouri, Inc.

(3) Thermal Line Windows, L.L.P. is now Thermal Line Windows, Inc.

Total pro forma gross profit percentages improved from 53.3% for the six
months ended June 30, 1998 as compared to 55.2% for the six months ended June
30, 1999.

RETAIL SEGMENT. The more significant gross profit fluctuations in the
retail segment were:

- The Rolox Companies reported a 2.4% improvement in gross profit primarily
from increased sales of replacement windows which have a higher gross
profit than other products it sells.

- American Home Remodeling and Five Star Builders together had a 4.0%
improvement in gross profit due to price increases.

26
<PAGE>

MANUFACTURING SEGMENT. In the manufacturing segment, Precision negotiated
more favorable product costs of vinyl, glass and hardware, which resulted in an
increased gross profit of 6.9%.

PRO FORMA REVENUES FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

The following table presents revenues for each of our acquired companies and
total pro forma revenues for the years ended December 31, 1996, 1997 and 1998.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
ACQUIRED COMPANY 1996 1997 1998
- -------------------------------------------------------------------------------- --------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
RETAIL SEGMENT:
Thermo-Tilt Window Company...................................................... $ 6,641 $ 5,629 $ 5,124
American Home Developers Co., Inc............................................... 3,648 4,883 4,715
Primax Window Co................................................................ 5,840 7,132 6,527
The Rolox Companies............................................................. 10,652 10,354 11,276
American Home Remodeling........................................................ 3,727 6,326 7,357
Five Star Builders, Inc.(1)..................................................... 6,172 8,279 8,032
NuView Industries, Inc.(2)...................................................... -- 4,690 4,602
Leingang Siding and Window, Inc................................................. 4,204 5,457 6,012
Thomas Construction, Inc........................................................ 24,218 26,493 25,554
The Thermo-Shield Companies..................................................... 8,085 12,395 14,906
--------- --------- ----------
Total pro forma revenues of retail segment.................................... 73,187 91,638 94,105

MANUFACTURING SEGMENT:
T. D. Windows, Inc.............................................................. 1,615 1,312 1,140
Thermal Line Windows, L.L.P.(3)................................................. 6,955 6,088 7,179
Precision Window Mfg., Inc...................................................... 5,696 6,432 6,548
--------- --------- ----------
Total pro forma revenues of manufacturing segment............................. 14,266 13,832 14,867
Intersegment eliminations and other............................................. (5,041) (5,846) (6,855)
--------- --------- ----------
Total pro forma revenues...................................................... $ 82,412 $ 99,624 $ 102,117
--------- --------- ----------
--------- --------- ----------
</TABLE>

- ---------

(1) Five Star Builders, Inc. has recently changed its name to ThermoView of
California, Inc.

(2) NuView Industries, Inc. has changed its name to ThermoView of Missouri, Inc.
NuView Industries, Inc. commenced its window business on February 1, 1997.

(3) Thermal Line Windows, L.L.P. is now Thermal Line Windows, Inc.

1997 PRO FORMA REVENUES COMPARED TO 1998 PRO FORMA REVENUES

Total pro forma revenues increased from $99.6 million in 1997 to $102.1
million in 1998.

RETAIL SEGMENT. Retail segment revenues increased a net $2.5 million, with
the following business units reporting the most significant fluctuations:

- The Rolox Companies' revenue increased $922,000, reflecting an increase in
its vinyl siding revenues.

- American Home Remodeling's revenue increased $1.0 million primarily as a
result of adding a textured coating business.

- The Thermo-Shield Companies' revenue increased $2.5 million related to
growth of its Michigan and Arizona additional branches opened in 1997 and
an Indiana branch opened in 1998.

27
<PAGE>
- Thomas Construction reported a decrease in revenue of $939,000 due to
reduced sales generated through an unaffiliated home improvement chain.

MANUFACTURING SEGMENT. In the manufacturing segment, Thermal Line Windows,
L.L.P experienced revenue growth of $1.9 million as it expanded its sales to
third-party customers in the Colorado market. Inclement weather adversely
affected sales to third-party customers in 1997.

1996 PRO FORMA REVENUES COMPARED TO 1997 PRO FORMA REVENUES

Total pro forma revenues increased from $82.4 million in 1996 to $99.6
million in 1997.

RETAIL SEGMENT. Retail segment revenues increased a net $18.4 million, with
the following business units reporting the most significant fluctuations:

- American Home Remodeling's revenue improved $2.6 million as it shifted its
business from general contracting to replacement windows.

- Five Star Builders, Inc.'s revenue increased $2.1 million resulting from
an approximate 10% price increase and growth in its textured coating and
window product lines.

- NuView Industries, Inc. commenced its retail window business in 1997 and
reported $4.7 million of revenue from window sales.

- Thomas Construction's revenue increased $2.3 million from 1996 to 1997 due
to growth in its product lines.

- Thermo-Shield's revenue increased $4.3 million due to growth in newly
opened branch offices in early 1997 in Michigan and Arizona, and
additional customer contracts generated from leads from an unaffiliated
home improvement chain.

- Thermo-Tilt's revenue decreased $1.0 million as this unit de-emphasized
one of its regional sales operations.

MANUFACTURING SEGMENT. Manufacturing segment revenues decreased from 1996
to 1997, primarily as a result of many of Thermal Line's third-party customers
being adversely affected by inclement weather in 1997.

28
<PAGE>
PRO FORMA GROSS PROFIT FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

The following table presents gross profit for each of our acquired companies
and total pro forma gross profit for the years ended December 31, 1996, 1997 and
1998.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
1996 1997 1998
------------------------ ------------------------ ------------------------
GROSS PERCENT OF GROSS PERCENT OF GROSS PERCENT OF
ACQUIRED COMPANY PROFIT REVENUES PROFIT REVENUES PROFIT REVENUES
- ------------------------------ --------- ------------ --------- ------------ --------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
RETAIL SEGMENT:
Thermo-Tilt Window Company.... $ 3,070 46.2% $ 2,739 48.7% $ 2,726 53.2%
American Home Developers Co.,
Inc......................... 1,657 45.4 2,193 44.9 2,249 47.7
Primax Window Co.............. 3,066 52.5 3,824 53.6 3,717 56.9
The Rolox Companies........... 6,497 61.0 6,268 60.5 6,379 56.6
American Home Remodeling...... 1,707 45.8 3,297 52.1 4,658 63.3
Five Star Builders, Inc.(1)... 4,074 66.0 5,945 71.8 5,730 71.3
NuView Industries, Inc.(2).... -- -- 2,329 49.7 2,577 56.0
Leingang Siding and Window,
Inc......................... 1,263 30.0 1,865 34.2 2,081 34.6
Thomas Construction, Inc...... 11,309 46.7 12,454 47.0 12,277 48.0
The Thermo-Shield Companies... 4,199 51.9 6,686 53.9 8,236 55.3
--------- --- --------- --- --------- ---
Total pro forma gross profit
of retail segment......... 36,842 50.3 47,600 51.9 50,630 53.8

MANUFACTURING SEGMENT:
T. D. Windows, Inc............ 340 21.0 274 20.9 285 25.0
Thermal Line Windows,
L.L.P.(3)................... 2,252 32.4 2,015 33.1 2,337 32.6
Precision Window Mfg., Inc.... 722 12.7 693 10.8 1,048 16.0
--------- --- --------- --- --------- ---
Total pro forma gross profit
of manufacturing
segment................... 3,314 23.2 2,982 20.9 3,670 24.7
Intersegment eliminations and
other....................... -- -- -- -- -- --
--------- --- --------- --- --------- ---
Total pro forma gross
profit.................... $ 40,156 48.7% $ 50,582 50.8% $ 54,300 53.2%
--------- --- --------- --- --------- ---
--------- --- --------- --- --------- ---
</TABLE>

- ---------

(1) Five Star Builders, Inc. has recently changed its name to ThermoView of
California, Inc.

(2) NuView Industries, Inc. has changed its name to ThermoView of Missouri, Inc.
NuView Industries, Inc. commenced its window business on February 1, 1997.

(3) Thermal Line Windows, L.L.P. is now Thermal Line Windows, Inc.

1997 PRO FORMA GROSS PROFIT COMPARED TO 1998 PRO FORMA GROSS PROFIT

Total pro forma gross profit percentages improved from 50.8% in 1997 to
53.2% in 1998.

RETAIL SEGMENT. Gross profit improved in the retail segment as our retail
companies enhanced purchasing power through growth and as competition increased
among supply vendors.

- The Rolox Companies' product mix accounted for the decrease in gross
profit percentage, where it reported higher sales of vinyl siding in 1998
which has a lower gross profit than replacement windows.

- American Home Remodeling's gross profit improved in 1998 as it shifted its
business from general contracting to replacement windows.

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<PAGE>
MANUFACTURING SEGMENT. In the manufacturing segment, Precision negotiated
cost reductions on vinyl and glass. Additionally, Precision implemented a 2.0%
price increase and TD Windows a 5.0% price increase, effective in 1998, related
to their manufacturing segment sales.
1996 PRO FORMA GROSS PROFIT COMPARED TO 1997 PRO FORMA GROSS PROFIT
Overall, gross profit percentages improved from 48.7% in 1996 to 50.8% in
1997.
RETAIL SEGMENT. Gross profit improved in the retail segment as our retail
companies enhanced purchasing power through growth and as competition increased
among supply vendors.
MANUFACTURING SEGMENT. In 1997, TD Windows and Precision experienced
increases in their costs without corresponding increases in their prices. TD
Windows' increase related to direct materials, and Precision's increase related
to labor costs. Overall, the manufacturing segment had a 2.3% decrease in gross
profit from 1996 to 1997.
LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1999, we had cash and cash equivalents of $2.3 million,
working capital of $454,000, and $23.7 million of long-term debt, net of current
maturities. Our operating activities for the six months ended June 30, 1999
provided $2.9 million of cash. We used $684,700 in our operating activities
during the year ended December 31, 1998. The use of cash for investing
activities relates primarily to acquisition activity which accounts for the use
of $17.1 million for the six months ended June 30, 1999 and $15.6 million for
the year ended December 31, 1998.

The major sources of cash provided by financing activities for the six
months ended June 30, 1999 were borrowings of $9.7 million under our PNC Bank
credit facility, related-party borrowings of $4.0 million, and net proceeds from
issuance of mandatorily redeemable Series C convertible preferred stock and
detachable stock purchase warrants of $5.4 million. During the year ended
December 31, 1998, we received $14.5 million of net proceeds from our Series A
preferred stock offering, $614,000 of net proceeds from an offering of common
stock, $5.3 million from our PNC Bank credit facility, and $1.5 million from
related-party borrowings. These sources were offset by a use of cash of $2.1
million to repurchase 91,284 shares of our common stock.

In August 1998, we established a $15.0 million line of credit with PNC Bank.
Borrowings under the line of credit bear interest at a Euro-Rate based variable
rate. Interest on the line of credit is payable quarterly and principal is
payable in full at maturity on August 31, 2000. Pursuant to the terms of the
line of credit, at any one time, the aggregate unpaid principal amount of
advances under the line of credit shall not exceed the lesser of $15.0 million
or 3.5 times our earnings before interest, income taxes, depreciation and
amortization, as modified in the loan documents, for the immediately preceding
four fiscal quarters from our most recent financial statements.
The line of credit is secured by substantially all of our personal property
and by a pledge to PNC Bank of all of our ownership interests in our
subsidiaries. Additionally, the line of credit obligates us to pay a quarterly
unused loan fee and certain other fees and expenses. The stated purposes under
the line of credit were to (A) fund future acquisitions, (B) provide us with
working capital and (C) provide the initial funding for our consumer finance
subsidiary, Key Home Credit.
As of the date of this prospectus, we have borrowed the entire amount
available to us under the line of credit. The line of credit requires that any
company acquired by us must become a borrower under the line of credit.
Additionally, we have pledged all of our ownership in acquired companies to PNC
Bank.

Subsequent to December 31, 1998, we had not met covenants related to
financial ratios and our consumer finance subsidiary in our bank credit
agreement. The lender has waived all covenant

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<PAGE>

violations through July 8, 1999, and has reset covenants to accommodate future
compliance. We are in compliance with these revised covenants.

In July 1999, we received $10.0 million in senior subordinated financing
from GE Capital Equity Investments, Inc. Interest under the note is payable
quarterly in arrears at 12% per annum, subject to substantial increases as
described in the financing. Principal under the note is payable in full in July
2002 but we may prepay the note at a premium prior to its maturity. Among its
covenants, the note requires us to refrain from entering into acquisitions
priced above a pre-defined earnings multiple unless GE Capital consents. The
note, which is subordinate to our line of credit with PNC Bank, is secured by a
lien on substantially all of our assets, a guarantee executed by our
subsidiaries and a pledge of our ownership in our current and future
subsidiaries. In conjunction with the issuance of the note, we issued to GE
Capital warrants to purchase 555,343 shares of our common stock at $0.03 per
share which expire during July 2007. We used the proceeds from this financing
primarily to repay related-party indebtedness and outstanding acquisition
indebtedness. We also used a portion of the proceeds to fund obligations to
former shareholders of acquired businesses for satisfying post-acquisition
performance standards as set forth in the acquisition agreements.

Our line of credit with PNC Bank and subordinated debt owed to GE Capital
require us to comply with affirmative and negative covenants. We must maintain
various financial ratios and these lenders may restrict us from incurring other
debt. We may not pay dividends on the common stock while the line of credit and
the subordinated debt are outstanding. We are also subject to other
restrictions, including restrictions pertaining to significant corporate
transactions and management changes.

If we default under the line of credit, PNC Bank could, among other items,
cease all advances, accelerate all amounts owed to PNC Bank and increase the
interest rate on the line of credit. If we default under the subordinated debt
documents, GE Capital could, among other items, accelerate all amounts owed to
GE Capital, subject to the rights of PNC Bank as our senior lender under the
line of credit. Under either the PNC Bank line of credit or the GE Capital
subordinated debt, an event of default could result in the loss of our
subsidiaries because of the pledge of our ownership in all of our subsidiaries
to PNC Bank and on a subordinated basis to GE Capital.

In April 1999, we issued an aggregate of 6,000 shares of Series C preferred
stock to two institutional accredited investors, Brown Simpson Growth Fund,
L.P., a New York limited partnership, and Brown Simpson Growth Fund, Ltd., a
Grand Cayman, Cayman Islands limited partnership, at a per share purchase price
of $1,000, for a total investment of $6.0 million. In conjunction with the
issuance of the Series C preferred stock, we issued to the two funds warrants to
purchase up to a total of 400,000 shares of common stock at $21.00 per share,
the number of shares and exercise price being subject to adjustment, which
expire in April 2004. In August 1999 we amended the exercise price of the
warrants to $18.00 per share in exchange for a commitment of the holders to
refrain from selling any of our securities from the closing of this offering
until January 31, 2000. We used the proceeds from this financing primarily to
repay outstanding acquisition indebtedness.

We believe that our cash flow from operations and the proceeds of the
offering will allow us to meet our anticipated needs during at least the next 12
months for:

- some of our planned acquisitions under our current business model;

- payment of the interest on our line of credit and subordinated debt;

- payment of dividends due on our Series C preferred stock;

- working capital requirements; and

- planned property and equipment capital expenditures.

We will need additional sources of financing to undertake all of the planned
acquisitions under our current business model during the next 12 months. After
this twelve month period, we will need

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<PAGE>

additional financing to consummate acquisitions and for working capital,
including payment of seller notes and future earned cash to sellers of acquired
companies. We may require financing sooner if we pursue acquisitions not
contemplated in our current business model. Any required additional financing
may not be available on terms favorable to us, or at all. If adequate funds are
not available on acceptable terms, we may be unable to fund additional
acquisitions, successfully promote our products or develop new or enhanced
products, any of which could lower our revenues and net income, if we achieve
profitability in the future. If we raise additional funds by issuing equity
securities, stockholders may experience dilution of their ownership interest and
the newly issued securities may have rights superior to those of the common
stock. If we issue or incur debt to raise funds, we may be subject to
limitations on our operations.

We intend to continue our aggressive acquisition program with a combination
of cash, common stock and seller debt used to finance the primary portion of
consideration. We expect the cash needed for these acquisitions to come from an
expanded bank line, this common stock offering and future common stock
offerings.

Preferred stock cash dividends are currently 10% on $16.9 million of Series
A and B preferred stock. We intend to convert the Series A and B preferred stock
to common stock in connection with this offering and, accordingly, the $1.7
million for annual dividends on Series A and B preferred stock will be
discontinued. We will continue to pay dividends on the Series C preferred stock
until the shares are redeemed or converted.

INTEREST RATE RISK

Changes in interest rates expose us to market risk. As of June 30, 1999,
approximately 84.5% of our debt portfolio consisted of variable-rate debt and
approximately 15.5% consisted of fixed-rate debt. With respect to the
variable-rate debt, a hypothetical 100 basis point increase in interest rates
would increase our annual interest expense by approximately $148,000 as of June
30, 1999.

Interest rate changes would result in gains or losses in the market value of
our fixed-rate debt due to the differences between the current market interest
rates and the rates governing these instruments. With respect to our fixed-rate
debt outstanding at June 30, 1999, a 10% change in interest rates would not have
resulted in a significant change in the fair value of our fixed-rate debt.

YEAR 2000

Computers, software, and other machinery and equipment containing imbedded
microchip technology which use only two digits to identify a year in a date
field may fail, or be unable to accurately process certain date-based
information at or after the year 2000. This is commonly referred to as the "year
2000 issue." With the assistance of an outside consulting firm, we have
developed a program to identify year 2000 issues that could impact us at or
after the year 2000. This program is being implemented in all areas of our
operations, including the computers, software and machinery that we rely upon to
conduct our business, as well as the year 2000 issues which may affect our
relationship with external customers and suppliers.

STATE OF READINESS. The year 2000 issue assessment program will address the
nature and potential impact of the information technology, as well as non-IT
systems which we use to conduct operations. Information technology systems
include computers, office equipment, telecommunication devices and predictive
dialers, which our retail operations use to develop leads for sales
presentations of our products. Non-IT systems consist of machinery which contain
embedded microchips and include manufacturing equipment, alarm systems, heating
and air conditioning units, and other similar equipment.

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<PAGE>

Our assessment program has four separate phases:

- Phase I Inventory/Audit;

- Phase II Correction;

- Phase III Post-Correction Testing; and

- Phase IV Contingency Planning.

PHASE I INVENTORY/AUDIT. Phase I consists of the identification of IT and
non-IT systems we use which the year 2000 issue could impact. Our outside
consultant and our personnel have conducted an inspection of all of our business
locations and taken a physical inventory of all systems currently in use. We
have evaluated the operation of each system with currently available knowledge
to determine the effect of year 2000 issues. Phase I also includes an inventory
of third party suppliers and customers that we rely upon to conduct business. We
sent a detailed questionnaire which seeks to identify the year 2000 readiness of
these third parties to 1,148 vendors of software, hardware and other IT and
non-IT equipment in use by us. We have currently received responses from 1,023,
or 89%, of these vendors. While we cannot control the year 2000 readiness of
these third parties, these questionnaires will enable us to identify potential
effects of year 2000 on these parties and to develop contingency plans to
minimize the impact to us caused by the third parties' year 2000 issues. We have
completed Phase I.

PHASE II CORRECTION. Phase II of the assessment program consists of
remedial correction of systems identified in Phase I as being vulnerable to year
2000 issues. For both IT and non-IT systems, the remedial actions consist of
upgrades to software that is year 2000 compliant, upgrades of equipment to the
extent possible and replacement of non-compliant equipment that we cannot
upgrade. We expect Phase II to be 75% complete by September 30, 1999 and 100%
complete by October 31, 1999.

PHASE III POST-CORRECTION TESTING. Phase III of the assessment program
requires the testing of all systems, with particular attention to those systems
which required correction during Phase II. In the event that systems do not pass
the testing of this phase, we will implement the contingency plans developed in
Phase I. We expect to complete Phase III by November 15, 1999.

PHASE IV CONTINGENCY PLANNING. Phase IV consists of evaluating the results
of Phase III post-correction testing and assessing the status of responses by
third party suppliers. Based upon the minimal nature of identified internal year
2000 issues, we believe that contingency planning of internal year 2000 issues
will also be minimal and complete by December 15, 1999.

The systems which the assessment program has addressed include the
following:

- personal computers;

- software;

- manufacturing equipment; and

- miscellaneous electronic telecommunications equipment.

We have not identified any significant year 2000 issues from our current
systems. Leingang Siding and Thomas Construction had addressed the year 2000
issue prior to acquisition and if required, are correcting known non-complaint
systems.

COST OF REMEDIATION. The costs to us for compliance with year 2000 issues
consist of our fee to our outside consultant for the development and management
of the assessment program, and the costs associated with the purchase of
software upgrades and replacement equipment. To date, we have paid $101,500 to
our outside consultant and $41,000 for the upgrade and replacement of software
and equipment. Our estimated future costs are $167,000 for the upgrade and
replacement of software and equipment. These costs do not include wages and
benefits paid to our personnel that utilize their time

33
<PAGE>

for the assessment program. We are funding costs of remediation from operations.
We are charging the costs associated with remediation as current expenses with
the exception of the costs of replacing software and equipment which are
capitalized.

WORST CASE SCENARIO. Since we have not identified any significant internal
year 2000 issues from our assessment program, we believe that the most
reasonably likely worst case scenario to our results of operations, liquidity,
and financial condition lies in the impact of year 2000 issues to our third
party customers and suppliers, and the effect on us of these issues. We have
five suppliers of manufacturing products that we consider significant to our
operations. The year 2000 issues of these third parties consist of the impact to
our raw materials and components suppliers that we use to fabricate our products
in our manufacturing subsidiaries. An interruption in the supply of raw
materials and components could have an adverse impact on our operations and
resulting revenue. This worst case scenario contains uncertainty to the extent
that we do not have control over the readiness of these third parties. We have
contacted these third parties regarding their year 2000 readiness. To date, of
the five significant suppliers, four have responded that they are year 2000
compliant and one has not responded.

CONTINGENCY PLAN. We have developed a contingency plan to handle the most
reasonably likely worst cast scenario. We anticipate receipt of the final
response from our fifth significant supplier by October 31, 1999. To the extent
that we do not receive assurances as to the year 2000 readiness from our
suppliers, we have the capability to identify alternate sources for the
materials used in our manufacturing facilities. Based upon the responses that we
receive from the remaining third party supplier regarding the severity of year
2000 issues and the time period that it needs to become compliant, the purchase
of additional materials from existing, and alternative suppliers could minimize
the impact of these issues. In this event, the increase in purchasing inventory
during the fourth quarter of 1999 could impact our cash flow and negatively
impact our operations.

INFLATION

Due to relatively low levels of inflation experienced during the years ended
December 31, 1996, 1997 and 1998 and the six months ended June 30, 1999,
inflation did not cause a signficant increase in our costs.

SEASONALITY

Historically, our results of operations have fluctuated on a seasonal basis.
We have experienced lower levels of sales and profitability during the period
from mid-November to mid-March, impacting the first and fourth quarters of each
year. Inclement weather conditions in the winter and spring months in certain of
our markets located in the north central United States, which limit our ability
to install exterior home improvement products, reduces demand for windows,
doors, vinyl siding and related products. Our intention is to expand our
southern California markets and to enter other markets in the Southwest and
southern United States to reduce the impact of seasonality.

34
<PAGE>
BUSINESS

OVERVIEW

We design, manufacture, sell and install custom vinyl replacement windows
for residential and retail commercial customers. We also sell and install
replacement doors, textured coatings, vinyl siding, patio decks, patio
enclosures, cabinet refacings, and bathroom and kitchen remodeling. We finance a
portion of our customers' purchases through Key Home Credit, our consumer
finance subsidiary.

THE REPLACEMENT WINDOW INDUSTRY

Sales of replacement windows have experienced substantial growth in recent
years. According to U.S. Census Bureau and industry statistics:

- domestic expenditures in the replacement window industry were $8.2 billion
in 1998, an increase of 32.3% over 1993;

- over 28.4 million replacement windows were sold in 1998, a 38.5% increase
over 1992 levels; and

- of available replacement windows, vinyl replacement windows are the most
popular, comprising 49.6% of total unit sales in 1998.

Three basic categories of windows comprise the replacement window market:
vinyl, wood and aluminum. We believe that vinyl windows require less maintenance
and are more durable than either wood or aluminum windows and they provide
greater energy efficiency than aluminum windows. Since prices for vinyl windows
have become more competitive with wood window prices and the durability and
energy efficiency of vinyl windows have improved, the demand for vinyl windows
has significantly increased over the last five years. Today, vinyl windows are
the most popular replacement window. We believe that factors driving demand in
the replacement window industry include:

- the aging existing housing stock;

- job and wage growth;

- consumer confidence levels;

- consumer credit conditions;

- interest rates;

- demographic trends;

- population migration between urban and suburban areas; and

- demand for maintenance free products.

ACQUISITION STRATEGY

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<PAGE>

the fragmented nature of the replacement window industry. We seek acquisition
candidates with the following characteristics:

- experienced, growth-oriented management;

- strong regional market share; and

- financial performance to increase our earnings and cash flow.

EXPERIENCED MANAGEMENT. Our management and that of our subsidiaries have
substantial experience in the replacement window and related businesses. We
believe this level of experience provides a solid foundation for growth. We
manage our subsidiaries on a decentralized basis with local management assuming
responsibility for the day-to-day operations, profitability and growth of the
business. We believe that while we actively maintain strong operating and
financial controls, as well as foster the sharing of information among our
subsidiaries to enhance our efficiency, our decentralized operating structure
allows us to retain the entrepreneurial spirit of each of our subsidiaries. In
addition, our decentralized operation allows us to capitalize on the local and
regional market knowledge and customer relationships of our retail and
manufacturing subsidiaries.

REGIONAL MARKET SHARE. Our goal is to become the leading vinyl replacement
window business in each region where we acquire a business. We seek acquirees
that have significant business and a recognizable name in the market areas where
those acquirees engage in business.

FINANCIAL PERFORMANCE. We analyze the financial performance of our
acquisition targets in their markets to determine how they will add to our
earnings and cash flow through our acquisition due diligence. Our internal
investigation seeks to target efficiencies and economies to be derived from the
integration of the target entity. We believe that the combined sales experience
of our subsidiary personnel should assist target entities in improving and
diversifying product sales in the region served by the target. The integration
of each new acquiree into ThermoView also provides an additional market for our
consumer finance subsidiary, Key Home Credit. We believe that Key Home Credit
affords our customers an additional means of financing purchases of our
products.

ACQUISITION BENEFITS TO THERMOVIEW

We believe that our acquisition and integration strategy offers a number of
benefits.

EFFICIENT PENETRATION OF NEW MARKETS. We believe we avoid many of the costs
and risks associated with entering new geographic markets by targeting one or
more leading local or regional companies providing vinyl replacement window and
complimentary business services. We focus on acquisition targets that have the
customer base, employees and infrastructure necessary to be a core business that
we can consolidate with our other service operations. We seek businesses that
are located in attractive markets, have experience in the industry, and
management willing to participate in our future growth. Our plan is to enter
markets in predominantly metropolitan areas in the Southeast, Midwest and West
if appropriate opportunities present themselves.

OPERATING EFFICIENCIES. We believe our integration strategy affords us the
ability to achieve operating efficiencies and cost savings through volume
discounts on purchases. With our increasing size, we expect to purchase raw
materials at a significant price advantage over the small, independent
competitors that largely comprise the vinyl replacement window industry. In
addition, the concentration of our sales/installation locations affords us lower
freight costs and the ability to better manage inventory levels between
facilities. Also, we seek to provide centralized accounting software and
administrative functions that we believe should enhance our profitability and
the operating efficiencies of our subsidiaries.

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<PAGE>
RELIABLE AND INEXPENSIVE SERVICING. Through the introduction of our own
manufactured vinyl replacement window from our manufacturers, we will be able to
provide our retail subsidiaries with a common product or products to sell in
their markets. By providing a manufacturing operation that is geographically
proximate to our retail operations, our manufacturers will be able to quickly
deliver a completed window for installation. In addition, by integrating our
manufacturing and retail operations, our retail subsidiaries can more easily
depend on the sources of their manufacturing.

ABILITY TO LEVERAGE LOCAL BUSINESS REPUTATIONS. We believe that we maintain
a strong relationship with our customer base of middle-income homeowners because
of our commitment to quality in both customer service and product offering. We
also maintain strong customer relationships by acquiring sales and installation
companies that have strong and long-standing local reputations, by generally
allowing the companies to continue to operate under their original names.
Beginning in 2000, we intend to introduce private label programs for our new
acquirees to diversify the products of our acquirees and take advantage of the
local reputation of our acquirees in their markets.

INCREASED ABILITY TO OFFER CUSTOMER FINANCING. We believe that through Key
Home Credit, our consumer finance subsidiary, we can provide our customers with
additional means to finance the purchases of our products. We believe that this
additional source of revenue will be an adjunct to our primary business and
should provide a means of assisting in the sales of our various products. As our
consumer finance subsidiary becomes licensed in more jurisdictions, we
anticipate its increased involvement in financing of the sales of our products.

THERMOVIEW ATTRACTION TO ACQUIREES

We believe that potential acquisition candidates will regard us as an
attractive acquirer because of the following:

- our strategy to become a national and integrated vinyl replacement window
business;

- our decentralized operations;

- our increased visibility and access to financial resources as a result of
being a public company;

- our potential for earnings based on the centralization of administrative
functions and enhanced systems capabilities; and

- our potential for the owners of businesses to participate in our internal
and acquisition growth while realizing liquidity from the sales of their
businesses. As an example, we have instituted an advisory board comprised
of managers of a number of our subsidiaries. These managers communicate
directly with corporate management on the operation of our subsidiaries
and also participate in our long-range planning.

MERCHANDISING

REPLACEMENT WINDOWS. We offer three lines of custom-made replacement vinyl
windows. Each of our lines consists of a broad range of window options including
awning, bay, bow, double hung, garden and slider replacement windows. We offer
the Barricade, Thermal-line and ThermoView lines of windows tailored to fit
remodeling and financial needs of our customers.

BARRICADE WINDOW. This line consists of our most expensive window products.
We design this line of replacement windows for energy performance, strength,
security and low maintenance. The windows offer welded vinyl frames reinforced
with aluminum in both their main frame and sash for added

37
<PAGE>

strength, and with one inch triple insulated glass with low-emissivity, Low-E
coatings to reduce heat radiation through the glass and double steel cam locks
for security. The Barricade replacement window generally sells for $750 to $900
per unit as installed.

THERMAL-LINE WINDOW. We design this line for high performance at affordable
cost. A component of this line of replacement windows is complast, a vinyl
substitute, which increases strength without the cost of aluminum reinforcement.
The use of complast also permits the use of dark colors in extreme heat. This
line of replacement windows contains double insulated glass and Low-E coatings.
The Thermal-line replacement window generally sells for $500 to $700 per unit as
installed.

THERMOVIEW WINDOW. We design this line of replacement windows to provide
customer value with three-quarter double insulated glass, Low-E coatings and
tilt-in sashes for easy cleaning. The ThermoView replacement window generally
sells for $400 to $700 per unit as installed.

Our windows offer the following features:

ENERGY EFFICIENCY. One characteristic of our windows is their insulating
qualities. Double- and triple-pane glass provides the R-values and U-values,
measures of insulation for end-users. With regard to this double- and
triple-pane glass, we incorporate state-of-the-art Low-E coatings. Low-E
coatings allow the passage of light but selectively block infrared radiation. As
a result, less heat escapes on cold days, and less heat enters on warm days. We
further increase the insulation value of our windows by sandwiching a layer of
argon, krypton and sulfur hexafluoride gas mixture between panes of glass.

HIGH QUALITY FRAMES. Our windows incorporate fusion-welded corners, and our
Barricade line includes an internal aluminum support system. This structure
enhances the durability of the windows and prevents warping problems.

CUSTOM DESIGN. We custom manufacture windows in varying dimensions. This
process involves the retro-fitting of existing homes with custom-made, energy
efficient, vinyl-clad windows.

INSTALLATION SERVICE. Some of our subsidiaries only use their employees for
installation of our replacement windows. Others subcontract with crews that work
exclusively for us. Combining our employees and exclusive subcontractor
installers for our windows helps with both the speed and quality consistency of
the installation of our replacement windows. Generally, we complete installation
within the same or the second day of commencing installation.

LOW MAINTENANCE PRODUCT. Our windows do not require external maintenance
due to the vinyl materials used. The tilt-in feature of our windows eases their
cleaning.

COMPETITIVE PRICING. We believe that, with our increased sales volume, we
can reduce manufacturing and materials costs, thereby giving a higher value to
our customers than the small, fragmented remodeler. Through our purchasing and
distribution channels, we further realize cost savings that will benefit the
customer.

REPLACEMENT DOORS. We offer custom-made insulated steel doors with
wood-grain embossed finishes in 36 styles and sliding glass doors in six
variations.

- The steel doors range in price from $750 to $3,000 per door as installed
depending upon the styles, hardware and art-glass options and woodgrain
finishings chosen.

- The sliding glass doors range in price from $1,200 to $2,000 per door as
installed.

ENERGY EFFICIENCY, DESIGN, AND INSTALLATION. Our sliding glass doors and
insulated steel doors that contain glass have the same energy efficiency
characteristics as our vinyl replacement windows. We custom design and install
our sliding glass doors and insulated steel doors in a similar fashion to our
vinyl replacement windows.

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PRODUCT GUARANTEE. The manufacturer of our insulated steel doors offers a
25-year guarantee against warping, cracking or swelling of the product.

HOME TEXTURED COATINGS. We offer home textured coatings for residential
use, the cost of which ranges approximately from $2,000 to $15,000 per residence
as installed. Home textured coating is a paint and service that usually takes
seven days to complete. The process involves four coats of primer and two finish
coats, together with a trenching operation to prevent ground moisture
penetration and patching and repairs of the surface to be coated.

INSTALLATION SERVICE. Both employee and exclusive subcontractor painters
provide the home textured coatings to our customers.

PRODUCT GUARANTEE. The manufacturer of the product, Textured Coatings of
America, Inc., provides a limited lifetime warranty to the owner of the home
against chipping, flaking and peeling of its product.

VINYL SIDING. We offer vinyl siding in several colors and styles. Our
customers will generally spend in the range of $2,800 to $10,000 as installed
depending upon the size of the residence on which we install the vinyl siding.
The average time for installation is seven days and generally the vinyl siding
is maintenance free.

CABINET REFACINGS. We offer kitchen cabinet refacings in a number of
designs which range in cost from $3,000 to $10,000 per kitchen as installed and
generally take one day to complete.

KITCHEN AND BATHROOM REMODELING. We offer kitchen and bathroom remodeling
through four of our subsidiaries. We estimate the cost for kitchen remodeling to
our customers to range from $3,000 to $20,000. Generally, remodeling takes one
week to complete. We charge our customers for bathroom remodeling from $3,000 to
$8,000 per residence as installed.

PATIO DECKS AND PATIO ENCLOSURES. We offer patio decks and patio enclosures
with single- or double-pane glass as a less expensive alternative to room
additions. Most sales involve single-pane glass together with a modular roof.
Generally, installation takes three days, and the cost to our customer ranges
from $8,000 to $18,000 as installed depending on the size and options chosen.

RETAIL BUSINESSES. ThermoView's retail segment consists of the following
businesses:

THERMO-TILT WINDOW COMPANY. Thermo-Tilt, founded in 1987 and headquartered
in Owensboro, Kentucky, designs, sells and installs vinyl replacement windows in
Indiana, Kentucky, Missouri and Tennessee. As of June 30, 1999, Thermo-Tilt had
84 employees. Charles L. Smith, our Chief Operating Officer, manages its
operations.

AMERICAN HOME DEVELOPERS CO., INC. American Home Developers Co., Inc.,
founded in 1985 and headquartered in Los Angeles, sells vinyl replacement
windows and textured coating in California. American Home Developers had 52
employees as of June 30, 1999. Alan B. Griefer, a former principal of American
Home Developers for five years, manages its operations under a three-year
employment agreement.

PRIMAX WINDOW CO. Primax Window Co., founded in 1981 and headquartered in
Louisville, Kentucky, sells and installs vinyl replacement windows and doors in
Indiana, Kentucky and Ohio. Primax had 79 employees as of June 30, 1999. Charles
L. Smith, our Chief Operating Officer and a former principal of Primax for 17
years, manages its operations under a three-year employment agreement.

THE ROLOX COMPANIES. The Rolox Companies, founded in 1973 and headquartered
in Kansas City, Kansas, sell and install vinyl replacement windows, steel doors
and storm siding in Arkansas, Iowa,

39
<PAGE>

Kansas, Missouri, Nebraska and Oklahoma. Rolox had 114 employees as of June 30,
1999. Robert L. Cox II, a former principal of Rolox for 17 years, manages its
operations under a three-year employment agreement.

AMERICAN HOME REMODELING. American Home Remodeling, founded in 1992, sells
and installs vinyl replacement windows, vinyl replacement doors and provides
textured coating services in California. Effective December 31, 1998, American
Home Remodeling merged into Five Star Builders, Inc., another ThermoView
subsidiary.

FIVE STAR BUILDERS, INC. Five Star Builders, Inc., founded in 1992 and
headquartered in San Diego, California, sells and installs vinyl replacement
windows, vinyl replacement doors and textured coatings in California. Five Star
had 211 employees as of June 30, 1999. Michael S. Haines and Bradley A. Smith,
former principals of Five Star for 11 years, manage its operations under
three-year employment agreements. Harinder S. Ahuja and Alan B. Fishman, former
principals of American Home Remodeling, also manage its operations under
three-year employment agreements. Five Star recently changed its name to
ThermoView of California, Inc.

NUVIEW INDUSTRIES, INC. NuView Industries, Inc., founded in 1995 and
headquartered in St. Louis, Missouri, sells and installs replacement windows,
doors and siding in Illinois and Missouri. NuView had 94 employees as of June
30, 1999. Douglas E. Miles, a former principal of NuView for 15 years, manages
its operations under a three-year employment agreement. NuView has changed its
name to ThermoView of Missouri, Inc.

LEINGANG SIDING AND WINDOW, INC. Leingang Siding and Window, Inc., founded
in 1991 and headquartered in Mandan, North Dakota, sells and installs
replacement and new construction windows and doors, vinyl siding and other home
improvement products in North Dakota and South Dakota. Leingang had 68 employees
as of June 30, 1999. Alvin W. Leingang, a former principal of Leingang for 24
years, manages its operations under a three-year employment agreement. Mr.
Leingang also manages the operations of Thermal Line Windows, Inc., another of
our subsidiaries.

THOMAS CONSTRUCTION, INC. Thomas Construction, Inc., founded in 1981 and
headquartered in Earth City, Missouri, designs, sells and installs replacement
and new construction windows, siding, patio enclosures and various other home
improvement products in Illinois and Missouri. Thomas had 266 employees as of
June 30, 1999. Rodney H. Thomas, a former principal of Thomas and related
companies for 29 years, manages its operations under a two-year employment
agreement.

THE THERMO-SHIELD COMPANIES. The Thermo-Shield Companies, comprised of five
corporations, founded in 1984 and headquartered in Wheeling, Illinois, sell,
furnish and install replacement windows and siding and also conducts cabinet
refacing in Arizona, Illinois, Michigan and Wisconsin. The Thermo-Shield
Companies' sales personnel operate from sales displays located within national
retail home improvement stores such as Sam's Club, Wal-Mart, Lowe's, K-Mart and
Builders Square. The Thermo-Shield Companies had 281 employees as of June 30,
1999. Joel S. Kron, a former principal of Thermo-Shield for 15 years, manages
its operations under a three-year employment agreement.

MANUFACTURING

With our acquisitions of Precision, Thermal Line and TD Windows, we have
begun to vertically integrate our replacement window sales, installation and
manufacturing functions. Unlike many of our competitors who must purchase window
products from third-party vendors, we now have the in-house capability to
manufacture many of the window products that our retail subsidiaries sell. Our
manufacturing subsidiaries provide us with a greater degree of process control
and flexibility.

LOW-TECH MANUFACTURING PROCESS. The process of manufacturing custom
replacement windows consists of measuring, cutting and assembling glass and
extruded vinyl "lineal" components to create

40
<PAGE>

windows that match customer specifications. We have invested in sophisticated
machinery to create an assembly line environment designed to further automate
the production process. A summary of the assembly of a vinyl replacement window
is as follows:

- we receive orders from the retail subsidiaries and enter the desired
dimensions of the windows into a computer;

- through the use of a proprietary computer program, we map the dimensions
of multiple windows onto a large sheet of glass in the configuration that
will maximize the number of windows to be cut from each sheet, thereby
minimizing waste;

- once the glass is cut, we wash it and coat the edges with an insulating
material that will separate the two or three layers of glass panes and
create the desired air-tight seal around the window;

- while cutting the glass, another procedure measures and cuts vinyl
"lineals" according to the specifications of the window types and
dimensions required by the order;

- the cut and processed lineals then move to a welding area, where we weld
the four sides together and complete any final fabricating and
attachments;

- we then send the completed sash to the glass insertion area, where we
insert the window panes into the proper sash units;

- all of the major components of the window arrive at the final assembly
area concurrently to produce the finished product.

Because we assemble our windows on a made-to-order basis utilizing a
just-in-time inventory system, we do not maintain a large finished goods
inventory at our manufacturing plants. We typically deliver finished products to
one of our retail subsidiaries. Service personnel complete the installation and
servicing of the product at the customer's home. Integration of our sales,
shipping, installation and service operations enables us to provide a complete
window or door installation service for customers. The average time between the
execution of a customer sales contract and completion of installation is
approximately two weeks.

SUPPLIERS. We currently have two major vinyl suppliers, a Mikron
Industries, Inc. subsidiary and Complast, Inc. As of December 31, 1998, vinyl
accounted for 38% of our window material costs and constitutes the largest
portion of our raw materials costs. We primarily purchase glass from AFG
Industries, Inc., Libbey-Owens-Ford Company and Cardinal CG, three window
producers. Glass constitutes 14% of our window content. The third principal
material in our windows is extruded aluminum, accounting for 10% of our window
materials cost. We purchase our extruded aluminum primarily from Loxcreen
Company, Inc. and Cardinal Aluminum Co.

Third party vendors manufacture our products except for our replacement
windows. We rely on one or two third party vendors for the manufacture of each
of our products, other than our replacement windows, to provide us with
manufacturing consistency and volume discounts.

MANUFACTURING BUSINESSES. ThermoView's manufacturing segment consists of
the following three businesses:

TD WINDOWS, INC. TD Windows, Inc., founded in 1993 and headquartered in
Louisville, Kentucky, designs, manufactures, sells and installs vinyl
replacement windows and doors in California, Indiana and Kentucky. TD Windows
had 29 employees at June 30, 1999. Larry Parrella, a former principal of TD
Windows for 16 years, manages its operations under a three-year employment
agreement.

THERMAL LINE WINDOWS, L.L.P. Thermal Line Windows, L.L.P., founded in 1996
and headquartered in Mandan, North Dakota, manufactures replacement and new
construction windows and doors for residential and commercial use for sale to
retailers in Colorado, Idaho, Iowa, Kansas,

41
<PAGE>

Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, Wisconsin
and Wyoming. Thermal Line Windows, L.L.P. had 78 employees as of June 30, 1999.
Alvin W. Leingang, a former principal of Thermal Line Windows for 24 years,
manages its operations under a two-year employment agreement. Mr. Leingang also
manages the operations of Leingang Siding and Windows, another of our
subsidiaries. Thermal Line Windows, L.L.P. is now Thermal Line Windows, Inc.

PRECISION WINDOW MFG., INC. Precision Window Mfg., Inc., founded in 1998
and headquartered in St. Louis, Missouri, manufactures and distributes vinyl
replacement windows for residential customers in Colorado, Illinois, Kansas,
Kentucky, Missouri, Nevada, Ohio and Tennessee. Precision had 62 employees as of
June 30, 1999. Charles L. Smith and Larry Ball, former principals of Precision
for 10 years, manage its operations under three-year employment agreements.

SALES AND MARKETING

Each one of our subsidiaries has its own sales staff that determines its
sales function. We pay members of our sales staff on a commission basis and on
the profitability of the subsidiary for which they work.

Each subsidiary maintains its own advertising staff. We have created an
advertising committee comprised of three subsidiary managers. Our goal is to
have this committee suggest marketing programs and assist in undertaking new
methods of advertising and marketing. On January 1, 1999, we formed ThermoView
Advertising Group, Inc. for future advertising and marketing activities. We
currently market our products through several media, including:

- various customer referral programs;

- telemarketing;

- direct mail solicitation;

- kiosk and discount store promotions;

- television and newspaper advertising;

- public displays; and

- door-to-door solicitation.

Our marketing approach varies from subsidiary to subsidiary and also varies
based upon the target area.

ADVERTISING. For each retail subsidiary, our goal is to allot approximately
8% of the subsidiary's sales budget for advertising expenses. We generally give
the individual subsidiary discretion as to the most effective form of
advertising for its geographic market.

We utilize a number of methods to create opportunities for direct contact
with potential customers, including renting space at local fairs and maintaining
kiosks at regional shopping malls. We employ infomercials as another form of our
advertising. In general, we believe that infomercials generate fewer customer
inquiries than direct solicitation but have a much greater probability of
generating a sale. In addition to direct solicitation and infomercials, we also
use various other forms of advertising, including television commercials, direct
mailings, newspaper inserts and other printed media. For one subsidiary, we also
contract with a local sports celebrity to endorse our products.

DISCOUNT STORE LOCATIONS. We are in the process of establishing retail
design centers within a number of major discount stores in Arizona, Michigan,
Illinois and Wisconsin. We currently have retail design centers in Sam's Club,
Builders' Square and Lowes located in Arizona, Illinois, Indiana and Michigan.
These retail design centers offer a limited range of vinyl replacement window
services, including the staffing of our trained sales representatives,
installation and product support.

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<PAGE>
TELEMARKETING. A majority of our retail subsidiaries solicits customers
through an internally managed system. Through the use of a predictive dialing
system--an automated system that calls multiple phone numbers at once and only
directs to the operators those calls that are answered--we have increased the
efficiency while reducing the costs associated with telemarketing.

IN-HOME DEMONSTRATION. When a sales representative receives an expression
of interest from a potential customer, he or she will then generally arrange for
an in-home demonstration at the customer's residence. We have developed a
ten-step procedure for in-home sales presentations. Furthermore, in the training
of our sales staff, we instruct them that they have limited discretion to
negotiate on price. We pay our sales staff solely on a commission basis to
provide for maximum incentives.

CUSTOMER PAYMENT

As of December 31, 1998, in approximately 50% of our sales customers pay in
cash upon completion of installation of our products. For the remaining 50% of
sales customers pay for the products under installment or conditional sales
contracts. In these sales, a customer contracts to pay the retail sales price,
plus a finance charge, in equal installments over a predetermined period of
time. A security interest or chattel mortgage collateralizes the purchased
goods. We currently assign the majority of these contracts to unaffiliated local
financial institutions, in return for the cash sales price of the products
involved, upon execution of a certificate of completion by a customer after
completion of installation. We assign a portion of contracts to our newly-formed
consumer finance division, Key Home Credit. The annual percentage rate for our
installment contracts varies from a minimum of approximately 9.75% to a maximum
rate in excess of 18% depending upon:

- the amount of the installment contract;

- the length of the repayment period;

- the state in which the contract is executed; and

- the financial institution to which we assign the contract.

Key Home Credit operates our consumer finance division. We formed Key Home
Credit in February 1998 to provide a source of financing for the purchasers of
ThermoView products and services through home equity and installment loans and
credit card financing. Key Home Credit began financing customer sales in August
1998 in Kentucky and Tennessee. Key Home Credit, headquartered in Owensboro,
Kentucky, has licenses to lend in California, Illinois, Indiana, Kentucky,
Missouri, North Dakota, Ohio, South Dakota and Tennessee. Leigh Ann Barney and
Larry Clark manage the operations of Key Home Credit.

It is Key Home Credit's policy to obtain security interests via fixture
filings in the purchased goods for loans less than or equal to $5,000 and to
obtain chattel mortgages in the purchased goods for loans in excess of $5,000.
From inception to June 30, 1999, Key Home Credit has approved loans in the
aggregate in excess of $2.5 million and funded loans in the aggregate in excess
of $1.2 million. Key Home Credit's revenue for the six months ended June 30,
1999 was $82,000, which was comprised of $34,000 in fees from the sale of loans
and $48,000 from interest on loans held in its portfolio.

COMPETITION

VINYL REPLACEMENT WINDOWS AND DOORS. The vinyl replacement window and door
industry is highly competitive. The industry is significantly fragmented at both
the manufacturing level and at the retail level. Most of our competitors are
smaller than us and to an extent consist of local lumber and home improvement
dealers. We also compete with larger home improvement chain store operations
such as Builders Square, HQ Home Quarters Warehouse, Inc., Home Depot, Lowes and
Scotty's. These stores, which usually sell windows with limited warranties and
without in-house installation services, have

43
<PAGE>
significantly greater financial and operating resources and greater name
recognition than we have. Additional competitors include Champion Windows,
Pacesetters and the Sears Group.

Brands in the window industry with the highest name recognition include
Andersen Corporation, Pella Corporation and Marvin Windows. These companies
primarily compete in the new construction segment of the window market. While
these companies also produce replacement windows, they currently sell a
relatively small percentage of their products for replacement applications.
Furthermore, these companies generally emphasize wood windows rather than vinyl
and market their products primarily to higher-end homeowners. We also compete
with other window and door manufacturers including Republic, Great Lakes,
Thermal, Inc., Atrium, American Architectural Products Corporation, Thermal
Guard and Winchester Industries.

HOME TEXTURED COATINGS. The competitors for our textured coating products
include small remodelers and painting contractors who use the textured coating
product or other painting products. We are not aware of a significantly large
company that competes with us directly in the installation of textured coating.

VINYL SIDING. We compete in the sale and installation of our vinyl siding
with PaceSetters, Champion Windows and the Sears Group.

CABINET REFACINGS AND KITCHEN AND BATHROOM REMODELING. Our principal
competitors include PaceSetters and the Sears Group. In addition, smaller
remodelers and contractors in each of the regions in which we engage in the
cabinet refacing and kitchen and bathroom remodeling businesses compete with us.

PATIO DECKS AND PATIO ENCLOSURES. Our competition in the installation of
patio decks and patio enclosures includes PaceSetters and a number of smaller
remodelers and contractors in each of the regions in which we install patio
decks and patio enclosures.

GOVERNMENT REGULATIONS

Our business is subject to various federal, state and local laws,
regulations and ordinances relating to, among other things, in-home sales,
telemarketing, consumer financing, retail installment sales, advertising, the
licensing of home improvement independent contractors, OSHA standards, building
and zoning, consumer protection and environmental protection and regulations
relating to the disposal of other solid wastes. Certain jurisdictions require us
to secure a license as a contractor. In addition, certain jurisdictions require
us to obtain a building permit for each installation. We are also subject to
certain federal, state and local laws and regulations, which, among other
things, regulate our advertising, warranties and disclosures to customers.
Although we believe that we are currently in compliance in all material respects
with these laws and regulations, existing or new laws or regulations applicable
to our business in the future may materially adversely affect our results of
operations.

The operations of our consumer finance subsidiary, Key Home Credit, are
subject to supervision by state authorities, typically state banking, consumer
credit or insurance authorities, that generally require Key Home Credit to be
licensed to conduct its business. Many states only issue licenses upon a finding
of public convenience, financial responsibility, character and fitness of the
applicant. Key Home Credit is generally subject to state regulations,
examinations and reporting requirements, and licenses are revocable for cause.
Currently, Key Home Credit is licensed and qualified to provide financing in
seven states.

Various federal statutes governing the consumer finance industry comprise
the Federal Consumer Credit Protection Act. Included within the Consumer
Protection Act are the Truth-in-Lending Act, the Fair Credit Reporting Act, the
Equal Credit Opportunity Act and the Fair Debt Collection Practices Act. The
Truth-in-Lending Act requires a written statement showing the annual percentage
rate of finance charges and requires that other information be presented to
debtors when consumer credit

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<PAGE>

contracts are executed. The Fair Credit Reporting Act requires disclosures to
applicants for credit concerning information that is used as a basis for denial
of credit. The Equal Credit Opportunity Act prohibits discrimination against
applicants with respect to any aspect of a credit transaction on the basis of
sex, marital status, race, color, religion, national origin, age, derivation of
income from a public assistance program, or the good faith exercise of a right
under the Consumer Protection Act. In addition, the Fair Debt Collections
Practices Act proscribes various debt collection practices which it deems
unfair, harassing or deceptive.

Key Home Credit is subject to state usury laws. In some states federal law
has preempted state law, although for a period of time individual states could
have enacted legislation superseding federal law. To be eligible for the federal
preemption, the credit application must comply with consumer protection
provisions. A few states have elected to override federal law, but have
established maximum rates that either fluctuate with changes in prevailing rates
or are high enough so that, to date, no state's maximum interest rate has
precluded Key Home Credit from continuing to offer financing in that state.
Although we believe that Key Home Credit is currently in compliance with these
usury laws and regulations, a change in existing laws or regulations or the
creation of new laws and regulations applicable to Key Home Credit's business
may preclude Key Home Credit from providing customer financing or reduce the
profitability of its activities.

INTELLECTUAL PROPERTY

We do not have any material patents related to our products. Two of our
subsidiaries have sales and installation processes that they consider trade
secrets. These subsidiaries protect these trade secrets by requiring their
employees to enter into confidentiality agreements. We intend to file for a
trademark with the U.S. Patent and Trademark Office under the name "ThermoView."

EMPLOYEES

As of June 30, 1999, we employed in excess of 1,400 people. With the
exception of employees of Precision Window and Thermal Line Windows, none of our
employees are subject to a collective bargaining agreement. The employees at
Precision Window and Thermal Line are members of the United Steel Workers of
America. The two-year contract with the employees of Precision Window expires on
July 1, 2001. The three-year contract with the employees of Thermal Line Windows
expires on February 1, 2001. We have never experienced a work stoppage, and we
consider our relations with our employees to be satisfactory.

Our employees typically receive an hourly wage or salary and are generally
eligible for bonuses, except for our sales staff who we pay on a commission
basis. Our compensation system is directly related to profitability and
accordingly compensation expense increases and decreases as sales and profits
fluctuate. We emphasize incentive compensation, including cash bonus
arrangements and various other incentive programs which offer our personnel an
opportunity for additional earnings and benefits.

PROPERTIES AND EQUIPMENT

The following lists our property locations having in excess of 9,000 square
feet and our headquarters. We lease all of our facilities. In many cases, we
lease the property, at market rates, from the former owners of the subsidiaries
which operate on the property. We also lease our headquarters,

45
<PAGE>
at market rates, from an affiliated company of Stephen A. Hoffmann, our Chairman
and Chief Executive Officer.

<TABLE>
<CAPTION>
LEASE EXPIRATION
PROPERTY DESCRIPTION DATE (EXCLUSIVE OF
THERMOVIEW OR SUBSIDIARY AS LESSEE PROPERTY ADDRESS AND USE RENEWAL OPTIONS)
- ----------------------------------------- ----------------------- ----------------------- --------------------
<S> <C> <C> <C>
ThermoView Industries, Inc............... 1101 Herr Lane 7,671 sq. ft. October 2003
Louisville, KY 40222 Executive offices
RETAIL SUBSIDIARIES:
Thermo-Tilt Window Company............... 2800 Warehouse Road 24,000 sq. ft. December 2002
Owensboro, KY 42301 Warehouse plus 9,000
sq. ft. Office

Primax Window Co......................... 5611 Fern Valley Road 15,000 sq. ft. October 2001
Louisville, KY 40228 Headquarters

Rolox, Inc............................... 4002 Main Street 16,000 sq. ft. April 2002
Grandview, MO 64030 Headquarters /
Warehouse

14405 Ridge Road 10,000 sq. ft. April 2002
Wichita, KS 67209 Office / Warehouse

Thomas Construction, Inc................. 13397 Lake Front Dr. 60,000 sq. ft. December 2013
Earth City, MO 63045 Office / Warehouse

Thermo-Shield Company, LLC............... 661 Glenn Avenue 17,000 sq. ft. October 2007
Wheeling, IL 60090 Office / Warehouse

MANUFACTURING SUBSIDIARIES:
TD Windows, Inc.......................... 1720 Research Drive 16,400 sq. ft. January 2000
Louisville, KY 40299 Headquarters / Office /
Manufacturing

Thermal Line Windows, Inc................ 3601 30(th) Ave, NW 49,500 sq. ft. December 2005
Mandan, ND 58554 Headquarters / Office /
Manufacturing

2605 Twin City Dr. 9,150 sq. ft. October 2003
Mandan, ND 58554 Manufacturing

Precision Window Mfg., Inc............... 7208 Weil Avenue 31,000 sq. ft. On 30 days notice
St. Louis, MO 63119 Headquarters / Office /
Manufacturing
</TABLE>

The leases of our properties provide for monthly rentals ranging from
approximately $500 to $37,500. See footnote 6 to our consolidated financial
statements for the year ended December 31, 1998, which appears on page F-24 of
this prospectus, for more information regarding our leases.

LEGAL PROCEEDINGS

ThermoView is occasionally a party to legal proceedings arising in the
ordinary course of its business. We are not currently a party to any material
legal proceedings, and we are not aware of any material litigation threatened
against us.

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<PAGE>
MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth the name, age, and position within ThermoView
of each director and executive officer and the key employees of ThermoView:

DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- --- ---------------------------------------------------------------------
<S> <C> <C>
Stephen A. Hoffmann.................. 54 Chairman of the Board and Chief Executive Officer
Richard E. Bowlds.................... 53 Vice Chairman of the Board and Executive Vice President--
Acquisitions
Nelson E. Clemmens................... 50 President and Director
Charles L. Smith..................... 45 Chief Operating Officer and Director
John H. Cole......................... 57 Chief Financial Officer
Robin C. Edwardsen................... 51 Vice President--Human Resources
Leigh Ann Barney..................... 31 Treasurer
J. Sherman Henderson, III............ 56 Director
Delores P. Kesler.................... 58 Director
Michael A. Toal...................... 43 Director
</TABLE>

KEY EMPLOYEES

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- --- ---------------------------------------------------------------------
<S> <C> <C>
Larry Clark.......................... 37 Vice President of Key Home Credit
Michael S. Haines.................... 52 Vice President of Five Star Builders, Inc.(1)
Joel S. Kron......................... 40 Vice President of The Thermo-Shield Companies
Alvin W. Leingang.................... 41 Vice President of Leingang Siding and Window, Inc. and Thermal Line
Windows, L.L.P.(2)
Rodney H. Thomas..................... 46 Vice President of Thomas Construction, Inc.
</TABLE>

- ---------

(1) Five Star Builders, Inc. has recently changed its name to ThermoView of
California, Inc.

(2) Thermal Line Windows, L.L.P. is now Thermal Line Windows, Inc.

STEPHEN A. HOFFMANN. Mr. Hoffmann has served as Chairman of the Board and
Chief Executive Officer of ThermoView since April 1998 and as President from
April 1998 to November 1998. From May 1992 to February 1997, Mr. Hoffmann, a
co-founder of AccuStaff Incorporated, served in various positions with AccuStaff
including Vice Chairman and Vice President--Acquisitions. AccuStaff is now known
as Modis Professional Services, Inc., a New York Stock Exchange listed temporary
staffing company based in Jacksonville, Florida, with annual revenues of
approximately $2.5 billion as of August 1998. The principal growth of AccuStaff
revenues has been through an aggressive consolidation strategy in the temporary
staffing industry. Mr. Hoffmann was also a co-founder of MetroTech, Inc., a
predecessor entity to AccuStaff. Additionally, Mr. Hoffmann has been a member of
The Founders Group LLC, a Louisville, Kentucky based venture capital firm, since
1997. Mr. Hoffmann received a B.S. in Commerce with a minor in Accounting from
the University of Louisville in 1972.

RICHARD E. BOWLDS. Mr. Bowlds has served as Executive Vice
President-Acquisitions of ThermoView since July 1999, as Vice Chairman of the
Board since June 1999, as a director since April 1998 and as Chief Operating
Officer from April 1998 to June 1999. Mr. Bowlds is the founder and is currently
a director of Thermo-Tilt. Prior to founding Thermo-Tilt in 1987, Mr. Bowlds
worked in the home improvement industry from 1977. Mr. Bowlds is the
father-in-law of Charlton C. Hundley, ThermoView's current Corporate Counsel and
Secretary.

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<PAGE>
NELSON E. CLEMMENS. Mr. Clemmens has served as a director of ThermoView
since April 1998 and as President of ThermoView since November 1998. Mr.
Clemmens formerly served as Vice President-Finance and Administration and
Secretary of ThermoView from April 1998 to November 1998. Mr. Clemmens has been
Managing Director of Pine South Capital, a private investment banking firm,
since its founding in April 1986. Mr. Clemmens has also been active as owner,
principal or investor in seven operating companies during the same period,
including a multi-service home health company consolidation. Since February
1999, Mr. Clemmens has been the majority owner of HCP, Inc., a regional health
care services company. From November 1997 until July 1999, Mr. Clemmens was
Chairman of WBC, Inc., a railroad equipment distribution company. From May 1989
until May 1990, Mr. Clemmens was also a co-owner of Courier Graphics, Inc., a
specialized printer, and from May 1987 until December 1989 President and
co-owner of Transue & Williams Stamping Co., a parts fabrication company. From
August 1983 until April 1986, Mr. Clemmens served as Vice President of
Finance/Administration with Olicon/Raytel, a health care venture. From January
1982 until August 1983, Mr. Clemmens served as Senior Vice President of
Stratford Leasing Company. From June 1977 until January 1982, Mr. Clemmens
served in several corporate finance management positions with General Electric
Capital Corporation. Mr. Clemmens holds a B.A. degree from Stetson University
and an M.B.A. from Western Kentucky University.

CHARLES L. SMITH. Mr. Smith has served as a director of ThermoView since
May 1998 and as its Chief Operating Officer since June 1999. Mr. Smith served as
Vice President--Manufacturing Operations from November 1998 to June 1999. Mr.
Smith founded in 1982 and was the President of Primax Window Co. until its
acquisition by ThermoView, at which time he became Primax's Vice President. Mr.
Smith is also the founder and President of Bee Line Courier Service, a courier
service based in Louisville, Kentucky. Additionally, Mr. Smith has been an
officer of Precision Window Mfg., Inc. since April 1992. Mr. Smith was the
President of Achievers Association, a window association of manufacturers,
dealers and retailers, from 1990 to 1995.

JOHN H. COLE. Mr. Cole has served as the Chief Financial Officer of
ThermoView since July 1999 and as its Senior Vice President--Acquisitions from
November 1998 to July 1999. From November 1966 to September 1998, Mr. Cole was
with PriceWaterhouse Coopers LLP, most recently as a Senior Audit Partner, where
he was involved with publicly reporting entities, SEC filings, mergers and
acquisitions, due diligence procedures and internal control functions. Mr. Cole,
a Certified Public Accountant, was a national coordinator of PriceWaterhouse
Cooper's quality control review program. In 1997 Mr. Cole led an international
quality control team inspecting the China offices of PriceWaterhouseCoopers LLP.
Mr. Cole holds a B.A. in Accountancy from the University of Kentucky and is a
University of Kentucky Fellow.

ROBIN C. EDWARDSEN. Mr. Edwardsen has served as ThermoView's Vice
President--Human Resources since March 1999. From March 1997 through March 1999,
Mr. Edwardsen attended the University of Missouri-Kansas City where he obtained
his M.A. From January 1996 through March 1997, Mr. Edwardsen served as Director
of Human Resources for Humana, Inc., where he designed and implemented several
company-wide strategic human resources initiatives. From August 1981 until
December 1995, Mr. Edwardsen served as Senior Vice President and founding
partner of Physician Services of America, a personnel staffing company. Mr.
Edwardsen also holds a B.A. from Hanover College.

LEIGH ANN BARNEY. Ms. Barney has served as ThermoView's Treasurer since
July 1998 and as President of Key Home Credit since November 1998. From April
1996 to May 1998, Ms. Barney served as Operations Controller for HomeCare and
Hospital Management, Inc., a diversified home health care and durable medical
equipment and supplies company. From May 1992 through March 1996, Ms. Barney
held various positions with Transitional Health Services including Senior
Financial Analyst and Treasury Manager. Ms. Barney holds B.S. and M.B.A. degrees
from the University of Louisville.

48
<PAGE>
J. SHERMAN HENDERSON, III. Mr. Henderson has served as a director of
ThermoView since August 1998. Mr. Henderson has served as President and Chief
Executive Officer of UniDial Communications, a telecommunications company, since
August 1993. Mr. Henderson is also a founder, President and Chief Executive
Officer of UniDial Direct, which sells commercial telecommunication products.
Mr. Henderson has served as the Chairman of the Telecom Resellers Association, a
national trade organization, since May 1994. Mr. Henderson received a B.S. in
Business Management from Florida State University in 1965.

DELORES P. KESLER. Ms. Kesler has served as a director of ThermoView since
August 1998. Ms. Kesler was a co-founder of AccuStaff and from August 1991 to
September 1998 served as Chairperson and Chief Executive Officer of AccuStaff.
Ms. Kesler has been a member of The Founders Group since 1997. Since 1993, Ms.
Kesler has been a director of PSS/World Medical, Incorporated, a distributor of
medical supply equipment and pharmaceuticals to office-based physicians. Ms.
Kesler also serves as a director of various private and charitable
organizations.

MICHAEL A. TOAL. Mr. Toal has served as a director of ThermoView since
August 1998. Mr. Toal formerly served as the President of CompAir LeROI, a
compressor manufacturing division of Siebe plc, an international conglomerate
holding company, from April 1994 to December 1998. Mr. Toal also served as a
director of LeROI International, Inc., a subsidiary of Siebe, from October 1991
to December 1998. Additionally, Mr. Toal has served as Vice President of T(3)
Management Group, a financial lender and acquisition consultant in the capital
equipment industry, since 1994 and a director of T(3) Management Group since
1998. Mr. Toal received a B.A. in History from Harvard University in 1978.

LARRY CLARK. Mr. Clark has served as Vice President of Key Home Credit
since August 1998. From May 1998 until August 1998, Mr. Clark served in other
capacities with ThermoView. From June 1996 through May 1998, Mr. Clark was a
commercial loan officer with National City Bank of Kentucky. From August 1995 to
May 1998, Mr. Clark served as a branch manager for the consumer finance division
of National City Bank. From June 1990 to August 1995, he served as branch
manager with Commercial Credit Corporation, a consumer finance company. Mr.
Clark holds a B.S. degree from Murray State University.

MICHAEL S. HAINES. Mr. Haines has served as Vice President of Five Star
Builders since its acquisition by ThermoView in July 1998. Mr. Haines co-founded
in 1989 and served as president of Five Star Builders from 1989 until July 1998.

JOEL S. KRON. Mr. Kron has served as Vice President of The Thermo-Shield
Companies since its acquisition by ThermoView in March 1999. Mr. Kron founded in
1984 and served as president of The Thermo-Shield Companies from 1984 until
March 1999.

ALVIN W. LEINGANG. Mr. Leingang has served as Vice President of Leingang
Siding and Window and Thermal Line Windows since their acquisition by ThermoView
in August 1998. Mr. Leingang founded in 1977 Leingang Century Siding and Windows
and served as its president from 1977 until August 1998. Mr. Leingang founded
Thermal Line Windows in 1984 and served as its president from 1984 until August
1998.

RODNEY H. THOMAS. Mr. Thomas has served as Vice President of Thomas
Construction since its acquisition by ThermoView in January 1999. Mr. Thomas
founded in 1982 and served as president of Thomas Construction from 1982 until
January 1999.

49
<PAGE>
BOARD OF DIRECTORS

The Board of Directors manages our business. The number of directors is
currently fixed at seven. Our certificate of incorporation provides that the
Board of Directors shall be divided into three classes. The members of each
class of directors serve for staggered three-year terms. The members of the
Class I Directors are Messrs. Bowlds and Smith; the members of the Class II
Directors are Ms. Kesler and Messrs. Henderson and Toal; and the members of the
Class III Directors are Messrs. Hoffmann and Clemmens. The initial terms of
office of the Class I Directors, Class II Directors and Class III Directors will
expire upon the election and qualification of directors at the annual meetings
of stockholders held following the fiscal years ending December 31, 2000, 2001
and 2002, respectively. At each subsequent annual meeting of stockholders,
stockholders will elect or re-elect directors for a full term of three years to
succeed those directors whose terms are expiring. Any alteration, amendment or
repeal of the staggered board requirement in the certificate of incorporation
would require the affirmative vote of stockholders owning at least 66 2/3% of
the total shares outstanding and entitled to vote generally in the election of
directors, voting together as a single class.

BOARD COMMITTEES

AUDIT COMMITTEE. The Board of Directors established its audit committee in
December 1998. This committee reviews, acts on and reports to the Board of
Directors with respect to various auditing and accounting matters, including the
recommendation of ThermoView's independent auditors, the scope of the annual
audits, fees that ThermoView agrees to pay to the independent auditors, the
performance of ThermoView's independent auditors and the accounting practices of
ThermoView. The members of the audit committee are Messrs. Henderson and Toal
and Ms. Kesler.

COMPENSATION COMMITTEE. The Board of Directors established the compensation
committee in December 1998. This committee determines the salaries and benefits,
including stock option grants for ThermoView's employees, consultants, directors
and other individuals. The compensation committee also administers ThermoView's
compensation plans. The members of the compensation committee are Messrs.
Henderson and Toal and Ms. Kesler.

STRATEGIC OPERATIONS COMMITTEE

We have formed a strategic operations committee comprised of five managers
of our subsidiaries, each of whom has substantial experience in the replacement
window and related product businesses. The members of the Strategic Operations
Committee are Messrs. Clark, Haines, Kron, Leingang and Thomas. This committee
serves as a formal advisory, problem-solving and communications forum for us.
The committee evaluates and advises our subsidiaries related to:

- our product mix and lines;

- our product design and features;

- our manufacturing facility locations, processes, quality controls and
expansions;

- our delivery and installation services;

- our purchasing programs;

- our marketing, sales and advertising programs; and

- industry trends and issues.

DIRECTOR COMPENSATION

ThermoView currently pays its directors a fee of $10,000 per annum plus
reimbursement for customary and reasonable expenses incurred in connection with
their services performed as directors.

50
<PAGE>

Outside directors also receive $500 per phone conference. In May 1999, the
compensation committee granted to Messrs. Henderson and Toal and Ms. Kesler,
ThermoView's three outside directors, non-qualified stock options to purchase,
in the aggregate, 7,500 shares of common stock under the 1999 stock option plan
as compensation for services rendered as directors. These options are
exercisable in whole or in part and one-third of these options vest in each of
May 2000, 2001 and 2002. These options expire in May 2009.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the compensation committee of the Board of Directors
is an officer or employee of ThermoView. No executive officer of ThermoView
serves as a member of the Board of Directors or compensation committee of any
entity that has one or more executive officers serving on ThermoView's
compensation committee.

EXECUTIVE COMPENSATION

The following table sets forth all compensation awarded to, earned by or
paid to ThermoView's Chief Executive Officer and the four other highest
compensated executive officers whose annual salary and bonus exceeded $100,000
in 1998 for services rendered in all capacities to ThermoView during 1998:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------------- UNDERLYING
OTHER ANNUAL OPTIONS/SARS
NAME AND PRINCIPAL POSITION SALARY COMPENSATION (# SHARES)
- ---------------------------------------- -------- --------------- ------------
<S> <C> <C> <C>
Stephen A. Hoffmann .................... $106,250 $10,100(1)(2) 378,997
Chief Executive Officer

Nelson E. Clemmens ..................... 89,583(3) 6,631(1)(4) 110,149
President

Richard E. Bowlds ...................... 167,507(5) 22,409(1)(6) -
Chief Operating Officer

James J. TerBeest(7) ................... 100,000 7,303(8) 41,667
Former Chief Financial Officer

Charles L. Smith ....................... 152,933(9) 23,396(1)(10) -
Vice President--Manufacturing
Operations
</TABLE>

- ---------

(1) Includes $5,000 in director fees.

(2) Includes $5,100 in automobile benefits.

(3) Includes $6,250 in consulting fees received from Thermo-Tilt in April 1998.

(4) Includes $1,631 in insurance benefits.

(5) Represents $58,174 in salary paid by Thermo-Tilt from January 1998 to May
1998 and $109,333 in salary paid by ThermoView from April 1998 to December
1998.

(6) Includes $12,652 in automobile benefits and $4,757 in insurance benefits.

(7) Mr. TerBeest resigned as Chief Financial Officer in July 1999.

(8) Includes $4,000 in automobile benefits and $3,303 in insurance benefits.

51
<PAGE>
(9) Represents $137,308 in salary paid by Primax Window Co. from January 1998 to
November 1998 and $15,625 in salary paid by ThermoView from November 1998 to
December 1998.

(10) Includes $9,598 in automobile benefits and $8,798 in insurance benefits.

STOCK OPTION GRANTS

The following table sets forth information regarding options granted or
assumed by ThermoView to the named executive officers during the year ended
December 31, 1998. Each option represents the right to purchase one share of
common stock. ThermoView has not granted any stock appreciation rights.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES AT ASSUMED ANNUAL RATES OF
UNDERLYING PERCENTAGE PER STOCK PRICE APPRECIATION
OPTIONS OF TOTAL SHARE FOR OPTION TERM
GRANTED OPTIONS EXERCISE EXPIRATION --------------------------
NAME (# SHARES) GRANTED PRICE DATE 5% 10%
- --------------------- ------------- ------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Nelson E. Clemmens... 14,495(1) 1.1% $ 0.87 10/22/02 $ --(3) $ --(3)
28,988 2.3 3.45 1/19/03 --(3) 26,042
66,667 5.2 6.90 11/1/08 1,582,051 2,116,816

Stephen A. Hoffmann.. 7,248(1) 0.6 0.87 10/22/02 --(3) --(3)
105,083 8.3 3.45 1/13/03 --(3) 94,404
266,667 21.1 3.45 --(2) --(3) 239,567

James J. TerBeest.... 41,667 3.3 3.45 4/20/03 1,442,030 1,857,309
</TABLE>

- ---------

(1) Represents options assumed by ThermoView upon its acquisition of Thermo-Tilt
on April 15, 1998.

(2) Options expire six months after the termination of Mr. Hoffmann's employment
period under his employment agreement with ThermoView.

(3) The option exercise price exceeded the per share market value of our common
stock at the grant date and no appreciation in excess of the option exercise
price has occurred with respect to this option at this assumed annual rate
of stock price appreciation.

52
<PAGE>
OPTION EXERCISES AND HOLDINGS

The following table sets forth information concerning the number and value
of unexercised options held by each of the named executive officers at December
31, 1998. There were no option exercises by a named executive officer during
1998.

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

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR END IN-THE-MONEY OPTIONS AT
ACQUIRED ON (# SHARES) FISCAL YEAR END(1)
EXERCISE VALUE ---------------------------- ----------------------------
NAME (# SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------- ------------ -------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Stephen A. Hoffmann................ 0 $0 378,997 0 $ 4,748,577 0
Nelson E. Clemmens................. 0 0 110,149 0 1,182,055 0
James J. TerBeest.................. 0 0 41,667 0 520,000 0
</TABLE>

- ---------

(1) The value of the in-the-money options is based on the $15.93 per share
closing price of our common stock on the OTC Bulletin Board on December 31,
1998.

1998 EMPLOYEE STOCK OPTION PLAN

The 1998 employee stock option plan became effective as of April 15, 1998.
In December 1998, the Board of Directors declared that, effective January 1,
1999, it would not grant any additional options under the 1998 employee stock
option plan due to the implementation of the 1999 stock option plan. The purpose
of the 1998 employee stock option plan was to promote the interests of
ThermoView by attracting key employees, providing its key employees with an
additional incentive to work to increase the value of the common stock and
providing key employees with a stake in the future of ThermoView which
corresponds to the stake of the stockholders. The Board of Directors granted
options to purchase 493,334 shares under the 1998 employee stock option plan at
prices ranging from $3.45 to $15.93. On January 1, 1999, the Board of Directors
authorized the transfer of the remaining 6,667 authorized but unissued shares
reserved for the 1998 employee stock option plan to the 1999 stock option plan.
The 1998 employee stock option plan provided for the granting to key employees
of either incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended or non-qualified stock options under
the Internal Revenue Code.

1999 STOCK OPTION PLAN

The 1999 stock option plan became effective as of January 1, 1999. The
purpose of the 1999 stock option plan is to promote the interests of ThermoView
by attracting key employees and directors, providing each of its key employees
and directors with an additional incentive to work to increase the value of the
common stock and providing key employees and directors with a stake in the
future of ThermoView which corresponds to the stake of the stockholders.
ThermoView authorized for issuance a total of 833,334 shares of common stock
under the 1999 stock option plan. As of September 9, 1999, the Board of
Directors had granted options to purchase 458,541 shares of common stock at
prices ranging from $11.43 to $25.86.

STOCK OPTIONS. Each stock option granted under the 1999 stock option plan
entitles the holder to purchase the number of shares of common stock specified
in the grant at the purchase price specified. The 1999 stock option plan
authorizes the Compensation Committee to grant:

- incentive stock options within the meaning of Section 422 of the Internal
Revenue Code to key employees, and

- non-qualified stock options under the Internal Revenue Code to key
employees or non-employee directors.

53
<PAGE>
If an option granted under the 1999 employee stock option plan expires, is
cancelled or is exchanged for a new option before a holder exercises the option
in full, the shares reserved for the unexercised portion of the option will
become available again for use under the 1999 stock option plan. Shares
underlying an option that a holder surrenders and shares used to satisfy an
option price or withholding obligation will not become available for use under
the 1999 stock option plan.

401(K) PLAN

In January 1999, our Board of Directors created a 401(k) profit sharing plan
for its employees. Participants may elect to make elective contributions
pursuant to salary withholding not to exceed $10,000 per annum. We intend to
make matching contributions on the first 25% of the first 6% of a participant's
annual compensation that a participant contributes.

EMPLOYMENT AGREEMENTS

Thermo-Tilt and Mr. Hoffmann are parties to an employment agreement, as
amended, governing his employment with Thermo-Tilt. The agreement expires in
January 2000.

ThermoView and Mr. Hoffmann are parties to an employment agreement, as
amended, governing his employment with ThermoView. The agreement expires in
April 2000. The agreement provides that Mr. Hoffmann will receive a base salary
of $150,000 per annum and will be eligible to receive an annual bonus equal to
two percent of ThermoView's pre-tax income.

Thermo-Tilt and Mr. Clemmens are parties to an employment agreement, as
amended, governing his employment with Thermo-Tilt. The agreement expires in
January 2000.

ThermoView and Mr. Clemmens are parties to an employment agreement, as
amended, governing his employment with ThermoView. The agreement expires in
April 2000. The agreement provides that Mr. Clemmens will receive a base salary
of $150,000 per annum.

ThermoView and Mr. Bowlds are parties to an employment agreement governing
his employment with ThermoView. The agreement expires in January 2000. The
agreement provides that Mr. Bowlds will receive a base salary of $145,000 per
annum.

ThermoView and Mr. TerBeest are parties to an employment agreement governing
his employment with ThermoView as its Senior Vice President-Finance and
Accounting. The agreement expires in May 2001. The agreement provides that Mr.
TerBeest will receive a base salary of $158,000 per annum.

ThermoView and Mr. Smith are parties to an employment agreement governing
his employment with Primax Window Co. The agreement expires in April 2001. The
agreement provides that Mr. Smith will receive a base salary of $125,000 per
annum. ThermoView and Mr. Smith are also parties to an employment agreement
governing his employment with Precision Window Mfg., Inc. The agreement expires
in January 2002. The agreement provides that Mr. Smith will receive a base
salary of $60,000 per annum.

ThermoView and Mr. Cole are parties to an employment agreement governing his
employment with ThermoView. The agreement expires in October 2000. The agreement
provides that Mr. Cole will receive a base salary of $150,000 per annum.

Each of the employment agreements summarized above provides that the
executive retains his salary and benefits until the expiration of the employment
agreement if we terminate the executive without cause.

54
<PAGE>
CERTAIN TRANSACTIONS

SALES OF STOCK TO INSIDERS

Since July 1997, we have issued and sold securities to the following persons
or entities who are our executive officers, directors or principal stockholders.
These figures reflect activity through September 9, 1999.

<TABLE>
<CAPTION>
PER SHARE
PURCHASE OR
TYPE OF NUMBER OF EXERCISE
INVESTOR SECURITY SHARES DATE ISSUED PRICE
- ------------------------------------------ --------- --------- -------------- -----------
<S> <C> <C> <C> <C>
Brown Simpson Strategic
Growth Fund, Ltd. and
Brown Simpson Strategic
Growth Fund, L.P........................ Preferred 6,000 April 1999 $ 1,000
(Series 400,000 April 1999 18.00
C)
Warrant
Richard E. Bowlds......................... Common 1,627,286 July 1997 (1)
GE Capital Equity Investments, Inc........ Warrant 555,343 July 1999 0.03
Stephen A. Hoffmann....................... Common 2,899 March 1998 3.45
Options 7,248 October 1997 0.87
Options 105,083 January 1998 3.45
Options 266,667 April 1998 3.45
Robert E. Anderson........................ Common 231,907 November 1997 3.09
Common 57,977 March 1998 3.45
LD Capital, Inc........................... Common 35,189 July 1997 0.57
Options 492,802 October 1997 0.87
Evangel Christian Life Center............. Common 339,024 July 1997 0.57
Charles L. Smith.......................... Common 153,000 April 1998 (2)
Nelson E. Clemmens........................ Options 14,495 October 1997 0.87
Options 28,988 January 1998 3.45
Options 66,667 November 1998 6.90
Delores P. Kesler......................... Common 14,495 March 1998 3.45
Options 2,500 May 1999 11.64
John H. Cole.............................. Options 100,000 April 1998 3.45
Options 33,334 July 1999 11.43
Michael A. Toal........................... Preferred 50,000 July 1998 5.00
(Series 2,500 May 1999 11.64
A)
Options
J. Sherman Henderson III.................. Options 2,500 May 1999 11.64
Robin C. Edwardsen........................ Options 66,667 July 1999 11.43
</TABLE>

- ---------

(1) Thermo-Tilt issued these shares to Mr. Bowlds in connection with the
conversion of his sole proprietorship into a corporation. No value was
assigned to these shares for accounting purposes since the business
exchanged for the shares had no basis for accounting purposes.

(2) Issued in connection with an acquisition.

55
<PAGE>
SERIES C PREFERRED STOCK AND WARRANTS

In April 1999, we issued an aggregate of 6,000 shares of Series C preferred
stock to two institutional accredited investors, Brown Simpson Growth Fund,
L.P., a New York limited partnership, and Brown Simpson Growth Fund, Ltd., a
Grand Cayman, Cayman Islands limited partnership, at a per share purchase price
of $1,000, for a total investment of $6.0 million. Each share of the Series C
preferred stock converts into 66 2/3 shares of our common stock, subject to
adjustment. In conjunction with the issuance of the Series C preferred stock, we
issued to the two funds warrants to purchase up to a total of 400,000 shares of
common stock at $21.00 per share, subject to adjustment, which expire in April
2004. In August 1999 we amended the exercise price of the warrants to $18.00 per
share in exchange for a commitment of the two funds to refrain from selling any
of our securities from the closing of this offering to January 31, 2000. We have
also granted registration rights to the two funds and pursuant to those rights
we have filed a concurrent registration statement on Form S-1 to register
1,200,000 shares of our common stock to be offered for sale by the two funds.
The shares being registered concurrently herewith represent 150% of our common
stock issuable upon conversion of the Series C preferred stock and exercise of
the warrants.

SENIOR SUBORDINATED NOTE AND WARRANTS

In July 1999, we received $10.0 million in senior subordinated financing
from GE Capital Equity Investments, Inc. Interest under the note is payable
quarterly in arrears at 12% per annum, subject to substantial increases in
certain circumstances. Principal under the note is payable in full in July 2002.
We may prepay the note at a premium prior to its maturity. The note requires us
to comply with certain affirmative and negative covenants. The note, which is
subordinate to our line of credit with PNC Bank, is secured by a lien on
substantially all of our assets, a guarantee executed by our subsidiaries and a
pledge of our ownership in our current and future subsidiaries. In conjunction
with the issuance of the note, we issued to GE Capital warrants to purchase
555,343 shares of our common stock at $0.03 per share which expire during July
2007. We have also granted to GE Capital two demand registration rights and
unlimited piggyback registration rights for the shares of common stock issuable
upon exercise of the warrants.

We have agreed to use our best efforts to cause a designee selected by GE
Capital to be elected to our Board of Directors at our next annual meeting of
stockholders.

RELATED-PARTY LEASES

ThermoView leases its headquarters from Glenn Lyon Lease Development, Inc.,
a corporation controlled by Mr. Hoffmann, for $111,000 annually. Primax leases
its headquarters from Mr. Smith for $82,000 annually. Additionally, on December
20, 1997, Thermo-Tilt entered into a sale-leaseback transaction on its
headquarters with Industrial Leasing of Florida, Inc., a Florida corporation
controlled by Robert E. Anderson, a stockholder of ThermoView. Industrial
Leasing of Florida purchased Thermo-Tilt's headquarters for $620,000 and
Thermo-Tilt deferred the $55,000 gain on the sale, which is being amortized to
income over the term of the lease. Thermo-Tilt leases its headquarters from
Industrial Leasing of Florida for $78,000 annually.

RELATED-PARTY NOTES

During 1998, ThermoView had a $1.5 million note payable to the Founders
Group, LLC, a venture capital firm. Stephen A. Hoffmann and Delores P. Kesler
are two controlling members of the Founders Group. Mr. Hoffmann is ThermoView's
Chairman of the Board and Chief Executive Officer and Ms. Kesler is a director
of ThermoView. The note, which evidenced a loan from the Founders Group to
ThermoView, bore interest at 10% per annum until we repaid it in July 1998.

56
<PAGE>
During 1998 and 1999, ThermoView had a $5.5 million note payable to Stephen
A. Hoffmann, Nelson E. Clemmens, Richard E. Bowlds and Douglas I. Maxwell, III.
Messrs. Hoffmann, Clemmens and Bowlds are officers and directors of ThermoView,
and Mr. Maxwell is an employee of ThermoView. The note, which evidenced a loan
from these individuals to ThermoView, bore interest at a Euro-Rate based
variable rate until we repaid it in July 1999. ThermoView paid a $250,000 fee to
these individuals in connection with the note.

During 1999, ThermoView had a $750,000 note payable to Stephen A. Hoffmann,
ThermoView's Chairman of the Board and Chief Executive Officer. The note, which
evidenced a loan from Mr. Hoffmann to ThermoView, bore interest at 12% per annum
until we repaid it in April 1999.

During 1999, ThermoView had a $150,000 note payable to Richard E. Bowlds,
ThermoView's Vice Chairman of the Board and Executive Vice
President-Acquisitions. The note, which evidenced a loan from Mr. Bowlds to
ThermoView, bore interest at 12% per annum until we repaid it in April 1999.

ThermoView currently has a $600,000 note payable to Charles L. Smith, our
Chief Operating Officer and a director. The note, which was issued as partial
consideration in our acquisition of Precision Window Mfg., Inc., bears interest
at 5.0% per annum. The note matures concurrently with the effectiveness of our
initial public offering.

During 1998 and 1999, Thermo-Tilt had a note receivable from Bluegrass Water
Treatment, Inc., a Kentucky corporation. James A. Bowlds, the son of Richard E.
Bowlds, our Vice Chairman of the Board and Executive Vice
President-Acquisitions, controls Bluegrass Water Treatment, Inc. In January
1999, Mr. James Bowlds repaid the $181,000 note, which had a balance of $232,000
in January 1998. The note bore interest at 8% per annum.

RELATED-PARTY RECEIVABLES

During 1998 and 1999, Thermo-Tilt had receivables due from Richard E.
Bowlds, our Vice Chairman of the Board and Executive Vice
President-Acquisitions, in an amount which never exceeded $201,000. The
receivables represented short-term non-interest bearing loans from Thermo-Tilt
to Mr. Bowlds for a variety of personal expenditures made by Mr. Bowlds. Mr.
Bowlds repaid the receivables in January 1999.

RELATED-PARTY PURCHASES

During 1998, ThermoView purchased $4.1 million of windows from Precision
Window Mfg., Inc., a corporation which ThermoView subsequently acquired on
January 5, 1999. Charles L. Smith, a director of ThermoView since May 1998 and
an officer of ThermoView since November 1998, was a stockholder of Precision
Window prior to its acquisition by ThermoView. Additionally, in 1998 and 1997
ThermoView purchased $780,000 and $1.5 million of windows from Sun Windows,
Inc., a Kentucky corporation controlled by Robert E. Anderson, a stockholder of
ThermoView. ThermoView has purchased $15,000 of windows from Sun Windows through
March 31, 1999.

COMPANY POLICY

Our Board of Directors has reviewed the lease transactions summarized above
and believes that those transactions were made on terms no less favorable than
terms we could have obtained from unaffiliated third parties. Our Board of
Directors has not made a determination as to whether the other related-party
transactions described above were made on terms no less favorable than terms we
could have obtained from unaffiliated third parties. The Board of Directors has
adopted a policy that any future transactions between ThermoView and its
officers, directors or principal stockholders will be approved by a majority of
the disinterested directors and will be on terms no less favorable than we could
obtain from an unaffiliated third party.

57
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of our common stock as of September 9, 1999, and as adjusted to
reflect the sale of the shares of common stock in this offering, by:

- each person, or group of affiliated persons, who we know beneficially owns
more than 5% of the common stock;

- each director and named executive officer; and

- all directors and executive officers as a group.

In accordance with the SEC's rules, the following table gives effect to the
shares of common stock that could be issued upon (A) the exercise of outstanding
options and warrants and (B) the conversion of Series C preferred stock, each
within 60 days of September 9, 1999. In addition, the shares beneficially owned
include the common stock issuable upon conversion of the Series A and Series B
preferred stock upon the closing of this offering. Unless otherwise indicated in
the footnotes to the table, the following individuals have sole voting,
conversion and investment control with respect to the shares they beneficially
own.

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
BENEFICIALLY OWNED(1)
NUMBER OF SHARES ------------------------------
BENEFICIALLY BEFORE
BENEFICIAL OWNER OWNED OFFERING AFTER OFFERING
- ------------------------------------------------------------------- ----------------- ------------- ---------------
<S> <C> <C> <C>
Brown Simpson Strategic Growth
Fund, Ltd. and Brown Simpson
Strategic Growth Fund, L.P.(2)................................... 800,000 14.2% 7.8%
Richard E. Bowlds(3)............................................... 536,691 11.1 5.7
GE Capital Equity Investments, Inc.(4)............................. 555,343 10.3 5.5
Stephen A. Hoffmann(5)............................................. 521,542 9.7 5.2
Robert E. Anderson(6).............................................. 456,860 9.4 4.8
LD Capital, Inc.(7)................................................ 492,802 9.2 4.9
Profutures Bridge Capital Fund LP(8)............................... 300,000 5.9 3.1
Charles L. Smith................................................... 153,667 3.2 1.6
Nelson E. Clemmens(9).............................................. 143,483 2.9 1.5
Delores P. Kesler(10).............................................. 128,989 2.6 1.3
James J. TerBeest(11).............................................. 65,834 1.3 *
Michael A. Toal(12)................................................ 16,667 * *
J. Sherman Henderson III........................................... 8,334 * *
All directors and executive officers
as a group (10 persons)(13)...................................... 1,772,197 30.6 17.0
</TABLE>

- ---------

* Less than 1% of total.

(1) Based on (A) 4,841,242 shares of common stock outstanding before the
offering and (B) 9,467,909 shares of common stock outstanding after the
offering, plus, for each individual or entity, the number of shares of
common stock that each individual or entity may acquire upon the exercise of
stock options or warrants or conversion of convertible securities within 60
days of September 9, 1999.

(2) Includes 400,000 shares issuable upon conversion of shares of Series C
preferred stock and 400,000 shares issuable upon exercise of outstanding
warrants. Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson
Strategic Growth Fund, L.P. are controlled by their general and managing
partner, Brown Simpson Asset Managment, LLC. The principal address for Brown
Simpson Strategic Growth Fund, Ltd. and Brown Simpson Strategic Growth Fund,
L.P. is 152 West 57th Street, 40th Floor, New York, New York 10019.

58
<PAGE>

(3) Excludes 20,834 shares sold by Mr. Bowlds to Renaissance Capital Growth &
Income Fund III, Inc. and Renaissance US Growth & Income Trust, PLC but
subject to a put option pursuant to a stock purchase agreement, dated as of
December 10, 1998, by and among Mr. Bowlds, Renaissance and Douglas I.
Maxwell, III. Mr. Bowlds disclaims beneficial ownership of these shares.
Includes 6,945 shares deposited in escrow pursuant to an escrow agreement,
dated as of December 17, 1998, by and among Mr. Bowlds, Renaissance, Mr.
Maxwell and Bank One, Texas, NA and subject to delivery to Renaissance
pursuant to the Renaissance stock purchase agreement. Mr. Bowlds' address is
4249 Lake Forest Drive, Owensboro, Kentucky 42303.

(4) Represents shares issuable upon exercise of outstanding warrants. GE Capital
Equity Investments, Inc. is a subsidiary of General Electric Company. GE
Capital Equity Investments, Inc.'s address is 120 Long Run Road, Stamford,
Connecticut 06927.

(5) Includes 11,596 shares deemed beneficially owned by Mr. Hoffmann as trustee
of two trusts, as to which Mr. Hoffmann disclaims beneficial ownership.
Includes 375,664 shares issuable upon exercise of outstanding stock options
granted to Mr. Hoffmann. Includes 100,000 shares issuable upon conversion of
shares of Series A preferred stock owned by The Founders Group, a limited
liability company in which Mr. Hoffmann owns one-third of the outstanding
ownership interest. Includes 33,334 shares issuable upon conversion of
shares of Series A preferred stock deemed beneficially owned by Mr. Hoffmann
as trustee of two trusts, as to which Mr. Hoffmann disclaims beneficial
ownership. Mr. Hoffmann's address is ThermoView Industries, Inc., 1101 Herr
Lane, Louisville, Kentucky 40222.

(6) Includes 6,667 shares beneficially owned by the spouse of Mr. Anderson, as
to which Mr. Anderson disclaims beneficial ownership. Includes 448,527
shares owned by the Robert E. Anderson Trust UA DTD 4/15/98 for which Mr.
Anderson is the trustee and beneficiary. Mr. Anderson's address is 2645
Pleasant Valley Road, Owensboro, Kentucky 42303.

(7) Represents shares issuable upon exercise of outstanding stock options
granted to LD Capital, Inc. Substantially all of the outstanding stock of LD
Capital, Inc. is held by Lindsey Maxwell, the spouse of Mr. Maxwell, our
Corporate Development Manager, as custodian for their minor children. Mr.
Clemmens is also a minority shareholder and the President, Secretary,
Treasurer and sole director of LD Capital, Inc. The address for LD Capital,
Inc. is 133 South Third Street, Suite 402, Louisville, Kentucky 40202.

(8) Includes 216,667 shares issuable upon conversion of shares of Series A
preferred stock. Profutures Bridge Capital Fund LP is controlled by James
Perry. The address for Profutures Bridge Capital Fund LP is 5350 S. Roselyn
Street, Suite 350, Englewood, Colorado 80111.

(9) Includes 110,149 shares issuable upon exercise of outstanding stock options
granted to Mr. Clemmens.

(10) Includes 100,000 shares issuable upon conversion of shares of Series A
preferred stock owned by The Founders Group, a limited liability company in
which Ms. Kesler owns one-third of the outstanding ownership interest.

(11) Includes 62,500 shares issuable upon exercise of outstanding stock options
granted to Mr. TerBeest. Includes 3,334 shares issuable upon conversion of
shares of Series A preferred stock owned jointly by Mr. TerBeest and his
wife.

(12) Represents 16,667 shares issuable upon conversion of shares of Series A
preferred stock owned by the Michael A. Toal Revocable Living Trust DTD
6/14/96 for which Mr. Toal is the trustee and beneficiary.

(13) Includes 690,813 shares issuable upon (A) exercise of outstanding stock
options and warrants owned by all directors and officers as a group which
vest within 60 days of September 9, 1999 and (B) shares issuable upon
conversion of shares of preferred stock owned by the group.

59
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of ThermoView consists of 100,000,000 shares of
common stock, par value $0.001 per share, and 50,000,000 shares of preferred
stock, par value $0.001 per share. As of September 9, 1999, there are 4,841,242
shares of common stock outstanding. There will be 9,467,909 shares of common
stock outstanding upon the closing of this offering. As of September 9, 1999,
there are 3,386,000 shares of convertible preferred stock outstanding. A total
of 3,380,000 shares of convertible preferred stock consisting of 2,980,000
shares of Series A preferred stock and 400,000 shares of Series B preferred
stock will be converted into 1,126,667 shares of common stock upon the closing
of this offering. After the closing, 6,000 shares of Series C preferred stock
will be outstanding.

We refer you to our certificate of incorporation, which is an exhibit to the
registration statement of which this prospectus is a part and which qualifies
the following summary in its entirety by this reference.

COMMON STOCK

Holders of common stock are entitled to one vote for each share on all
matters submitted to a vote of stockholders. Holders of a majority of the shares
of common stock entitled to vote in any election of directors may elect all of
the directors standing for election, subject to any rights of preferred
stockholders to elect two directors when dividends have been in arrears for six
dividend payment periods. Holders of common stock are entitled to receive
dividends, if, as, and when declared by the Board of Directors out of funds
legally available for such purposes, subject to (A) any dividend preferences of
any outstanding preferred stock and (B) lender preclusions of dividend payments.
Upon our liquidation, dissolution or winding-up, the holders of common stock are
entitled to share ratably in our assets available for distribution, subject to
the preferential rights of any outstanding preferred stock. Holders of the
common stock have no preemptive, subscription, redemption or conversion rights.
The rights of the holders of the Series C preferred stock and shares of any
series of preferred stock that we may designate and issue in the future may
reduce the rights, preferences and privileges of holders of common stock. All
outstanding shares of common stock are fully paid and non-assessable.

PREFERRED STOCK

The Series C preferred stock has a liquidation preference of $1,000 per
share plus accumulated and unpaid dividends and has a perpetual term unless
converted or redeemed. Dividends on the Series C preferred stock are cumulative
at the annual rate of 9.6%, 70% of which are payable quarterly in cash and the
remainder in our common stock.

The Series C preferred stock is convertible at any time, in whole or in
part, at the option of the holders into shares of common stock, at a conversion
price, subject to adjustment, of $15.00 per share of common stock. This
conversion is initially equivalent to a conversion rate of 66 2/3 shares of
common stock per one share of Series C preferred stock. Additionally, the Series
C preferred stock is redeemable or convertible at the option of the holders:

- on October 23, 2000;

- on April 23, 2002; and

- immediately upon the occurrence of events of redemption as specified in
the Series C certificate of designation.

The Series C certificate of designation does not require us to repurchase or
redeem the Series C preferred stock if the redemption would result in the
occurrence of a default or event of default under our loan documents with PNC
Bank or any successor senior lender, or GE Capital Equity Investments, Inc. An
adjustment to the warrant exercise price based on the market value results from
this failure to

60
<PAGE>

purchase or redeem. We have no right to require redemption or conversion of the
Series C preferred stock. We have also granted registration rights to the
holders and pursuant to those rights we are filing a concurrent registration
statement on Form S-1 to register 1,200,000 shares of our common stock to be
offered for sale by the holders. The holders have committed to refrain from
selling these shares from the closing of this offering to January 31, 2000. The
shares being registered concurrently herewith represent 150% of our common stock
issuable upon conversion of the Series C preferred stock and exercise of the
warrants.

Upon the closing of this offering and without further stockholder approval,
our Board of Directors may authorize for issuance from time to time up to an
aggregate of 49,994,000 shares of preferred stock in one or more series. Our
Board of Directors may fix or alter the designations, preferences, rights and
any qualifications, limitations or restrictions of the shares of each of these
series, including:

- the dividend rights;

- dividend rates;

- conversion rights;

- voting rights;

- terms of redemption;

- redemption price or prices;

- liquidation preferences; and

- the number of shares constituting any series or designations of these
series.

WARRANTS

As of the date of this prospectus, we have outstanding warrants to purchase
a total of 997,010 shares of common stock, at a weighted average exercise price
of $8.49 per share. All of the warrants are currently exercisable and warrants
to purchase 41,667, 400,000 and 555,343 shares expire in November 2003, April
2004 and July 2007. Holders of warrants to purchase 400,000 shares have entered
into lockup agreements which expire on January 31, 2000. All of the warrants
contain (A) anti-dilution provisions providing for adjustments of the exercise
price and the number of shares of common stock underlying the warrants and (B)
registration rights.

REGISTRATION RIGHTS

The holders of options to purchase 892,031 shares of our common stock have
the right to request from us a best-efforts registration on Form S-8 for these
shares when we are eligible to use Form S-8. In addition, the holders of
1,479,214 shares of our common stock are entitled to piggy-back registration
rights with respect to the registration of their shares under the Securities
Act. Piggy-back and demand registration rights will also exist for an
indeterminate number of shares of common stock that we must issue under our
acquisition agreements if the acquired businesses satisfy financial targets in
future periods. In the event a securityholder exercises a registration right, we
must use our reasonable best efforts to register the shares. These registration
rights are subject to conditions and limitations, among them the right of
underwriters to limit the number of shares to be included in the registration
statement. Additionally, in the event of an underwritten public offering,
registered securities may not be sold until 90 days after effectiveness of the
registration statement.

EBI Securities Corporation is entitled to registration rights with respect
to 41,667 shares of our common stock underlying a warrant. EBI has piggyback
registration rights and one demand registration right exercisable in the three
year period beginning on November 1, 2000. These registration rights are

61
<PAGE>

subject to conditions and limitations, among them the right of the underwriters
to limit the number of shares to be included in a registration.

Brown Simpson Growth Fund, L.P. and Brown Simpson Growth Fund, Ltd. are
entitled to piggy-back and demand registration rights with respect to 150% of
the shares of our common stock issuable upon conversion of the Series C
preferred stock and exercise of the warrants. Pursuant to those rights we have
filed a concurrent registration statement on Form S-1 to register 1,200,000
shares of our common stock to be offered for sale by the two funds. The two
funds have committed to refrain from selling these shares from the closing of
this offering to January 31, 2000. Additionally, GE Capital Equity Investments,
Inc. is entitled to piggy-back and demand registration rights with respect to
555,343 shares of our common stock subject to warrants.

ThermoView generally bears the expenses of registrations resulting from
registration rights, except underwriting discounts and selling commissions.
Registration of any of the shares of common stock held by security holders would
result in the shares becoming freely tradable without restriction under the
Securities Act immediately upon effectiveness of such registration, subject to
the 90 day holdback.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF DELAWARE LAW

ThermoView is subject to the provisions of Section 203 of the Delaware
General Corporation Law. Section 203 of the Delaware General Corporation Law
generally prohibits a publicly-held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the interested stockholder attained that status with the
approval of the board of directors or unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to exceptions, an "interested stockholder" is a
person who, together with affiliates and associates, owns, or within three years
did own, 15% or more of a corporation's voting stock. This statute could
prohibit or delay the accomplishment of mergers or other attempts to acquire us.

In addition, those provisions of our certificate of incorporation and bylaws
which are described in the following paragraphs may be deemed to have an
anti-takeover effect and may delay, defer or prevent a tender offer or takeover
attempt that a stockholder might consider in its best interest, including those
attempts that might result in a premium over the market price for the shares
held by stockholders.

CLASSIFIED BOARD OF DIRECTORS. The certificate imposes a classified board
of directors whereby three classes of directors serve staggered terms.
Additionally, the certificate requires a supermajority vote of stockholders to
remove this certificate provision. These provisions could prevent a change of
control by limiting the number of directors stockholders elect each year.

SPECIAL MEETING OF STOCKHOLDERS. The bylaws provide that only our
President, a majority of our board of directors or stockholders holding a
majority of our capital stock which is issued, outstanding and entitled to vote
may call special meetings of our stockholders.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. The bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for election
as directors at an annual meeting of stockholders, must deliver a written notice
to our principal executive offices within a prescribed time period. This
provision may preclude stockholders from bringing matters before an annual
meeting of stockholders or from making nominations for directors at an annual
meeting of stockholders.

AUTHORIZED BUT UNISSUED SHARES. The authorized but unissued shares of
common stock and preferred stock are available for future issuance without
stockholder approval, subject to limitations

62
<PAGE>
imposed by the Nasdaq National Market. We may use these additional shares for a
variety of corporate purposes, including future public offerings to raise
additional capital, acquisitions and employee benefit plans. The existence of
authorized but unissued and unreserved common stock and preferred stock could
render more difficult or discourage an attempt to obtain control of us by means
of a proxy contest, tender offer, merger or otherwise.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Delaware law authorizes corporations to limit or eliminate the personal
liability of officers and directors to corporations and their stockholders for
monetary damages for breach of officers' and directors' fiduciary duty of care.
The duty of care requires that, when acting on behalf of the corporation,
officers and directors must exercise an informed business judgment based on all
material information reasonably available to them. Absent the limitations
authorized by Delaware law, officers and directors are accountable to
corporations and their stockholders for monetary damages for conduct
constituting gross negligence in the exercise of their duty of care. Delaware
law enables corporations to limit available relief to equitable remedies such as
injunction or rescission. Article 7 of ThermoView's certificate of incorporation
requires ThermoView to indemnify its directors and officers to the fullest
extent authorized or permitted by Delaware law. Delaware law provides that
officers and directors of ThermoView will not be personally liable for monetary
damages for breach of an officer's or director's fiduciary duty in such
capacity, except for liability (A) for any breach of the officer's or director's
duty of loyalty to ThermoView or its stockholders, (B) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (C) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation Law,
or (D) for any transaction from which the officer and director derived an
improper personal benefit.

The Board of Directors has approved a form of indemnification agreement into
which ThermoView has entered with each of its present directors (including those
directors who are also officers of ThermoView) and into which ThermoView intends
to enter with its future directors. The indemnification agreement gives
directors a specific contractual right to indemnification by ThermoView.
Although the directors of ThermoView presently have certain rights to
indemnification under ThermoView's certificate of incorporation and bylaws and
may have protection from certain liabilities under the terms of a directors and
officers liability insurance policy which ThermoView has obtained, the Board of
Directors believes that the additional assurance provided by the broader
contractual rights contained in the indemnification agreement enables ThermoView
to attract and retain qualified directors.

The inclusion of these provisions in the certificate of incorporation and
bylaws may reduce the likelihood of derivative litigation against officers and
directors, and may discourage or deter stockholders or management from bringing
a lawsuit against officers and directors for breach of their duty of care, even
though a lawsuit, if successful, might otherwise have benefited ThermoView and
its stockholders. ThermoView's certificate of incorporation, bylaws and the
indemnification agreements provide indemnification to ThermoView's officers and
directors and certain other persons with respect to certain matters to the
maximum extent allowed by Delaware law as it exists now or may hereafter be
amended. These provisions and the indemnification agreements do not alter the
liability of officers and directors under federal securities laws and do not
affect the right to sue (nor to recover monetary damages) under federal
securities laws for violations thereof.

TRANSFER AGENT AND REGISTRAR

American Securities Transfer & Trust, Inc., Denver, Colorado, presently acts
as transfer agent and registrar for the common stock, the Series A preferred
stock, the Series B preferred stock and the Series C preferred stock.

63
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, our common stock has been thinly traded on the OTC
Bulletin Board, and no prediction can be made as to the effect, if any, that
future market sales of shares of common stock or the availability of shares of
common stock for sale will have on the market price of the common stock
prevailing from time to time. Nevertheless, sales of substantial amounts of
common stock in the public market, or the perception that sales could occur,
could cause the market price of the common stock to decline and could impair our
future ability to raise capital through the sale of our equity securities.

SHARES OUTSTANDING AND FREELY TRADEABLE IMMEDIATELY FOLLOWING THIS OFFERING

After this offering, we will have an aggregate of 9,467,909 shares of common
stock outstanding, assuming conversion of all outstanding shares of Series A and
Series B preferred stock into common stock on the closing of this offering, no
exercise of the underwriters' over-allotment option and no exercise or
conversion of outstanding options, warrants or Series C preferred stock. Of the
9,467,909 shares outstanding immediately after the offering, 5,136,197 shares,
including the 3,500,000 shares sold in this offering, will be freely tradeable
without restriction or further registration under the Securities Act, except
that any shares purchased by our affiliates, as that term is defined in Rule 144
under the Securities Act, in this offering or in the public market may only be
sold in compliance with the volume and manner of sale limitations of Rule 144
described below.

SHARES SUBJECT TO RULE 144

The remaining 4,331,712 shares of common stock held by existing stockholders
will be deemed restricted securities as that term is defined in Rule 144.
Restricted securities may be sold in the public market only if registered or if
they qualify for an exemption from registration under Rules 144, 144(k) or 701
promulgated under the Securities Act. These rules are summarized below.

Subject to the lock-up agreements described below and the provisions of
Rules 144, 144(k) and 701, additional shares will be eligible for sale in the
public market as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES DATE
- ----------------- ---------------------------------------------------------------------------
<C> <S>
1,728,103 90 days after the date of this prospectus--all of these shares will be
subject to the volume and manner of sale limitations of Rule 144;

2,404,233 180 days after the date of this prospectus--1,111,760 of these shares will
be subject to the volume and manner of sale limitations of Rule 144; and

199,376 At various times commencing 180 days after the date of this prospectus--all
of these shares will be subject to the volume and manner of sale
limitations of Rule 144.
</TABLE>

In general, under Rule 144 as currently in effect, a person or persons whose
shares are aggregated, including an affiliate, who has beneficially owned shares
for at least one year is entitled to sell, within any three-month period
commencing 90 days after the date of this prospectus, a number of shares that
does not exceed the greater of:

- one percent of the then outstanding shares of common stock, which will
equal approximately 94,679 shares immediately after this offering; or

- the average weekly trading volume in the common stock during the four
calendar weeks preceding the date on which notice of that sale is filed
with the SEC, subject to restrictions.

64
<PAGE>
In addition, a person who is not deemed to have been an affiliate of ThermoView
at any time during the 90 days preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years is entitled to sell those
shares under Rule 144(k) without regard to the requirements described above. To
the extent that shares are acquired from an affiliate of ThermoView, the
acquiring person's holding period for the purpose of effecting a sale under Rule
144 commences on the date of transfer from the affiliate.

RESALE OF SHARES UNDERLYING STOCK OPTIONS AND WARRANTS

Rule 701 permits resales of shares in reliance upon Rule 144 but without
compliance with certain limitations of Rule 144. In general, any of our
employees, officers or directors and qualifying consultants and advisors who
purchased shares from us pursuant to a written compensatory plan or contract,
including shares issuable upon exercise of options and warrants granted prior to
the date of this prospectus, are entitled to rely on the resale provisions of
Rule 701. Rule 701 permits affiliates to sell their Rule 701 shares under Rule
144 without complying with the holding period requirements of Rule 144. Rule 701
further provides that non-affiliates may sell such shares in reliance on Rule
144 without having to comply with the holding period, public information, volume
limitation or notice provisions of Rule 144. All holders of Rule 701 shares are
required to wait until 90 days after the date of this prospectus before selling
such shares.

As of September 9, 1999, options to purchase a total of 1,843,905 shares of
common stock are outstanding, of which options to purchase 1,392,864 shares are
currently exercisable. The outstanding options have a weighted average exercise
price of $6.57 per share. Subject to applicable vesting requirements and the
lock-up agreements described below, the holders of options to purchase 1,829,411
of these shares may rely on the resale provisions of Rule 701. Additionally,
within 90 days following the closing of this offering, we intend to file a
registration statement to register for resale 1,829,411 shares underlying
options and an additional 374,793 shares reserved for issuance under the 1999
stock option plan. That registration statement will automatically become
effective upon filing. Accordingly, these shares will be eligible for resale in
the public market from time to time, subject to vesting restrictions, and in the
case of some of the options the expiration of the lock-up agreements referred to
below.

Upon the closing of the offering, 400,000 shares, subject to adjustment,
will be issuable upon conversion of the shares of Series C preferred stock, and
997,010 shares will be issuable upon the exercise of outstanding warrants.

LOCK-UP AGREEMENTS

The holders of 2,216,117 shares of our common stock, 560,000 shares of our
preferred stock and 875,813 shares covered by outstanding options have agreed
that they will not, without the prior written consent of the underwriters, sell,
transfer, pledge, hypothecate, otherwise dispose of or agree to do any of the
foregoing with respect to any of our securities for a period commencing on May
13, 1999 and continuing to a date 180 days after the date of this prospectus.
The underwriters may, in their sole discretion and at any time without notice,
release all or any portion of the securities subject to these lock-up
agreements. The underwriters will consider requests for release of shares from
these lock-up agreements on a case by case basis, based upon current market
price and trading activity of the common stock, general market conditions and
individual circumstances. Additionally, the holders of 1,200,000 shares of our
preferred stock and 400,000 shares covered by warrants have committed that they
will not sell, transfer, pledge, hypothecate, otherwise dispose of or agree to
do any of the foregoing with respect to any of our securities for a period
commencing on the closing of this offering and ending on January 31, 2000. The
underwriters have no discretion to release any of the securities described in
the preceding sentence prior to the expiration of the lock-up agreement. We have
also agreed that, for a period of 180 days after the date of this prospectus, we
will not, without the consent of the underwriters, make any offering, purchase,
sale, or other disposition of any shares of common

65
<PAGE>
stock or other securities convertible into or exchangeable or exercisable for
shares of common stock, except in connection with acquisitions, the grant of
options under the 1999 stock option plan, the exercise of options and warrants
outstanding as of the date of this prospectus and the conversion of shares of
Series C preferred stock into common stock.

REGISTRATION RIGHTS

Following this offering, the holders of 3,768,254 shares of common stock
outstanding or issuable upon exercise of outstanding options and warrants or
conversion of the Series C preferred stock will have rights to have their shares
of common stock registered for resale under the Securities Act. Pursuant to
these registration rights we have filed a concurrent registration statement on
Form S-1 to register 1,200,000 shares of our common stock to be offered for sale
by two securityholders. These securityholders have committed to refrain from
selling these shares from the closing of this offering to January 31, 2000. If
the holders of registration rights, by exercising their rights, cause a large
number of shares to be registered and sold in the public market, the sales could
cause the market price of our common stock to decline. Please see "Description
of Capital Stock--Registration Rights."

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<PAGE>
UNDERWRITING

ThermoView and the underwriters named below have entered into an
underwriting agreement concerning the shares being offered. Each underwriter has
severally agreed to purchase the number of shares indicated in the following
table. Southwest Securities, Inc. and EBI Securities Corporation are the
representatives of the underwriters.

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
Southwest Securities, Inc..................................................
EBI Securities Corporation.................................................
-----------------
Total.................................................................... 3,500,000
-----------------
-----------------
</TABLE>

If the underwriters sell more shares than the total number presented in the
table above, the underwriters have an option to buy up to an additional 525,000
shares from ThermoView to cover these sales. They may exercise that option for
60 days. If any shares are purchased upon exercise of this option, the
underwriters will severally purchase shares in approximately the same proportion
as presented in the table above.

The following table shows the per share and total underwriting discounts and
commissions that ThermoView will pay to the underwriters. We show these amounts
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares.

<TABLE>
<CAPTION>
PAID BY THERMOVIEW
------------------------
FULL
NO EXERCISE EXERCISE
----------- -----------
<S> <C> <C>
Per share................................................................. $ $
Total..................................................................... $ $
</TABLE>

Shares sold by the underwriters to the public will initially be offered at
the public offering price presented on the cover of this prospectus. Any shares
that the underwriters sell to securities dealers the underwriters may sell at a
discount of up to $ per share from the initial public offering price. Any
of these securities dealers may resell any shares purchased from the
underwriters to other brokers or dealers at a discount of up to $ per share
from the initial public offering price. If the underwriters do not sell all the
shares at the initial offering price, the representatives may change the
offering price and the other selling terms.

Upon completion of this offering, ThermoView will sell to the
representatives for $350 a warrant to purchase 350,000 shares of common stock.
The representatives' warrant will become exercisable one year after the
effective date of this offering at a per share exercise price of $ and will
expire five years from the effective date of this offering. The representatives'
warrant and underlying shares of common stock will be restricted from sale,
transfer, assignment or hypothecation for a period of one year from the date of
this prospectus, except to the representatives, underwriters, selling group
members and their officers or partners. During the exercise period, holders of
the representatives' warrant are entitled to demand and incidental rights with
respect to the shares of common stock issuable upon exercise of the
representatives' warrant. The common stock issuable on exercise of the
representatives' warrant is subject to adjustment to prevent dilution.

ThermoView will pay the representatives a nonaccountable expense allowance
of 3% of the gross proceeds of the offering, which will include proceeds from
the over-allotment option, if exercised. The representatives will bear their
expenses in excess of the nonaccountable expense allowance. ThermoView has paid
$40,000 to the representatives as an advance for expenses.

ThermoView and some of its securityholders have agreed with the underwriters
not to dispose, sell, transfer, pledge, hypothecate, otherwise dispose of or
agree to do any of the foregoing, any securities of

67
<PAGE>

ThermoView during the period from the date of this prospectus continuing through
the date 180 days after the date of this prospectus, except with the prior
written consent of Southwest Securities, Inc. and EBI Securities Corporation.
See "Shares Eligible for Future Sale" for a discussion of transfer restrictions
of ThermoView's securities.

The common stock currently trades on the OTC Bulletin Board under the symbol
"TVII." ThermoView and the representatives will negotiate the public offering
price. Among the factors to be considered in determining the public offering
price of the shares, in addition to prevailing market conditions and prices,
will be ThermoView's historical performance, estimates of the business potential
and earnings prospects of ThermoView, an assessment of ThermoView's management
and the consideration of the above factors in relation to market valuation of
companies in related businesses.

ThermoView has applied to list the common stock on the Nasdaq National
Market under the symbol "TVII."

In connection with this offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the common stock while
the offering is in progress.

The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount it receives because the representatives have repurchased shares sold by
or for the account of that underwriter in stabilizing or short covering
transactions.

These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, the underwriters may discontinue them
at any time. The underwriters may effect these transactions on the Nasdaq
National Market, in the over-the-counter market or otherwise.

The underwriters do not expect sales to discretionary accounts to exceed 5%
of the total number of shares offered.

ThermoView estimates that its share of the total expenses of the offering,
excluding underwriting commissions, will be approximately $3,000,000.

ThermoView has agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act.

No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. This prospectus is an
offer to sell only the shares offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.

We have had prior financial and investment transactions with EBI Securities
Corporation. In June 1998, EBI Securities Corporation acted as a financial
consultant and we paid them a fee of $350,000 and in November 1998 we issued
them a five year warrant to purchase 41,667 shares of common stock at a per
share exercise price of $30.00. In April 1999, EBI Securities Corporation acted
as placement agent for the Series C preferred stock, and we paid them a sales
commission of $550,000. An employee of EBI Securities Corporation owns 8,334
shares of our common stock which we issued to him for consulting services
rendered prior to his employment with EBI Securities Corporation. From time to
time, EBI Securities Corporation has acted as a market maker in our common
stock.

68
<PAGE>
LEGAL MATTERS

The validity of the shares of common stock offered by this prospectus will
be passed upon for us by Stites & Harbison, Louisville, Kentucky. Legal matters
will be passed upon for the underwriters by Freshman, Marantz, Orlanski, Cooper
& Klein, a law corporation, Beverly Hills, California. As of the date of this
prospectus, attorneys with Stites & Harbison who have participated in the
preparation of this offering beneficially owned, directly or indirectly, 16,567
shares of our common stock and 4,600 shares of our Series A preferred stock.

EXPERTS

The following financial statements included in this prospectus and
registration statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere herein, and
are included in reliance upon their reports given upon the authority of their
firm as experts in accounting and auditing:

- the consolidated financial statements of ThermoView Industries, Inc. as of
and for the year ended December 31, 1998;

- the financial statements of NuView Industries, Inc. as of July 21, 1998
and for the period from January 1, 1998 through July 21, 1998;

- the combined financial statements of Thomas Construction, Inc. as of
December 31, 1997 and 1998 and for each of the three years in the period
ended December 31, 1998;

- the financial statements of Precision Window Mfg., Inc. as of December 31,
1996, 1997 and 1998 and for each of the three years in the period ended
December 31, 1998; and

- the combined financial statements of The Thermo-Shield Companies as of
December 31, 1996, 1997 and 1998 and for each of the three years in the
period ended December 31, 1998.

The following financial statements included in this prospectus and
registration statement have been audited by Singer, Lewak, Greenbaum &
Goldstein, LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon their reports
given upon the authority of their firm as experts in accounting and auditing:

- the financial statements of ThermoView Industries, Inc. (formerly
Thermo-Tilt Window Company) as of December 31, 1997 and for each of the
two years in the period ended December 31, 1997;

- the financial statements of American Home Developers Co., Inc. as of
December 31, 1996 and 1997 and April 25, 1998, and for each of the two
years in the period ended December 31, 1997 and the period from January 1,
1998 through April 25, 1998;

- the financial statements of Primax Window Co. as of December 31, 1996 and
1997 and April 30, 1998, and for each of the two years in the period ended
December 31, 1997 and the period from January 1, 1998 through Apri1 30,
1998;

- the combined financial statements of The Rolox Companies as of December
31, 1996 and 1997 and April 30, 1998, and for each of the two years in the
period ended December 31, 1997 and the period from January 1, 1998 through
April 30, 1998;

- the financial statements of American Home Remodeling as of December 31,
1997 and July 9, 1998, and for the year ended December 31, 1997 and the
period from January 1, 1998 through July 9, 1998; and

69
<PAGE>
- the financial statements of Five Star Builders, Inc. as of December 31,
1996 and 1997 and July 13, 1998, and for each of the two years in the
period ended December 31, 1997 and the period from January 1, 1998 through
July 13, 1998.

The following financial statements included in this prospectus and
registration statement have been audited by Rodney W. Melby, certified public
accountant, as set forth in his reports thereon appearing elsewhere herein, and
are included in reliance upon his reports given upon his authority as an expert
in accounting and auditing:

- the financial statements of Leingang Siding and Window, Inc. as of
December 31, 1996 and 1997 and August 14, 1998, and for each of the two
years in the period ended December 31, 1997 and the period January 1, 1998
to August 14, 1998; and

- the financial statements of Thermal Line Windows, L.L.P. as of December
31, 1996 and 1997 and August 14, 1998, and for each of the two years in
the period ended December 31, 1997 and the period January 1, 1998 to
August 14, 1998.

On November 10, 1998, our Board of Directors approved the engagement of
Ernst & Young LLP, and the dismissal of Singer, Lewak, Greenbaum & Goldstein,
LLP, as our independent auditors in preparation for this offering. During the
year ended December 31, 1997, and the subsequent interim period preceding the
dismissal of Singer, Lewak, Greenbaum & Goldstein, LLP in November 1998, there
were no disagreements between them and us on any matters of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, and no reportable events relating to the relationship between Singer,
Lewak, Greenbaum & Goldstein and us.

WHERE YOU CAN FIND MORE INFORMATION

ThermoView has filed with the SEC a registration statement on Form S-1 under
the Securities Act with respect to the shares of common stock to be sold in this
offering. This prospectus does not contain all of the information set forth in
the registration statement, and the exhibits and schedules filed as a part of
the registration statement. For further information with respect to ThermoView
and the shares of common stock to be sold in this offering, we refer you to the
registration statement, and the exhibits and schedules filed as a part of the
registration statement. This prospectus contains all material information
regarding the contents of any contract, agreement or other document referred to
in it. The descriptions of those contracts, agreements and other documents are
not necessarily complete, however. If a contract, agreement or other document
has been filed as an exhibit to the registration statement, we refer you to that
exhibit. Each statement in this prospectus relating to a contract, agreement or
other document filed as an exhibit to the registration statement is qualified by
the filed exhibit.

As a result of this offering, ThermoView will become subject to the
information and reporting requirements of the Securities Exchange Act, and, in
accordance with those requirements, will file periodic reports, proxy statements
and other information with the SEC. You may read and copy all or any portion of
the registration statement or any other information ThermoView files at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. You can request copies of these documents, upon payment of a
duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330
for further information on the operation of the public reference rooms.
ThermoView's SEC filings, including the registration statement, are also
available to you on the SEC's web site (http://www.sec.gov).

We intend to furnish our stockholders with annual reports containing audited
financial statements and quarterly reports containing unaudited financial
information for the first three quarters of each year.

70
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS................................................ F-4
Unaudited Pro Forma Consolidated Statement of Operations for the six months ended June 30, 1999........ F-5
Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1998.......... F-6
Notes to Unaudited Pro Forma Consolidated Statements of Operations..................................... F-8

THERMOVIEW INDUSTRIES, INC.
Reports of Independent Auditors........................................................................ F-13
Report of Independent Certified Public Accountants..................................................... F-14
Consolidated Balance Sheets as of December 31, 1997 and 1998........................................... F-15
Consolidated Statements of Operations for the years ended December 31, 1996, 1997 and 1998............. F-16
Consolidated Statements of Stockholders' Equity for the years ended December 31, 1996, 1997 and
1998................................................................................................. F-17
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998............. F-18
Notes to Consolidated Financial Statements............................................................. F-19
Condensed Consolidated Balance Sheets as of December 31, 1998 and June 30, 1999 (Unaudited)............ F-37
Condensed Consolidated Statements of Operations for the six months ended June 30, 1998 and 1999
(Unaudited).......................................................................................... F-38
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 1998 and 1999
(Unaudited).......................................................................................... F-39
Notes to Condensed Consolidated Financial Statements (Unaudited)....................................... F-40

AMERICAN HOME DEVELOPERS CO., INC.
Report of Independent Certified Public Accountants..................................................... F-46
Balance Sheets as of December 31, 1996, December 31, 1997 and April 25, 1998........................... F-47
Statements of Operations for the years ended December 31, 1996 and December 31, 1997 and for the period
from January 1, 1998 through April 25, 1998.......................................................... F-48
Statements of Shareholders' Equity for the years ended December 31, 1996 and December 31, 1997 and for
the period from January 1, 1998 through April 25, 1998............................................... F-49
Statements of Cash Flows for the years ended December 31, 1996 and December 31, 1997 and for the period
from January 1, 1998 through April 25, 1998.......................................................... F-50
Notes to Financial Statements.......................................................................... F-51

PRIMAX WINDOW CO.
Report of Independent Certified Public Accountants..................................................... F-56
Balance Sheets as of December 31, 1996, December 31, 1997 and April 30, 1998........................... F-57
Statements of Operations for the years ended December 31, 1996 and December 31, 1997 and for the four
months ended April 30, 1998.......................................................................... F-58
Statements of Shareholders' Equity for the years ended December 31, 1996 and December 31, 1997 and for
the four months ended April 30, 1998................................................................. F-59
Statements of Cash Flows for the years ended December 31, 1996 and December 31, 1997 and for the four
months ended April 30, 1998.......................................................................... F-60
Notes to Financial Statements.......................................................................... F-61
</TABLE>

F-1
<PAGE>

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
THE ROLOX COMPANIES
Report of Independent Certified Public Accountants..................................................... F-70
Combined Balance Sheets as of December 31, 1996, December 31, 1997 and April 30, 1998.................. F-71
Combined Statements of Operations for the years ended December 31, 1996 and December 31, 1997 and for
the four months ended April 30, 1998................................................................. F-72
Combined Statements of Shareholders' Deficit for the years ended December 31, 1996 and December 31,
1997 and for the four months ended April 30, 1998.................................................... F-73
Combined Statements of Cash Flows for the years ended December 31, 1996 and December 31, 1997 and for
the four months ended April 30, 1998................................................................. F-74
Notes to Combined Financial Statements................................................................. F-75

AMERICAN HOME REMODELING
Report of Independent Certified Public Accountants..................................................... F-81
Balance Sheets as of December 31, 1997 and July 9, 1998................................................ F-82
Statements of Operations for the year ended December 31, 1997 and for the period from January 1, 1998
through July 9, 1998................................................................................. F-83
Statements of Shareholders' Equity for the year ended December 31, 1997 and for the period from January
1, 1998 through July 9, 1998......................................................................... F-84
Statements of Cash Flows for the year ended December 31, 1997 and for the period from January 1, 1998
through July 9, 1998................................................................................. F-85
Notes to Financial Statements.......................................................................... F-86

FIVE STAR BUILDERS, INC.
Report of Independent Certified Public Accountants..................................................... F-90
Balance Sheets as of December 31, 1996, December 31, 1997 and July 13, 1998............................ F-91
Statements of Operations for the years ended December 31, 1996 and December 31, 1997 and for the period
from January 1, 1998 through July 13, 1998........................................................... F-92
Statements of Shareholders' Equity for the years ended December 31, 1996 and December 31, 1997 and for
the period from January 1, 1998 through July 13, 1998................................................ F-93
Statements of Cash Flows for the years ended December 31, 1996 and December 31, 1997 and for the period
from January 1, 1998 through July 13, 1998........................................................... F-94
Notes to Financial Statements.......................................................................... F-95

NUVIEW INDUSTRIES, INC.
Report of Independent Auditors......................................................................... F-101
Balance Sheet as of July 21, 1998...................................................................... F-102
Statement of Operations and Accumulated Deficit for the period from January 1, 1998 through July 21,
1998................................................................................................. F-103
Statement of Cash Flows for the period from January 1, 1998 through July 21, 1998...................... F-104
Notes to Financial Statements.......................................................................... F-105

LEINGANG SIDING AND WINDOW, INC.
Independent Auditor's Report........................................................................... F-109
Balance Sheets as of December 31, 1996 and 1997 and August 14, 1998.................................... F-110
Statements of Income for the years ended December 31, 1996 and 1997 and for the period January 1, 1998
to August 14, 1998................................................................................... F-111
Statements of Changes in Retained Earnings for the years ended December 31, 1996 and 1997 and for the
period January 1, 1998 to August 14, 1998............................................................ F-112
Statements of Cash Flows for the years ended December 31, 1996 and 1997 and for the period January 1,
1998 to August 14, 1998.............................................................................. F-113
Notes to Financial Statements.......................................................................... F-114
</TABLE>

F-2

<PAGE>

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
THERMAL LINE WINDOWS, L.L.P.
Independent Auditor's Report........................................................................... F-119
Balance Sheets as of December 31, 1996 and 1997 and August 14, 1998.................................... F-120
Statements of Income for the years ended December 31, 1996 and 1997 and for the period January 1, 1998
to August 14, 1998................................................................................... F-122
Statements of Partnership Equity for the years ended December 31, 1996 and 1997 and for the period
January 1, 1998 to August 14, 1998................................................................... F-123
Statements of Cash Flows for the years ended December 31, 1996 and 1997 and for the period January 1,
1998 to August 14, 1998.............................................................................. F-124
Notes to Financial Statements.......................................................................... F-126

THOMAS CONSTRUCTION, INC.
Report of Independent Auditors......................................................................... F-132
Combined Balance Sheets as of December 31, 1997 and 1998............................................... F-133
Combined Statements of Income and Retained Earnings for the years ended December 31, 1996, 1997 and
1998................................................................................................. F-134
Combined Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998................. F-135
Notes to Combined Financial Statements................................................................. F-136

PRECISION WINDOW MFG., INC.
Report of Independent Auditors......................................................................... F-141
Balance Sheets as of December 31, 1996, 1997 and 1998.................................................. F-142
Statements of Operations and Retained Earnings for the years ended December 31, 1996, 1997 and 1998.... F-143
Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998.......................... F-144
Notes to Financial Statements.......................................................................... F-145

THE THERMO-SHIELD COMPANIES
Report of Independent Auditors......................................................................... F-149
Combined Balance Sheets as of December 31, 1996, 1997 and 1998......................................... F-150
Combined Statements of Operations and Retained Earnings for the years ended December 31, 1996, 1997 and
1998................................................................................................. F-152
Combined Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998................. F-153
Notes to Financial Statements.......................................................................... F-154
</TABLE>

F-3
<PAGE>

THERMOVIEW INDUSTRIES, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

BASIS OF PRESENTATION

The following unaudited pro forma consolidated statements of operations give
effect to the acquisitions by ThermoView discussed in Note 2 on page F-9 as if
the acquisitions were made as of January 1, 1998. During the fifteen month
period ended June 30, 1999, ThermoView acquired twelve businesses which have
been accounted for using the purchase method of accounting.

ThermoView has analyzed the savings that it expects to realize from
reductions in salaries, bonuses, and certain benefits to the former owners of
the acquired businesses. To the extent the former owners have contractually
agreed to prospective reductions in salaries, bonuses, and benefits, these
reductions have been reflected in the unaudited pro forma consolidated
statements of operations. The unaudited pro forma consolidated results of
operations do not reflect any corporate expenses prior to April 15, 1998, since
corporate activities did not commence until then.

The pro forma adjustments are based on available information that Company
management deems appropriate and may be revised as additional information
becomes available. The pro forma financial data do not purport to represent what
ThermoView's results of operations would actually have been if all acquisitions
had occurred on January 1, 1998, and are not necessarily representative of
ThermoView's results of operations for any future period.

Since the acquired companies were not under common control or management
during the entire period covered by the pro forma statements of operations,
historical consolidated results may not be comparable to, or indicative of,
future performance. The unaudited pro forma consolidated statements of
operations should be read in conjunction with the other financial statements and
notes thereto included elsewhere in this prospectus. See also "Risk Factors"
included elsewhere herein.

F-4
<PAGE>

THERMOVIEW INDUSTRIES, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
PREACQUISITION
THERMO- THERMOVIEW PRO FORMA PRO FORMA
SHIELD INDUSTRIES, ADJUSTMENTS CONSOLIDATED
COMPANIES INC. (NOTE 3) TOTAL
------------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Revenues............................................. $ 2,501,817 $ 50,196,310 $ -- $ 52,698,127
Cost of revenues earned.............................. 1,118,997 22,502,359 (386,500) 23,234,856
------------- -------------- ----------- -------------
Gross profit......................................... 1,382,820 27,693,951 386,500 29,463,271

Selling, general and administrative expenses......... 1,604,203 25,389,692 (52,576) 26,941,319
Depreciation and amortization........................ 27,699 1,442,628 29,214 1,499,541
------------- -------------- ----------- -------------
Income (loss) from operations........................ (249,082) 861,631 409,862 1,022,411

Interest expense..................................... -- (857,837) (85,037) (942,874)
Interest income...................................... 314 100,666 -- 100,980
------------- -------------- ----------- -------------
Income (loss) before income taxes.................... (248,768) 104,460 324,825 180,517
Income tax expense (benefit)......................... (108,000) 423,000 142,968 457,968
------------- -------------- ----------- -------------
Net loss............................................. (140,768) (318,540) 181,857 (277,451)
Preferred stock dividends--cash...................... -- (989,681) -- (989,681)
Preferred stock dividends--non-cash.................. -- (1,464,290) -- (1,464,290)
------------- -------------- ----------- -------------
Net loss attributable to common stockholders......... $ (140,768) $ (2,772,511) $ 181,857 $ (2,731,422)
------------- -------------- ----------- -------------
------------- -------------- ----------- -------------
Basic and diluted loss per common share.............. $ (0.57)
-------------
-------------
Weighted average shares used in computing pro forma
basic and diluted loss per common share............ 4,813,120
-------------
-------------
</TABLE>

See accompanying notes.

F-5
<PAGE>

THERMOVIEW INDUSTRIES, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
PREACQUISITION PREACQUISITION
AMERICAN HOME PREACQUISITION PREACQUISITION PREACQUISITION PREACQUISITION FIVE STAR
DEVELOPERS PRIMAX ROLOX TD WINDOWS, AMERICAN HOME BUILDERS,
CO., INC. WINDOW CO. COMPANIES INC. REMODELING INC.
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues.................... $ 1,143,760 $ 2,150,747 $ 3,786,513 $ 375,987 $ 3,343,847 $ 3,349,814
Cost of revenues earned..... 580,555 964,759 1,645,687 277,841 1,262,510 992,461
------------- ------------- ------------- ------------- ------------- -------------
Gross profit................ 563,205 1,185,988 2,140,826 98,146 2,081,337 2,357,353
Selling, general and
administrative expenses... 1,006,643 1,095,260 2,199,545 97,923 2,071,428 2,782,440
Stock-based compensation
expense................... -- -- -- -- -- --
Depreciation and
amortization.............. 14,894 30,999 3,865 -- 1,799 45,682
------------- ------------- ------------- ------------- ------------- -------------
Income (loss) from
operations................ (458,332) 59,729 (62,584) 223 8,110 (470,769)
Interest expense............ (1,500) (1,205) (535) (10,004) (4,587) (8,700)
Other income................ 4,268 18,024 -- -- 542 8,038
------------- ------------- ------------- ------------- ------------- -------------
Income (loss) before income
taxes..................... (455,564) 76,548 (63,119) (9,781) 4,065 (471,431)
Income tax expense
(benefit)................. (181,027) -- -- -- -- (192,557)
------------- ------------- ------------- ------------- ------------- -------------
Net income (loss)........... (274,537) 76,548 (63,119) (9,781) 4,065 (278,874)
Less preferred stock
dividends:
Cash........................ -- -- -- -- -- --
Additional dividend
attributable to beneficial
conversion feature........ -- -- -- -- -- --
------------- ------------- ------------- ------------- ------------- -------------
Net income (loss)
attributable to common
stockholders.............. $ (274,537) $ 76,548 $ (63,119) $ (9,781) $ 4,065 $ (278,874)
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------

<CAPTION>
PREACQUISITION
NUVIEW
INDUSTRIES,
INC.
-------------
<S> <C>
Revenues.................... $ 2,478,656
Cost of revenues earned..... 964,341
-------------
Gross profit................ 1,514,315
Selling, general and
administrative expenses... 1,529,889
Stock-based compensation
expense................... --
Depreciation and
amortization.............. 6,957
-------------
Income (loss) from
operations................ (22,531)
Interest expense............ --
Other income................ 1,610
-------------
Income (loss) before income
taxes..................... (20,921)
Income tax expense
(benefit)................. --
-------------
Net income (loss)........... (20,921)
Less preferred stock
dividends:
Cash........................ --
Additional dividend
attributable to beneficial
conversion feature........ --
-------------
Net income (loss)
attributable to common
stockholders.............. $ (20,921)
-------------
-------------
</TABLE>

F-6
<PAGE>

THERMOVIEW INDUSTRIES, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
PREACQUISITION PREACQUISITION PREACQUISITION
LEINGANG SIDING THERMAL LINE PREACQUISITION PRECISION PREACQUISITION THERMOVIEW PRO FORMA
AND WINDOW, WINDOWS, THOMAS WINDOW THERMO- SHIELD INDUSTRIES, ADJUSTMENTS
INC. L.L.P. CONSTRUCTION MFG., INC. COMPANIES INC. (NOTE 3)
--------------- -------------- ------------- ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues........... $ 3,379,359 $3,668,394 $25,553,981 $ 6,547,964 $14,905,796 $ 37,376,355 ($5,945,828)
Cost of revenues
earned........... 2,340,476 2,538,731 13,277,004 5,499,617 6,669,722 16,747,734 (5,668,828)
--------------- -------------- ------------- ------------- ------------- -------------- -----------
Gross profit....... 1,038,883 1,129,663 12,276,977 1,048,347 8,236,074 20,628,621 (277,000)
Selling, general
and
administrative
expenses......... 899,983 838,334 9,823,912 642,543 8,004,875 20,233,163 (1,798,479)
Stock-based
compensation
expense.......... -- -- -- -- -- 5,508,700 --
Depreciation and
amortization..... 33,688 50,286 89,489 48,915 41,252 854,170 1,036,073
--------------- -------------- ------------- ------------- ------------- -------------- -----------
Income (loss) from
operations....... 105,212 241,043 2,363,576 356,889 189,947 (5,967,412) 485,406
Interest expense... (12,902) (20,132) -- (27,196) -- (439,131) (1,867,688)
Other income....... 9,935 31,228 272,187 2,413 47,248 69,057 --
--------------- -------------- ------------- ------------- ------------- -------------- -----------
Income (loss)
before income
taxes............ 102,245 252,139 2,635,763 332,106 237,195 (6,337,486) (1,382,282)
Income tax expense
(benefit)........ -- -- 13,833 126,743 (63,000) (1,135,000) 934,011
--------------- -------------- ------------- ------------- ------------- -------------- -----------
Net income
(loss)........... 102,245 252,139 2,621,930 205,363 300,195 (5,202,486) (2,316,293)
Less preferred
stock dividends:
Cash............... -- -- -- -- -- 585,105 200,000
Additional dividend
attributable to
beneficial
conversion
feature.......... -- -- -- -- -- 9,539,678 --
--------------- -------------- ------------- ------------- ------------- -------------- -----------
Net income (loss)
attributable to
common
stockholders..... $ 102,245 $ 252,139 $ 2,621,930 $ 205,363 $ 300,195 $(15,327,269) ($2,516,293)
--------------- -------------- ------------- ------------- ------------- -------------- -----------
--------------- -------------- ------------- ------------- ------------- -------------- -----------
Basic and diluted
loss per common
share............
Weighted average
shares used in
computing pro
forma basic and
diluted loss per
common share.....

PRO FORMA
CONSOLIDATED
TOTAL
------------
<S> <C>
Revenues........... 1$02,115,345
Cost of revenues
earned........... 48,092,610
------------
Gross profit....... 54,022,735
Selling, general
and
administrative
expenses......... 49,427,459
Stock-based
compensation
expense.......... 5,508,700
Depreciation and
amortization..... 2,258,069
------------
Income (loss) from
operations....... (3,171,493)
Interest expense... (2,393,580)
Other income....... 464,550
------------
Income (loss)
before income
taxes............ (5,100,523)
Income tax expense
(benefit)........ (496,997)
------------
Net income
(loss)........... (4,603,526)
Less preferred
stock dividends:
Cash............... 785,105
Additional dividend
attributable to
beneficial
conversion
feature.......... 9,539,678
------------
Net income (loss)
attributable to
common
stockholders..... ($14,928,309)
------------
------------
Basic and diluted
loss per common
share............ $ (3.07)
------------
------------
Weighted average
shares used in
computing pro
forma basic and
diluted loss per
common share..... 4,858,134
------------
------------
</TABLE>

See accompanying notes.

F-7
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND THE YEAR ENDED DECEMBER 31, 1998

1. GENERAL

The historical results of operations of the acquired companies included in
the accompanying unaudited pro forma consolidated statements of operations
reflect the results of operations of these companies from January 1, 1998 to
their dates of acquisition. The audited historical financial statements for the
acquired companies included elsewhere herein have been included in accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 80.

The weighted average shares used in computing pro forma basic and diluted
loss per common share includes the shares issued in connection with business
combinations (see Note 2) as if they were issued on January 1, 1998.

F-8
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND THE YEAR ENDED DECEMBER 31, 1998

2. BUSINESS COMBINATIONS

<TABLE>
<CAPTION>
COST OF ACQUIRED COMPANY
-----------------------------------------------
STOCK ISSUED
(COMMON STOCK EXCEPT AS
NOTED IN (B) BELOW)
DATE OF CASH AND -----------------------
ACQUIRED COMPANY ACQUISITION PAYABLES SHARES VALUE TOTAL COST
- -------------------------------------- ----------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
American Home Developers Co., Inc..... 04/25/98 $1,201,861 259,058 $5,315,870 $6,517,731
Primax Window Company, Inc............ 04/30/98 1,582,566 180,725 3,426,045 5,008,611
Rolox, Inc............................ 04/30/98 3,819,812 374,058 7,254,854 11,074,666
TD Windows, Inc....................... 05/15/98 311,031 -- -- 311,031
American Home Remodeling, Inc......... 07/10/98 3,192,005 122,415 2,536,752 5,728,757
Five Star Builders, Inc............... 07/12/98 1,550,534 116,667 2,215,500 3,766,034
NuView Industries, Inc................ 07/21/98 1,189,734 725 13,106 1,202,840
Leingang Siding and Window, Inc....... 08/14/98 2,900,353 29,255 376,623 3,276,976
Thermal Line Windows, LLP (a)......... 08/14/98 4,670,442 50,003 643,734 5,314,176
Thomas Construction (b)............... 01/04/99 11,056,301 500,475 3,500,000 14,556,301
Precision Window Mfg. Inc............. 01/05/99 3,062,736 37,351 450,000 3,512,736
Thermo-Shield Companies............... 03/01/99 4,543,960 185,006 2,624,953 7,168,913
---------- ----------- ---------- ----------
$39,081,335 1,855,738 $28,357,437 $67,438,772
---------- ----------- ---------- ----------
----------- ---------- ----------
</TABLE>

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

(a) Includes the acquisition of North Country Thermal Line, Inc., on November 1,
1998 for $277,926 cash and 20,973 shares of common stock valued at $270,000.

(b) Stock issued in connection with the acquisition of Thomas Construction, Inc.
includes 400,000 shares of Series B preferred stock valued at $2,000,000.
All other shares and values represent common stock.

The above acquisitions have been accounted for as purchase transactions.
These companies are engaged primarily in the business of manufacturing
replacement windows or selling and installing them in the residential retail
market.

As of June 30, 1999, $1,500,000 has been recorded as a liability for future
cash payments, and 18,000 additional common shares (valued at $270,000) have
been issued to satisfy obligations for additional earned consideration. The
table above reflects this additional consideration through June 30, 1999, and
the pro forma statements of operations include the amortization effect since the
date the additional consideration was earned in 1999. Retroactive adjustment to
January 1, 1998, was not made, since this additional consideration was not
earned as of that date.

F-9
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND THE YEAR ENDED DECEMBER 31, 1998

3. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS ADJUSTMENTS

The following table summarizes unaudited pro forma consolidated statements
of operations adjustments for the six months ended June 30, 1999.

SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
ADJUSTMENTS
------------------------------------------------------- PRO FORMA
(A) (B) (C) (D) (E) ADJUSTMENTS
---------- --------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues............................................ $ -- $ -- $ -- $ -- $ -- $ --
Cost of revenues earned............................. (386,500) -- -- -- -- (386,500)
---------- --------- --------- --------- ---------- -----------
Gross profit........................................ 386,500 -- -- -- -- 386,500

Selling, general and administrative expenses........ -- (52,576) -- -- -- (52,576)
Depreciation and amortization....................... -- -- 29,214 -- -- 29,214
---------- --------- --------- --------- ---------- -----------
Income (loss) from operations....................... 386,500 52,576 (29,214) -- -- 409,862

Interest expense.................................... -- -- -- (85,037) -- (85,037)
Interest income..................................... -- -- -- -- -- --
---------- --------- --------- --------- ---------- -----------
Income (loss) before income taxes................... 386,500 52,576 (29,214) (85,037) -- 324,825
Income tax expense (benefit)........................ -- -- -- -- 142,968 142,968
---------- --------- --------- --------- ---------- -----------
Net income (loss)................................... 386,500 52,576 (29,214) (85,037) (142,968) 181,857
Less preferred stock dividends:
Cash.............................................. -- -- -- -- -- --
Additional dividend attributable to beneficial
conversion feature.............................. -- -- -- -- -- --
---------- --------- --------- --------- ---------- -----------
Net income (loss) attributable to common
stockholders...................................... $ 386,500 $ 52,576 $ (29,214) $ (85,037) $ (142,968) $ 181,857
---------- --------- --------- --------- ---------- -----------
---------- --------- --------- --------- ---------- -----------
</TABLE>

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

(a) Reflects the impact of eliminating the effect of sellers' profit on
contracts in process at the acquisition dates charged to cost of revenues
earned during the six months ended June 30, 1999, since the assumption is
being made that all acquisitions are made as of January 1, 1998. Since we
use the completed-contract method of accounting, our historical financial
statements reflect the impact of attributing profit to sellers for contracts
in process in allocating the purchase price of our acquisitions.

(b) Reflects reduction in salaries and benefits to the former owners of business
acquired. This reduction in salaries and benefits reflect the terms of an
employment agreement entered into with one of the former owners as part of
the purchase agreement. This employment agreement is for three years and
contains restrictions related to competition. Duties and responsibilities of
the former owners have not been reduced as a result of reductions in
salaries and benefits with the result that other costs will be incurred.

(c) Reflects the amortization of goodwill recorded as a result of the March 1,
1999 acquisition over a 40-year estimated life.

(d) Reflects interest expense on debt that is directly related to the March 1,
1999 acquisition.

F-10
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND THE YEAR ENDED DECEMBER 31, 1998

3. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS ADJUSTMENTS
(CONTINUED)
(e) Reflects the incremental provision for federal and state income taxes at an
approximate 40% overall tax rate on the above adjustments to the statements
of operations (except for non-deductible goodwill included therein) and for
S corporation income not provided for in the historical financial
statements.

The following table summarizes unaudited pro forma consolidated statements
of operations adjustments for the year ended December 31, 1998.

YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
ADJUSTMENTS
------------------------------------------------------------------------------- PRO FORMA
(A) (B) (C) (D) (E) (F) (G) ADJUSTMENTS
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ -- $(5,945,828) $ -- $ -- $ -- $ -- $ -- ($5,945,828)
Cost of revenues
earned................ 277,000 (5,945,828) -- -- -- -- -- (5,668,828)
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
Gross profit............ (277,000) -- -- -- -- -- -- (277,000)

Selling, general and
administrative
expenses.............. -- -- (1,798,479) -- -- -- -- (1,798,479)
Depreciation and
amortization.......... -- -- -- 1,036,073 -- -- -- 1,036,073
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
Income (loss) from
operations............ (277,000) -- 1,798,479 (1,036,073) -- -- -- 485,406

Interest expense........ -- -- -- -- (1,867,688) -- -- (1,867,688)
Other income............ -- -- -- -- -- -- -- --
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
Income (loss) before
income taxes.......... (277,000) -- 1,798,479 (1,036,073) (1,867,688) -- -- (1,382,282)
Income tax expense
(benefit)............. -- -- -- -- -- 934,011 -- 934,011
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
Net income (loss)....... (277,000) -- 1,798,479 (1,036,073) (1,867,688) (934,011) -- (2,316,293)
Less preferred stock
dividends:
Cash.................. -- -- -- -- -- -- 200,000 200,000
Additional dividend
attributable to
beneficial
conversion
feature............. -- -- -- -- -- -- -- --
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
Net income (loss)
attributable to common
stockholders.......... $(277,000) $ -- $1,798,479 $(1,036,073) $(1,867,688) $(934,011) $(200,000) ($2,516,293)
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
--------- ---------- ---------- ---------- ---------- --------- --------- -----------
</TABLE>

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

(a) Reflects the impact of attributing profit to sellers for contracts in
process as of January 1, 1998. Since we use the completed-contract method of
accounting, this adjustment is necessary to properly allocate the purchase
price of our acquisitions.

(b) Reflects the elimination of revenues between certain of the acquired
businesses prior to their acquisition by ThermoView.

F-11
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND THE YEAR ENDED DECEMBER 31, 1998

3. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS ADJUSTMENTS
(CONTINUED)

(c) Reflects reduction in salaries and benefits to the former owners of
businesses acquired. These reductions in salaries and benefits have been
agreed to prospectively in accordance with the terms of employment
agreements negotiated as part of the purchase agreements. Such employment
agreements are primarily for three years and contain restrictions related to
competition. Duties and responsibilities of the former owners have not been
reduced as a result of reductions in salary and benefits with the result
that other costs will be incurred.

(d) Reflects the amortization of goodwill recorded as a result of the
acquisitions over a 40-year estimated life.

(e) Reflects interest expense on debt that is directly related to acquisitions.

(f) Reflects the incremental provision for federal and state income taxes at an
approximate 40% overall tax rate on the above adjustments to the statements
of operations (except for non-deductible goodwill included therein) and on S
corporation and partnership income not provided for in the historical
financial statements.

(g) Reflects dividends on Series B preferred stock. The preferred stock was
issued in connection with an acquisition.

* * * * *

On April 23, 1999, the Company sold 6,000 shares of mandatorily redeemable
Series C convertible preferred stock at $1,000 per share. A portion of this
financing was used to retire $4,150,000 of seller notes and $1,100,000 of
related-party loans which were outstanding. The effects of this refinancing have
been reflected since April 23, 1999 in the accompanying unaudited pro forma
consolidated statement of operations for the six months ended June 30, 1999.

In connection with this common stock offering, the Company's Series A and
Series B preferred stock will be converted into common stock and the preferred
dividends on these shares will be discontinued. Also, subsequent to June 30,
1999, the Company borrowed $10,000,000 under a senior subordinated promissory
note. A portion of the proceeds from this financing was used to retire $750,000
of seller notes and $5,500,000 of related-party loans which were outstanding at
June 30, 1999. The effects of the preferred stock conversion and the debt
refinancing are not reflected in the accompanying unaudited pro forma
consolidated statements of operations.

See footnote 15 of the consolidated financial statements, which appears on
page F-34 and "Risk Factors" on page 6 of this prospectus.

F-12
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders

ThermoView Industries, Inc.

We have audited the consolidated balance sheet of ThermoView Industries,
Inc. (see Note 1) as of December 31, 1998 and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year then
ended. 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of ThermoView
Industries, Inc. at December 31, 1998, and the consolidated results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

Louisville, Kentucky
July 8, 1999, except Note 16
as to which the date
is September 23, 1999

F-13
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
ThermoView Industries, Inc.

We have audited the accompanying balance sheet of ThermoView Industries,
Inc. (formerly Thermo-Tilt Window Company as discussed in Note 1) as of December
31, 1997, and the related statements of operations, stockholders' equity, and
cash flows for the years ended December 31, 1996 and 1997. 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 audited
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ThermoView Industries, Inc.,
as of December 31, 1997, and the results of its operations and its cash flows
for the years ended December 31, 1996 and 1997 in conformity with generally
accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
July 8, 1998, except for Note 16
as to which the date
is September 23, 1999

F-14
<PAGE>

THERMOVIEW INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1997 1998
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents............................................................... $ 69,057 $ 1,302,797
Receivables:
Trade, net of allowance for doubtful accounts of $15,000 in 1997 and $237,000 in
1998........................................................................... 23,248 2,969,462
Finance, net of unearned interest of $346,701.................................... -- 763,616
Related party.................................................................... -- 410,720
Other............................................................................ 33,933 326,079
Costs in excess of billings on uncompleted contracts............................... 28,165 604,550
Inventories........................................................................ 16,000 1,313,318
Prepaid expenses and other current assets.......................................... 12,137 169,584
Deferred income taxes.............................................................. 18,000 533,000
------------ -------------
Total current assets................................................................. 200,540 8,393,126
Property and equipment, net.......................................................... 482,180 2,680,895
Other assets:
Goodwill, net of accumulated amortization of $521,115.............................. -- 37,040,101
Deferred income taxes.............................................................. 248,000 1,242,000
Related party notes receivable..................................................... 370,427 --
Other assets....................................................................... 202,217 837,624
------------ -------------
820,644 39,119,725
------------ -------------
Total assets......................................................................... $ 1,503,364 $ 50,193,746
------------ -------------
------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable (including related party vendor payables of $341,894 in 1998)..... $ 211,281 $ 2,052,937
Due to sellers of acquired businesses.............................................. -- 1,000,481
Accrued expenses................................................................... 533,513 2,775,439
Billings in excess of costs on uncompleted contracts............................... -- 566,702
Income taxes payable............................................................... -- 150,837
Current portion of long-term debt.................................................. 295,872 595,754
------------ -------------
Total current liabilities............................................................ 1,040,666 7,142,150
Long-term debt (including related party note payable of $1,500,000 in 1998).......... 231,062 8,610,069
Other long-term liabilities.......................................................... 54,550 43,545
Stockholders' equity:
Preferred stock, 50,000,000 shares authorized:
Series A, $.001 par value; 2,980,000 shares issued and outstanding............... -- 2,980
Series B, $.001 par value; none issued........................................... -- --
Common stock, $.001 par value; 100,000,000 shares authorized; 2,938,529 shares
issued and outstanding in 1997 and 4,490,288 shares issued and outstanding in
1998............................................................................. 2,939 4,490
Paid-in capital.................................................................... 1,038,644 40,457,495
Accumulated deficit................................................................ (864,497) (6,066,983)
------------ -------------
Total stockholders' equity........................................................... 177,086 34,397,982
------------ -------------
Total liabilities and stockholders' equity........................................... $ 1,503,364 $ 50,193,746
------------ -------------
------------ -------------
</TABLE>

See accompanying notes.

F-15
<PAGE>

THERMOVIEW INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------------------
1996 1997 1998
------------ ------------ --------------
<S> <C> <C> <C>
Revenues.............................................................. $ 6,641,397 $ 5,628,726 $ 37,376,355
Cost of revenues earned............................................... 3,571,473 2,889,444 16,747,734
------------ ------------ --------------
Gross profit.......................................................... 3,069,924 2,739,282 20,628,621
Selling, general and administrative expenses.......................... 2,634,018 3,292,548 20,233,163
Stock-based compensation expense...................................... -- 1,050 5,508,700
Depreciation and amortization......................................... 67,538 69,274 854,170
------------ ------------ --------------
Income (loss) from operations......................................... 368,368 (623,590) (5,967,412)
Interest expense...................................................... (56,603) (90,031) (439,131)
Other income (expense)................................................ (47,394) (18,607) 69,057
------------ ------------ --------------
Income (loss) before income taxes..................................... 264,371 (732,228) (6,337,486)
Income tax benefit.................................................... -- (266,000) (1,135,000)
------------ ------------ --------------
Net income (loss)..................................................... $ 264,371 (466,228) (5,202,486)
------------
------------
Less amount attributable to sole proprietor........................... 398,269 --
Less preferred stock dividends:
Cash................................................................ -- 585,105
Additional dividend attributable to beneficial conversion feature... -- 9,539,678
------------ --------------
-- 10,124,783
------------ --------------
Net loss attributable to common stockholders.......................... $ (864,497) $ (15,327,269)
------------ --------------
------------ --------------
Basic and diluted loss per common share............................... $ (3.86)
--------------
--------------
Weighted average shares outstanding................................... 3,975,236
--------------
--------------
</TABLE>

See accompanying notes.

F-16
<PAGE>

THERMOVIEW INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
PROPRIETOR'S
PREFERRED PREFERRED COMMON COMMON DEFICIT/
STOCK STOCK STOCK STOCK PAID-IN ACCUMULATED
SHARES PAR VALUE SHARES PAR VALUE CAPITAL DEFICIT TOTAL
----------- ----------- --------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1996............. -- $ -- -- $ -- $ -- $ (341,899) $ (341,899)
Owner's draw............................ -- -- -- -- -- (152,849) (152,849)
Net income.............................. -- -- -- -- -- 264,371 264,371
----------- ----------- --------- ----------- ---------- ------------ ----------
Balances at December 31, 1996........... -- -- -- -- -- (230,377) (230,377)
Owner's draw and closing of
proprietorship........................ -- -- -- -- -- (167,892) (167,892)
Net income for the last six months ended
June 30, 1997......................... -- -- -- -- -- 398,269 398,269
----------- ----------- --------- ----------- ---------- ------------ ----------
Balances at June 30, 1997............... -- -- -- -- -- -- --
Initial capitalization of corporation... -- -- 2,621,967 2,622 140,636 -- 143,258
Issuance of common stock in private
placement............................. -- -- 316,562 317 896,958 -- 897,275
Stock-based compensation expense........ -- -- -- -- 1,050 -- 1,050
Net loss for the six-months ended
December 31, 1997..................... -- -- -- -- -- (864,497) (864,497)
----------- ----------- --------- ----------- ---------- ------------ ----------
Balances at December 31, 1997........... -- -- 2,938,529 2,939 1,038,644 (864,497) 177,086
Acquisition of the Company-issuance of
common stock in reverse merger........ -- -- 346,667 347 (347) -- --
Common stock issued for cash............ -- -- 181,472 181 613,469 -- 613,650
Common stock issued for acquisitions.... -- -- 1,114,906 1,115 21,511,369 -- 21,512,484
Preferred stock issued for cash......... 2,980,000 2,980 -- -- 14,510,603 -- 14,513,583
Purchase and retirement of
common stock.......................... -- -- (91,284) (91) (2,139,839) -- (2,139,930)
Portion of proceeds from issuance of
Series A preferred stock attributable
to beneficial conversion feature at
the date of issue..................... -- -- -- -- 9,539,678 -- 9,539,678
Additional dividend on Series A
preferred stock attributable to
beneficial conversion feature at date
of issue.............................. -- -- -- -- (9,539,678) -- (9,539,678)
Preferred stock dividend payments....... -- -- -- -- (585,105) -- (585,105)
Stock-based compensation expense........ -- -- -- -- 5,508,700 -- 5,508,700
Net loss................................ -- -- -- -- -- (5,202,486) (5,202,486)
----------- ----------- --------- ----------- ---------- ------------ ----------
Balances at December 31, 1998........... 2,980,000 $ 2,980 4,490,288 $ 4,490 $40,457,495 $(6,066,983) $34,397,382
----------- ----------- --------- ----------- ---------- ------------ ----------
----------- ----------- --------- ----------- ---------- ------------ ----------
</TABLE>

See accompanying notes.

F-17
<PAGE>

THERMOVIEW INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1996 1997 1998
----------- ----------- --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)...................................................... $ 264,371 $ (466,228) $ (5,202,486)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operations:
Depreciation and amortization........................................ 67,538 69,274 854,170
Deferred income taxes................................................ -- (266,000) (1,282,000)
Stock-based compensation............................................. -- 1,050 5,508,700
Other................................................................ 47,393 27,342 (22,400)
Changes in operating assets and liabilities:
Trade receivables.................................................. 32,411 (12,970) (1,199,734)
Finance, related party and other receivables....................... 4,093 (20,375) (558,457)
Costs in excess of billings on uncompleted contracts............... -- (28,165) 115,906
Inventories........................................................ -- 12,000 109,757
Prepaid expenses and other current assets.......................... -- (7,637) (18,944)
Accounts payable................................................... 10,584 (394,096) (67,369)
Accrued expenses................................................... 53,480 371,735 896,640
Billings in excess of costs on uncompleted contracts............... -- -- 51,239
Income taxes payable............................................... -- -- 131,305
----------- ----------- --------------
Net cash provided by (used in) operating activities.................... 479,870 (714,070) (683,673)

INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired....................... -- -- (15,613,913)
Payments for purchase of property and equipment........................ (142,067) (315,819) (860,897)
Proceeds from sale of property and equipment........................... 85,870 526,305 195,000
Other.................................................................. (324,348) 112,820 (602,667)
----------- ----------- --------------
Net cash provided by (used in) investing activities.................... (380,545) 323,306 (16,882,477)

FINANCING ACTIVITIES
Increase in long-term debt............................................. 122,973 -- 16,915,876
Payments of long-term debt............................................. (71,392) (305,709) (10,518,184)
Distributions to proprietor............................................ (152,849) (167,892) --
Preferred stock dividend payments...................................... -- -- (585,105)
Proceeds from issuance of common stock................................. -- 897,275 613,650
Cash received on initial capitalization of corporation................. -- 34,253 --
Purchase and retirement of common stock................................ -- -- (2,139,930)
Proceeds from issuance of preferred stock.............................. -- -- 14,513,583
----------- ----------- --------------
Net cash provided by (used in) financing activities.................... (101,268) 457,927 18,799,890
----------- ----------- --------------
Net increase (decrease) in cash and equivalents........................ (1,943) 67,163 1,233,740
Cash and equivalents at beginning of year.............................. 3,837 1,894 69,057
----------- ----------- --------------
Cash and equivalents at end of year.................................... $ 1,894 $ 69,057 $ 1,302,797
----------- ----------- --------------
----------- ----------- --------------
</TABLE>

See accompanying notes.

F-18
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1998

1. ORGANIZATION AND NATURE OF OPERATIONS

ThermoView Industries, Inc. ("ThermoView") was incorporated in Nevada on
December 1, 1987, under the name of Jackal, Inc. On May 10, 1994, the name was
changed from Jackal to Oak Hill, Inc., and on February 24, 1998, the name was
again changed from Oak Hill, Inc., to ThermoView Industries, Inc. ThermoView has
been eligible to be traded on the OTC Bulletin Board pursuant to Rule
15c2-11(a)(5) under the Securities Exchange Act of 1934, as amended, and is now
a Delaware corporation. Trading in ThermoView common stock commenced on April
16, 1998. Prior to April 15, 1998, ThermoView was a development stage
corporation, and had no business operations since its incorporation. From
inception through April 15, 1998, ThermoView had been seeking possible
acquisition or merger candidates.

On April 15, 1998, ThermoView acquired all of the outstanding stock of
Thermo-Tilt Window Company ("Thermo-Tilt"), a Delaware corporation, in exchange
for 3,120,000 shares of ThermoView's authorized, but unissued, common stock
which represented 90% of ThermoView's then outstanding common stock. Such shares
were issued to the former stockholders of Thermo-Tilt. The stock exchange
between Thermo-Tilt and ThermoView was accounted for as a capital transaction
similar to a reverse acquisition except that no goodwill was recorded. As a
result, Thermo-Tilt is deemed to be the acquirer for accounting purposes and is
the accounting survivor and reporting successor. Also, there was a change in
control of ThermoView, whereby all of ThermoView's officers and directors
resigned, and new officers and directors selected by Thermo-Tilt were elected.
The historical results of operations for the years ended December 31, 1996 and
1997 and for the period January 1, 1998 through April 15, 1998 reflect the
activities of Thermo-Tilt, using Thermo-Tilt's historical cost basis. Because of
the nature of this merger, "Company" as used in subsequent footnotes refers
interchangeably to ThermoView or Thermo-Tilt. All common share and per share
data has been retroactively restated in the accompanying consolidated financial
statements and notes thereto to reflect the number of shares received from
ThermoView, the Thermo-Tilt two-for-one stock split on September 29, 1997 and
the one-for-three reverse stock split discussed in Note 16. Pro forma
information is not presented since the transaction is not a business
combination. Following the merger, ThermoView has continued to be traded on the
OTC Bulletin Board.

Thermo-Tilt commenced operations in 1987 as a Kentucky sole proprietorship
engaged in the business of designing, installing, and selling state of the art
vinyl replacement thermal paned windows for the existing home market. On May 9,
1997, Thermo-Tilt was incorporated with the initial issuance of Thermo-Tilt
common stock for the assets of the sole proprietorship occurring on July 1,
1997.

2. SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.

CASH AND EQUIVALENTS

The Company considers all short-term, highly liquid investments with
original maturities of three months or less to be cash equivalents.

TRADE RECEIVABLES

Trade receivables consist of amounts due from customers. These are
uncollateralized, short-term receivables. The Company reviews its trade
receivables and provides allowances as deemed necessary.

F-19
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain of the Company's financial instruments including cash,
receivables, accounts payable, and other accrued liabilities, the carrying
amounts approximate fair value due to their short maturities. The Company also
estimates the fair value of long-term debt to be approximately the same as the
recorded value at each balance sheet date.

INVENTORIES

Inventories are recorded at the lower of cost (first-in, first-out basis) or
market. Inventories consist principally of components for the manufacturing of
windows such as glass, vinyl and other composites.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for major renewals
and improvements which increase the useful lives of assets are capitalized.
Maintenance, repairs and minor renewals are expensed as incurred. Assets are
depreciated on a straight-line or accelerated method over their estimated useful
lives which generally range from 3 to 7 years.

GOODWILL

Goodwill represents the excess of the aggregate purchase price paid by the
Company in acquisitions accounted for as purchases over the fair value of the
net tangible assets acquired. Goodwill is amortized on a straight-line basis
over 40 years.

ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates its goodwill and other long-term assets for impairment
and assesses their recoverability based upon anticipated future cash flows. If
facts and circumstances lead the Company's management to believe that the cost
of one of its assets may be impaired, the Company will (a) evaluate the extent
to which that cost is recoverable by comparing the future undiscounted cash
flows estimated to be associated with that asset to the asset's carrying amount
and (b) write-down that carrying amount to market value or discounted cash flow
value to the extent necessary.

WARRANTIES

The Company provides its customers with various warranty programs on its
products and services. The Company provides an accrual for future warranty costs
based upon the relationship of prior years' revenues to actual warranty costs.
It is the Company's practice to classify the entire warranty accrual as a
current liability.

REVENUE AND COST RECOGNITION

The Company recognizes revenues from fixed-price contracts on the
completed-contract method since the contracts are of a short duration. A
contract is considered complete when the customer accepts the work.

F-20
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
as incurred. Provisions for estimated losses on uncompleted contracts are made
in the period in which such losses are determined.

Costs in excess of amounts billed are classified under current assets as
costs in excess of billings on uncompleted contracts. Billings in excess of
costs are classified under current liabilities as billings in excess of costs on
uncompleted contracts.

ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expense was
$58,648 in 1996, $64,421 in 1997 and $1,578,685 in 1998.

INCOME TAXES

Prior to July 1, 1997, the Company was taxed as a sole proprietorship
whereby taxable income or loss was passed on to the proprietor. At July 1, 1997,
under the provisions of the Internal Revenue Code, the Company was incorporated
and elected to be taxed as a "C" corporation. The Company filed a consolidated
return for federal income tax purposes for its first tax year-end as of May 31,
1998. The Company intends to change its tax reporting year-end to a calendar
year basis effective December 31, 1998. Income taxes are provided for under the
liability method, which takes into account differences between financial
statement treatment and tax treatment of certain transactions.

LOSS PER COMMON SHARE

Loss per common share is calculated in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "EARNINGS PER SHARE." The
Company calculates basic earnings per common share using the weighted average
number of shares outstanding for the period. Diluted earnings per common share
include both the weighted average number of shares and any common share
equivalents such as options or warrants in the calculation. As the Company
recorded a loss in 1998, common share equivalents outstanding would be
anti-dilutive, and as such, have not been included in weighted average shares
outstanding. Basic and diluted loss per common share for the year ended December
31, 1997, is not presented as this information is not meaningful since the
Company operated as a sole proprietorship until July 1, 1997.

STOCK OPTIONS

These financial statements include the disclosure requirements of SFAS No.
123, "ACCOUNTING FOR STOCK-BASED COMPENSATION." With respect to accounting for
stock options, as permitted under SFAS No. 123, the Company has retained the
intrinsic value method prescribed by Accounting Principles Board Opinion No. 25
(APB 25), "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES," and related
interpretations.

NEW ACCOUNTING PRONOUNCEMENT

In June 1997, the FASB issued SFAS No. 130, "REPORTING COMPREHENSIVE
INCOME". SFAS 130 requires all non-owner changes in equity that are excluded
from net earnings under existing FASB standards be included as comprehensive
income. The Company has not had any transactions that directly affect equity
other than those transactions with owners in their capacity as owners.

F-21
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES

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

3. BUSINESS COMBINATIONS

During 1998, the Company acquired nine companies. Information about these
transactions is summarized as follows:

<TABLE>
<CAPTION>
COST OF ACQUIRED COMPANY
-------------------------------------------------------
COMMON STOCK ISSUED
DATE OF CASH AND -------------------------
ACQUIRED COMPANY ACQUISITION PAYABLES SHARES VALUE TOTAL COST
- ------------------------------------------------ ----------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
American Home Developers Co., Inc............... 04/25/98 $ 1,201,861 259,058 $ 5,315,870 $ 6,517,731
Primax Window Co................................ 04/30/98 1,132,566 162,725 3,156,045 4,288,611
The Rolox Companies............................. 04/30/98 2,769,812 374,058 7,254,854 10,024,666
TD Windows, Inc................................. 05/15/98 311,031 -- -- 311,031
American Home Remodeling........................ 07/10/98 3,192,005 122,415 2,536,752 5,728,757
Five Star Builders, Inc......................... 07/12/98 1,550,534 116,667 2,215,500 3,766,034
NuView Industries, Inc.......................... 07/21/98 1,189,734 725 13,106 1,202,840
Leingang Siding and Window, Inc................. 08/14/98 2,895,722 29,255 376,623 3,272,345
Thermal Line Windows, LLP....................... 08/14/98 4,670,006 50,003 643,734 5,313,740
------------- ---------- ------------- -------------
$ 18,913,271 1,114,906 $ 21,512,484 $ 40,425,755
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
</TABLE>

The above acquisitions have been accounted for as purchase transactions and,
accordingly, the results of operations of the acquired businesses have been
included in the consolidated financial statements since the respective
acquisition dates. These companies are engaged primarily in the businesses of
manufacturing replacement windows or selling and installing them in the
residential retail market. The accompanying consolidated balance sheet as of
December 31, 1998 includes allocations of the respective purchase prices to the
assets acquired and liabilities assumed based on estimates of fair value with
the excess of cost over the fair value of net assets acquired recorded as
goodwill.

The terms of certain of the Company's acquisition agreements provide for
additional consideration to be paid if the acquired entities' results of
operations exceed certain targeted levels, generally for a period of three years
subsequent to the acquisition dates. Targeted levels are generally set at the
annual earnings of the acquired entities before interest and taxes, allowing for
the add back of certain salaries and other costs that will not be incurred on a
post-acquisition basis. Such additional consideration is paid in cash and with
shares of the Company's common stock, and is recorded when earned as additional
purchase price. Goodwill is increased for any additional purchase price. During
1998, additional consideration was paid in cash totaling $150,000. Also,
$1,000,481 has been recorded as a liability as of December 31, 1998 for a future
cash payment, and 79,259 additional common shares (valued at $1,020,357) are
reported as issued and outstanding to satisfy an obligation for additional
earned consideration. The table above reflects

F-22
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

3. BUSINESS COMBINATIONS (CONTINUED)
additional consideration recorded through December 31, 1998, as well as the
$1,500,000 note payable discussed in Note 8.

The following unaudited pro forma consolidated results of operations are
presented as if the acquisitions of the nine purchased companies had occurred on
January 1, 1997:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
(UNAUDITED) 1997 1998
------------- --------------
<S> <C> <C>
Net revenues................................................... $ 59,114,861 $ 60,199,313
Net income (loss).............................................. 743,806 (5,288,847)
Net income (loss) applicable to common stockholders............ 743,806 (15,413,630)
Basic and diluted loss per common share........................ (3.37)
</TABLE>

The pro forma consolidated results of operations include adjustments to give
effect to amortization of goodwill, interest expense, and certain other
adjustments, together with related income tax effects. The pro forma
consolidated results of operations do not reflect any corporate expenses prior
to April 15, 1998, since corporate activities did not commence until then. The
unaudited pro forma information is not necessarily indicative of the results of
operations that would have occurred had the acquisitions occurred on January 1,
1997 or of the future results of the combined operations.

4. PROPERTY AND EQUIPMENT

Property and equipment at December 31 consists of the following:

<TABLE>
<CAPTION>
1997 1998
---------- ------------
<S> <C> <C>
Building and improvements........................................... $ 186,554 $ 469,107
Manufacturing equipment............................................. -- 705,632
Furniture, fixtures and equipment................................... 20,150 368,311
Computer equipment and software..................................... 156,173 649,722
Autos and trucks.................................................... 148,840 804,003
---------- ------------
511,717 2,996,775
Less accumulated depreciation....................................... (29,537) (315,880)
---------- ------------
$ 482,180 $ 2,680,895
---------- ------------
---------- ------------
</TABLE>

5. UNCOMPLETED CONTRACTS

Costs and billings on uncompleted contracts at December 31 are as follows:

<TABLE>
<CAPTION>
1997 1998
--------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts................................ $ 28,165 $ 846,051
Billings to date....................................................... -- 808,203
--------- ----------
$ 28,165 $ 37,848
--------- ----------
--------- ----------
</TABLE>

F-23
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

5. UNCOMPLETED CONTRACTS (CONTINUED)
These amounts are included in the accompanying consolidated balance sheets
under the following captions:

<TABLE>
<CAPTION>
1997 1998
--------- -----------
<S> <C> <C>
Costs in excess of billings on uncompleted contracts.................. $ 28,165 $ 604,550
Billings in excess of costs on uncompleted contracts.................. -- (566,702)
--------- -----------
$ 28,165 $ 37,848
--------- -----------
--------- -----------
</TABLE>

6. LEASES

The Company and its subsidiaries are lessees under various operating lease
agreements for office space, manufacturing facilities, warehouses, equipment and
other properties. The Company in general is responsible for all taxes, insurance
and utility expenses associated with these leases. Lease renewal options are
present in many of the lease arrangements, and range in renewal periods from one
to five years. Future minimum rental commitments at December 31, 1998, are as
follows:

<TABLE>
<CAPTION>
RELATED
YEAR PARTY LEASES OTHER LEASES TOTAL
- --------------------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
1999............................................... $ 665,699 $ 934,096 $ 1,599,795
2000............................................... 559,235 587,114 1,146,349
2001............................................... 400,467 341,817 742,284
2002............................................... 187,428 162,341 349,769
2003............................................... 104,220 54,664 158,884
Thereafter......................................... -- 6,162 6,162
------------ ------------ ------------
Total.............................................. $1,917,049 $ 2,086,194 $ 4,003,243
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

Rent expense was $124,687, $88,053 and $722,465 for the years ended December
31, 1996, 1997 and 1998, respectively. Of these amounts, related party rent
expense was $6,500 in 1997 and $296,123 in 1998. There was no related party rent
expense in 1996.

7. ACCRUED EXPENSES

Accrued expenses as of December 31 consist of the following:

<TABLE>
<CAPTION>
1997 1998
---------- ------------
<S> <C> <C>
Payroll and related................................................. $ 203,513 $ 1,249,963
Warranties.......................................................... 30,000 209,655
Professional fees................................................... 300,000 619,830
Other............................................................... -- 695,991
---------- ------------
$ 533,513 $ 2,775,439
---------- ------------
---------- ------------
</TABLE>

F-24
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

8. LONG-TERM DEBT

Long-term debt at December 31 consists of the following:

<TABLE>
<CAPTION>
1997 1998
---------- ------------
<S> <C> <C>
Bank revolving line of credit....................................... $ -- $ 5,250,000
Related party note payable.......................................... -- 1,500,000
Note payable to seller of business acquired by Company, with an
interest rate of 5.5%, unsecured and maturing on the earlier of
August 1999 or the date of a public offering of voting equity
securities........................................................ -- 1,500,000
Note payable to bank, with an interest rate of 9%, maturing in March
2004, with monthly payments of principal and interest totaling
$4,424............................................................ 255,994 227,580
Note payable to bank, with an interest rate of 9.25% (repaid in
January 1999)..................................................... -- 253,822
Other............................................................... 270,940 474,421
---------- ------------
526,934 9,205,823
Less current portion................................................ 295,872 595,754
---------- ------------
Long-term portion................................................... $ 231,062 $ 8,610,069
---------- ------------
---------- ------------
</TABLE>

The following is a schedule by years of future maturities of long-term debt
as of December 31, 1998:

<TABLE>
<S> <C>
1999............................................................ $ 595,754
2000............................................................ 5,400,412
2001............................................................ 86,378
2002............................................................ 50,771
2003............................................................ 3,048,725
Thereafter...................................................... 23,783
---------
Total......................................................... $9,205,823
---------
---------
</TABLE>

On April 20, 1998, the Company entered into an agreement with a venture
capital firm for a $5,000,000 revolving line of credit which expires on April
20, 2003. The line bears interest at prime (7.75% at December 31, 1998) plus 1%.
The line required an origination fee of $25,000. A stockholder, who also is an
officer and director of the Company, and a stockholder/director of the Company
have an ownership interest in the venture capital firm. There is no balance
outstanding on this line at December 31, 1998.

On August 31, 1998, the Company entered into a loan agreement with PNC Bank,
N.A., for a $15,000,000 revolving credit facility. At December 31, 1998, the
outstanding balance under the line of credit was $5,250,000. The interest rate
is a LIBOR-based variable rate which was 7.84% at December 31, 1998. Interest on
the line of credit is payable quarterly and principal is payable in full at
maturity on August 31, 2000.

Under this credit facility and other financing and lease arrangements,
substantially all of the Company's assets are pledged as collateral. The Company
is required to maintain certain financial ratios

F-25
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

8. LONG-TERM DEBT (CONTINUED)
and to comply with various other covenants and restrictions under the terms of
the credit facility and other agreements, including restriction as to the
payment of dividends, other than preferred stock dividends, and the incurrence
of additional indebtedness. The Company has not met certain covenants subsequent
to December 31, 1998. PNC Bank, N.A., has waived all covenant violations through
July 8, 1999, and has reset covenants to accommodate future compliance.

On December 18, 1998, the Company executed a $5,500,000 unsecured
subordinated promissory note in favor of four stockholders of the Company. Three
of the four stockholders are also officers and directors of the Company. The
principal amount outstanding under the note at December 31, 1998, was
$1,500,000. The interest rate is a LIBOR-based variable rate which was 9.59% at
December 31, 1998. Interest is payable monthly and principal was payable in full
at maturity on March 31, 1999, and is now payable on demand. As of December 31,
1998, the lenders are due a loan origination fee of $250,000 which is being
amortized over the term of the note.

Both the related party note and the note payable to seller have been
classified as long-term since the Company currently has the ability and the
intent to refinance these obligations on a long-term basis.

Cash paid for interest was $56,603, $90,032 and $383,244 for 1996, 1997 and
1998, respectively.

9. INCOME TAXES

Significant components of income tax benefit for the years ended December
31, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
1997 1998
----------- -------------
<S> <C> <C>
Current:
Federal......................................................... $ -- $ --
State........................................................... -- 147,000
----------- -------------
-- 147,000
Deferred:
Federal......................................................... (211,000) (1,099,000)
State........................................................... (55,000) (183,000)
----------- -------------
(266,000) (1,282,000)
----------- -------------
Income tax benefit................................................ $ (266,000) $ (1,135,000)
----------- -------------
----------- -------------
</TABLE>

F-26
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

9. INCOME TAXES (CONTINUED)
A reconciliation of income tax benefit with the expected amount computed by
applying the federal statutory income tax rate to loss before income taxes for
the years ended December 31, 1997 and 1998 is as follows:

<TABLE>
<CAPTION>
1997 1998
---------- -----------
<S> <C> <C>
Income tax benefit computed at federal statutory tax rate............... (34.0)% (34.0)%
State taxes, net of federal benefit..................................... (4.8) (.4)
Nondeductible expense related to sales of common stock to employees..... -- 12.5
Nondeductible merger and acquisition costs.............................. 21.2 1.5
Nondeductible goodwill amortization..................................... -- 2.5
Effect of sole proprietor's income taxed on proprietor's individual
return................................................................ (18.5) --
Other................................................................... (.2) --
---------- -----------
Total................................................................. (36.3)% (17.9)%
---------- -----------
---------- -----------
</TABLE>

Significant components of deferred income taxes as of December 31 are as
follows:

<TABLE>
<CAPTION>
1997 1998
---------- ------------
<S> <C> <C>
Net operating loss carryforwards.................................... $ 154,000 $ 265,000
Allowance for doubtful accounts..................................... 6,000 94,000
Compensation expense related to stock options....................... -- 1,270,000
Warranties.......................................................... 12,000 84,000
Other............................................................... 94,000 62,000
---------- ------------
Total deferred tax assets........................................... $ 266,000 $ 1,775,000
---------- ------------
---------- ------------
</TABLE>

As of December 31, 1998, the Company has net operating loss carryforwards of
approximately $675,000 for federal income tax purposes which the Company expects
to be able to utilize in the year ended December 31, 1999. These net operating
losses expire in 2018. The Company believes it is more likely than not that
future earnings will be sufficient to ensure the realization of its deferred tax
assets.

Cash paid for income taxes was $17,614 in 1998. No income taxes were paid in
1996 or 1997.

10. STOCKHOLDERS' EQUITY

PREFERRED STOCK

SERIES A

On June 12, 1998, the Company commenced a Series A preferred stock offering
for the sale of a maximum of 4,000,000 shares of its 10% Cumulative Convertible
Series A preferred stock (the "Series A preferred stock") at $5.00 per share. On
October 15, 1998, the date the preferred stock offering terminated, 2,980,000
shares of Series A preferred stock had been sold and the Company collected
$14,513,583 in proceeds, after issuance costs.

F-27
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

10. STOCKHOLDERS' EQUITY (CONTINUED)

Dividends on the shares of Series A preferred stock at an annual rate of 50
cents per share are cumulative from the date of original issuance and are
payable quarterly in arrears. The Series A preferred stock has a liquidation
preference of $5 per share and is convertible at the option of the holder at any
time, unless previously redeemed by the Company, into the Company's $.001 par
value Common Stock (the "Common Stock") at a conversion price, subject to
adjustment in certain circumstances, of $15.00 per share of Common Stock
(initially equivalent to a conversion rate of one share of Common Stock for each
share of Series A preferred stock). Because of the beneficial conversion feature
of the Series A preferred stock relative to the OTC Bulletin Board price of
Common Stock at the date of issue, the Company has included $9,539,678 of
dividends in addition to cash dividends paid as an amount attributable to
preferred stockholders in the accompanying consolidated statement of operations
for the year ended December 31, 1998.

The Series A preferred stock is not redeemable prior to June 12, 2001
(except in the case of a public offering of the Company's Common Stock, in which
case the Series A preferred stock will be converted in whole at such time) and
is not redeemable by the Company for cash. On or after June 12, 2001, the Series
A preferred stock will be redeemable for Common Stock at the option of the
Company, in whole or in part, for such number of shares of Common Stock as are
issuable at a conversion rate of one share of Common Stock for three shares of
Series A preferred stock, subject to adjustment in certain circumstances. The
Company may exercise this option only if for 20 trading days within any period
of 30 consecutive trading days, including the last trading day of such period,
the closing price of the Common Stock on the OTC Bulletin Board exceeds $15.00
per share, subject to adjustment in certain circumstances.

SERIES B

In October 1998, the Company's Board of Directors authorized the Company to
issue up to 4,000,000 shares of 10% Cumulative Series B preferred stock (the
"Series B preferred stock") to be used as consideration in certain acquisitions.
The Series B preferred stock has terms substantially identical to the Series A
preferred stock described above. As mentioned in Note 15, 400,000 shares of
Series B preferred stock were issued as partial consideration for a January 1999
acquisition.

VOTING RIGHTS

Generally, the holders of Series A and Series B preferred stock will not
have voting rights. Whenever dividends on the preferred stock are in arrears in
an amount equal to the dividends payable thereon for six quarterly dividend
periods, holders of the preferred stock will have the right to elect two
additional directors to serve on the Company's Board of Directors until all
accumulated and unpaid dividends on the preferred stock have been paid in full.

COMMON STOCK

On July 1, 1997, in connection with the Company's initial capitalization,
the Company issued 1,859,245 shares of common stock to the President of the
Company, at that time, and his family members in exchange for assets and
liabilities having a net book deficiency of $290,867 at historical cost. The
Company also issued 762,722 shares of the Company's common stock to various
outside investors in exchange for assets having a fair value of $434,125.

F-28
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

10. STOCKHOLDERS' EQUITY (CONTINUED)

In the last quarter of 1997, the Company issued 316,562 shares of common
stock in two private placements for net proceeds of $897,275. During the first
quarter of 1998, the Company completed these private placements by issuing an
additional 181,472 shares for net proceeds of $613,650.

As more fully described in Note 1, on April 15, 1998, the Company acquired
all of the outstanding common stock of Thermo-Tilt in a reverse merger.

During 1998, the Company issued 1,114,906 shares of common stock having a
fair value of $21,512,484 in connection with the acquisition of nine companies
and retired 91,285 shares of its common stock which was purchased for
$2,139,930.

EMPLOYEE STOCK OPTIONS

Prior to April 15, 1998, the Company had no formal employee stock option
plan. As such, all options granted to employees prior to April 15, 1998, were
non-qualified stock options. The exercise price and terms of any non-qualified
options granted are determined at the date of grant.

During 1998, the Company issued non-qualified, non-plan options to purchase
315,597 shares of common stock to key employees. The options were granted at
$3.45 per share which, except for an option to purchase 41,667 shares granted to
a key employee, equaled or exceeded the estimated fair value of the common stock
at the date of grant. All of these options are fully vested at December 31, 1998
and expire five years from the date of grant. The Company recognized expense of
$1,098,750 in 1998 in connection with the option for 41,667 shares.

On April 15, 1998, the Company adopted the 1998 Employee Stock Option Plan
(the "1998 Plan"). Under the 1998 Plan, qualified or non-qualified stock options
for up to 500,000 shares may be granted to key employees. The exercise price and
terms of any options granted are determined at the date of grant.

During 1998, the Company issued options to purchase 376,667 shares of common
stock under the 1998 Plan. The options were granted at exercise prices ranging
from $3.45 to $6.90 per share which, except for options to purchase 110,000
shares, equaled or exceeded the estimated fair value of the common stock at the
date of grant. The Company recognized expense of $2,076,000 in 1998 in
connection with the options for 110,000 shares. All of these options are fully
vested at December 31, 1998, and expire five to ten years from the date of
grant.

In October 1997, the Company issued an option to purchase 492,802 shares of
common stock to a company owned by immediate family members of an employee of
the Company. The option was granted at $.87 per share, vested one year after the
grant date and expires five years after grant date. The exercise price of the
option exceeded the estimated fair value of the Company's common stock at the
date of grant. Pursuant to SFAS No. 123 "ACCOUNTING FOR STOCK-BASED
COMPENSATION," the Company has elected to account for its employee stock options
under APB No. 25 "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES." Accordingly, no
compensation cost has been recognized for employee options except as noted
above. Had

F-29
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

10. STOCKHOLDERS' EQUITY (CONTINUED)

compensation cost for employee options been determined based on the fair value
at the grant date consistent with SFAS No. 123, the Company's net loss and loss
per share would have been as follows for the year ended December 31:

<TABLE>
<CAPTION>
1997 1998
----------- --------------
<S> <C> <C>
Net loss:
As reported.................................................... $ (466,228) $ (5,202,486)
Pro forma...................................................... (491,730) (5,992,725)
Net loss attributable to common stockholders:
As reported.................................................... (864,497) (15,327,269)
Pro forma...................................................... (889,999) (16,117,508)
Basic and diluted loss per common share:
As reported.................................................... (3.85)
Pro forma...................................................... (4.05)
</TABLE>

The fair value of each option grant to employees is estimated on the date of
grant using the Black Scholes option-pricing model with the following weighted
average assumptions:

<TABLE>
<S> <C>
Interest rate...................................................... 5%
Dividends.......................................................... --
Expected volatility................................................ 2.21
Expected life in years............................................. 3 years
</TABLE>

Stock option activity during 1997 and 1998 is summarized as follows:

<TABLE>
<CAPTION>
1997 1998
--------- ----------
<S> <C> <C>
Outstanding, January 1................................................ -- 492,802
Granted............................................................... 492,802 692,263
Exercised............................................................. -- --
Canceled.............................................................. -- --
--------- ----------
Outstanding, December 31.............................................. 492,802 1,185,065
--------- ----------
--------- ----------
Exercisable........................................................... -- 1,185,065
Available for grant................................................... -- 123,334
Average price per share:
Outstanding, January 1.............................................. $ -- $ .87
Granted............................................................. .87 3.96
Exercised........................................................... -- --
Outstanding, December 31............................................ .87 2.67
Exercisable, December 31............................................ -- 2.67
Weighted average grant date fair value of options..................... $ .27 $ 3.75
</TABLE>

F-30
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

10. STOCKHOLDERS' EQUITY (CONTINUED)
The following table summarizes information about employee stock options
outstanding at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING WEIGHTED-AVERAGE
- ------------------------------------ REMAINING CONTRACTUAL
NUMBER OUTSTANDING EXERCISE PRICE LIFE
- ------------------- --------------- -------------------------
<C> <C> <S>
492,802....... $ .87 45 months
582,263....... 3.45 49
43,334........ 6.15 114
66,666........ 6.90 118
</TABLE>

In December 1998, the Company's Board of Directors adopted the 1999 Stock
Option Plan (the "1999 Plan") under which qualified or non-qualified options for
up to 833,334 shares may be granted to key employees and directors. On January
1, 1999, options for 240,041 shares of common stock were granted to 227
employees of the Company under the 1999 Plan at an exercise price of $15.93 per
share. These options vest over a three-year period and expire on July 1, 2003.

In January 1999, options for 116,667 shares of common stock were granted
under the 1998 Plan to certain employees of a business acquired by the Company
in January 1999. These options have the same terms as the options granted under
the 1999 Plan noted above. The remaining shares available for grant under the
1998 Plan (6,667 shares) are now considered shares reserved under the 1999 Plan.

In March 1999, the Company granted options for 33,334 shares of common stock
under the provisions of the 1999 Plan to an employee of a business acquired in
March 1999. The exercise price of the options is $25.86 per share. The options
vest equally in March 2004 and March 2005 and expire on March 23, 2009.

In April 1999, the Company granted options for 16,000 shares of common stock
under the provisions of the 1999 Plan to certain employees of a business
acquired in January 1999. The exercise price of the options is $19.38 per share.
The options vest over a three-year period and expire on April 16, 2009.

The Company granted options for 7,500 shares of common stock with an
exercise price of $11.64 to three non-employee directors in May 1999 under the
1999 Plan. The options vest over a three-year period and expire on May 10, 2009.

NON-EMPLOYEE STOCK OPTIONS AND PURCHASE WARRANTS

On October 22, 1997, the Company issued options to purchase 43,483 shares of
common stock to several consultants for services. The options were granted at
$0.87 per share, vested one year after the grant date and expire five years
after grant date. In March 1998, the Company issued options to purchase 43,483
shares of common stock to consultants for services. The options were granted at
$3.45 per share and vested immediately. The Company recognized expense of $1,050
and $11,950 for 1997 and 1998, respectively, for all of these options granted to
consultants based on an estimate of the fair value of the options granted.

On November 1, 1998, the Company issued stock warrants to purchase 41,667
shares of common stock at $30 per share to a consultant. The warrants vested
immediately and expire five years from the date of issue. No expense was
recognized due to the insignificance of the estimated fair value of the
warrants.

F-31
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

10. STOCKHOLDERS' EQUITY (CONTINUED)
COMMON STOCK SOLD TO EMPLOYEES BY SIGNIFICANT STOCKHOLDER

During 1998, a significant stockholder who is also an officer and director
of the Company sold 107,828 shares of his Company common stock to certain
employees or their children at prices below the OTC Bulletin Board price at the
date of sale. The Company recognized expense of $2,322,000 in 1998 in connection
with these sales.

COMMON SHARES RESERVED

The following table summarizes the number of shares of common stock reserved
for future issuance as of December 31, 1998:

<TABLE>
<S> <C>
Series A convertible preferred stock............................. 993,334
Employee stock options:
Options granted................................................ 1,185,065
Shares reserved for future grants:
1998 Plan.................................................... 116,667
1999 Plan.................................................... 833,334
Other stock options and stock purchase warrants.................. 128,633
---------
3,257,033
---------
---------
</TABLE>

11. EMPLOYEE BENEFIT PLANS

Effective January 1, 1999, the Company established a defined contribution
401(k) profit sharing plan and trust for the benefit of all its employees,
subject to certain age and service requirements. Plan participants may make
salary reduction contributions to the plan which are subject to Internal Revenue
Service contribution limitations. The Company will make matching employer
contributions of twenty-five percent of the first six percent of the employees'
contributions. Employee contributions vest immediately. Employer contributions
vest over a six-year period.

Thermo-Tilt has a 401(k) profit sharing plan established to cover
substantially all of its eligible employees. Employee contributions to the plan
are elective, and matching contributions by the employer are optional.
Thermo-Tilt incurred $23,476, $14,721 and $13,971 in contribution expense for
the years ended December 31, 1996, 1997 and 1998, respectively. This plan will
be merged into the ThermoView plan in 1999.

Five of the Company's acquired businesses have existing 401(k) profit
sharing plans. The Company will merge these plans into its own plan during 1999.
These plans have various eligibility requirements and vesting provisions. All of
the plans provide for either a predetermined or discretionary employer match.
Contribution expense for these plans aggregated $30,081 for the periods since
acquisition during 1998.

12. RELATED PARTY TRANSACTIONS

On December 20, 1997, in connection with a building sale-leaseback
transaction, the Company began leasing its place of business in Owensboro,
Kentucky, from a stockholder. In connection with the sale, the buyer assumed and
satisfied debts of the Company in the amount of $620,223. The lease expires

F-32
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

12. RELATED PARTY TRANSACTIONS (CONTINUED)
December 20, 2002. Future minimum aggregate lease payments required as of
December 31, 1998, approximate $312,000. The gain of $55,008 on the transaction
has been deferred and is being amortized over the term of the lease.
Amortization of the gain on the sale for the years ended December 31, 1997 and
1998 was $458 and $11,005, respectively. Lease expense and the related lease
commitment are included in related party amounts disclosed in Note 6.

During the years ended December 31, 1997 and 1998, the Company had notes
receivable at an interest rate of 8% from a company controlled by a relative of
a stockholder, who is also an officer and director of the Company. Amounts owed
the Company were approximately $232,000 and $181,000 at December 31, 1997 and
1998, respectively. The remaining $181,000 was repaid in January 1999.

At December 31, 1997 and 1998, the Company had receivables due from a
stockholder, who is also an officer and director of the Company, amounting to
$138,430 and $19,006, respectively.

During 1998, the Company purchased $4,106,375 of windows from a supplier
owned by a stockholder, who is also a director and officer of the Company. The
net amount owed this supplier at December 31, 1998, was approximately $225,393.

The Company purchased $1,487,090 and $779,518 of windows in 1997 and 1998,
respectively, from a company that is owned by a stockholder of the Company.

13. COMMITMENTS AND CONTINGENCIES

In October 1998, the Company entered into a $350,000 equipment lease line
with a bank. The lease line will be used principally for computer hardware and
software. Commitments for approximately $180,000 of purchases to be leased under
this line were outstanding at December 31, 1998.

The Company is subject to legal proceedings and claims which have arisen in
the ordinary course of its business and have not been finally adjudicated.
Although there can be no assurance as to the ultimate disposition of these
matters, it is the opinion of the Company's management, based upon the
information available at this time, that the expected outcome of these matters,
individually or in the aggregate, will not have a material adverse effect on the
results of operations and financial condition of the Company.

14. SEGMENT INFORMATION

In 1996 and 1997, the Company was comprised of only one business unit that
operated exclusively in the retail segment designing, selling, and installing
vinyl replacement windows. In 1998, the Company's ten business units have
separate management teams and infrastructures that operate primarily in the
vinyl replacement windows, doors and related home improvement products industry
in various states in the Midwest and in Southern California. The business units
have been aggregated into three reportable operating segments: manufacturing,
retail and financial services.

MANUFACTURING

The manufacturing segment includes the businesses that manufacture and sell
vinyl replacement windows to the Company's retail segment and to unaffiliated
customers.

F-33
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

14. SEGMENT INFORMATION (CONTINUED)
RETAIL

The retail segment includes the businesses that design, sell and install
vinyl replacement windows, doors and related home improvement products to
commercial and retail customers.

FINANCIAL SERVICES

The financial services segment is in a start-up phase and finances credit
sales of the retail segment.

The accounting policies of the segments are the same as those described in
Note 2. Intersegment sales prices are comparable to sales prices charged to
unaffiliated customers. The Company allocated $1,915,000 of corporate expenses
in 1998 to its operating business units as a management fee based on a percent
of revenues. The Company evaluates performance based on income from operations
of the respective businesses.

Segment information for 1998 was as follows:

<TABLE>
<CAPTION>
FINANCIAL
MANUFACTURING RETAIL SERVICES CORPORATE CONSOLIDATED
-------------- ------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues from external customers........ $ 3,365,808 $ 34,010,547 $ -- $ -- $ 37,376,355
Intersegment revenues................... 909,019 -- -- -- 909,019
Interest income......................... 10,935 32,050 11,651 14,421 69,057
Interest expense........................ 11,009 131,033 -- 297,089 439,131
Income (loss) from operations........... 312,680 (378,529) (188,920) (5,712,643) (5,967,412)
Depreciation and amortization........... 86,276 707,105 7,895 52,894 854,170
Total assets............................ 6,779,994 39,781,170 662,234 2,970,348 50,193,746
Capital expenditures.................... 269,004 356,652 76,409 158,832 860,897
</TABLE>

15. SUBSEQUENT EVENTS

On January 4, 1999, the Company purchased Thomas Construction, Inc.
(Thomas), for $11,095,000 in cash, 100,475 shares of common stock at an
estimated fair value of $1,500,000 and 400,000 shares of Series B preferred
stock at an estimated fair value of $2,000,000. The acquisition agreement
provides for additional consideration to be paid if Thomas exceeds certain
targeted levels of operating results. Thomas is primarily engaged in the home
improvement business in the St. Louis Metropolitan area.

On January 5, 1999, the Company purchased Precision Window Manufacturing,
Inc. (Precision), for $1,800,000 in cash, 37,351 shares of common stock at an
estimated fair value of $450,000 and a seller note for $1,200,000. Precision
manufactures windows and sells primarily to the Company's retail segment, and is
located in St. Louis.

Effective March 1, 1999, the Company purchased Thermo-Shield, Inc.
(Thermo-Shield), for $350,000 cash, 185,006 shares of common stock at an
estimated fair value of $2,625,000 and a seller note for $4,150,000.
Thermo-Shield is primarily engaged in the home improvement business (retail
sales and installation) in Illinois, Wisconsin, Arizona, Michigan and Indiana.

All of these acquisitions have been accounted for as purchase transactions.
The cash portion of the acquisitions was provided from a $9,750,000 draw on the
Company's $15,000,000 bank line, and the

F-34
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

15. SUBSEQUENT EVENTS (CONTINUED)
balance from the $5,500,000 related-party loan facility discussed in Note 8 and
a $350,000 related-party loan discussed below.

Subsequent to December 31, 1998, the Company borrowed $1,100,000 with
interest at 12% from three stockholders. Two of the three stockholders are also
officers and directors of the Company. The Company used $750,000 of the proceeds
to pay a portion of a contingent payment related to a 1998 business acquisition
and $350,000 was used to pay the cash portion of the March 1, 1999, acquisition
mentioned above. The Company subsequently repaid the $1,100,000.

On April 19, 1999, the Board of Directors authorized the Company to issue up
to 25,000 shares of Series C preferred stock.

On April 23, 1999, Brown Simpson Growth Fund, L.P., a New York limited
partnership, and Brown Simpson Growth Fund, Ltd., a Grand Cayman, Cayman Islands
limited partnership, pursuant to a securities purchase agreement, purchased
6,000 shares of Series C preferred stock at $1,000 per share for a total
investment of $6,000,000.

The Series C preferred stock has a stated value of $1,000 per share, with
certain other preferences, rights, voting powers, restrictions and limitations
as to dividends, qualifications and terms and conditions of redemption. Dividend
payments (9.6% per annum) are to be 70% cash and 30% Company common stock. The
Series C preferred stock is convertible at any time, in whole, or in part, at
the option of the holder into shares of common stock, at a conversion price
(initially equivalent to a conversion rate of 67 shares of common stock for each
share of Series C preferred stock). Additionally, the Series C preferred stock
is redeemable at the option of the holder: (i) on October 23, 2000, or (ii) on
April 23, 2002, and (iii) immediately upon the occurrence of certain events of
redemption, but only in the event such redemption would not violate the
Company's senior debt agreements then in effect. The Company has no right to
require redemption or conversion of the Series C preferred stock.

In conjunction with the issuance of the Series C preferred stock, the
Company issued to the two funds warrants to purchase up to a total of 400,000
shares of common stock at $21.00 per share (the number of shares and exercise
price being subject to adjustment in certain circumstances) at any time until
April 22, 2004. Additionally, the Company and the two funds entered into a
registration rights agreement whereby the Company has agreed to register 150% of
the shares of common stock issuable upon conversion of the Series C preferred
stock and exercise of the warrants. The Company has agreed to file a
registration statement on Form S-1 with the Securities and Exchange Commission
(SEC) by July 15, 1999 to register the aforementioned shares. The Company has
agreed to keep the registration statement effective for four years after the
date the SEC declares the registration statement effective unless the two funds
have sold all of the common stock covered by the registration statement or
unless the two funds may sell the common stock without volume restrictions
pursuant to Rule 144 under the Securities Act of 1933, as amended. For every
month in which (i) the Company has not met the required filing date of the
registration statement or the registration statement has not been declared
effective by the SEC within 120 days following the filing date of the
registration statement or 150 days if a delay results from the SEC review
process, (ii) the Company has failed to keep the registration statement
effective as required, or (iii) the common stock is not listed or quoted on the
OTC Bulletin Board, the NASDAQ National Market System or other national
securities exchange, the funds have the right to require the Company to pay them
a cash penalty equal to 2% of the product of the number of shares of Series C
preferred stock then outstanding and $1,000. The

F-35
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

15. SUBSEQUENT EVENTS (CONTINUED)
registration rights agreement also grants the two funds certain other demand and
piggy-back registration rights.

The portion of the proceeds from this mandatorily redeemable preferred stock
issue allocable to the detachable stock purchase warrants will be accounted for
as paid-in capital with the resulting discount to be accounted for as additional
dividends to the preferred stockholders from the date of issue to the earliest
redemption date (October 23, 2000). In addition, since the Series C preferred
stock has a beneficial conversion feature at the date of issue, preferred
dividends will also include approximately $1,200,000 in the second quarter of
1999.

Proceeds of the Series C were used to retire the $4,150,000 seller note
incurred in connection with the March 1, 1999, acquisition mentioned above.

On July 8, 1999, the Company entered into a senior subordinated promissory
note agreement with GE Capital Equity Investments, Inc. (GE) for $10,000,000.
Terms of the agreement require 12% interest, payable quarterly. The base rate
increases to 15% if the Company does not complete a qualified public offering as
defined in the agreement by July 8, 2000, and an additional 24% per annum if and
while the Company is paying penalties to Brown Simpson with respect to untimely
registration statement filing or effectiveness dates. The agreement provides for
redemption in whole or in part at the Company's option at a 103% premium the
first year, 102% the second year and 101% the third year. The Company must
redeem $10,000,000 (or such lesser amount as then may be outstanding) without
premium on the maturity date in July 2002. Upon a change in control of the
Company, GE has the option to require the Company to redeem all or a portion of
the note with a premium due as set forth above.

In connection with the loan agreement, GE was issued a warrant with the
right to purchase 555,343 shares of common stock at any time at $.03 per share
(the number of shares being subject to adjustment in certain circumstances)
until July 2007. The portion of the proceeds from this loan allocable to the
detachable stock purchase warrant will be accounted for as paid-in capital with
the resulting discount to be accounted for as additional interest over the term
of the loan. GE has certain demand and piggy-back registration rights with
respect to common stock underlying the warrant.

The Company must comply with various covenants and restrictions under the
terms of the loan agreement. The subordinated note and warrant are secured by a
second perfected interest in all assets of the Company and its subsidiaries and
by a pledge of all of the Company's ownership in its current and future
subsidiaries.

A portion of the proceeds of the loan will be used to retire the $5,500,000
related-party loan and a portion of the $1,500,000 seller note discussed in Note
8.

16. REVERSE COMMON STOCK SPLIT

On September 9, 1999, the Board of Directors declared a one-for-three
reverse common stock split to become effective at the date the Company files an
amendment to its restated articles of incorporation. The reverse stock split was
voted on and approved by stockholders on September 23, 1999. All common share
and per share data has been retroactively restated in the accompanying
consolidated financial statements and notes thereto to reflect the reverse stock
split.

F-36
<PAGE>

THERMOVIEW INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, 1998 JUNE 30, 1999
(NOTE 1) (UNAUDITED)
----------------- --------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents........................................................ $ 1,302,797 $ 2,291,941
Receivables:
Trade..................................................................... 2,969,462 4,174,495
Finance................................................................... 763,616 394,523
Related party............................................................. 410,720 52,447
Other..................................................................... 326,079 457,404
Costs in excess of billings on uncompleted contracts........................ 604,550 1,982,247
Inventories................................................................. 1,313,318 2,521,952
Prepaid expenses and other current assets................................... 169,584 354,693
Deferred income taxes....................................................... 533,000 350,500
----------------- --------------
Total current assets.......................................................... 8,393,126 12,580,202

Property and equipment, net................................................... 2,680,895 3,887,805

Other assets:
Goodwill, net............................................................... 37,040,101 62,369,830
Deferred income taxes....................................................... 1,242,000 1,242,000
Other assets................................................................ 837,624 1,141,502
----------------- --------------
39,119,725 64,753,332
----------------- --------------
Total assets.................................................................. $ 50,193,746 $ 81,221,339
----------------- --------------
----------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................................ $ 2,052,937 $ 4,852,433
Due to sellers of acquired businesses....................................... 1,000,481 1,500,000
Accrued expenses............................................................ 2,775,439 3,633,852
Billings in excess of costs on uncompleted contracts........................ 566,702 1,510,693
Income taxes payable........................................................ 150,837 134,867
Current portion of long-term debt........................................... 595,754 494,015
----------------- --------------
Total current liabilities..................................................... 7,142,150 12,125,860

Long-term debt (including related party notes payable of $1,500,000 at
December 31, 1998 and $5,500,000 at June 30, 1999).......................... 8,610,069 23,716,858
Other long-term liabilities................................................... 43,545 38,844
Mandatorily redeemable Series C convertible preferred stock, $.001 par value;
25,000 shares authorized; 6,000 shares issued and outstanding at June 30,
1999...................................................................... -- 3,885,680

Stockholders' equity:
Preferred stock, 50,000,000 shares authorized:
Series A, $.001 par value; 2,980,000 shares issued and outstanding at
December 31, 1998 and June 30, 1999..................................... 2,980 2,980
Series B, $.001 par value; 400,000 shares issued and outstanding at June
30, 1999................................................................ -- 400
Common stock, $.001 par value; 100,000,000 shares authorized; 4,490,288
shares issued and outstanding at December 31, 1998 and 4,831,120 shares
issued and outstanding at June 30, 1999................................... 4,490 4,831
Paid-in capital............................................................. 40,457,495 47,831,409
Accumulated deficit......................................................... (6,066,983) (6,385,523)
----------------- --------------
Total stockholders' equity.................................................... 34,397,982 41,454,097
----------------- --------------
Total liabilities and stockholders' equity.................................... $ 50,193,746 $ 81,221,339
----------------- --------------
----------------- --------------
</TABLE>

See accompanying notes.

F-37
<PAGE>

THERMOVIEW INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
----------------------------
1998 1999
------------ --------------
<S> <C> <C>
Revenues............................................................................ $ 6,257,639 $ 50,196,310

Cost of revenues earned............................................................. 2,719,213 22,502,359
------------ --------------

Gross profit........................................................................ 3,538,426 27,693,951

Selling, general and administrative expenses........................................ 3,991,008 25,389,692
Depreciation and amortization....................................................... 162,510 1,442,628
------------ --------------

Income (loss) from operations....................................................... (615,092) 861,631

Interest expense.................................................................... (124,100) (857,837)
Interest income..................................................................... 12,237 100,666
------------ --------------

Income (loss) before income taxes................................................... (726,955) 104,460

Income tax expense (benefit)........................................................ (210,000) 423,000
------------ --------------

Net loss............................................................................ (516,955) (318,540)

Preferred stock dividends:..........................................................

Cash.............................................................................. -- (989,681)

Non-cash.......................................................................... -- (1,464,290)
------------ --------------

Net loss attributable to common stockholders........................................ $ (516,955) $ (2,772,511)
------------ --------------
------------ --------------

Basic and diluted loss per common share............................................. $ (0.15) $ (0.58)
------------ --------------
------------ --------------

Weighted average shares outstanding................................................. 3,489,862 4,750,323
------------ --------------
------------ --------------
</TABLE>

See accompanying notes.

F-38
<PAGE>

THERMOVIEW INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE
30,
-----------------------------
1998 1999
------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss........................................................................... $ (516,955) $ (318,540)
Adjustments to reconcile net loss to net cash provided by operations:
Depreciation and amortization.................................................... 162,510 1,442,628
Deferred income taxes............................................................ (239,313) 182,500
Stock-based compensation expense................................................. 305,926 --
Changes in operating assets and liabilities...................................... 349,074 1,598,360
------------- --------------
Net cash provided by operating activities.......................................... 61,242 2,904,948

INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired................................... (4,898,060) (17,124,750)
Payments for purchase of property and equipment.................................... (95,410) (1,228,819)
Other.............................................................................. (196,107) (538,604)
------------- --------------
Net cash used in investing activities.............................................. (5,189,577) (18,892,173)

FINANCING ACTIVITIES
Increase in long-term debt......................................................... 5,014,316 13,561,471
Payment of amount due to sellers of acquired businesses............................ -- (1,000,481)
Proceeds from issuance of mandatorily redeemable preferred stock and detachable
stock purchase warrants, net of fees............................................. -- 5,405,060
Proceeds from issuance of preferred stock.......................................... 497,169 --
Proceeds from issuance of common stock............................................. 613,650 --
Preferred stock dividends--cash.................................................... -- (989,681)
Other.............................................................................. 12,012 --
------------- --------------
Net cash provided by financing activities.......................................... 6,137,147 16,976,369
------------- --------------
Net increase in cash and equivalents............................................... 1,008,812 989,144
Cash and equivalents at beginning of period........................................ 69,057 1,302,797
------------- --------------
Cash and equivalents at end of period.............................................. $ 1,077,869 $ 2,291,941
------------- --------------
------------- --------------
</TABLE>

See accompanying notes.

F-39
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1999

(UNAUDITED)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions in Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. ThermoView's business is subject to seasonal variations. The
demand for replacement windows and related home improvement products is
generally lower during the winter months due to inclement weather. Demand for
replacement windows is generally higher in the second and third quarters.
Operating results for the six-month period ended June 30, 1999, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1999.

For further information, refer to the consolidated financial statements and
footnotes thereto for the year ended December 31, 1998, included elsewhere in
this prospectus.

On April 15, 1998, ThermoView Industries, Inc. ("ThermoView" or "the
Company") acquired all of the outstanding stock of Thermo-Tilt Window Company
("Thermo-Tilt"), a Delaware corporation, in exchange for 3,120,000 shares of
ThermoView's authorized, but unissued, common stock which represented 90% of
ThermoView's then outstanding common stock. Such shares were issued to the
former stockholder of Thermo-Tilt. The stock exchange between Thermo-Tilt and
ThermoView was accounted for as a capital transaction similar to a reverse
acquisition except that no goodwill was recorded. As a result, Thermo-Tilt is
deemed to be the acquirer for accounting purposes and is the accounting survivor
and reporting successor. All common share and per share data has been
retroactively restated in the accompanying condensed consolidated financial
statements and notes thereto to reflect the number of shares received from
ThermoView, the Thermo-Tilt two-for-one stock split on September 29, 1997 and
the one-for-three reverse stock split discussed in Note 10. Results of
operations for the six-month periods ended June 30, 1998 and 1999, reflect the
operating results of Thermo-Tilt consolidated with the operating results (since
the acquisition dates) of the following businesses acquired by ThermoView:

American Home Developers Co., Inc.
Primax Window Co.
The Rolox Companies
TD Windows, Inc. (formerly Allhom Eagle Windows and Doors, Inc.)
American Home Remodeling, Inc.
Five Star Builders, Inc.
ThermoView of Missouri, Inc. (formerly NuView Industries, Inc.)
Leingang Siding and Window, Inc.
Thermal Line Windows, LLP
Thomas Construction, Inc. (see Note 2)
Precision Window Mfg., Inc. (see Note 2)
Thermo-Shield Companies (see Note 2)

F-40
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1999

(UNAUDITED)

2. BUSINESS COMBINATIONS

On January 5, 1999, the Company purchased Precision Window Mfg., Inc.
(Precision), for $1,800,000 in cash, 37,351 shares of common stock at an
estimated fair value of $450,000 and a seller note for $1,200,000. Precision
manufactures windows and sells primarily to the Company's retail segment, and is
located in St. Louis.

Effective March 1, 1999, the Company purchased The Thermo-Shield Companies
(Thermo-Shield), for $350,000 cash, 185,006 shares of common stock at an
estimated fair value of $2,625,000 and a seller note for $4,150,000. The
acquisition agreement provides for additional consideration to be paid if
Thermo-Shield exceeds certain targeted levels of operating results.
Thermo-Shield is primarily engaged in the home improvement business (retail
sales and installation) in Illinois, Wisconsin, Arizona, Michigan and Indiana.

All of these acquisitions have been accounted for as purchase transactions.
The cash portion of the acquisitions was provided from a $9,750,000 draw on the
Company's $15,000,000 bank line, and the balance from related-party loans
totaling $5,850,000.

The pro forma unaudited results of operations for the six-month periods
ended June 30, 1998 and 1999, assuming all acquisitions were made as of January
1, 1998, are as follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1999
---------- ----------
<S> <C> <C>
Net revenues....................................... $47,159,851 $52,698,127
Net loss........................................... (155,382) (277,451)
Net loss applicable to common stockholders......... (155,382) (2,731,422)
Basic and diluted loss per common share............ (.01) (.57)
</TABLE>

The pro forma consolidated results of operations include adjustments to give
effect to amortization of goodwill, interest expense, preferred stock dividends,
and certain other adjustments, together with related income tax effects. The pro
forma results for the six months ended June 30, 1998, include corporate expenses
for only a portion of the period, since corporate activities did not commence
until April 1998.

3. INVENTORIES

Inventories consist principally of components for the manufacturing of
windows such as glass, vinyl and other composites.

F-41
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1999

(UNAUDITED)

4. LOSS PER COMMON SHARE

Loss per common share is calculated in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "EARNINGS PER SHARE." The
Company calculates basic earnings per common share using the weighted average
number of shares outstanding for the period. Diluted earnings per common share
include both the weighted average number of shares and any common share
equivalents such as options or warrants in the calculation. As the Company
recorded losses for the six-month periods ended June 30, 1998 and 1999, common
share equivalents outstanding would be anti-dilutive, and as such, have not been
included in weighted average shares outstanding.

5. RELATED PARTY TRANSACTIONS

During the six months ended June 30, 1999, the Company borrowed $1,100,000
from three stockholders. Two of the three stockholders are also officers and
directors of the Company. The Company used $750,000 of the proceeds to pay a
portion of a contingent payment related to a 1998 business acquisition and
$350,000 was used to pay the cash portion of the March 1, 1999, acquisition
mentioned in Note 2. The Company repaid the loans prior to June 30, 1999.

6. INCOME TAXES

The benefit for income taxes for the six-month periods ended June 30, 1998
and 1999 differs from the amount computed by applying the statutory U.S. Federal
income tax rate to loss before income taxes primarily as a result of state taxes
and non-deductible goodwill amortization.

7. SEGMENT INFORMATION

For the six-month periods ended June 30, 1998 and 1999, the Company's
business units had separate management teams and infrastructures that operate
primarily in the vinyl replacement windows, doors and related home improvement
products industry in various states in the Midwest and in Southern California.
The business units have been aggregated into three reportable operating
segments: manufacturing, retail and financial services.

MANUFACTURING

The manufacturing segment includes the businesses that manufacture and sell
vinyl replacement windows to the Company's retail segment and to unaffiliated
customers.

RETAIL

The retail segment includes the businesses that design, sell and install
vinyl replacement windows, doors and related home improvement products to
commercial and retail customers.

FINANCIAL SERVICES

The financial services segment is in a start-up phase and finances credit
sales of the retail segment.

F-42
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1999

(UNAUDITED)

7. SEGMENT INFORMATION (CONTINUED)

Segment information for the six-month periods ended June 30, was as follows:

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FINANCIAL
JUNE 30, 1998 MANUFACTURING RETAIL SERVICES CORPORATE CONSOLIDATED
- -------------------------------------- -------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues from external customers...... $ 114,762 $ 6,142,877 $ -- $ -- $ 6,257,639
Intersegment revenues................. 1,799 -- -- -- 1,799
Income (loss) from operations......... (4,653) 1,165 (28,937) (582,667) (615,092)
Total assets.......................... 382,733 23,908,214 27,417 623,640 24,942,004

FOR THE SIX MONTHS ENDED FINANCIAL
JUNE 30, 1999 MANUFACTURING RETAIL SERVICES CORPORATE CONSOLIDATED
- -------------------------------------- -------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues from external customers...... $ 3,422,494 $ 46,712,374 $ 34,002 $ 27,440 $ 50,196,310
Intersegment revenues................. 4,344,282 -- -- -- 4,344,282
Income (loss) from operations......... 285,759 3,092,557 (163,898) (2,352,787) 861,631
Total assets.......................... 11,292,689 66,232,220 1,027,153 2,669,277 81,221,339
</TABLE>

8. LONG-TERM DEBT

The Company is required to maintain certain financial ratios and to comply
with various other covenants and restrictions under the terms of its credit
facility with PNC Bank, N.A. The Company has not met certain covenants
subsequent to December 31, 1998. PNC Bank, N.A., has waived all covenant
violations through July 8, 1999, and has reset covenants to accommodate future
compliance.

9. MANDATORILY REDEEMABLE SERIES C CONVERTIBLE PREFERRED STOCK

On April 19, 1999, the Board of Directors authorized the Company to issue up
to 25,000 shares of Series C preferred stock.

F-43
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1999

(UNAUDITED)

9. MANDATORILY REDEEMABLE SERIES C CONVERTIBLE PREFERRED STOCK (CONTINUED)

The portion of the proceeds from this mandatorily redeemable preferred stock
issue equal to the estimated fair value of the detachable stock purchase
warrants amounting to $1,980,000 has been allocated to paid-in capital (less a
prorata share of issue costs of $196,330) with the resulting discount, as well
as a prorata share of issue costs of $398,610, being accounted for as additional
dividends to the preferred stockholders from the date of issue to the earliest
redemption date (October 23, 2000). In addition, since the Series C preferred
stock has a beneficial conversion feature at the date of issue, $1,200,000 is
included in non-cash preferred dividends in the accompanying condensed
consolidated statement of operations for the six months ended June 30, 1999.

In August 1999, the Company amended the exercise price of the warrant to
$18.00 per share in exchange for a commitment of the holders to refrain from
selling any securities of the Company until January 31, 2000. The estimated
increase in fair value of the warrants amounting to $180,000 as the result of
the change in the exercise price will be accounted for as additional dividends
to the preferred stockholders from August 1999 through January 2000.

Proceeds of the Series C were used to retire the $4,150,000 seller note
incurred in connection with the March 1, 1999, acquisition mentioned in Note 2.

10. SUBSEQUENT EVENTS

F-44
<PAGE>

THERMOVIEW INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1999

(UNAUDITED)

10. SUBSEQUENT EVENTS (CONTINUED)

offering as defined in the agreement by July 8, 2000, and an additional 24% per
annum if and while the Company is paying penalties to Brown Simpson with respect
to untimely registration statement filing or effectiveness dates. The agreement
provides for redemption in whole or in part at the Company's option at a 103%
premium the first year, 102% the second year and 101% the third year. The
Company must redeem $10,000,000 (or such lesser amount as then may be
outstanding) without premium on the maturity date in July 2002. Upon a change in
control of the Company, GE has the option to require the Company to redeem all
or a portion of the note with a premium due as set forth above.

In connection with the loan agreement, GE was issued a warrant with the
right to purchase 555,343 shares of common stock at any time at $.03 per share
(the number of shares being subject to adjustment in certain circumstances)
until July 2007. The portion of the proceeds from this loan allocable to the
detachable stock purchase warrant amounting to $4,369,219 will be accounted for
as paid-in capital (less a prorata share of issue costs of $302,739) with the
resulting discount, as well as a prorata share of issue costs of $390,152, to be
accounted for as additional interest over the term of the loan. GE has certain
demand and piggy-back registration rights with respect to common stock
underlying the warrant.

A portion of the proceeds of the loan has been used to retire a $5,500,000
related-party loan and a portion of a $1,500,000 seller note.

In July 1999, options for 161,667 shares of common stock were granted under
the Company's 1999 Stock Option Plan. The exercise price of the options is
$11.43 per share. Vesting of 124,167 shares occurred on July 29, 1999, and the
remaining 37,500 vest on July 29, 2000.

On September 9, 1999, the Board of Directors declared a one-for-three
reverse common stock split to become effective at the date the Company files an
amendment to its restated articles of incorporation. The reverse split was voted
on and approved by stockholders on September 23, 1999. All common share and per
share data has been retroactively restated in the accompanying condensed
consolidated financial statements and notes thereto to reflect the reverse stock
split.

F-45
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
American Home Developers Co., Inc.

We have audited the accompanying balance sheets of American Home Developers
Co., Inc. as of December 31, 1996 and 1997 and April 25, 1998, and the related
statements of operations, shareholders' equity, and cash flows for each of the
two years in the period ended December 31, 1997 and the period from January 1,
1998 through April 25, 1998. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of American Home Developers
Co., Inc. as of December 31, 1996 and 1997 and April 25, 1998, and the results
of its operations and its cash flows for each of the two years in the period
ended December 31, 1997 and the period from January 1, 1998 through April 25,
1998 in conformity with generally accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
August 10, 1998

F-46
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

BALANCE SHEETS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 25, 1998

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- APRIL 25,
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.................................................. $ 297,136 $ 426,150 $ --
Costs and prepaid commissions on contracts in progress in excess of
billings................................................................. 100,429 65,779 56,467
Other receivables.......................................................... 19,502 16,210 8,526
Deferred tax asset......................................................... -- -- 34,595
---------- ---------- ----------
Total current assets..................................................... 417,067 508,139 99,588
---------- ---------- ----------

Property and equipment
Office equipment........................................................... 6,483 24,230 24,230
Automobiles................................................................ 30,518 30,518 25,293
---------- ---------- ----------
37,001 54,748 49,523
Less accumulated depreciation.............................................. 10,344 24,977 35,081
---------- ---------- ----------
Total property and equipment............................................. 26,657 29,771 14,442
---------- ---------- ----------

Other assets
Deposits................................................................... 3,000 3,000 3,000
---------- ---------- ----------
Total assets............................................................. $ 446,724 $ 540,910 $ 117,030
---------- ---------- ----------
---------- ---------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable........................................................... $ 36,716 $ 40,549 $ 61,743
Accrued liabilities........................................................ 14,175 27,924 33,817
Due to related party....................................................... 30,000 30,000 --
Income taxes payable....................................................... 90,488 145,664 5,837
Deferred income taxes...................................................... 20,337 6,603 --
---------- ---------- ----------
Total current liabilities................................................ 191,716 250,740 101,397
---------- ---------- ----------

Commitments and contingencies

Shareholders' equity
Common stock, no par value 2,500 shares authorized 1,000 shares issued and
outstanding.............................................................. 500 500 500
Retained earnings.......................................................... 254,508 289,670 15,133
---------- ---------- ----------
Total shareholders' equity............................................... 255,008 290,170 15,633
---------- ---------- ----------
Total liabilities and shareholders' equity............................. $ 446,724 $ 540,910 $ 117,030
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

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

F-47
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH APRIL 25, 1998

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEARS ENDED FROM JANUARY
DECEMBER 31, 1, 1998
-------------------------- THROUGH APRIL
1996 1997 25, 1998
------------ ------------ --------------
<S> <C> <C> <C>
Contract revenues.................................................... $ 3,647,605 $ 4,883,265 $ 1,143,760
Contract costs....................................................... 1,990,721 2,690,084 580,555
------------ ------------ --------------
Gross profit......................................................... 1,656,884 2,193,181 563,205
------------ ------------ --------------
Operating expenses
Advertising expense................................................ 25,500 39,800 9,908
Selling............................................................ 982,069 1,044,318 274,737
General and administrative......................................... 757,576 1,045,282 736,892
------------ ------------ --------------
Total operating expenses......................................... 1,765,145 2,129,400 1,021,537
------------ ------------ --------------
Income (loss) from operations........................................ (108,261) 63,781 (458,332)
------------ ------------ --------------
Other income (expense)
Interest income.................................................... 7,892 12,823 4,268
Interest expense................................................... -- -- (1,500)
------------ ------------ --------------
Total other income (expense)..................................... 7,892 12,823 2,768
Income (loss) before provision for (benefit from) income taxes....... (100,369) 76,604 (455,564)
Provision for (benefit from) income taxes............................ (32,717) 41,442 (181,027)
------------ ------------ --------------
Net income (loss)................................................ $ (67,652) $ 35,162 $ (274,537)
------------ ------------ --------------
------------ ------------ --------------
</TABLE>

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

F-48
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH APRIL 25, 1998

<TABLE>
<CAPTION>
COMMON STOCK
---------------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1995.......................................... 1,000 $ 500 $ 322,160 $ 322,660
Net loss............................................................ (67,652) (67,652)
--------- ----- ----------- -----------
Balance, December 31, 1996.......................................... 1,000 500 254,508 255,008
Net income.......................................................... 35,162 35,162
--------- ----- ----------- -----------
Balance, December 31, 1997.......................................... 1,000 500 289,670 290,170
Net loss............................................................ (274,537) (274,537)
--------- ----- ----------- -----------
Balance, April 25, 1998........................................... 1,000 $ 500 $ 15,133 $ 15,633
--------- ----- ----------- -----------
--------- ----- ----------- -----------
</TABLE>

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

F-49
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH APRIL 25, 1998

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEARS ENDED FROM JANUARY
DECEMBER 31, 1, 1998
---------------------- THROUGH APRIL
1996 1997 25, 1998
---------- ---------- --------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss)...................................................... $ (67,652) $ 35,162 $ (274,537)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities
Depreciation......................................................... 4,455 14,633 14,894
Deferred taxes....................................................... 22,445 (13,734) (41,198)
Income taxes......................................................... (55,167) 55,176 (139,827)
(Increase) decrease in
Costs and prepaid commissions in excess of billings.................. (54,346) 34,650 9,312
Other receivables.................................................... (14,822) 3,292 7,684
Increase in
Accounts payable..................................................... 1,771 3,833 21,194
Other accrued liabilities............................................ 954 13,749 5,893
---------- ---------- --------------
Net cash provided by (used in) operating activities...................... (162,362) 146,761 (396,585)
---------- ---------- --------------

Cash flows from investing activities
Purchase of fixed assets............................................... (20,232) (17,747) --
Proceeds from the sale of fixed assets................................. -- -- 435
---------- ---------- --------------
Net cash provided by (used in) investing activities...................... (20,232) (17,747) 435
---------- ---------- --------------
Cash flows from financing activities
Payments on note payable............................................... -- -- (30,000)
---------- ---------- --------------
Net cash used in financing activities.................................... -- -- (30,000)
---------- ---------- --------------
Net increase (decrease) in cash and cash equivalents..................... (182,594) 129,014 (426,150)
Cash and cash equivalents, beginning of period........................... 479,730 297,136 426,150
---------- ---------- --------------
Cash and cash equivalents, end of period................................. $ 297,136 $ 426,150 $ --
---------- ---------- --------------
---------- ---------- --------------

Supplemental disclosures of cash flow information
Interest paid.......................................................... $ -- $ -- $ 1,500
---------- ---------- --------------
---------- ---------- --------------
Income taxes paid...................................................... $ 6,914 $ 2,375 $ --
---------- ---------- --------------
---------- ---------- --------------
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During the year ended December 31, 1996, in connection with the purchase of
an automobile, the Company exchanged a vehicle with a net book value of $5,060.

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

F-50
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 25, 1998

NOTE 1--BUSINESS ACTIVITY

American Home Developers Co., Inc. (the "Company") is a California
corporation, founded September 23, 1985. The Company's primary lines of business
are Tex-Coting, retail selling, and installing state-of-the-art vinyl
replacement windows for the existing home market. The Company markets its
products primarily through the use of an extensive telemarketing effort. The
Company retains independent contractors for the installation of its products at
the customer's site.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

METHOD OF ACCOUNTING FOR TEX-COTING AND WINDOW INSTALLATION CONTRACTS

The accompanying financial statements have been prepared using the
completed-contract method of accounting for fixed-price contracts since the
contracts are of a short duration. Accordingly, revenue and costs of individual
contracts are included in operations in the year during which they are
completed. Losses expected to be incurred on contracts in progress are charged
to operations in the period such losses are determined. The aggregate of costs
incurred on uncompleted contracts in excess of related billings is shown as an
asset, and the aggregate of billings on uncompleted contracts in excess of
related costs is shown as a liability.

Contract costs include all direct labor and benefits, materials unique to or
installed in the project, subcontract costs, and other direct installation
costs.

CASH AND CASH EQUIVALENTS

For the purpose of reporting cash flows, the Company considers cash on
deposit, cash on hand, and financial instruments purchased with an original
maturity of three months or less to be cash equivalents.

OTHER RECEIVABLES

Other receivables consist primarily of advances to employees. All amounts
are expected to be recovered, and as such, no allowance for uncollectible
amounts is deemed necessary.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain of the Company's financial instruments including cash and cash
equivalents, other receivables, accounts payable, and other accrued liabilities,
the carrying amounts approximate fair value due to their short maturities.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is generally
provided using the straight-line method. The estimated useful lives of the
related assets are as follows:

<TABLE>
<S> <C>
3 to 5
Office equipment............................................... years
Automobiles.................................................... 5 years
</TABLE>

ADVERTISING EXPENSE

The Company accounts for advertising expenditures by charging to expense all
amounts as incurred.

F-51
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 25, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
all or a portion of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.

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
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RISK CONCENTRATIONS

The Company's customers are primarily homeowners located in Southern
California. The Company purchases substantially all of its Tex-Coting material
from one supplier. Purchases from this supplier were 55%, 70%, and 70% of the
Company's total cost of sales for the years ended December 31, 1996 and 1997 and
the period from January 1, 1998 through April 25, 1998, respectively.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." This statement requires companies to classify items of
other comprehensive income by their nature in a financial statement and display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS No. 130 is effective for financial statements issued
for fiscal years beginning after December 15, 1997. Management believes that
SFAS No. 130 will not have a material effect, if any, on the Company's financial
statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information." This statement establishes additional
standards for segment reporting in the financial statements and is effective for
fiscal years beginning after December 15, 1997. Management believes that SFAS
No. 131 will not have an effect on the Company's financial statements.

NOTE 3--CASH AND CASH EQUIVALENTS

The Company maintains its cash balances at several financial institutions.
The balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. As of December 31, 1997, the uninsured portions of the balances held
at the banks aggregated to $13,387.

F-52
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 25, 1998

NOTE 4--CONTRACTS IN PROGRESS

For the years ended December 31, 1996 and 1997 and the period from January
1, 1998 through April 25, 1998, contract amounts, accumulated costs, and the
related billings to date on completed contracts and contracts in progress were
as follows:

<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNTS COSTS
------------- -------------
<S> <C> <C>
Contracts in progress at December 31, 1995...................... $ 201,000 $ 48,878
Contracts initiated during the year............................. 3,859,031 2,045,567
Contracts completed during the year............................. (3,647,605) (1,990,721)
------------- -------------
Contracts in progress at December 31, 1996...................... 412,426 103,724
Contracts initiated during the year............................. 4,735,635 2,656,052
Contracts completed during the year............................. (4,883,265) (2,690,084)
------------- -------------
Contracts in progress at December 31, 1997...................... 264,796 69,692
Contracts initiated during the period........................... 1,279,107 567,330
Contracts completed during the period........................... (1,143,760) (580,555)
------------- -------------
Contracts in progress at April 25, 1998....................... $ 400,143 $ 56,467
------------- -------------
------------- -------------
</TABLE>

Contracts in progress:

<TABLE>
<CAPTION>
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
--------------------- APRIL 25,
1996 1997 1998
---------- --------- -----------
<S> <C> <C> <C>
Cumulative costs to date................................... $ 103,724 $ 68,692 $ 76,477
Less cash collected to date................................ 3,295 2,913 20,010
---------- --------- -----------
Net contracts in progress.................................. $ 100,429 $ 65,779 $ 56,467
---------- --------- -----------
---------- --------- -----------
</TABLE>

Included in the accompanying balance sheet under the following caption:

<TABLE>
<S> <C> <C> <C>
Costs and prepaid commissions on contracts in
progress in excess of billings............... $ 100,429 $ 65,779 $ 56,467
--------- --------- -----------
--------- --------- -----------
</TABLE>

NOTE 5--COMMITMENTS AND CONTINGENCIES

LEASES

The Company has entered into an operating lease agreement for its facility.
The lease is terminable in 1998. The minimum rental commitment under this lease
agreement at December 31, 1997 is $4,250.

Management intends to extend the lease upon termination of the original
agreement.

Rent expense was approximately $48,500, $51,800, and $17,648 for the years
ended December 31, 1996 and 1997 and the period from January 1, 1998 through
April 25, 1998, respectively.

F-53
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 25, 1998

NOTE 5--COMMITMENTS AND CONTINGENCIES (CONTINUED)
LITIGATION

The Company is involved in various litigation in the normal course of
business. The outcome of such litigation is not expected to have a material
effect on the Company.

NOTE 6--INCOME TAXES

Significant components of the provision for (benefit from) taxes based on
income for the years ended December 31, 1996 and 1997 and the period from
January 1, 1998 through April 25, 1998 are as follows:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEARS ENDED FROM JANUARY
DECEMBER 31, 1, 1998
---------------------- THROUGH APRIL
1996 1997 25, 1998
---------- ---------- --------------
<S> <C> <C> <C>
Current
Federal............................................ $ (46,888) $ 46,900 $ (118,854)
State.............................................. (8,274) 8,276 (20,975)
---------- ---------- --------------
(55,162) 55,176 (139,829)
---------- ---------- --------------
Deferred
Federal............................................ 19,078 (11,674) (35,018)
State.............................................. 3,367 (2,060) (6,180)
---------- ---------- --------------
22,445 (13,734) (41,198)
---------- ---------- --------------
Provision for (benefit from) income taxes.......... $ (32,717) $ 41,442 $ (181,027)
---------- ---------- --------------
---------- ---------- --------------
</TABLE>

A reconciliation of the provision for income tax expense with the expected
income tax computed by applying the federal statutory income tax rate to income
before provision for (benefit from) income taxes for the years ended December
31, 1996 and 1997 and the period from January 1, 1998 through April 25, 1998 is
as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
FOR THE PERIOD
DECEMBER 31, FROM JANUARY 1,
-------------------- 1998 THROUGH
1996 1997 APRIL 25, 1998
--------- --------- -----------------
<S> <C> <C> <C>
Income tax provision (benefit) computed at federal
statutory tax rate..................................... (34.0)% 34.0% (34.0)%
State taxes, net of federal benefit...................... (6.0) 6.0 (6.0)
Permanent differences and other.......................... 7.0 14.0 --
--------- --- -----
Total.................................................. (33.0)% 54.0% (40.0)%
--------- --- -----
--------- --- -----
</TABLE>

F-54
<PAGE>
AMERICAN HOME DEVELOPERS CO., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 25, 1998

NOTE 6--INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets and liabilities
for income taxes consist of the following:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEARS ENDED FROM JANUARY
DECEMBER 31, 1, 1998
---------------------- THROUGH APRIL
1996 1997 25, 1998
---------- ---------- --------------
<S> <C> <C> <C>
Deferred tax assets
Accounts payable................................... $ 14,686 $ 16,220 $ 25,932
Accrued liabilities................................ 5,672 11,170 14,203
Other.............................................. -- -- 17,046
---------- ---------- --------------
20,358 27,390 57,181
---------- ---------- --------------
Deferred tax liability
Costs and prepaid commissions on contracts in
progress in excess of billings................... (37,625) (26,341) (22,586)
Other.............................................. (3,070) (7,652) --
---------- ---------- --------------
(40,695) (33,993) (22,586)
---------- ---------- --------------
Net deferred tax asset (liability)............... $ (20,337) $ (6,603) $ 34,595
---------- ---------- --------------
---------- ---------- --------------
</TABLE>

The Company files its income tax returns on a fiscal year-end, not calendar
year-end basis. The Company's fiscal year ends June 30. Deferred taxes are
stated as if the Company filed its income tax returns at December 31.

NOTE 7--RELATED PARTY TRANSACTIONS

During the years ended December 31, 1996 and 1997, the Company had a
non-interest bearing note payable agreement, no stated due date, with the
majority shareholder of the Company in which the Company owed $30,000 for each
of the two years. This note was repaid April 14, 1998.

NOTE 8--SUBSEQUENT EVENTS

On April 25, 1998, in connection with its acquisition, the Company entered
into an employment agreement with a former director and officer of the Company,
and the agreement expires April 30, 2001. Under the agreement, the Company is
required to pay an annual salary of $200,000 plus various other benefits.

On April 25, 1998, 100% of the Company's common stock was acquired by
ThermoView Industries, Inc.

F-55
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
Primax Window Co.

We have audited the accompanying balance sheets of Primax Window Co. as of
December 31, 1996 and 1997 and April 30, 1998, and the related statements of
operations, shareholders' equity, and cash flows for each of the two years in
the period ended December 31, 1997 and the four months ended April 30, 1998.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Primax Window Co. as of
December 31, 1996 and 1997 and April 30, 1998, and the results of its operations
and its cash flows for each of the two years in the period ended December 31,
1997 and the four months ended April 30, 1998 in conformity with generally
accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
July 8, 1998

F-56
<PAGE>
PRIMAX WINDOW CO.

BALANCE SHEETS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- APRIL 30,
1996 1997 1998
---------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................................... $ 47,190 $ 241,219 $ 330,947
Marketable securities....................................................... 451,887 641,794 --
Accounts receivable......................................................... 21,734 23,855 20,928
Inventory................................................................... 61,430 61,430 89,068
Costs and prepaid commissions on contracts in progress in excess of
billings.................................................................. -- 107,735 --
Prepaid expenses............................................................ 22,712 3,347 32,787
---------- ---------- ---------
Total current assets...................................................... 604,953 1,079,380 473,730
---------- ---------- ---------
Property and equipment
Transportation equipment.................................................... 275,909 320,795 320,795
Small tools and equipment................................................... 11,075 11,948 11,948
Furniture and fixtures...................................................... 185,825 184,269 171,392
Leasehold improvements...................................................... 212,889 212,889 212,889
---------- ---------- ---------
685,698 729,901 717,024
Less accumulated depreciation and amortization.............................. 370,643 459,569 480,706
---------- ---------- ---------
Total property and equipment.............................................. 315,055 270,332 236,318
---------- ---------- ---------
Other assets
Cash surrender value--officers' life insurance.............................. 47,787 42,432 --
Notes receivable from related parties....................................... 317,896 135,769 172,284
Deposits.................................................................... 4,817 5,818 4,068
---------- ---------- ---------
Total other assets........................................................ 370,500 184,019 176,352
---------- ---------- ---------
Total assets............................................................ $1,290,508 $1,533,731 $ 886,400
---------- ---------- ---------
---------- ---------- ---------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt........................................... $ 15,051 $ 47,548 $ 40,058
Line of credit.............................................................. 30,000 -- --
Accounts payable............................................................ 233,173 232,133 226,723
Accrued liabilities:
Warranty.................................................................. 21,000 21,000 21,000
Payroll and items directly related to payroll............................. 80,502 92,034 89,895
Billings in excess of costs and prepaid commissions on contracts in
progress.................................................................. 56,871 113,502 13,578
Income taxes payable........................................................ 94,687 -- --
Deferred taxes.............................................................. 108,232 -- --
---------- ---------- ---------
Total current liabilities................................................. 639,516 506,217 391,254
Long-term debt, net of current portion........................................ 30,118 24,958 13,232
Deferred gain on sale of building............................................. 45,212 35,853 32,838
---------- ---------- ---------
Total liabilities......................................................... 714,846 567,028 437,324
---------- ---------- ---------
Commitments and contingencies

Shareholders' equity
Common stock, $100 par value, 100 shares authorized, issued, and
outstanding............................................................... 10,000 10,000 10,000
Additional paid-in capital.................................................. 10,000 10,000 10,000
Retained earnings........................................................... 555,662 946,703 429,076
---------- ---------- ---------
Total shareholders' equity................................................ 575,662 966,703 449,076
---------- ---------- ---------
Total liabilities and shareholders' equity.............................. $1,290,508 $1,533,731 $ 886,400
---------- ---------- ---------
---------- ---------- ---------
</TABLE>

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

F-57
<PAGE>
PRIMAX WINDOW CO.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE FOUR MONTHS ENDED APRIL 30, 1998

<TABLE>
<CAPTION>
FOR THE FOUR
FOR THE YEARS ENDED MONTHS
DECEMBER 31, ENDED APRIL
-------------------------- 30,
1996 1997 1998
------------ ------------ --------------
<S> <C> <C> <C>
Contract revenues.................................................... $ 5,840,446 $ 7,132,296 $ 2,150,747
Contract costs....................................................... 2,773,986 3,307,853 964,759
------------ ------------ --------------
Gross profit......................................................... 3,066,460 3,824,443 1,185,988
------------ ------------ --------------
Operating expenses
Advertising........................................................ 592,668 734,470 188,005
Selling............................................................ 1,073,611 1,415,804 596,201
General and administrative......................................... 1,227,152 1,412,497 342,053
------------ ------------ --------------
Total operating expenses......................................... 2,893,431 3,562,771 1,126,259
------------ ------------ --------------
Income from operations............................................... 173,029 261,672 59,729
------------ ------------ --------------
Other income (expense)
Interest expense................................................... (30,557) (10,827) (1,205)
Interest income.................................................... 26,347 31,039 9,553
Gain on sale of property and equipment............................. 480 620 --
Realized gains on investments...................................... 4,933 21,700 8,471
------------ ------------ --------------
Total other income............................................... 1,203 42,532 16,819
------------ ------------ --------------
Income before provision for (benefit from) income taxes.............. 174,232 304,204 76,548
Provision for (benefit from) income taxes............................ 103,112 (86,837) --
------------ ------------ --------------
Net income........................................................... $ 71,120 $ 391,041 $ 76,548
------------ ------------ --------------
------------ ------------ --------------
</TABLE>

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

F-58
<PAGE>

PRIMAX WINDOW CO.
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE FOUR MONTHS ENDED APRIL 30, 1998

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
---------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
----------- --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995............................... 100 $ 10,000 $ 10,000 $ 484,542 $ 504,542
Net income............................................... 71,120 71,120
--- --------- ----------- ---------- -----------
Balance, December 31, 1996............................... 100 10,000 10,000 555,662 575,662
Net income............................................... 391,041 391,041
--- --------- ----------- ---------- -----------
Balance, December 31, 1997............................... 100 10,000 10,000 946,703 966,703
Dividends distributed.................................... (594,175) (594,175)
Net income............................................... 76,548 76,548
--- --------- ----------- ---------- -----------
Balance, April 30, 1998 100 $ 10,000 $ 10,000 $ 429,076 $ 449,076
--- --------- ----------- ---------- -----------
--- --------- ----------- ---------- -----------
</TABLE>

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

F-59
<PAGE>

PRIMAX WINDOW CO.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE FOUR MONTHS ENDED APRIL 30, 1998

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
---------------------- APRIL 30,
1996 1997 1998
--------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income............................................................... $ 71,120 $ 391,041 $ 76,548
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation........................................................... 106,682 124,957 34,014
Deferred taxes......................................................... 95,342 (108,232) --
Amortization of gain on sale of building............................... (1,561) (9,360) (3,015)
Gain on sale of property and equipment................................. (480) (620) --
Realized gains on investments.......................................... (4,933) (21,700) (8,471)
(Increase) decrease in
Accounts receivable.................................................... 8,841 (2,120) (7,073)
Inventory.............................................................. -- -- (27,638)
Costs and prepaid commissions on contracts in progress in excess of
billings............................................................. -- (107,735) 107,735
Prepaid expenses....................................................... 3,275 19,364 (29,440)
Other assets........................................................... (7,458) 4,356 44,182
Increase (decrease) in
Income taxes payable................................................... (12,885) (81,700) --
Accounts payable....................................................... 56,879 (1,040) (5,410)
Other accrued liabilities.............................................. 11,543 11,532 (2,139)
Billings in excess of costs and prepaid commissions on contracts in
progress............................................................. (2,963) 43,645 (99,924)
--------- ----------- ------------
Net cash provided by operating activities................................ 323,402 262,388 79,369
--------- ----------- ------------
Cash flows from investing activities
Purchase of fixed assets................................................. (85,078) (33,166) --
Proceeds from sale of property and equipment............................. 129,647 16,707 --
Purchase of investment securities........................................ (648,625) (1,498,207) --
Proceeds from sale of securities......................................... 300,000 1,330,000 650,265
Net payments from (lending to) related parties........................... (97,390) 182,127 (26,515)
--------- ----------- ------------
Net cash provided by (used in) investing activities...................... (401,446) (2,539) 623,750
--------- ----------- ------------
Cash flows from financing activities
Payments on notes payable................................................ (57,651) (65,820) (19,216)
Dividend payments........................................................ -- -- (594,175)
--------- ----------- ------------
Net cash used in financing activities.................................... (57,651) (65,820) (613,391)
--------- ----------- ------------
Net increase (decrease) in cash and cash equivalents..................... (135,695) 194,029 89,728
Cash and cash equivalents, beginning of period............................. 182,885 47,190 241,219
--------- ----------- ------------
Cash and cash equivalents, end of period................................... $ 47,190 $ 241,219 $ 330,947
--------- ----------- ------------
--------- ----------- ------------
Supplemental disclosures of cash flow information
Interest paid............................................................ $ 30,557 $ 10,827 $ 1,205
--------- ----------- ------------
--------- ----------- ------------
Income taxes paid........................................................ $ 7,670 $ 116,080 $ --
--------- ----------- ------------
--------- ----------- ------------
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

The Company executed notes payable for the acquisition of property and
equipment in the amount of $52,926 and $63,155 for the years ended December 31,
1996 and 1997, respectively.

On October 30, 1996, in connection with the sale of a building to a related
party, the buyer assumed Company liabilities in the amount of $273,774.

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

F-60
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 1--BUSINESS ACTIVITY

Primax Window Co. (the "Company"), is a Kentucky corporation, founded May
21, 1981. The Company is a designer, retail seller, and installer of
state-of-the-art vinyl replacement windows for the existing home market.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

METHOD OF ACCOUNTING FOR WINDOW INSTALLATION CONTRACTS

Contract costs include all direct labor and benefits, materials unique to or
installed in the project, subcontract costs, and other direct installation
costs.

CASH AND CASH EQUIVALENTS

MARKETABLE SECURITIES

Marketable securities are comprised of government bonds and are stated at
fair market value. They are classified as "available for sale." Unrealized gains
and losses, if any, and the related deferred income tax effects are excluded
from earnings and reported as a separate component of shareholders' equity.
Realized gains or losses are computed based upon specific identification of
securities sold.

ACCOUNTS RECEIVABLE

Accounts receivable consists of amounts due from customers. These are
uncollateralized, short-term receivables, typically with monthly payment plans.
To date, the Company has not experienced material losses resulting from bad
debts. As a result, the Company has not established an allowance for doubtful
accounts.

INVENTORY

Inventory is stated on a first-in, first-out basis, at the lower of cost or
market, and consists primarily of supplies.

F-61
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation and amortization are
generally provided using the straight-line method. The estimated useful lives of
the related assets are as follows:

<TABLE>
<S> <C>
Transportation equipment................................. 3 to 5 years
Small tools and equipment................................ 3 to 5 years
Furniture and fixtures................................... 5 to 7 years
Leasehold improvements................................... lesser of useful
life
or life of the
lease
</TABLE>

WARRANTIES

The Company provides the retail customer with a limited warranty covering
workmanship and manufacturing defects. The Company provides an accrual for
future costs based upon the relationship of prior year's revenues to estimated
warranty costs. It is the Company's practice to classify the entire warranty
accrual as a current liability.

ADVERTISING EXPENSE

The Company accounts for advertising expenditures by charging to expense all
amounts as incurred.

INCOME TAXES

At April 1, 1997, under the provisions of the Internal Revenue Code, the
Company elected to be taxed as an "S" corporation whereby the Company's taxable
income or loss and tax credits are passed through to its shareholders.

Prior to that date, the Company used the liability method, whereby deferred
tax assets are recognized for deductible temporary differences, and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain of the Company's financial instruments including cash and cash
equivalents, accounts receivable, accounts payable, and other accrued
liabilities, the carrying amounts approximate fair value due to their short
maturities. The amount shown for long-term debt also approximates fair value
because current interest rates and terms offered to the Company for similar
long-term debt are substantially the same.

ESTIMATES

F-62
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

RISK CONCENTRATIONS

The Company's customers are primarily homeowners located in Kentucky,
Indiana, and Ohio. In addition, the Company purchases substantially all of its
windows from one related-party supplier.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

NOTE 3--CASH AND CASH EQUIVALENTS

The Company maintains its cash balances at a bank located in Kentucky. The
balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. As of December 31, 1997, the uninsured portions of the balances held
at the bank aggregated to $21,116.

NOTE 4--MARKETABLE SECURITIES

The following is a summary of investment securities:

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
---------------------- APRIL 30,
1996 1997 1998
---------- ---------- ---------------
<S> <C> <C> <C>
Available for sale securities United States Government
bonds, at cost and fair value........................ $ 451,887 $ 641,794 $ --
---------- ---------- ---
---------- ---------- ---
</TABLE>

Changes in the unrealized holding gains on investment securities available
for sale during the year ended December 31, 1997 were immaterial, and as such,
have not been reported as a separate component of shareholders' equity.

F-63
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 4--MARKETABLE SECURITIES (CONTINUED)
The following is a summary of investment earnings recognized in income:

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
-------------------- APRIL 30,
1996 1997 1998
--------- --------- -------------
<S> <C> <C> <C>
Available for sale securities
Realized gains........................................... $ 4,933 $ 21,700 $ 8,471
--------- --------- ------
--------- --------- ------
</TABLE>

NOTE 5--CONTRACTS IN PROGRESS

Contract amounts, accumulated costs, and the related billings to date on
completed contracts and contracts in progress were as follows:

<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNTS COSTS
------------- -------------
<S> <C> <C>
Contracts in progress at December 31, 1995...................... $ 499,421 $ 31,117
Contracts initiated during the year............................. 6,351,727 2,911,704
Contracts completed during the year............................. (5,840,446) (2,773,986)
------------- -------------
Contracts in progress at December 31, 1996...................... 1,010,702 168,835
Contracts initiated during the year............................. 7,091,790 3,360,672
Contracts completed during the year............................. (7,132,296) (3,307,853)
------------- -------------
Contracts in progress at December 31, 1997.................... 970,196 221,654
Contracts initiated during the year............................. 1,975,984 873,048
Contracts completed during the year............................. (2,150,747) (964,759)
------------- -------------
Construction contracts in progress at April 30, 1998.......... $ 795,433 $ 129,943
------------- -------------
------------- -------------
</TABLE>

Contracts in progress:

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
----------------------- APRIL 30,
1996 1997 1998
----------- ---------- ------------
<S> <C> <C> <C>
Cumulative costs to date.............................. $ 168,835 $ 221,654 $ 129,943
Less cash collected to date........................... 310,181 301,833 195,496
----------- ---------- ------------
(141,346) (80,179) (65,553)
Plus prepaid commissions on uncompleted contracts..... 84,475 74,412 51,975
----------- ---------- ------------
Net contracts in progress......................... $ (56,871) $ (5,767) $ (13,578)
----------- ---------- ------------
----------- ---------- ------------
</TABLE>

F-64
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 5--CONTRACTS IN PROGRESS (CONTINUED)

Included in the accompanying balance sheet under the following captions:

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
----------------------- APRIL 30,
1996 1997 1998
---------- ----------- ------------
<S> <C> <C> <C>
Costs and prepaid commissions on contracts in progress
in excess of billings................................ $ -- $ 107,735 $ --
Billings in excess of costs and prepaid commissions on
contracts in progress................................ (56,871) (113,502) (13,578)
---------- ----------- ------------
Total.............................................. $ (56,871) $ (5,767) $ (13,578)
---------- ----------- ------------
---------- ----------- ------------
</TABLE>

NOTE 6--CASH SURRENDER VALUE--OFFICERS' LIFE INSURANCE

The Company is the owner and beneficiary of life insurance policies insuring
the lives of Company officers. On April 30, 1998, in connection with the
acquisition of the Company by ThermoView Industries, Inc. (see Note 13), these
policies were distributed to the officers and majority shareholders in the form
of dividend distributions.

NOTE 7--LINE OF CREDIT

The Company has available a $150,000 line of credit bearing interest at the
bank's prime rate (8.25% at December 31, 1996) plus 0.5%. Any borrowings are
collateralized by substantially all assets of the Company and are personally
guaranteed by the shareholders of the Company. There were no outstanding
borrowings as of December 31, 1997 or April 30, 1998. As of December 31, 1996,
the balance was $30,000.

F-65
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 8--LONG-TERM DEBT

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
-------------------- APRIL 30,
1996 1997 1998
--------- --------- ------------
<S> <C> <C> <C>
Notes payable to bank, with an aggregate original principal balance of
$89,746, interest rates between 7.9% and 8.25%, secured by four automobiles,
and maturing between January 20, 1997 and November 10, 1999................... $ 25,566 $ 68,650 $ 53,290
Note payable to finance company, with a principal balance of $26,286, an
interest rate of 9.25%, secured by a vehicle, and maturing on February 16,
1998.......................................................................... 16,948 3,452 --
Note payable to finance company, with a principal balance of $9,010, an
interest rate of 13%, secured by equipment, and maturing February 15, 1998.... 2,655 404 --
--------- --------- ------------
45,169 72,506 53,290
Less current portion.......................................................... 15,051 47,548 40,058
--------- --------- ------------
Long-term portion........................................................... $ 30,118 $ 24,958 $ 13,232
--------- --------- ------------
--------- --------- ------------
</TABLE>

The following is a schedule by years of future maturities of long-term debt
as of December 31, 1997:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- ------------------------------------------------------------
<S> <C>
1998........................................................ $ 47,548
1999........................................................ 24,958
------------
TOTAL $ 72,506
------------
------------
</TABLE>

NOTE 9--EMPLOYEE BENEFIT PLAN

The Company has a profit sharing plan established in accordance with Section
401(k) of the Employee Retirement Income Security Act of 1974 as amended. The
plan covers substantially all eligible employees. Employee contributions to the
plan are elective, and matching contributions by the employer are optional. The
Company incurred $20,485 and $24,784 in contribution expense for the years ended
December 31, 1996 and 1997, respectively.

NOTE 10--COMMITMENTS AND CONTINGENCIES

LEASES

The Company has entered into a non-cancelable operating lease with an
affiliated entity (see Note 12) for its corporate offices and facilities. In
addition, the Company has entered into various operating lease agreements for
vehicles and sales facilities in two outlying markets.

F-66
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 10--COMMITMENTS AND CONTINGENCIES (CONTINUED)
Future minimum rental commitments under these lease agreements with initial
or remaining terms of one year or more at December 31, 1997 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- --------------------------------------------------------------
<S> <C>
1998.......................................................... $ 134,299
1999.......................................................... 136,138
2000.......................................................... 90,297
2001.......................................................... 68,500
----------
Total....................................................... $ 429,234
----------
----------
</TABLE>

Rent expense was approximately $58,400, $128,400, and $42,900 for the years
ended December 31, 1996 and 1997 and the four months ended April 30, 1998,
respectively.

LITIGATION

The Company is involved in various litigation in the normal course of
business. The outcome of such litigation is not expected to have an adverse
effect on the Company.

NOTE 11--INCOME TAXES

Significant components of the provision for (benefit from) taxes based on
income for the years ended December 31 are as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-----------------------
1996 1997
---------- -----------
<S> <C> <C>
Current
Federal............................................................ $ 3,390 $ 21,395
State.............................................................. 4,380 --
---------- -----------
7,770 21,395
---------- -----------
Deferred
Federal............................................................ 79,409 (88,750)
State.............................................................. 15,933 (19,482)
---------- -----------
95,342 (108,232)
---------- -----------
Provision for (benefit from) income taxes........................ $ 103,112 $ (86,837)
---------- -----------
---------- -----------
</TABLE>

F-67
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 11--INCOME TAXES (CONTINUED)
A reconciliation of the provision for (benefit from) income tax expense with
the expected income tax computed by applying the federal statutory income tax
rate to income before provision for income taxes for the years ended December 31
is as follows:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------
1996 1997
----------- ------------
<S> <C> <C>
Income tax provision (benefit) computed at federal statutory tax rate... 34.0% 34.0 %
State taxes, net of federal benefit..................................... 6.0 --
Differences arising from release of deferred tax liability upon change
of corporate filing status............................................ -- (63.0)
Other................................................................... 19.0 --
----- -----
Total................................................................. 59.0% (29.0)%
----- -----
----- -----
</TABLE>

Significant components of the Company's deferred tax assets and liabilities
for federal income taxes consist of the following:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-----------------------
1996 1997
----------- ----------
<S> <C> <C>
Deferred tax assets
Warranty reserve................................................... $ 8,400 $ --
Property and equipment............................................. 5,081 --
----------- ----------
13,481 --
----------- ----------
Deferred tax liabilities
Costs and prepaid commissions on contracts in progress in excess of
billings......................................................... 111,104 --
Other.............................................................. 10,609 --
----------- ----------
121,713 --
----------- ----------
Net deferred tax liability....................................... $ (108,232) $ --
----------- ----------
----------- ----------
</TABLE>

NOTE 12--RELATED PARTY TRANSACTIONS

On October 30, 1996, in connection with a sales lease-back transaction, the
Company began leasing its primary place of business from the majority
shareholder of the Company. The gain on the sale of $46,772 was recorded as a
deferred gain on the Company's financial statements. The lease expires October
31, 2001. Future minimum aggregate lease payments required under the lease are
$390,000. For the years ended December 31, 1996 and 1997 and the four months
ended April 30, 1998, total rent paid to the affiliated company was $13,700,
$82,200 and $27,400, respectively. Amortization of the gain was $1,561, $9,360
and $3,015 during the years ended December 31, 1996 and 1997 and the four months
ended April 30, 1998, respectively.

F-68
<PAGE>
PRIMAX WINDOW CO.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 12--RELATED PARTY TRANSACTIONS (CONTINUED)
During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company purchased substantially all of its windows from a
supplier partially owned by the Company's majority shareholder. Purchases from
this supplier were $2,040,094, $2,344,041, and $692,965 for the years ended
December 31, 1996 and 1997 and the four months ended April 30, 1998,
respectively.

During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company retained an advertising agency that was owned by the
Company's majority shareholder. Expenditures related to this agency were
$513,078, $545,524, and $86,166 for the years ended December 31, 1996 and 1997
and the four months ended April 30, 1998, respectively.

During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company conducted business with a company owned by the
Company's majority shareholder for messenger services. Expenditures related to
this Company were $10,068, $40,277, and $13,439 for the years ended December 31,
1996 and 1997 and the four months ended April 30, 1998, respectively.

During the year ended December 31, 1997 and the four months ended April 30,
1998, the Company charged administrative fees to a company owned by the majority
shareholder of the Company. Fees charged during the year ended December 31, 1997
and the four months ended April 30, 1998 were $42,100 and $48,800 respectively.

During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company entered into certain notes receivable agreements
with the two shareholders of the Company. As of December 31, 1996 and 1997 and
April 30, 1998, the Company was owed $137,494, $17,655 and $73,140 respectively.
Interest rates on these notes ranged from 6% to 8%, and all balances were paid
in full following April 30, 1998.

During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company entered into notes receivable agreements with two
companies controlled by the majority shareholder. Amounts owed the Company were
$180,401, $118,114, and $99,144 at December 31, 1996 and 1997 and April 30,
1998, respectively. Interest rates on the notes were 9.25% and 15%, and the
notes are due on October 6, 1998, and August 7, 1999. The Company is current on
these obligations.

During the year ended December 31, 1996, the Company leased an office with
its primary location of business to a related entity. Total rent collected for
the year was $14,000. The lease expired on October 30, 1996.

NOTE 13--ACQUISITION

On April 30, 1998, 100% of the Company's common stock was acquired by
ThermoView Industries, Inc.

F-69
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
The Rolox Companies

We have audited the accompanying combined balance sheets of The Rolox
Companies as of December 31, 1996, 1997 and April 30, 1998, and the related
combined statements of operations, shareholders' equity, and cash flows for each
of the two years in the period ended December 31, 1997 and the four months ended
April 30, 1998. These combined financial statements are the responsibility of
the Companies' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of The Rolox
Companies as of December 31, 1996, 1997 and April 30, 1998, and the combined
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1997 and the four months ended April 30, 1998 in
conformity with generally accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
July 23, 1998

F-70
<PAGE>
THE ROLOX COMPANIES

COMBINED BALANCE SHEETS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- APRIL 30,
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................................... $ 611 $ 3,504 $ 2,120
Accounts receivable, net of allowance for doubtful accounts of $10,000 for
all periods............................................................... 184,058 157,325 156,002
Inventory................................................................... 46,250 46,250 46,250
Costs and prepaid commissions on contracts in progress in excess of
billings.................................................................. 190,153 55,589 90,007
Prepaid expenses............................................................ 1,544 9,784 1,051
---------- ---------- ----------
Total current assets.................................................... 422,616 272,452 295,430
---------- ---------- ----------

Property and equipment
Furniture and fixtures...................................................... 50,001 58,190 58,190
Vehicles.................................................................... 92,442 32,580 69,348
---------- ---------- ----------
142,443 90,770 127,538
Less accumulated depreciation............................................... 68,605 66,010 69,875
---------- ---------- ----------
Total property and equipment............................................ 73,838 24,760 57,663
---------- ---------- ----------
Total assets.......................................................... $ 496,454 $ 297,212 $ 353,093
---------- ---------- ----------
---------- ---------- ----------

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Current portion of long-term debt........................................... $ 5,744 $ 6,189 $ 21,026
Accounts payable............................................................ 232,639 196,341 315,831
Overdraft at bank........................................................... 32,061 -- --
Accrued liabilities:
Payroll................................................................... 101,115 100,042 90,961
Warranty.................................................................. 37,500 37,500 37,500
Other..................................................................... 63,406 55,047 87,900
Billings in excess of costs and prepaid commissions on contracts in
progress.................................................................. 183,652 72,738 14,373
---------- ---------- ----------
Total current liabilities................................................. 656,117 467,857 567,591
Long-term debt, net of current portion........................................ 11,741 5,552 24,818
---------- ---------- ----------
Total liabilities......................................................... 667,858 473,409 592,409
---------- ---------- ----------
Commitments and contingencies

Shareholders' deficit
Rolox of Kansas City, Inc.:
Common stock, $1.00 par value, 100 shares authorized, issued and
outstanding............................................................. 100 100 100
Additional paid in capital................................................ 400 400 400
Rolox of Wichita, Inc.:
Common stock, $1.00 par value, 1,000 shares authorized, issued and
outstanding............................................................. 1,000 1,000 1,000
Accumulated deficit......................................................... (172,904) (177,697) (240,816)
---------- ---------- ----------
Total shareholders' deficit............................................... (171,404) (176,197) (239,316)
---------- ---------- ----------
Total liabilities and shareholders' deficit............................. $ 496,454 $ 297,212 $ 353,093
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

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

F-71
<PAGE>
THE ROLOX COMPANIES

COMBINED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE FOUR MONTHS ENDED APRIL 30, 1998

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE FOUR
DECEMBER 31, MONTHS ENDED
---------------------------- APRIL 30,
1996 1997 1998
------------- ------------- ------------
<S> <C> <C> <C>
Contract revenues.................................................... $ 10,651,741 $ 10,353,840 $3,786,513
Contract costs....................................................... 4,154,276 4,086,011 1,645,687
------------- ------------- ------------
Gross profit......................................................... 6,497,465 6,267,829 2,140,826
------------- ------------- ------------
Operating expenses
Advertising........................................................ 761,608 704,607 225,139
Selling............................................................ 2,343,531 2,299,615 806,351
General and administrative......................................... 3,293,800 3,259,499 1,171,920
------------- ------------- ------------
Total operating expenses......................................... 6,398,939 6,263,721 2,203,410
------------- ------------- ------------
Income (loss) from operations........................................ 98,526 4,108 (62,584)
------------- ------------- ------------
Other expense
Interest expense................................................... (671) (1,191) (535)
Loss on sale of property and equipment............................. -- (7,710) --
------------- ------------- ------------
Total other expense.............................................. (671) (8,901) (535)
------------- ------------- ------------
Net income (loss).................................................... $ 97,855 $ (4,793) $ (63,119)
------------- ------------- ------------
------------- ------------- ------------
</TABLE>

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

F-72
<PAGE>
THE ROLOX COMPANIES

COMBINED STATEMENTS OF SHAREHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE FOUR MONTHS ENDED APRIL 30, 1998

<TABLE>
<CAPTION>
ROLOX OF
ROLOX OF KANSAS CITY, INC. WICHITA, INC.
--------------------------------------- ----------------------
COMMON STOCK ADDITIONAL COMMON STOCK
------------------------ PAID-IN ---------------------- ACCUMULATED
SHARES AMOUNT CAPITAL SHARES AMOUNT DEFICIT
----------- ----------- ------------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995.................. 100 $ 100 $ 400 1,000 $ 1,000 $ (270,759)
Net income.................................. 97,855
--- ----- ----- ----- --------- ------------
Balance, December 31, 1996.................. 100 100 400 1,000 1,000 (172,904)
Net loss.................................... (4,793)
--- ----- ----- ----- --------- ------------
Balance, December 31, 1997.................. 100 100 400 1,000 1,000 (177,697)
Net loss.................................... (63,119)
--- ----- ----- ----- --------- ------------
Balance, April 30, 1998..................... 100 $ 100 $ 400 1,000 $ 1,000 $ (240,816)
--- ----- ----- ----- --------- ------------
--- ----- ----- ----- --------- ------------

TOTAL
-----------
<S> <C>
Balance, December 31, 1995.................. $ (269,259)
Net income.................................. 97,855
-----------
Balance, December 31, 1996.................. (171,404)
Net loss.................................... (4,793)
-----------
Balance, December 31, 1997.................. (176,197)
Net loss.................................... (63,119)
-----------
Balance, April 30, 1998..................... $ (239,316)
-----------
-----------
</TABLE>

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

F-73
<PAGE>
THE ROLOX COMPANIES

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE FOUR MONTHS ENDED APRIL 30, 1998

<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
----------------------- APRIL 30,
1996 1997 1998
----------- ---------- ------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss)........................................................ $ 97,855 $ (4,793) $ (63,119)
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operating activities
Depreciation........................................................... 11,699 10,953 3,865
Loss on sale of property and equipment................................. -- 7,710 --
(Increase) decrease in
Accounts receivable.................................................... (34,833) 26,731 1,323
Costs and prepaid commissions on contracts in progress in excess of
billings............................................................. (14,123) 44,085 (34,418)
Prepaid expenses....................................................... 6,208 (8,240) 8,733
Increase (decrease) in
Accounts payable....................................................... (130,611) (36,838) 119,490
Other accrued liabilities.............................................. 5,987 (8,891) 23,772
Billings in excess of costs and prepaid commissions on contracts in
progress............................................................. 55,959 (20,433) (58,365)
----------- ---------- ------------
Net cash provided by (used in) operating activities.................... (1,859) 10,284 1,281
----------- ---------- ------------
Cash flows from investing activities
Purchase of property and equipment....................................... (9,335) (8,354) --
Proceeds from sale of property and equipment............................. 9,301 38,769 --
----------- ---------- ------------
Net cash provided by (used in) investing activities.................... (34) 30,415 --
----------- ---------- ------------
Cash flows from financing activities
Net change in overdraft at bank.......................................... 4,190 (32,061) --
Payments on notes payable................................................ (10,137) (5,745) (2,665)
----------- ---------- ------------
Net cash used in financing activities.................................. (5,947) (37,806) (2,665)
----------- ---------- ------------
Net increase (decrease) in cash and cash equivalents................... (7,840) 2,893 (1,384)
Cash and cash equivalents, beginning of period............................. 8,451 611 3,504
----------- ---------- ------------
Cash and cash equivalents, end of period................................... $ 611 $ 3,504 $ 2,120
----------- ---------- ------------
----------- ---------- ------------
Supplemental disclosures of cash flow information
Interest paid............................................................ $ 671 $ 1,191 $ 535
----------- ---------- ------------
----------- ---------- ------------
Income taxes paid........................................................ $ -- $ -- $ --
----------- ---------- ------------
----------- ---------- ------------
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

On September 13, 1996, the Company purchased property and equipment with a
note payable in the amount of $18,808.

On March 18, 1998, the Company purchased fixed assets with notes payable in
the amount of $36,768.

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

F-74
<PAGE>
THE ROLOX COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 1--BUSINESS ACTIVITY AND BASIS OF PRESENTATION

The combined financial statements include the accounts and transactions of
Rolox of Kansas City, Inc., and Rolox of Wichita, Inc., together referred to
herein as "the Company." All material intercompany transactions and accounts
have been eliminated in the accompanying combined financial statements.

Management has chosen to omit RMS, Inc. ("RMS") from these combined
financial statements. RMS performs as a management company which employs the
Company's officers and collects fees for their services. Management believes
inclusion of RMS in these financial statements would have an immaterial effect.

The accompanying financial statements are presented on a combined basis as
each of the combined companies is owned by a common shareholder group, and the
Company comprises one operating segment primarily engaged in the design, retail
sale and installation of state-of-the-art vinyl replacement windows for the
existing home market. The majority of contracts are financed for the customers
by third party finance companies.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

METHOD OF ACCOUNTING FOR WINDOW INSTALLATION CONTRACTS

The accompanying financial statements have been prepared using the completed
contract-method of accounting for fixed-price contracts since the contracts are
of a short duration. Accordingly, revenue and costs of individual contracts are
included in operations in the year during which they are completed. Losses
expected to be incurred on contracts in progress are charged to operations in
the period such losses are determined. The aggregate of costs in uncompleted
contracts in excess of related billings is shown as an asset, and the aggregate
of billings on uncompleted contracts in excess of related costs is shown as a
liability.

Contract costs include all direct labor and benefits, materials unique to or
installed in the project, subcontract costs, and other direct installation
costs.

CASH AND CASH EQUIVALENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

INVENTORY

Inventory is stated on a first-in, first-out basis, at the lower of cost or
market, and consists primarily of supplies.

F-75
<PAGE>
THE ROLOX COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is generally
provided using the straight-line method. The estimated useful lives of the
related assets are as follows:

<TABLE>
<S> <C>
5 to 7
Furniture and fixtures......................................... years
3 to 5
Vehicles....................................................... years
</TABLE>

WARRANTIES

The Company provides the retail customer with a limited warranty covering
workmanship and manufacturing defects. The Company provides an accrual for
future warranty costs based upon the relationship of prior year's revenues to
estimated warranty costs. It is the Company's practice to classify the entire
warranty accrual as a current liability.

ADVERTISING EXPENSE

The Company accounts for advertising expenditures by charging to expense all
amounts as incurred.

INCOME TAXES

The two companies comprising the Company have elected to be taxed as S
corporations under the provisions of Subchapter S of the Internal Revenue Code.
Under those provisions, the companies do not pay federal income taxes on their
taxable income. Instead the shareholders are liable for federal income taxes on
the companies' taxable income.

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
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RISK CONCENTRATIONS

The Company's customers are primarily homeowners located in Missouri and
Kansas. In addition, the Company purchases substantially all of its windows from
one related party supplier.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

F-76
<PAGE>
THE ROLOX COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
effective for financial statements issued for fiscal years beginning after
December 15, 1997. Management believes that SFAS No. 130 will not have a
material effect, if any, on the Company's financial statements.

NOTE 3--CASH AND CASH EQUIVALENTS

The Company maintains its cash balance at banks. Balances are insured by the
Federal Deposit Insurance Corporation up to $100,000. As of December 31, 1997,
the uninsured portion of the balance held at the bank aggregated to $19,998.

NOTE 4--ACCOUNTS RECEIVABLE

Accounts receivable consist primarily of amounts due from financing
companies related to construction projects already complete. The Company has
recorded an allowance for doubtful accounts of $10,000 and believes this to be
sufficient for any uncollectible amounts.

NOTE 5--CONTRACTS IN PROGRESS

Contract amounts, accumulated costs, and the related billings to date on
completed contracts and contracts in progress were as follows:

<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNTS COSTS
-------------- -------------
<S> <C> <C>
Contracts in progress at December 31, 1995..................... $ 1,658,923 $ 117,413
Contracts initiated during the year............................ 10,621,354 4,152,305
Contracts completed during the year............................ (10,651,741) (4,154,276)
-------------- -------------

Contracts in progress at December 31, 1996..................... 1,628,536 115,442
Contracts initiated during the year............................ 10,295,836 4,053,617
Contracts completed during the year............................ (10,353,840) (4,086,011)
-------------- -------------

Contracts in progress at December 31, 1997..................... 1,570,532 83,048
Contracts initiated during the year............................ 4,153,588 1,732,643
Contracts completed during the year............................ (3,786,513) (1,645,687)
-------------- -------------
Construction contracts in progress at April 30, 1998......... $ 1,937,607 $ 170,004
-------------- -------------
-------------- -------------
</TABLE>

F-77
<PAGE>
THE ROLOX COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 5--CONTRACTS IN PROGRESS (CONTINUED)
Contracts in progress:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE FOUR
DECEMBER 31, MONTHS ENDED
------------------------ APRIL 30,
1996 1997 1998
----------- ----------- --------------
<S> <C> <C> <C>
Cumulative costs to date........................... $ 115,442 $ 83,048 $ 170,004
Less cash collected to date........................ 229,327 204,318 225,269
----------- ----------- --------------
(113,885) (121,270) (55,265)
Plus prepaid commissions on uncompleted
contracts........................................ 120,386 104,121 130,899
----------- ----------- --------------
Net contracts in progress........................ $ 6,501 $ (17,149) $ 75,634
----------- ----------- --------------
----------- ----------- --------------
</TABLE>

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

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE FOUR
DECEMBER 31, MONTHS ENDED
----------------------- APRIL 30,
1996 1997 1998
----------- ---------- --------------
<S> <C> <C> <C>
Costs and prepaid commissions on contracts in
progress in excess of billings.................... $ 190,153 $ 55,589 $ 90,007
Billings in excess of costs and prepaid commissions
on contracts in progress.......................... (183,652) (72,738) (14,373)
----------- ---------- --------------
Total............................................. $ 6,501 $ (17,149) $ 75,634
----------- ---------- --------------
----------- ---------- --------------
</TABLE>

NOTE 6--LONG-TERM DEBT

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE FOUR
DECEMBER 31, MONTHS ENDED
-------------------- APRIL 30,
1996 1997 1998
--------- --------- --------------
<S> <C> <C> <C>
Notes payable to bank, with an original principal balance of $18,808,
bearing interest at a rate of 8.1%, secured by an automobile, and
maturing on October 13, 1998............................................. $ 17,485 $ 11,741 $ 9,733
Notes payable to bank, with an original principal balance of $36,768,
bearing interest at rates ranging from 7.6% to 8.1%, secured by vehicles,
and maturing on March 18, 2002........................................... -- -- 36,111
--------- --------- -------
17,485 11,741 45,844
Less current portion....................................................... 5,744 6,189 21,026
--------- --------- -------
Long-term portion........................................................ $ 11,741 $ 5,552 $ 24,818
--------- --------- -------
--------- --------- -------
</TABLE>

F-78
<PAGE>
THE ROLOX COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 6--LONG-TERM DEBT (CONTINUED)
The following is a schedule by years of future maturities of long-term debt
as of December 31, 1997:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- -----------------------------------------------------------------------------------
<S> <C>
1998............................................................................... $ 6,189
1999............................................................................... 5,552
---------
Total............................................................................ $ 11,741
---------
---------
</TABLE>

NOTE 7--EMPLOYEE BENEFIT PLAN

The Company has a profit sharing plan established in accordance with Section
401(k) of the Employee Retirement Income Security Act of 1974 as amended. The
plan covers substantially all eligible employees. Employee contributions to the
plan are elective, and matching contributions by the employer are optional. The
Company incurred $92,000 and $81,000 in contribution expense for the years ended
December 31, 1996 and 1997, respectively. No contribution was made for the four
months ended April 30, 1998.

NOTE 8--COMMITMENTS AND CONTINGENCIES

LEASES

The Company has entered into certain non-cancelable operating leases with
related parties for its corporate offices and facilities and for computer
equipment. In addition, the Company has entered into various operating lease
agreements for vehicles.

Future minimum rental commitments under these lease agreements with initial
or remaining terms of one year or more at December 31, 1997 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- --------------------------------------------------------------------------------
<S> <C>
1998............................................................................ $ 271,709
1999............................................................................ 285,801
2000............................................................................ 272,964
2001............................................................................ 269,200
2002............................................................................ 89,733
------------
Total......................................................................... $ 1,189,407
------------
------------
</TABLE>

Rent expense was $190,183 and $202,258 for the years ended December 31, 1996
and 1997, respectively, and $72,033 for the four-month period ended April 30,
1998.

LITIGATION

The Company is involved in various litigation arising from the normal course
of business. The outcome of such litigation is not expected to have an adverse
effect on the Company.

F-79
<PAGE>
THE ROLOX COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND APRIL 30, 1998

NOTE 9--RELATED PARTY TRANSACTIONS

During the years ended December 31, 1996 and 1997 and for the four months
ended April 30, 1998, the Company paid fees to a related company for management
services in the amounts of $2,196,984, $1,957,439 and $680,000, respectively.

During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company purchased substantially all of its windows from a
supplier partially owned by the Company's majority shareholder. Purchases from
this supplier were $2,085,280, $2,230,765 and $564,858 for the years ended
December 31, 1996 and 1997 and the four months ended April 30, 1998,
respectively.

During the years ended December 31, 1996 and 1997 and the four months ended
April 30, 1998, the Company retained an advertising agency that was owned by the
Company's majority shareholder. Expenditures related to this agency were
$766,761, $660,370, and $232,816 for the years ended December 31, 1996 and 1997
and the four months ended April 30, 1998, respectively.

During the years ended December 31, 1996 and 1997, the Company had entered
into operating leases with a related party as follows:

- - The Company leases facilities in Grandview, Missouri from a company owned by
the majority shareholder under two separate leases. Both leases expire on
April 30, 2002, and required monthly payments of $8,333 and $3,667.

- - The Company leases facilities in Wichita, Kansas, from an affiliated entity
owned by the Company's majority shareholder. The lease expires April 30, 2002,
and requires monthly payments of $5,100.

- - The Company leases certain computer and telephone equipment from the majority
shareholder of the Company. The lease expires on April 30, 1998 and requires
monthly payments of $4,500.

NOTE 10--ACQUISITION

On April 30, 1998, 100% of the common stock of each of the companies
comprising the Company was acquired by ThermoView Industries, Inc.

F-80
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
American Home Remodeling

We have audited the accompanying balance sheets of American Home Remodeling
as of December 31, 1997 and July 9, 1998, and the related statements of
operations, shareholders' equity, and cash flows for the year ended December 31,
1997 and the period from January 1, 1998 through July 9, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of American Home Remodeling as
of December 31, 1997 and July 9, 1998, and the results of its operations and its
cash flows for the year ended December 31, 1997 and the period from January 1,
1998 through July 9, 1998 in conformity with generally accepted accounting
principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
February 5, 1999

F-81
<PAGE>
AMERICAN HOME REMODELING

BALANCE SHEETS

DECEMBER 31, 1997 AND JULY 9, 1998

<TABLE>
<CAPTION>
DECEMBER 31, JULY 9,
1997 1998
------------ ----------
<S> <C> <C>
ASSETS
Current assets
Cash................................................................................. $ -- $ 80,415
Accounts receivable, net of allowance for doubtful accounts of $38,000 and $50,000... 16,359 2,562
------------ ----------
Total current assets............................................................... 16,359 82,977
------------ ----------
Furniture and equipment
Office equipment..................................................................... 89,398 91,142
Less accumulated depreciation........................................................ 81,085 82,884
------------ ----------
Total furniture and equipment...................................................... 8,313 8,258
------------ ----------
Other assets
Deposits............................................................................. 4,752 4,752
Due from officers.................................................................... 110,832 --
------------ ----------
Total assets..................................................................... $ 140,256 $ 95,987
------------ ----------
------------ ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft....................................................................... $ 18,343 $ --
Lines of credit...................................................................... 23,525 121,525
Accounts payable..................................................................... 321,945 337,587
Billings in excess of costs and prepaid commissions on contracts in progress......... 115,071 203,303
Accrued liabilities.................................................................. 112,742 148,073
Due to related party................................................................. 153,560 113,893
------------ ----------
Total current liabilities.......................................................... 745,186 924,381
------------ ----------
Commitments and contingencies
Shareholders' equity
Common stock, no par value
100,000 shares authorized
40,000 shares issued and outstanding
Accumulated deficit.................................................................. (604,930) (828,394)
------------ ----------
Total shareholders' deficit........................................................ (604,930) (828,394)
------------ ----------
Total liabilities and shareholders' deficit...................................... $ 140,256 $ 95,987
------------ ----------
------------ ----------
</TABLE>

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

F-82
<PAGE>
AMERICAN HOME REMODELING

STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH JULY 9, 1998

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
JANUARY 1,
FOR THE 1998
YEAR ENDED THROUGH
DECEMBER 31, JULY 9,
1997 1998
------------ ---------------
<S> <C> <C>
Contract revenues.................................................................. $6,325,454 $ 3,343,847
Contract costs..................................................................... 3,028,114 1,262,510
------------ ---------------
Gross profit....................................................................... 3,297,340 2,081,337
------------ ---------------
Operating expenses
Advertising...................................................................... 269,452 37,375
Selling.......................................................................... 1,546,721 699,284
General and administrative....................................................... 1,620,905 1,336,568
------------ ---------------
Total operating expenses....................................................... 3,437,078 2,073,227
------------ ---------------
Income (loss) from operations...................................................... (139,738) 8,110
------------ ---------------
Other income (expense)
Interest income.................................................................. 9,433 542
Interest expense................................................................. (1,998) (4,587)
------------ ---------------
Total other income (expense)................................................... 7,435 (4,045)
------------ ---------------
Income (loss) before provision for income taxes.................................... (132,303) 4,065
Provision for income taxes......................................................... 1,775 --
------------ ---------------
Net income (loss)............................................................ $ (134,078) $ 4,065
------------ ---------------
------------ ---------------
</TABLE>

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

F-83
<PAGE>
AMERICAN HOME REMODELING

STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH JULY 9, 1998

<TABLE>
<CAPTION>
COMMON STOCK
---------------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996.......................................... 40,000 $ -- $ (422,252) $ (422,252)
Distributions to shareholders....................................... (48,600) (48,600)
Net loss............................................................ (134,078) (134,078)
--------- ----- ----------- -----------
Balance, December 31, 1997.......................................... 40,000 -- (604,930) (604,930)
Distributions to shareholders....................................... (227,529) (227,529)
Net income.......................................................... 4,065 4,065
--------- ----- ----------- -----------
Balance, July 9, 1998............................................... 40,000 $ -- $ (828,394) $ (828,394)
--------- ----- ----------- -----------
--------- ----- ----------- -----------
</TABLE>

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

F-84
<PAGE>
AMERICAN HOME REMODELING

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH JULY 9, 1998

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
FOR THE JANUARY 1, 1998
YEAR ENDED THROUGH
DECEMBER 31, JULY 9,
1997 1998
------------ ------------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss)............................................................ $ (134,078) $ 4,065
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities
Depreciation............................................................. 21,359 1,799
(Increase) decrease in
Billings in excess of costs and prepaid commissions........................ 26,613 88,232
Accounts receivable........................................................ (2,894) 13,797
Deposits................................................................... (1,064) --
Increase (decrease) in
Accounts payable........................................................... (44,919) 15,642
Other accrued liabilities.................................................. 87,741 35,331
------------ ----------
Net cash provided by (used in) operating activities...................... (47,242) 158,866
------------ ----------

Cash flows from investing activities
Purchase of furniture and equipment.......................................... (16,325) (1,744)
------------ ----------
Net cash used in investing activities.................................... (16,325) (1,744)
------------ ----------

Cash flows from financing activities
Net borrowing from officers.................................................. 31,248 --
Net borrowing from (payments to) related parties............................. 20,000 (39,667)
Net borrowing on lines of credit............................................. 23,525 98,000
Cash distributions to shareholders........................................... (48,600) (116,697)
------------ ----------
Net cash provided by (used in) financing activities...................... 26,173 (58,364)
------------ ----------
Net increase (decrease) in cash and cash equivalents................... (37,394) 98,758

Cash and cash equivalents (bank overdraft), beginning of period................ 19,051 (18,343)
------------ ----------

Cash and cash equivalents (bank overdraft), end of period...................... $ (18,343) $ 80,415
------------ ----------
------------ ----------

Supplemental disclosures of cash flow information
Interest paid................................................................ $ 1,998 $ 4,587
------------ ----------
------------ ----------
Income taxes paid............................................................ $ 975 $ 800
------------ ----------
------------ ----------
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During the period January 1, 1998 to July 9, 1998, $110,832 of amounts due
from officers were distributed to the officers (shareholders) in the form of
distributions to shareholders.

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

F-85
<PAGE>
AMERICAN HOME REMODELING

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND JULY 9, 1998

NOTE 1--BUSINESS ACTIVITY

American Home Remodeling (the "Company") is a California corporation,
founded March 17, 1992. The Company's primary line of business is installing
replacement windows for the existing home market. The Company markets its
products primarily through the use of an extensive telemarketing effort. The
Company retains independent contractors for the installation of its products at
the customer's site.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

METHOD OF ACCOUNTING FOR WINDOW INSTALLATION AND CONTRACTS

The accompanying financial statements have been prepared using the
completed-contract method of accounting for fixed-price contracts since the
contracts are of a short duration. Accordingly, revenue and costs of individual
contracts are included in operations in the year during which they are
completed. Losses expected to be incurred on contracts in progress are charged
to operations in the period such losses are determined. The aggregate of costs
in uncompleted contracts in excess of related billings is shown as an asset, and
the aggregate of billings on uncompleted contracts in excess of related costs is
shown as a liability.

Contract costs include all direct labor and benefits, materials unique to or
installed in the project, subcontract costs, and other direct installation
costs.

CASH AND CASH EQUIVALENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

FURNITURE AND EQUIPMENT

Furniture and equipment are stated at cost. Depreciation is generally
provided using the straight-line method over the estimated useful lives of the
assets of three to five years.

WARRANTIES

The Company has a three-year warranty covering workmanship. The Company
provides an accrual for future warranty costs based upon the relationship of
prior year's revenues to estimated warranty costs. It is the Company's practice
to classify the entire warranty accrual as a current liability.

INCOME TAXES

Under the provisions of the Internal Revenue Code, the Company has elected
to be taxed as an "S" corporation, whereby the Company's taxable income or loss
and tax credits are passed through to its shareholders.

F-86
<PAGE>
AMERICAN HOME REMODELING

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND JULY 9, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RISK CONCENTRATIONS

The Company's customers are primarily homeowners located in Southern
California. The Company purchases substantially all of its Tex-Coting material
from one supplier. Purchases from this supplier were 56% of the Company's total
cost of sales for both the year ended December 31, 1997 and the period from
January 1, 1998 through July 9, 1998.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

F-87
<PAGE>
AMERICAN HOME REMODELING

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND JULY 9, 1998

NOTE 3--CONTRACTS IN PROGRESS

For the year ended December 31, 1997 and the period from January 1, 1998
through July 9, 1998, contract amounts, accumulated costs, and the related
billings to date on completed contracts and contracts in progress were as
follows:

<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNTS COSTS
------------- -------------
<S> <C> <C>
Contracts in progress at December 31, 1996...................... $ 365,677 $ 69,252
Contracts initiated during the year............................. 6,413,819 3,013,356
Contracts completed during the year............................. (6,325,454) (3,028,114)
------------- -------------

Contracts in progress at December 31, 1997...................... 454,042 54,494
Contracts initiated during the period........................... 3,465,492 1,265,617
Contracts completed during the period........................... (3,343,847) (1,262,510)
------------- -------------

Contracts in progress at July 9, 1998......................... $ 575,687 $ 57,601
------------- -------------
------------- -------------
</TABLE>

Contracts in progress:

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
FOR THE JANUARY 1, 1998
YEAR ENDED THROUGH
DECEMBER 31, JULY 9,
1997 1998
------------ ------------------
<S> <C> <C>
Cumulative costs to date................................... $ 54,494 $ 57,601
Plus prepaid commissions to date........................... 28,468 39,140
Less cash collected to date................................ (198,033) (300,044)
------------ ----------
Net contracts in progress.............................. $ (115,071) $ (203,303)
------------ ----------
------------ ----------
</TABLE>

Included in the accompanying balance sheet under the following caption:

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
FOR THE JANUARY 1, 1998
YEAR ENDED THROUGH
DECEMBER 31, JULY 9,
1997 1998
------------ ------------------
<S> <C> <C>
Billings in excess of costs and prepaid commissions on
contracts in progress.................................... $ (115,071) $ (203,303)
------------ ----------
------------ ----------
</TABLE>

NOTE 4--LINES OF CREDIT

The Company had available a $25,000 line of credit bearing interest at
9.75%. Any borrowings are collateralized by substantially all assets of the
Company and are personally guaranteed by the shareholders of the Company.
Outstanding borrowings as of December 31, 1997 and July 9, 1998 were $23,525 for
both periods.

F-88
<PAGE>
AMERICAN HOME REMODELING

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997 AND JULY 9, 1998

NOTE 4--LINES OF CREDIT (CONTINUED)
The Company also had available a $100,000 line of credit, bearing interest
at 10%. Any borrowings are collateralized by substantially all the assets of the
Company and are personally guaranteed by the shareholders of the Company.
Outstanding borrowings as of July 9, 1998 were $98,000.

NOTE 5--COMMITMENTS AND CONTINGENCIES

LEASES

The Company has entered into an operating lease agreement for its facility.
The lease is terminable in 1999. The minimum rental commitment under this lease
agreement at December 31, 1997 is $48,450.

Management intends to extend the lease upon termination of the original
agreement.

Rent expense was approximately $56,060 and $28,638 for the year ended
December 31, 1997 and for the period from January 1, 1998 through July 9, 1998.

NOTE 6--RELATED PARTY TRANSACTIONS

During the year ended December 31, 1997, the Company had two notes payable
aggregating $153,560 due to related party, bearing interest at 0% and 10%. Both
notes have no stated due date. Balances due aggregated to $113,893 at July 9,
1998.

At December 31, 1997, the Company maintained two draw accounts receivable
aggregating to $110,832 from officers of the Company. The amounts are payable on
demand and bear no interest. During the period from January 1, 1998 through July
9, 1998, the Company distributed the accounts in the form of distributions to
shareholders.

NOTE 7--SUBSEQUENT EVENTS

On July 9, 1998, 100% of the Company's common stock was acquired by
ThermoView Industries, Inc.

F-89
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
Five Star Builders, Inc.

We have audited the accompanying balance sheets of Five Star Builders, Inc.
as of December 31, 1996 and 1997 and July 13, 1998, and the related statements
of operations, shareholders' equity, and cash flows for each of the two years in
the period ended December 31, 1997 and the period from January 1, 1998 through
July 13, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Five Star Builders, Inc. as
of December 31, 1996 and 1997 and July 13, 1998, and the results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1997 and the period from January 1, 1998 through July 13, 1998 in
conformity with generally accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
December 30, 1998

F-90
<PAGE>
FIVE STAR BUILDERS, INC.

BALANCE SHEETS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- JULY 13,
1996 1997 1998
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.................................................... $ 98,087 $ 424,422 $ 74,963
Costs and prepaid commissions on contracts in progress in excess of
billings................................................................... 17,186 18,565 40,287
Accounts receivable, net of allowance for doubtful accounts of $12,363,
$13,877, and $14,328....................................................... 296,702 283,655 240,694
Other receivables............................................................ 33,936 16,190 21,836
Prepaid assets............................................................... 10,304 3,385 24,133
Deferred tax asset........................................................... -- -- 3,768
Income tax receivable........................................................ -- -- 183,812
--------- ----------- ---------
Total current assets....................................................... 456,215 746,217 589,493
Furniture and equipment
Furniture and fixtures....................................................... 73,096 71,744 81,247
Equipment.................................................................... 226,467 311,500 331,490
Leasehold improvements....................................................... 2,146 2,146 25,774
--------- ----------- ---------
301,709 385,390 438,511
Less accumulated depreciation................................................ 66,224 108,070 153,753
--------- ----------- ---------
Total furniture and equipment.............................................. 235,485 277,320 284,758
Other assets
Deposits..................................................................... 5,252 5,252 11,894
--------- ----------- ---------
Total assets............................................................... $ 696,952 $ 1,028,789 $ 886,145
--------- ----------- ---------
--------- ----------- ---------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable............................................................. $ 119,954 $ 57,964 $ 90,725
Accrued liabilities:
Payroll and related........................................................ 85,275 129,010 186,254
Warranty................................................................... -- 40,865 48,664
Income taxes payable......................................................... 136,815 247,851 197,504
Deferred taxes............................................................... 5,282 4,977 --
Current portion of capital lease obligation.................................. 61,437 96,959 75,010
Accrued legal settlement..................................................... -- -- 142,000
--------- ----------- ---------
Total current liabilities.................................................. 408,763 577,626 740,157
Capital lease obligation, net of current portion............................... 28,535 26,301 --
--------- ----------- ---------
Total liabilities.......................................................... 437,298 603,927 740,157
--------- ----------- ---------
Commitments and contingencies
Shareholders' equity
Common stock, no par value
1,000 shares authorized 450,900 and 900 shares issued and outstanding...... 11,250 41,250 41,250
Subscriptions receivable..................................................... -- (30,000) (30,000)
Retained earnings............................................................ 248,404 413,612 134,738
--------- ----------- ---------
Total shareholders' equity................................................. 259,654 424,862 145,988
--------- ----------- ---------
Total liabilities and shareholders' equity............................... $ 696,952 $ 1,028,789 $ 886,145
--------- ----------- ---------
--------- ----------- ---------
</TABLE>

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

F-91
<PAGE>
FIVE STAR BUILDERS, INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH JULY 13, 1998

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
FOR THE YEARS ENDED JANUARY 1,
DECEMBER 31, 1998 THROUGH
-------------------------- JULY 13,
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Contract revenues....................................................... $ 6,171,891 $ 8,278,494 $3,349,814
Contract costs.......................................................... 2,098,147 2,333,756 992,461
------------ ------------ ------------
Gross profit............................................................ 4,073,744 5,944,738 2,357,353
------------ ------------ ------------
Operating expenses
Advertising........................................................... 12,516 197,728 38,076
Selling............................................................... 1,516,695 1,309,519 1,087,700
General and administrative............................................ 2,187,962 4,108,730 1,500,346
Legal settlement...................................................... -- -- 202,000
------------ ------------ ------------
Total operating expenses............................................ 3,717,173 5,615,977 2,828,122
------------ ------------ ------------
Income (loss) from operations........................................... 356,571 328,761 (470,769)
------------ ------------ ------------
Other income (expense)
Interest income....................................................... 1,455 8,031 8,038
Interest expense...................................................... (7,672) (21,531) (8,700)
Loss on sale of assets................................................ -- (15,623) --
------------ ------------ ------------
Total other income (expense)........................................ (6,217) (29,123) (662)
------------ ------------ ------------
Income (loss) before provision for (benefit from) income taxes.......... 350,354 299,638 (471,431)
Provision for (benefit from) income taxes............................... 150,346 134,430 (192,557)
------------ ------------ ------------
Net income (loss)................................................... $ 200,008 $ 165,208 $ (278,874)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

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

F-92
<PAGE>
FIVE STAR BUILDERS, INC.

STATEMENTS OF SHAREHOLDLERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH JULY 13, 1998

<TABLE>
<CAPTION>
COMMON STOCK
---------------------- SUBSCRIPTIONS RETAINED
SHARES AMOUNT RECEIVABLE EARNINGS TOTAL
----------- --------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995........................... 450 $ 11,250 $ -- $ 48,396 $ 59,646
Net income........................................... 200,008 200,008
--- --------- ------------ ----------- -----------
Balance, December 31, 1996........................... 450 11,250 248,404 259,654
Issuance of common stock for subscriptions........... 450 30,000 (30,000) --
Net income........................................... 165,208 165,208
--- --------- ------------ ----------- -----------
Balance, December 31, 1997........................... 900 41,250 (30,000) 413,612 424,862
Net loss............................................. (278,874) (278,874)
--- --------- ------------ ----------- -----------
Balance, July 13, 1998............................... 900 $ 41,250 $ (30,000) $ 134,738 $ 145,988
--- --------- ------------ ----------- -----------
--- --------- ------------ ----------- -----------
</TABLE>

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

F-93
<PAGE>
FIVE STAR BUILDERS, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1997 AND
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH JULY 13, 1998

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
----------------------- JULY 13,
1996 1997 1998
------------ --------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss)........................................................ $ 200,008 $ 165,208 $(278,874)
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operating activities
Depreciation and amortization.......................................... 10,351 68,749 45,682
Deferred taxes......................................................... 12,731 (305) (8,745)
Allowance for doubtful accounts........................................ 8,175 1,514 451
Loss on sale of assets................................................. -- 15,623 --
(Increase) decrease in Costs and prepaid commissions in excess of
billings............................................................... (32,764) (1,279) (21,722)
Accounts receivable...................................................... (204,364) 11,433 42,510
Prepaid expenses and other current assets................................ (6,624) 6,919 (20,748)
Other receivables........................................................ (18,916) 17,746 (5,646)
Deposits and other long-term assets...................................... (4,152) -- (6,642)
Income taxes receivable.................................................. -- -- (183,812)
Increase (decrease) in Accounts payable.................................... 96,812 (61,991) 32,761
Accrued income taxes..................................................... 136,815 111,036 (50,347)
Other accrued liabilities................................................ 65,949 84,600 65,045
Accrued legal settlement................................................. -- -- 142,000
------------ --------- -----------
Net cash provided by (used in) operating activities........................ 264,021 419,253 (248,087)
------------ --------- -----------
Cash flows from investing activities
Purchase of furniture and equipment...................................... (61,606) (31,481) (53,122)
------------ --------- -----------
Net cash used in investing activities...................................... (61,606) (31,481) (53,122)
------------ --------- -----------
Cash flows from financing activities
Principal payments on capital lease obligation........................... (17,132) (61,437) (48,250)
------------ --------- -----------
Net cash used in financing activities...................................... (17,132) (61,437) (48,250)
------------ --------- -----------
Net increase (decrease) in cash and cash equivalents....................... $ 185,283 $ 326,335 $(349,459)
Cash and cash equivalents (book overdraft), beginning of period............ (87,196) 98,087 424,422
------------ --------- -----------
Cash and cash equivalents, end of period................................... $ 98,087 $ 424,422 $ 74,963
------------ --------- -----------
------------ --------- -----------
Supplemental disclosures of cash flow information
Interest paid............................................................ $ 7,672 $ 21,531 $ 8,700
------------ --------- -----------
------------ --------- -----------
Income taxes paid........................................................ $ 800 $ 23,699 $ 51,147
------------ --------- -----------
------------ --------- -----------
</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During the year ended December 31, 1997, the Company entered into capital
lease agreements for assets valued at $94,723.

During the year ended December 31, 1997, the Company issued 450 shares of
common stock to an officer of the Company in exchange for a subscription
agreement for $30,000.

During the year ended December 31, 1996, the Company entered into capital
lease agreements for assets valued at $107,104.

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

F-94
<PAGE>
FIVE STAR BUILDERS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

NOTE 1--BUSINESS ACTIVITY

Five Star Builders, Inc. (the "Company") is a California corporation,
founded June 18, 1992. The Company's primary lines of business are retail
selling and installing state-of-the-art vinyl replacement windows for the
existing home market. The Company markets its products primarily through the use
of an extensive telemarketing effort. The Company retains independent
contractors for the installation of its products at the customer's site.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

METHOD OF ACCOUNTING FOR CONTRACTS

The accompanying financial statements have been prepared using the
completed-contract method of accounting for fixed-price contracts since the
contracts are of a short duration. Accordingly, revenue and costs of individual
contracts are included in operations in the year during which they are
completed. Losses expected to be incurred on contracts in progress are charged
to operations in the period such losses are determined. The aggregate of costs
in uncompleted contracts in excess of related billings is shown as an asset, and
the aggregate of billings on uncompleted contracts in excess of related costs is
shown as a liability.

Contract costs include all direct labor and benefits, materials unique to or
installed in the project, subcontract costs, and other direct installation
costs.

CASH AND CASH EQUIVALENTS

OTHER RECEIVABLES

Other receivables consist primarily of advances to employees. All amounts
are expected to be recovered, and as such, no allowance for uncollectible
amounts is deemed necessary.

FAIR VALUE OF FINANCIAL INSTRUMENTS

FURNITURE AND EQUIPMENT

Furniture and equipment are stated at cost. Depreciation and amortization
are generally provided using the straight-line method. The estimated useful
lives of the related assets are as follows:

<TABLE>
<S> <C>
Furniture and fixtures............... 3 to 5 years
Equipment............................ 3 to 5 years
Leasehold improvements............... shorter of length of lease or
estimated useful life
</TABLE>

F-95
<PAGE>
FIVE STAR BUILDERS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
WARRANTIES

The Company provides the retail customer with a warranty covering
workmanship and manufacturing defects. The Company provides an accrual for
future warranty costs based upon the relationship of prior year's revenues to
estimated warranty costs. It is the Company's practice to classify the entire
warranty accrual as a current liability.

ADVERTISING EXPENSE

The Company accounts for advertising expenditures by charging to expense all
amounts as incurred.

INCOME TAXES

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
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

RISK CONCENTRATIONS

The Company's customers are primarily homeowners located in Southern
California.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

F-96
<PAGE>
FIVE STAR BUILDERS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

NOTE 3--CASH AND CASH EQUIVALENTS

NOTE 4--CONTRACTS IN PROGRESS

For the years ended December 31, 1996 and 1997 and for the period from
January 1, 1998 through July 13, 1998, contract amounts, accumulated costs, and
the related billings to date on completed contracts and contracts in progress
were as follows:

<TABLE>
<CAPTION>
CONTRACT CONTRACT
AMOUNTS COSTS
------------- -------------
<S> <C> <C>
Contracts in progress at December 31, 1995...................... $ 48,234 $ 3,337
Contracts initiated during the year............................. 6,429,352 2,118,946
Contracts completed during the year............................. (6,171,891) (2,098,147)
------------- -------------

Contracts in progress at December 31, 1996...................... 305,695 24,136
Contracts initiated during the year............................. 8,294,631 2,329,969
Contracts completed during the year............................. (8,278,494) (2,333,756)
------------- -------------

Contracts in progress at December 31, 1997...................... 321,832 20,349
Contracts initiated during the period........................... 3,220,937 1,008,682
Contracts completed during the period........................... (3,349,814) (992,461)
------------- -------------
Contracts in progress at July 13, 1998........................ $ 192,955 $ 36,570
------------- -------------
------------- -------------
</TABLE>

Contracts in progress:

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
-------------------- JULY 13,
1996 1997 1998
--------- --------- -----------
<S> <C> <C> <C>
Cumulative costs to date.................................. $ 24,136 $ 20,349 $ 36,570
Less cash collected to date............................... (8,652) (7,990) (3,699)
Plus prepaid commissions on contracts in progress......... 1,702 6,206 7,416
--------- --------- -----------
Net contracts in progress............................. $ 17,186 $ 18,565 $ 40,287
--------- --------- -----------
--------- --------- -----------
</TABLE>

F-97
<PAGE>
FIVE STAR BUILDERS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

NOTE 4--CONTRACTS IN PROGRESS (CONTINUED)

Included in the accompanying balance sheet under the following caption:

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
-------------------- JULY 13,
1996 1997 1998
--------- --------- -----------
<S> <C> <C> <C>
Costs and prepaid commissions on contracts in progress in
excess of billings....................................... $ 17,186 $ 18,565 $ 40,287
--------- --------- -----------
--------- --------- -----------
</TABLE>

NOTE 5--COMMITMENTS AND CONTINGENCIES

LEASES

The Company has entered into various operating leases for facilities and
equipment. The Company also leases certain office and computer equipment under
non-cancelable, capital lease arrangements. Future minimum payments under
capital and operating leases with initial or remaining terms of one year or more
at December 31, 1997 are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
YEAR ENDING DECEMBER 31, LEASES LEASES
- ---------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
1998.................................................................. $ 43,020 $ 96,961
1999.................................................................. 36,156 39,587
2000.................................................................. 26,784 4,319
---------- ----------
$ 105,960 140,867
----------
----------
Less amount representing interest..................................... 17,607
----------
123,260
Less current portion.................................................. 96,959
----------
Long-term portion................................................... $ 26,301
----------
----------
</TABLE>

Assets capitalized under capital lease agreements at December 31, 1997 were
valued at $201,827.

On January 1, 1998 and March 1, 1998, the Company entered into operating
leases for office spaces which have a total future commitment of $265,107.

LITIGATION

During the period from January 1, 1998 through July 13, 1998, the Company
settled a lawsuit arising from the Company's construction and installation
activities. The settlement called for payments totaling $202,000 and required an
initial payment of $60,000 on June 12, 1998, $43,000 on September 1, 1998, and
three quarterly payments thereafter of $33,000 beginning on January 6, 1999.

In addition, the Company is involved in various other litigation in the
normal course of business. The outcome of such litigation is not expected to
have a material effect on the Company.

F-98
<PAGE>
FIVE STAR BUILDERS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

NOTE 6--INCOME TAXES

Significant components of the provision for (benefit from) taxes based on
income for the years ended December 31, 1996 and 1997 and the period from
January 1, 1998 through July 13, 1998 are as follows:

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
---------------------- JULY 13,
1996 1997 1998
---------- ---------- -----------
<S> <C> <C> <C>
Current
Federal............................................... $ 109,196 $ 106,846 $(145,639)
State................................................. 28,419 27,889 (38,173)
---------- ---------- -----------
137,615 134,735 (183,812)
---------- ---------- -----------
Deferred
Federal............................................... 2,320 (53) (6,716)
State................................................. 10,411 (252) (2,029)
---------- ---------- -----------
12,731 (305) (8,745)
---------- ---------- -----------
Provision for (benefit from) income taxes........... $ 150,346 $ 134,430 $(192,557)
---------- ---------- -----------
---------- ---------- -----------
</TABLE>

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
------------------------ JULY 13,
1996 1997 1998
----------- ----------- -------------
<S> <C> <C> <C>
Income tax provision (benefit) computed at federal
statutory tax rate....................................... 34.0% 34.0% (34.0)%
State taxes, net of federal benefit........................ 6.0 6.0 (6.0 )
Permanent, differences, and other.......................... 3.0 5.0 (1.0 )
--- --- -----
Total.................................................... 43.0% 45.0% (41.0 )%
--- --- -----
--- --- -----
</TABLE>

F-99
<PAGE>
FIVE STAR BUILDERS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996, DECEMBER 31, 1997 AND JULY 13, 1998

NOTE 6--INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets and liabilities
for income taxes consist of the following:

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JANUARY 1,
FOR THE YEARS ENDED 1998
DECEMBER 31, THROUGH
-------------------- JULY 13,
1996 1997 1998
--------- --------- -----------
<S> <C> <C> <C>
Deferred tax asset
Warranty reserve......................................... $ -- $ -- $ 19,529
--------- --------- -----------
Deferred tax liability
Contracts in process..................................... 5,282 4,977 15,761
--------- --------- -----------
Net deferred tax asset (liability)..................... $ (5,282) $ (4,977) $ 3,768
--------- --------- -----------
--------- --------- -----------
</TABLE>

The Company files its income tax returns on a fiscal year-end, not calendar
year-end basis. Deferred taxes are stated as if the Company filed its income tax
returns at December 31.

NOTE 7--RELATED PARTY TRANSACTIONS

During the year ended December 31, 1997, the Company issued an
interest-bearing note receivable for $30,000 in exchange for common stock to an
officer of the Company. The note was due at December 31, 1997 and was in default
at that date and at July 13, 1998.

NOTE 8--SUBSEQUENT EVENTS

On July 13, 1998, the Company entered into a three year employment agreement
with a former director and officer of the Company. The agreement calls for a
base yearly salary of $200,000, plus various incentives.

On July 13, 1998, 100% of the Company's common stock was acquired by
ThermoView Industries, Inc.

F-100
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors

ThermoView Industries, Inc.

We have audited the accompanying balance sheet of NuView Industries, Inc. as
of July 21, 1998 and the related statements of operations and accumulated
deficit and cash flows for the period from January 1, 1998 through July 21,
1998. These financial statements are the responsibility of the NuView
Industries, Inc.'s management. Our responsibility is to express an opinion on
these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of NuView Industries, Inc. at
July 21, 1998 and the results of its operations and its cash flows for the
period from January 1, 1998 through July 21, 1998 in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Louisville, Kentucky

January 15, 1999

F-101
<PAGE>

NUVIEW INDUSTRIES, INC.

BALANCE SHEET

JULY 21, 1998

<TABLE>
<S> <C>
ASSETS

Current assets:
Cash........................................................................... $ 19,287
Accounts receivable............................................................ 10,162
Note receivable--stockholder................................................... 150,000
Inventories.................................................................... 26,593
Costs in excess of billings on uncompleted contracts........................... 2,080
Prepaid commissions............................................................ 29,389
---------
Total current assets............................................................. 237,511
Property and equipment, net...................................................... 44,127
Other assets..................................................................... 16,000
---------
Total assets..................................................................... $ 297,638
---------
---------

LIABILITIES AND STOCKHOLDER'S DEFICIENCY

Current liabilities:
Accounts payable............................................................... $ 217,492
Accrued expenses............................................................... 137,030
Billings in excess of costs on uncompleted contracts........................... 73,260
Current portion of long-term debt.............................................. 8,155
---------
Total current liabilities........................................................ 435,937
Long-term debt, less current portion............................................. 15,015
Stockholder's deficiency:
Common stock, no par value; 30,000 shares authorized, 100 shares issued and
outstanding.................................................................. 500
Accumulated deficit............................................................ (153,814)
---------
Total stockholder's deficiency................................................... (153,314)
---------
Total liabilities and stockholder's deficiency................................... $ 297,638
---------
---------
</TABLE>

See accompanying notes.

F-102
<PAGE>

NUVIEW INDUSTRIES, INC.

STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT

PERIOD FROM JANUARY 1, 1998 THROUGH JULY 21, 1998

<TABLE>
<S> <C>
Contract revenue................................................................ $2,478,656

Cost of revenues earned......................................................... 964,341
---------

Gross profit.................................................................... 1,514,315

Selling, general and administrative expenses.................................... 1,529,889
Depreciation.................................................................... 6,957
---------

Loss from operations............................................................ (22,531)

Interest income, net............................................................ 1,610
---------

Net loss........................................................................ (20,921)

Accumulated deficit, beginning of period........................................ (132,893)
---------

Accumulated deficit, end of period.............................................. $(153,814)
---------
---------
</TABLE>

See accompanying notes.

F-103
<PAGE>

NUVIEW INDUSTRIES, INC.

STATEMENT OF CASH FLOWS

PERIOD FROM JANUARY 1, 1998 THROUGH JULY 21, 1998

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss......................................................................... $ (20,921)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation................................................................. 6,957
Changes in operating assets and liabilities:
Accounts receivable........................................................ 7,954
Inventories................................................................ (593)
Costs in excess of billings on uncompleted contracts....................... (5,486)
Prepaid commissions........................................................ (8,047)
Other assets............................................................... (16,000)
Accounts payable........................................................... 131,769
Accrued expenses........................................................... (33,612)
Billings in excess of costs on uncompleted contracts....................... 18,673
---------
Net cash provided by operating activities........................................ 80,694

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment.............................................. (27,268)
Advances to stockholder.......................................................... (137,744)
---------
Net cash used in investing activities............................................ (165,012)

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in restricted cash...................................................... 50,000
Proceeds from notes payable...................................................... 15,071
Payments on notes payable........................................................ (12,761)
---------
Net cash provided by financing activities........................................ 52,310
---------

Net decrease in cash............................................................. (32,008)
Cash, beginning of period........................................................ 51,295
---------
Cash, end of period.............................................................. $ 19,287
---------
---------
</TABLE>

SEE ACCOMPANYING NOTES.

F-104
<PAGE>

NUVIEW INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS

JULY 21, 1998

1. ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

NuView Industries, Inc. (NuView) sells and installs home improvement
products in the St. Louis Metropolitan area, with offices in St. Louis,
Missouri, and Decatur, Illinois. NuView has an exclusive territory and product
line from Precision Window Mfg., Inc. in the states of Missouri and Illinois.
NuView's principal product lines are Barricade thermal replacement windows,
Barricade steel entry and patio doors, Barricade vinyl siding and accessories.
The Company does not finance customer purchases. More than half of the total
business is financed through banks or finance companies.

Effective July 22, 1998, the Company was purchased by ThermoView Industries,
Inc. and changed its name to ThermoView of Missouri.

REVENUE RECOGNITION

Contract costs include all direct material and labor costs and those
indirect costs related to contract performance such as indirect labor and
supplies costs. General and administrative costs are charged to expense as
incurred. Provisions for estimated losses on uncompleted contracts are made in
the period in which such losses are determined.

INVENTORIES

Inventories are recorded at the lower of cost (weighted average basis) or
market. Inventories primarily consist of finished goods, parts and supplies.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for major renewals
and improvements which increase the useful lives of assets are capitalized.
Maintenance, repairs and minor renewals are expensed as incurred. Assets are
depreciated on accelerated methods over their estimated useful lives which
generally range from 5 to 7 years.

WARRANTIES

The Company provides the retail customer with a one year warranty covering
workmanship. The Company expenses warranty costs as incurred.

ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expense was
approximately $58,000 for the period from January 1, 1998 through July 21, 1998.

F-105
<PAGE>

NUVIEW INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JULY 21, 1998

1. ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

The Company has elected to be taxed as an S corporation under the provisions
of Subchapter S of the Internal Revenue Code. Under those provisions, the
Company does not pay federal corporate income taxes on its taxable income.
Instead, the Company's taxable income or loss passes through to the stockholder.

USE OF ESTIMATES

2. RELATED PARTY TRANSACTIONS

The Company entered into a $50,000 line of credit with Magna Bank late in
1997, for which the bank required collateral. A $50,000 certificate of deposit
was established as the collateral. When the line of credit was canceled in 1998,
the stockholder received the cash for the certificate of deposit as an advance.

3. PROPERTY AND EQUIPMENT

Property and equipment at July 21, 1998 consists of the following:

<TABLE>
<S> <C>
Furniture, fixtures and equipment................................. $ 10,878
Computer equipment................................................ 15,621
Automobiles....................................................... 29,879
---------
56,378
Less accumulated depreciation..................................... (12,251)
---------
$ 44,127
---------
---------
</TABLE>

4. UNCOMPLETED CONTRACTS

Costs and billings on uncompleted contracts at July 21, 1998 are as follows:

<TABLE>
<S> <C>
Costs incurred on uncompleted contracts........................... $ 17,512
Billings to date.................................................. (88,692)
---------
$ (71,180)
---------
---------
</TABLE>

F-106
<PAGE>

NUVIEW INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JULY 21, 1998

4. UNCOMPLETED CONTRACTS (CONTINUED)
These amounts are included in the accompanying balance sheet under the
following captions:

<TABLE>
<S> <C>
Costs in excess of billings on uncompleted contracts.............. $ 2,080
Billings in excess of costs on uncompleted contracts.............. (73,260)
---------
$ (71,180)
---------
---------
</TABLE>

5. ACCRUED EXPENSES

Accrued expenses as of July 21, 1998 consist of the following:

<TABLE>
<S> <C>
Wages............................................................. $ 61,105
Payroll taxes..................................................... 70,553
Other............................................................. 5,372
---------
$ 137,030
---------
---------
</TABLE>

6. LONG-TERM DEBT

Long-term debt at July 21, 1998 consists of the following:

<TABLE>
<S> <C>
Note payable to stockholder, interest at 10%, monthly principal and
interest payments of $400, due in June 2000...................... $ 8,682
Note payable to finance company, interest at 3.9%, principal and
interest payments of $339, due in May 2000....................... 14,488
---------
23,170
Less current portion............................................... 8,155
---------
$ 15,015
---------
---------
</TABLE>

Aggregate principal payments of long-term debt at July 21, 1998 are as
follows (on a calendar year basis):

Substantially all of the Company's assets are pledged as collateral under
financing and various lease agreements.

F-107
<PAGE>

NUVIEW INDUSTRIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JULY 21, 1998

7. COMMITMENTS AND CONTINGENCIES

The Company leases an office building from a previous stockholder and also
leases equipment and vehicles under noncancelable operating leases. There are no
future commitments associated with the lease for the office building, as the
agreement is on a month-to-month basis and requires monthly rents of $2,000.
Future minimum lease payments for other operating leases at July 21, 1998 are as
follows (on a calendar year basis):

<TABLE>
<S> <C>
1998............................................................... $ 33,305
1999............................................................... 25,071
---------
Total.............................................................. $ 58,376
---------
---------
</TABLE>

The Company incurred rental expense under noncancellable operating leases
amounting to approximately $44,000 for the period from January 1, 1998 through
July 21, 1998 (including $13,354 to the previous stockholder).

8. YEAR 2000 READINESS (UNAUDITED)

The Company has initiated an assessment of the possible impact of Year 2000
issues to assure they are prepared to effectively deal with transactions in the
Year 2000 and beyond. This "Year 2000 Problem" creates risk for the Company from
unforeseen sources in its own computer systems and from third parties with whom
the Company deals on financial transactions.

The Company intends to achieve uninterrupted, high quality performance from
its computer systems before, during and after the year 2000. The cost of
assessment and ultimate assurance as to readiness is being expensed as incurred.
Total incremental spending by the Company is not expected to be material to the
Company's operations, liquidity or capital resources.

In addition to taking every reasonable step to secure its internal systems
and external relationships, the Company is further developing contingency plans
to assure that unexpected failures will not adversely affect operations. The
Company intends to monitor these processes through the rollover of 1999 into
2000 and to implement quickly alternate solutions if necessary.

Despite the Company's efforts and contingency plans, non compliant computer
systems could have a material effect on operations and financial position.

F-108
<PAGE>
INDEPENDENT AUDITOR'S REPORT

To The Board of Directors
LEINGANG SIDING AND WINDOW, INC.
Mandan, North Dakota

I have audited the accompanying balance sheets of Leingang Siding and
Window, Inc., as of December 31, 1996 and 1997 and August 14, 1998, and the
related statements of income changes in retained earnings and cash flows for the
periods then ended. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform my audits 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.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Leingang Siding and Window,
Inc. as of December 31, 1996 and 1997 and August 14, 1998 and the results of its
operations and its cash flows for the periods then ended, in conformity with
generally accepted accounting principles.

RODNEY W. MELBY

Bismarck, North Dakota
January 15, 1999

F-109
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash................................................................................ $ 18,276 $ 26,960 $ 170,766
Trade receivables, net of allowance for doubtful accounts of $15,000................ 402,992 618,978 483,459
Due from employees.................................................................. 35,724 40,647 19,428
Due from officer.................................................................... 86,177 96,177 68,505
Due from related company--Thermal Line Windows, L.L.P............................... -- -- 1,873
Notes receivable.................................................................... -- 20,376 44,035
Accrued interest receivable......................................................... -- -- 279
Accrued refunds receivable.......................................................... -- -- 19,776
Costs in excess of billings on uncompleted contracts................................ 178,206 67,231 36,618
Prepaid expenses.................................................................... -- -- 17,804
----------- ----------- -----------
Total current assets............................................................ 721,375 870,369 862,543
----------- ----------- -----------
Other Assets
Financing costs, net of amortization................................................ 7,785 7,108 6,685
Other investments................................................................... 1,000 1,000 1,000
----------- ----------- -----------
Total other assets.............................................................. 8,785 8,108 7,685
----------- ----------- -----------
Property and Equipment
Building Improvements............................................................... 32,942 37,663 41,524
Vehicles and equipment.............................................................. 228,882 276,276 258,291
Office equipment.................................................................... 131,955 160,437 182,205
----------- ----------- -----------
Total........................................................................... 393,779 474,376 482,020
Less--accumulated depreciation.................................................. 74,568 98,689 109,646
----------- ----------- -----------
Total property, plant and equipment............................................... 319,211 375,687 372,374
----------- ----------- -----------
Total assets...................................................................... $ 1,049,371 $ 1,254,164 $ 1,242,602
----------- ----------- -----------
----------- ----------- -----------

LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable.................................................................... $ 117,260 $ 159,842 $ 90,281
Due to officer...................................................................... -- -- 813
Due to Thermal Line Windows, L.L.P.................................................. 152,190 26,326 148,185
10% Note payable to bank, secured by all accounts receivable, inventories,
equipment, general intangibles and personal guarantee of stockholders............. -- 30,000 --
Current maturity of note payable.................................................... 9,522 18,764 --
Accrued liabilities--
Wages............................................................................. 113,060 137,868 152,928
Workers Compensation.............................................................. 23,375 26,319 4,825
Payroll and local taxes........................................................... 20,212 10,322 10,359
Retirement plan................................................................... 4,334 15,965 2,784
Rent.............................................................................. -- -- 7,000
----------- ----------- -----------
Total current liabilities....................................................... 439,953 425,406 417,175
Long Term Debt
Note payable, net of current maturity included above................................ 27,792 49,576 --
----------- ----------- -----------
Total liabilities............................................................... 467,745 474,982 417,175
----------- ----------- -----------
Stockholder's Equity
Common stock, par value $4 per share--
Authorized 25,000 shares, issued and outstanding 24,408 shares...................... 97,632 97,632 97,632
Retained earnings................................................................... 483,994 681,550 727,795
----------- ----------- -----------
Total stockholder's equity...................................................... 581,626 779,182 825,427
----------- ----------- -----------
Total liabilities and equity.................................................... $ 1,049,371 $ 1,254,164 $ 1,242,602
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See notes to financial statements.

F-110
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

STATEMENTS OF INCOME

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Sales................................................................... $ 4,204,405 $ 5,457,411 $ 3,379,359
------------ ------------ ------------
Direct Costs
Materials............................................................. 1,997,444 2,318,494 1,460,659
Labor and benefits.................................................... 944,229 1,273,830 879,817
------------ ------------ ------------
Total direct costs.................................................. 2,941,673 3,592,324 2,340,476
------------ ------------ ------------
Gross profit on sales............................................... 1,262,732 1,865,087 1,038,883
Operating Expense....................................................... 1,233,706 1,426,360 933,671
------------ ------------ ------------
Operating income...................................................... 29,026 438,727 105,212
------------ ------------ ------------
Other Income (Expense)
Interest expense...................................................... (5,578) (17,661) (12,902)
Gain (loss) on sale of equipment...................................... (4,977) (4,762) 719
Interest income....................................................... 5,620 4,763 2,567
Miscellaneous income.................................................. 8,976 11,489 6,649
------------ ------------ ------------
Total other income (expense)........................................ 4,041 (6,171) (2,967)
------------ ------------ ------------
Net Income.............................................................. $ 33,067 $ 432,556 $ 102,245
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

F-111
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

STATEMENTS OF CHANGES IN RETAINED EARNINGS

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
----------- ----------- ----------
<S> <C> <C> <C>
Balance, Beginning of Period............................................... $ 550,927 $ 483,994 $ 681,550
Distributions.............................................................. (100,000) (235,000) (56,000)
Net Income for the period.................................................. 33,067 432,556 102,245
----------- ----------- ----------
Balance, End of Period..................................................... $ 483,994 $ 681,550 $ 727,795
----------- ----------- ----------
----------- ----------- ----------
</TABLE>

See notes to financial statements.

F-112
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

STATEMENTS OF CASH FLOWS

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Operating Activities
Cash received from customers....................................... $ 4,253,747 $ 5,176,253 $ 3,538,914
Interest received.................................................. 5,620 4,763 2,288
Miscellaneous receipts............................................. 8,976 11,489 6,649
Interest expense................................................... (5,578) (17,661) (12,902)
Cash disbursements for costs and expenses.......................... (4,074,286) (4,842,495) (3,233,615)
------------- ------------- -------------
Total............................................................ 188,479 332,349 301,334
------------- ------------- -------------
Investing Activities
Purchase of equipment and improvements............................. (129,247) (143,147) (92,822)
Repayment of shareholder loan...................................... 10,215 (10,000) 96,990
Employee receivable collection..................................... 19,146 (4,923) 21,219
Proceeds on sale of equipment...................................... 9,550 28,756 63,589
Loans to customers................................................. -- (20,376) (23,659)
Advance to officer................................................. -- -- (68,505)
------------- ------------- -------------
Total............................................................ (90,336) (149,690) (3,188)
------------- ------------- -------------
Financing Activities
Short term borrowing............................................... -- 30,000 --
Repayment of short-term debt....................................... 20,000 65,000 (30,000)
Repayment of long-term debt........................................ (8,315) (33,975) (68,340)
Distributions to shareholder....................................... (100,000) (235,000) (56,000)
------------- ------------- -------------
Total............................................................ (88,315) (173,975) (154,340)
------------- ------------- -------------
Net Increase in Cash................................................. 9,828 8,684 143,806
Cash Balance, Beginning of Period.................................... 8,448 18,276 26,960
------------- ------------- -------------
Cash Balance, End of Period.......................................... $ 18,276 $ 26,960 $ 170,766
------------- ------------- -------------
------------- ------------- -------------
Reconciliation of Net Income to Cash Flows from Operating Activities
Net income for the period.......................................... $ 33,067 $ 432,556 $ 102,245
Reconciling items--
Depreciation and amortization.................................... 37,843 53,831 33,688
(Gain)/Loss on sale of equipment................................. 4,977 4,762 (719)
Changes in--
Trade receivable................................................. (402) (215,986) 133,646
Costs in excess of billings...................................... (175,805) 110,975 30,613
Prepaid expenses................................................. 6,795 -- (17,804)
Lease deposit.................................................... 1,000 -- --
Accrued interest receivable...................................... -- -- (279)
Accrued refunds receivable....................................... -- -- (19,776)
Accounts payable................................................. 167,538 43,145 52,298
Accrued liabilities.............................................. 82,686 29,493 (12,578)
Related company payables......................................... 30,780 (126,427) --
------------- ------------- -------------
Cash flows from operating activities............................... $ 188,479 $ 332,349 $ 301,334
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See notes to financial statements.

F-113
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Nature of Business--

The Company is engaged in retail sales and installation of exterior
building products including siding, gutters, and windows, throughout
North and South Dakota.

b. Depreciation--

Property and equipment are stated at cost. It is the policy of the
company to provide depreciation based on the estimated useful lives of
the individual units. Depreciation is computed using the straight-line
method with estimated useful lives as follows:

<TABLE>
<S> <C>
Building improvements............................................ 25 years
5-10
Vehicles and equipment........................................... years
5-10
Office equipment................................................. years
</TABLE>

Depreciation expense for 1996 and 1997 were $37,166 and $53,154
respectively. Depreciation expense from January 1 to August 14, 1998 was
$33,265.

c. Revenue Recognition--

The Company requires a deposit from most customers prior to the start of
a project. Contracts and sales orders are recognized as income upon
completion of the contract since the contracts are of a short duration.
The Company is on the accrual basis of accounting.

Contract costs include all direct material, subcontract, subsistence and
labor costs and those indirect costs related to contract performance,
such as payroll taxes, retirement and other employee benefits. General
and administrative costs are charged to expense as incurred.

d. Use of Estimates--

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

e. Income Taxes--

The Company has elected to be taxed under the provisions of Subchapter S
of the Internal Revenue Code. Under those provisions, the Company does
not pay federal and state corporate income taxes on its taxable income.
Instead, the stockholder is liable for individual federal and state
income taxes on the Company's taxable income.

Accelerated depreciation is used for tax reporting, and straight line
depreciation is used for financial statement reporting.

f. Retirement Plan--

The Company adopted a defined contribution retirement plan covering all
employees who work 1,000 hours or more the first year and 500 hours per
year thereafter, who have been employed at least one year. The employees
may contribute up to 8% of their eligible compensation. The Company will
match 25% of the employees contribution but limited to 1% of
compensation. The Company may also make discretionary contributions to a
profit sharing plan from time to time.

F-114
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Retirement plan $7,410 and $25,586 respectively for the years 1996 and
1997. Retirement plan expense through August 14, 1998 was $7,019.

g. Advertising Costs--

Advertising costs are expensed as incurred. Total advertising costs for
1996 and 1997 were $124,200 and $169,011 respectively. Advertising costs
for the period ended August 14, 1998 were $128,580.

2. LOAN GUARANTEE

a. The Company has guaranteed the loans of $1,338,957 of Mr. Alvin Leingang
who refinanced his mortgage note payable during 1993 to provide funds for
additional expansion of the plant for North Country Thermal Line, Inc., a
new building for Leingang Siding & Window, Inc., for additional equipment
and working capital. One loan of $957,051 is 70% guaranteed by the U.S.
Small Business Administration (SBA). The mortgage notes of Mr. Al
Leingang are payable in monthly installments of $13,119 beginning January
1, 1994, with a final maturity date of December 1, 2008. Interest is
computed 2% over New York National Prime and will be adjusted annually.
The present stated interest rate is 10.25%. However, $420,000 of the loan
is being subsidized by the P.A.C.E. program administered by the Bank of
North Dakota and the Mandan Growth Fund whereby the net interest rate to
the Al Leingang Rental proprietorship is 1%. The related companies must
demonstrate that there is one job created for every $75,000 of total
borrowing. The collateral for this loan is all land, buildings,
equipment, inventory, accounts receivable and contract rights of Leingang
Siding & Window, Inc., North Country Thermal Line, Inc., and Alvin
Leingang. The loan is also guaranteed by these same entities. In
addition, life insurance on Alvin Leingang of $1,000,000 is assigned to
the bank. The loan agreements provide, among other things, the following:

1) No dividends or distributions may be made without the written consent
of the lender or SBA.

2) Salary and/or draw shall be limited to $125,000 per year from the
corporations, plus income tax due on corporate and proprietorship
income.

3) Capital purchases are limited to $50,000 per year without prior
approval of lender or SBA.

4) The companies must provide insurance coverage for fire, flood and
extended coverage equal to the face amount of the loan.

5) No additional debt may be acquired without prior approval from the
bank.

6) Minimum cash flows must be $250,000 on an annual basis.

7) The revolving line of credit must have no outstanding balance for at
least 30 days per year.

The proprietorship and companies are in compliance with all the terms of
the loan agreements.

b. The Company has also guaranteed three installment loans to employees and
subcontractor with an outstanding balances of $16,526.

F-115
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

3. LINE OF CREDIT

The Company has a working capital line of credit of $200,000 from Norwest
Bank of which none is being used at August 14, 1998. As of December 31, 1997,
$30,000 of the line of credit was being used. The present rate is 9.75%. The
line of credit loan must be zero for at least 30 days on an annual basis. The
loan is subject to other loan provisions described in Note 2.

4. LEASES

a. The Company leased its Mandan plant and major equipment items from the
major stockholder on an operating lease dated January 1, 1997, for a
three year period at $7,150 per month. All operating costs including
taxes, insurance, repairs, maintenance, etc., shall be borne by the
lessee. On August 14, 1998, the original lease was amended and the per
month rent was changed to $5,557 per month. The lease may be renewed for
two additional terms of five years each, at $5,557 per month.

b. The Company leases its Minot building from the major stockholder on an
operating lease dated August 16, 1995 for a five year period beginning
February 1, 1996, at $2,000 per month. The lease may be renewed for two
additional terms, the first for three years at $2,200 per month and the
second for five years.

c. Minimum lease payments for future years are as follows:

<TABLE>
<CAPTION>
BISMARCK MINOT
LEASE LEASE TOTAL
----------- --------- ----------
<S> <C> <C> <C>
Through August 14, 1999..................................... $ 67,481 $ 24,000 $ 91,481
Through August 14, 2000..................................... 25,006 24,000 49,006
Through August 14, 2001..................................... -- 11,000 11,000
Later years................................................. -- -- --
----------- --------- ----------
$ 92,487 $ 59,000 $ 151,487
----------- --------- ----------
----------- --------- ----------
</TABLE>

d. Total rent expense for 1996 and 1997 was $123,535 and $118,790
respectively, including short-term rentals. Total rent expense through
August 14, 1998 was $75,552, including short term rentals.

F-116
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

5. RELATED PARTY TRANSACTIONS

This Company is related to other Companies through common ownership. Mr. Al
Leingang is a 50% owner in Thermal Line Windows, L.L.P. and the majority owner
in all other companies. Intercompany transactions are as follows:

<TABLE>
<CAPTION>
JANUARY 1,
1998-- AUGUST
1996 1997 14, 1998
---------- ---------- ----------------
<S> <C> <C> <C>
Purchase from--
Thermal Line Windows, LLP........................ $ 785,340 $ 821,979 $ 574,229
Homeworks Supply, Inc............................ 289,347 -- --
Sales to Thermal Line Windows, L.L.P............... 9,567 -- --
Due to stockholder................................. -- -- 813
Due from stockholder............................... 86,177 96,177 68,505
Due to Thermal Line Windows, LLP................... 152,190 26,326 148,185
Due from Thermal Line Windows, LLP................. -- -- 1,873
</TABLE>

The Company also leases its plant and equipment from the major shareholder
as described in Note 4. See note 2 for loan guarantee for major shareholder.

6. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of trade accounts receivables. Concentrations
of credit risk is limited due to the large number of customers comprising the
Company's customer base, primarily located in the upper mid-west. The Company
generally does not require collateral, but has the ability to secure mechanic
liens if needed.

As of August 14, 1998 the Company had on deposit $68,678 in excess of FDIC
insured limits in one bank.

7. SALE OF COMPANY

The Company's stockholder interest was sold to ThermoView Industries, Inc.,
as of the close of business on August 14, 1998, and consequently will be an
operating subsidiary thereof.

8. CASH EQUIVALENTS

For purpose of the statement of cash flows, the company considers all highly
liquid investments purchased with a maturity of three months or less to be cash
equivalents.

F-117
<PAGE>
LEINGANG SIDING AND WINDOW, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

9. LONG-TERM DEBT

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
--------- --------- -------------
<S> <C> <C> <C>
9.75% Note payable, due in installments of $1,650, including interest, to June
2001, secured by seamless siding equipment.................................... $ -- $ 57,019 $ --
9.14% Note payable, due in installments of $499, including interest to January
2000, secured by vehicle...................................................... 16,039 11,321 --
7.9% Note payable, due in installments of $526, including interest, to December
2000, secured by vehicle...................................................... 21,275 -- --
--------- --------- -----
Total notes payable........................................................... 37,314 68,340 --
Less--current maturity.......................................................... 9,522 18,764 --
--------- --------- -----
Net long-term debt............................................................ $ 27,792 $ 49,576 $ --
--------- --------- -----
--------- --------- -----
</TABLE>

During 1998, prior to August 14, 1998, all notes payable had been paid off.

10. YEAR 2000 ISSUE (UNAUDITED)

The Company has made an assessment of its year 2000 issues. Most of the
hardware has been replaced or upgraded to become 2000 complaint. New software
has been acquired or developed to become 2000 compliant. The Company is in the
process of getting assurances from third party vendors and major customers that
there will be no adverse consequences to the Company. Alternate contingency
plans are being developed in the event of a failure.

F-118
<PAGE>
INDEPENDENT AUDITOR'S REPORT

To the Joint Management Committee
Thermal Line Windows, L.L.P.
Mandan, North Dakota

I have audited the accompanying balance sheets of Thermal Line Windows,
L.L.P., as of December 31, 1996 and 1997 and August 14, 1998, and the related
statements of income, partnership equity and cash flows for the periods then
ended. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audits.

In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Thermal Line Windows, L.L.P. as
of December 31, 1996 and 1997 and August 14, 1998 and the results of its
operations and its cash flows for the periods then ended, in conformity with
generally accepted accounting principles.

RODNEY W. MELBY

Bismarck, North Dakota
January 11, 1999

F-119
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash.................................................................. $ 36,384 $ 91,753 $ 121,675
Money market account.................................................. -- 502,608 10,482
Trade receivables, net of allowance for doubtful accounts of $5,000 in
1996, $20,000 in 1997 and $22,000 in 1998........................... 663,830 708,202 664,708
Current maturity of note receivable................................... -- 1,200 3,705
Due from related companies--
Leingang Siding and Window, Inc..................................... 152,190 26,326 148,185
Complast, Inc....................................................... -- -- 1,100
Hoyt Home Improvement, Inc.......................................... 14,596 79,659 158
Due from officer...................................................... 100,000 -- --
Inventories........................................................... 884,877 625,501 1,127,209
Refundable lease deposit.............................................. -- 58,320 --
Prepaid expenses...................................................... -- 14,203 30,947
------------ ------------ ------------
Total current assets.............................................. 1,851,877 2,107,772 2,108,169
------------ ------------ ------------
Other Assets
Organization costs, net of amortization computed on a five year
straight line basis................................................. 39,588 29,688 23,500
Note receivable net of current maturity included above................ -- 2,100 9,451
Lease security deposit................................................ -- 2,750 3,260
------------ ------------ ------------
Total other assets................................................ 39,588 34,538 36,211
------------ ------------ ------------
Property, Plant and Equipment
Leasehold improvements................................................ 200,029 250,312 255,710
Equipment............................................................. 404,454 477,175 534,169
------------ ------------ ------------
Total............................................................. 604,483 727,487 789,879
Less--accumulated depreciation........................................ 43,942 100,138 142,194
------------ ------------ ------------
Total property, plant and equipment............................... 560,541 627,349 647,685
------------ ------------ ------------
Total assets...................................................... $ 2,452,006 $ 2,769,659 $ 2,792,065
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

F-120
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
LIABILITIES AND PARTNERSHIP EQUITY

Current Liabilities
Current maturities of long-term debt.................................. $ 90,558 $ 98,837 $ 105,573
Accounts payable...................................................... 133,273 148,229 370,692
Notes payable--line of credit......................................... -- -- 50,000
Customer deposits..................................................... 1,425 -- 11,018
Due to related companies--
Complast, Inc....................................................... -- -- 50,379
North Country Glass................................................. 8,915 -- 8,481
Leingang Siding and Window, Inc..................................... -- -- 1,873
Due to officer...................................................... 37,125 -- --
Accrued liabilities--
Compensation........................................................ 49,326 65,783 90,555
Payroll and local taxes............................................. 96,005 29,061 19,196
Retirement plan..................................................... -- 15,798 1,669
Interest............................................................ 3,696 3,054 --
Warranty and other.................................................. 11,171 11,094 7,875
Unearned income, current portion...................................... 6,588 6,600 6,600
------------ ------------ ------------
Total current liabilities......................................... 438,082 378,456 723,911
------------ ------------ ------------
Other Liabilities
Long-term debt, net of current maturities included above.............. 350,656 253,280 182,217
Unearned income....................................................... 21,412 14,800 10,675
------------ ------------ ------------
Total other liabilities........................................... 372,068 268,080 192,892
------------ ------------ ------------
Total liabilities................................................. 810,150 646,536 916,803
------------ ------------ ------------
Partnership Equity
Capital contribution.................................................. 900,000 900,000 900,000
Undistributed earnings................................................ 741,856 1,223,123 975,262
------------ ------------ ------------
Total partnership equity.......................................... 1,641,856 2,123,123 1,875,262
------------ ------------ ------------
Total liabilities and equity...................................... $ 2,452,006 $ 2,769,659 $ 2,792,065
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

F-121
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

STATEMENTS OF INCOME

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Sales................................................................... $ 6,954,920 $ 6,088,024 $ 3,668,394
------------ ------------ ------------
Direct Costs
Materials............................................................. 3,234,514 2,774,335 1,625,803
Labor and benefits.................................................... 1,117,749 986,594 740,377
Freight out........................................................... 350,393 312,073 172,551
------------ ------------ ------------
Total direct costs.................................................. 4,702,656 4,073,002 2,538,731
------------ ------------ ------------
Gross profit on sales............................................... 2,252,264 2,015,022 1,129,663
Operating Expense....................................................... 1,482,696 1,333,866 888,620
------------ ------------ ------------
Operating income...................................................... 769,568 681,156 241,043
Other Income (Expenses)
Miscellaneous......................................................... 14,658 6,500 10,738
Interest income....................................................... 13,773 12,654 14,381
Warranty income, net.................................................. 13,938 20,669 7,067
Interest expense...................................................... (70,081) (39,708) (20,132)
Loss on sale of equipment............................................. -- -- (958)
------------ ------------ ------------
Total other income (expense)........................................ (27,712) 115 11,096
------------ ------------ ------------
Net Income.............................................................. $ 741,856 $ 681,271 $ 252,139
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

See notes to financial statements.

F-122
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

STATEMENTS OF PARTNERSHIP EQUITY

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
BLIZZARD
ENTERPRISES,
ICE, INC. INC. TOTAL
------------ --------------- ------------
<S> <C> <C> <C>
Initial Capital Contribution........................................ $ 350,000 $ 350,000 $ 700,000
Subsequent Capital Contribution..................................... 100,000 100,000 200,000
Net Income for the Year 1996........................................ 370,928 370,928 741,856
------------ --------------- ------------
Balance, December 31, 1996.......................................... 820,928 820,928 1,641,856
Net Income for the Year 1997........................................ 340,633 340,634 681,267
Withdrawals......................................................... (100,000) (100,000) (200,000)
------------ --------------- ------------
Balance, December 31, 1997.......................................... 1,061,561 1,061,562 2,123,123
Net income January 1, 1998 to August 14, 1998....................... 126,070 126,069 252,139
Withdrawals......................................................... (250,000) (250,000) (500,000)
------------ --------------- ------------
Balance, August 14, 1998............................................ $ 937,631 $ 937,631 $ 1,875,262
------------ --------------- ------------
------------ --------------- ------------
</TABLE>

See notes to financial statements.

F-123
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

STATEMENTS OF CASH FLOWS

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Operating Activities
Cash received from customers....................................... $ 6,199,526 $ 6,088,028 $ 3,667,592
Interest received.................................................. 13,773 12,654 14,381
Warranty income.................................................... 18,938 20,669 7,067
Miscellaneous receipts............................................. 14,658 6,500 10,738
Interest expense................................................... (38,384) (40,350) (23,186)
Cash disbursements for costs and expenses.......................... (6,759,370) (5,153,053) (3,616,887)
------------- ------------- -------------
Total.......................................................... (550,859) 934,448 59,705
------------- ------------- -------------
Investing Activities
Make leasehold improvements........................................ (200,029) (50,283) (5,398)
Purchase of equipment.............................................. (404,454) (72,721) (63,994)
Due from officer................................................... (100,000) 100,000 --
Lease deposit returned............................................. -- -- 58,320
Purchase organization costs........................................ (49,488) -- --
Proceeds from sale of fixed assets................................. -- -- 4,000
Make lease deposits................................................ -- (61,070) (510)
Advance to employees............................................... -- (3,300) --
------------- ------------- -------------
Total.......................................................... (753,971) (87,374) (7,582)
------------- ------------- -------------
Financing Activities
Capital contribution............................................... 900,000 -- --
Short-term borrowings.............................................. -- -- 50,000
Loan from bank..................................................... 500,000 -- --
Payments on note payable........................................... (58,786) (89,097) (64,327)
Partner withdrawals................................................ -- (200,000) (500,000)
------------- ------------- -------------
Total.......................................................... 1,341,214 (289,097) (514,327)
------------- ------------- -------------
Net Increase in Cash................................................. 36,384 557,977 (462,204)
Cash Balance, Beginning of Year...................................... -- 36,384 594,361
------------- ------------- -------------
Cash Balance, End of Period.......................................... $ 36,384 $ 594,361 $ 132,157
------------- ------------- -------------
------------- ------------- -------------
Cash consists of--
Cash............................................................... $ 36,384 $ 91,753 $ 121,675
Money market accounts.............................................. -- 502,608 10,482
------------- ------------- -------------
Total.......................................................... $ 36,384 $ 594,361 $ 132,157
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

F-124
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

STATEMENTS OF CASH FLOWS (CONTINUED)

THE YEARS ENDED DECEMBER 31, 1996 AND 1997 AND
FOR THE PERIOD JANUARY 1, 1998 TO AUGUST 14, 1998

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Reconciliation of Net Income to Cash Flows from Operating Activities
Net income for the period.......................................... $ 741,856 $ 681,267 $ 252,139
Reconciling items--
Depreciation and amortization.................................... 53,842 66,096 50,286
Loss on sale of fixed assets..................................... -- -- 958
Changes in--
Trade receivables................................................ (663,830) (44,372) (105,949)
Related company receivable....................................... (166,786) 60,801 105,985
Inventories...................................................... (884,877) 259,376 (501,708)
Prepaid expenses................................................. -- (14,203) (16,744)
Accounts payable................................................. 133,273 14,956 283,196
Related company payables......................................... 46,040 (46,040) --
Note receivable.................................................. -- -- (9,856)
Customer deposits................................................ 1,425 (1,425) 11,018
Accrued liabilities.............................................. 160,198 (35,408) (5,495)
Unearned income.................................................. 28,000 (6,600) (4,125)
------------- ------------- -------------
Cash flows from operating activities............................... $ (550,859) $ 934,448 $ 59,705
------------- ------------- -------------
------------- ------------- -------------
Non-Cash Transactions
Contribution to capital in exchange for note receivable............ $ 100,000 $ -- $ --
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See notes to financial statements.

F-125
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Nature of Business--

The Company, a Minnesota limited liability partnership, is engaged in the
manufacturing and distribution of all architectural styles of vinyl and
composite window systems. The manufacturing plant is in Mandan, North
Dakota with sales to customers primarily in the Midwest.

b. Inventories--

Inventories are valued at the lower of cost or market, on a first-in
first-out basis. Substantially all of the inventories are manufacturing
components.

c. Depreciation--

Property, plant and equipment are stated at cost. It is the policy of the
company to provide depreciation based on the estimated useful lives of
the individual units. Depreciation is computed using the straight-line
method with estimated useful lives as follows:

<TABLE>
<S> <C>
Leasehold improvements........................................... 25 years
5-10
Equipment........................................................ years
</TABLE>

Depreciation expenses for 1996 and 1997 were $43,942 and $56,195
respectively. Depreciation expense from January 1, through August 14, 1998
was $44,098.

d. Revenue Recognition--

The company is on the accrual basis of accounting.

e. Use of Estimates--

f. Income Taxes--

Income tax policies are substantially the same for financial statement
purposes as they are for income tax purposes, with the following
exceptions. Overhead costs relating to inventory are added to inventory
for income tax purposes. The company uses accelerated methods and shorter
lives for depreciation for income tax purposes.

The Company is organized as a limited liability partnership and
consequently files a partnership return. All profits of the Company are
passed through to the partners who in turn pay taxes on these profits.
Therefore, no income tax provision is recorded in these financial
statements.

g. Retirement Plan--

F-126
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

h. Advertising Costs--

Advertising costs are expensed as incurred. Advertising costs for 1996
and 1997 were $25,936 and $38,098 respectively. Total advertising costs
for the period ended August 14, 1998 were $35,927.

2. FORMATION OF PARTNERSHIP

The Company was formed on January 2, 1996 as a joint venture by Ice, Inc.
and Blizzard Enterprises, Inc. which companies are controlled by Al Leingang or
the Hoyt family respectively. The initial contribution of capital was as
follows:

<TABLE>
<S> <C> <C>
Ice, Inc........................ Inventory....................... $ 350,000
Blizzard........................ Cash............................ 350,000
</TABLE>

Subsequent contributions were as follows:

<TABLE>
<S> <C> <C>
Ice, Inc........................ Cash............................ 100,000
Blizzard........................ Note receivable................. 100,000
</TABLE>

The note receivable was paid by April 15, 1997.

The joint venture agreement stipulates the partnership shall terminate no
later than December 31, 2020. Minimum distributions will be equal to the income
tax liability generated by the partnership profits. The agreement also provides
that a partner's interest may not be transferred except under the provisions of
the agreement. In the event of death of Al Leingang or Steve Hoyt, the company
must redeem the interest of the decedent at appraised value without regard to
minority interest discount or readily marketable discount. The purchase price
shall be payable as follows:

a) The down payment shall be the greater of the life insurance proceeds
received (limited to purchase price) or 20% of the purchase price.

b) The remaining balance shall be payable in 5 equal annual installments
with interest at the lowest applicable AFR rate. The company carries a
$1,000,000 policy on each person to fund this potential liability.

3. LINE OF CREDIT

The Company has a working capital line of credit of $400,000 from Norwest
Bank, $50,000 of which is being used at August 14, 1998. The present interest
rate is 10.00%. The line of credit loan must be zero for at least 30 days on an
annual basis. The loan is subject to other loan provisions described in Note 4.

F-127
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

4. LONG-TERM DEBT

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
10.00% Note payable to bank, due in monthly installments of $10,800,
including interest, to February 2001, secured by all assets of the company
and personal guarantees by Alvin Leingang and Steve Hoyt................... $ 441,214 $ 352,117 $ 287,790
Less--current maturities................................................. 90,558 98,837 105,573
---------- ---------- ----------
Total long-term debt................................................... $ 350,656 $ 253,280 $ 182,217
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Minimum principal payments required on long-term debt, assuming the current
interest rate, are as follows:

<TABLE>
<S> <C>
Through August 14, 1999........................................... $ 105,573
Through August 14, 2000........................................... 116,628
Through August 14, 2001........................................... 65,589
---------
$ 287,790
---------
---------
</TABLE>

The interest expense on the 10.00% note payable is being subsidized by the
Mandan Growth Fund. The interest subsidy was received in advance for a lump sum
total of $32,949. It is being carried in an unearned income account and is being
recognized as a reduction to interest expense over the life of the loan which is
5 years.

Total interest expense for 1996 and 1997 was $70,081 and $39,708
respectively. Total interest expense through August 14, 1998 was $20,132. The
company has all its financing through Norwest Bank--Mandan.

Financial covenants included in the loan agreement for the term loan and the
line of credit are as follows:

a. The company shall at all times have a minimum equity position of 40%,
not to include intangible assets.

b. The company must maintain a working capital level of $500,000 at all
times.

c. The company must achieve a pretax profitability level of $1,000,000
in 1998.

d. The company may not acquire capital assets in excess of $150,000 per
year without prior bank approval.

e. The company may not make any distributions of capital or assets to
the partners without prior consent of the bank, except to pay their
personal income tax liability resulting from the profits of the
company.

f. Annual compensation for Alvin Leingang shall not exceed $100,000 and
no compensation shall be paid to Steve Hoyt.

g. No additional debt may be acquired without prior approval from the
bank.

F-128
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

4. LONG-TERM DEBT (CONTINUED)

The bank has waived the profitability covenant in 1997. In all other
respects, the Company is in compliance with the loan agreement.

5. LEASES

a. Buildings--

The Company leases its plant from a related party, Mr. Al Leingang, on an
operating lease dated January 2, 1996 for a five year period at $12,375
per month. All operating costs including taxes, insurance, repairs,
maintenance, utilities, etc., shall be borne by the lessee. The Company
has the option to renew the lease for two additional five year terms.

b. Equipment--

The Company leases major equipment items from a related party, North
Country Thermal Line, Inc. on an operating lease dated January 2, 1996
for a five year period at $7,876 per month. The Company has an option to
purchase the equipment at the end of the lease term for $60,216.

The Company also leases equipment from a related party, Mr. Al Leingang,
on an operating lease dated January 2, 1996 for a five year period at
$1,340 per month. The Company has an option to purchase the equipment at
the end of the lease term for $9,925.

The Company also leases equipment on two operating leases at $3,798 per
month for four and five years respectively with the final payment due in
December 2002. The Company has the option of purchase the equipment at
the end of the lease for 20% of the original cost.

Total rent expense for 1996 and 1997 was $302,881 and $266,789
respectively. Total rent expense through August 14, 1998 was $192,034. At
August 14, 1998, future minimum lease payments are as follows:

<TABLE>
<CAPTION>
BUILDING EQUIPMENT TOTAL
---------- ----------- ----------
<S> <C> <C> <C>
Through August 14, 1999.................................. $ 148,500 $ 156,168 $ 304,668
Through August 14, 2000.................................. 148,500 156,168 304,668
Through August 14, 2001.................................. 55,688 87,048 142,736
Through August 14, 2002.................................. -- 34,576 34,576
Through August 14, 2003.................................. -- 10,792 10,792
---------- ----------- ----------
$ 352,688 $ 444,752 $ 797,440
---------- ----------- ----------
---------- ----------- ----------
</TABLE>

F-129
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

6. RELATED PARTY TRANSACTIONS

This Company is related to other Companies through common ownership. Mr. Al
Leingang or the Hoyt family are the majority shareholders in all companies.
Intercompany transactions are as follows:

<TABLE>
<CAPTION>
AUGUST 14,
1996 1997 1998
------------ ---------- ----------
<S> <C> <C> <C>
Sales to--
Complast, Inc........................................ $ -- $ -- $ 4,800
Leingang Siding and Windows, Inc..................... 785,340 821,978 574,229
Homeworks Supply, Inc................................ 20,832 -- --
Hoyt Home Improvement, Inc........................... 829,345 434,813 33,868
North Country Thermal Line, Inc...................... -- 2,705 3,102
Purchase from--
Complast, Inc........................................ 1,673,588 923,134 790,531
Leingang Siding and Windows, Inc..................... 9,567 -- --
Homeworks Supply, Inc................................ 13,190 -- --
North Country Thermal Line, Inc...................... -- 96,263 169,651
Due to--
Complast, Inc........................................ -- -- 50,379
Leingang Siding and Windows, Inc..................... -- -- 1,873
Al Leingang.......................................... 37,125 -- --
North Country Thermal Line, Inc...................... 8,915 -- 8,481
Due from--
Complast, Inc........................................ 14,596 -- 1,100
Leingang Siding and Window, Inc...................... 152,190 26,326 148,185
Hoyt Home Improvement, Inc........................... -- 79,659 158
Steven Hoyt.......................................... 100,000 -- --
</TABLE>

The Company has entered into several requirement purchase agreements whereby
the company will purchase all of its extrusion inventory from Complast, Inc. and
Leingang Siding and Window, and Hoyt Home Improvement will purchase all their
window requirements from Thermal Line Windows.

The Company also leases its plant and equipment from the major shareholder
as described in Note 5 above.

7. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of trade accounts receivables. Concentrations
of credit risk are limited due to their dispersion across a large geographic
area. The Company has a concentration of credit risk in that the customer base
consists of construction companies installing windows and siding. The company
generally does not require collateral, but does have the ability to secure
mechanic liens if needed.

The Company's money market account is invested in Norwest Advantage Cash
Investment, which is not FDIC insured.

F-130
<PAGE>
THERMAL LINE WINDOWS, L.L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1996 AND 1997 AND AUGUST 14, 1998

8. CASH EQUIVALENTS

For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments purchased with a maturity of three months or less, to
be cash equivalents.

9. UNION AGREEMENT

The Company entered into a collective bargaining agreement on September 1,
1997. This agreement covers the Company's production employees and governs the
wages, working conditions and fringe benefits of the production work force. This
agreement covers approximately 56% of the total payroll costs of the Company.

10. MAJOR CUSTOMERS

In addition to those described in Note 5, the Company has one additional
major customer with sales over 10% of total sales. Sales to Gravina Siding &
Window were as follows.

<TABLE>
<S> <C>
Period ended August 14, 1998...................................... $ 533,996
Year ended December 31, 1997...................................... 947,490
Year ended December 31, 1996...................................... 757,507
</TABLE>

11. PRIOR PERIOD ADJUSTMENT

Net income, partnership equity and accrued warranty payable have been
restated by $5,000 for the year 1996 to provide for estimated future warranty
costs on the company's manufactured products.

12. SALE OF COMPANY

The Company's partnership interest was sold to ThermoView Industries, Inc.,
as of the close of business August 14, 1998, and consequently will be an
operating subsidiary thereof.

13. YEAR 2000 ISSUE (UNAUDITED)

F-131
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Stockholder and Boards of Directors
Thomas Construction, Inc., Castle Associates, Inc.
and Showplace Home Improvements, Inc.

We have audited the accompanying combined balance sheets of Thomas
Construction, Inc., Castle Associates, Inc. and Showplace Home Improvements,
Inc. (together referred to herein as the "Company" or "Thomas Construction") as
of December 31, 1997 and 1998 and the related combined statements of income and
retained earnings and cash flows for each of the three years in the period ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Thomas
Construction at December 31, 1997 and 1998 and the combined results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1998 in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Louisville, Kentucky

March 5, 1999

F-132
<PAGE>

THOMAS CONSTRUCTION

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------
1997 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash................................................................................ $ 421,387 $ 472,361
Accounts receivable, net of allowance for doubtful accounts of $58,954 in 1997 and
$40,957 in 1998................................................................... 568,891 849,075
Other receivables................................................................... 109,591 73,939
Due from stockholder and related companies.......................................... 132,258 46,177
Inventories......................................................................... 134,961 113,077
Costs in excess of billings on uncompleted contracts................................ 240,331 179,612
Prepaid commisions.................................................................. 149,144 200,551
Other current assets................................................................ 26,287 20,075
------------ ------------
Total current assets.................................................................. 1,782,850 1,954,867
Property and equipment, net........................................................... 215,850 190,498
Note receivable....................................................................... 9,776 --
Other assets.......................................................................... 18,406 500
------------ ------------
Total assets.......................................................................... $ 2,026,882 $ 2,145,865
------------ ------------
------------ ------------

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
Accounts payable.................................................................... $ 818,320 $ 722,882
Accrued expenses.................................................................... 805,218 935,774
Billings in excess of costs on uncompleted contracts................................ 194,286 214,192
------------ ------------
Total current liabilities............................................................. 1,817,824 1,872,848

Stockholder's equity:
Thomas Construction, Inc.--
Common stock, $1.00 par value--30,000 shares authorized, 25,961 shares issued and
16,875 outstanding.............................................................. 25,961 25,961
Paid-in capital................................................................... 539 539
Treasury stock, at cost, 9,086 shares............................................. (20,000) (20,000)
Castle Associates, Inc.--
Common stock, $1.00 par value--30,000 shares authorized, 100 shares issued and
outstanding..................................................................... 100 100
Showplace Home Improvements, Inc.--
Common stock, $1.00 par value--30,000 shares authorized, 500 shares issued and 375
outstanding..................................................................... 500 500
Treasury stock, at cost, 125 shares............................................... (5,000) (5,000)
Retained earnings................................................................... 206,958 270,917
------------ ------------
Total stockholder's equity............................................................ 209,058 273,017
------------ ------------
Total liabilities and stockholder's equity............................................ $ 2,026,882 $ 2,145,865
------------ ------------
------------ ------------
</TABLE>

See accompanying notes.

F-133
<PAGE>

THOMAS CONSTRUCTION

COMBINED STATEMENTS OF INCOME
AND RETAINED EARNINGS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
Contract revenue.................................................... $ 24,218,233 $ 26,493,224 $ 25,553,981
Cost of revenues earned............................................. 12,909,235 14,039,731 13,277,004
------------- ------------- -------------
Gross profit........................................................ 11,308,998 12,453,493 12,276,977
Selling, general and administrative expenses........................ 8,359,371 9,282,888 9,823,912
Depreciation........................................................ 103,518 95,890 89,489
------------- ------------- -------------
Income from operations.............................................. 2,846,109 3,074,715 2,363,576
Other income (expense):
Interest income................................................... 61,669 71,890 54,885
Rental income..................................................... -- 41,696 188,677
Gain (loss) on disposal of assets................................. 8,387 (234,669) (3,217)
Other............................................................. 16,724 10,107 31,842
------------- ------------- -------------
86,780 (110,976) 272,187
------------- ------------- -------------
Income before income taxes.......................................... 2,932,889 2,963,739 2,635,763
Provision for income taxes.......................................... 14,100 16,625 13,833
------------- ------------- -------------
Net income.......................................................... 2,918,789 2,947,114 2,621,930
Retained earnings, beginning of year................................ 733,393 809,162 206,958
Distributions to stockholder........................................ (2,843,020) (3,549,318) (2,557,971)
------------- ------------- -------------
Retained earnings, end of year...................................... $ 809,162 $ 206,958 $ 270,917
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes.

F-134
<PAGE>

THOMAS CONSTRUCTION

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income........................................................... $ 2,918,789 $ 2,947,114 $ 2,621,930
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation....................................................... 103,518 95,890 89,489
(Gain) loss on disposal of assets.................................. (8,387) 234,669 3,217
Changes in operating assets and liabilities:
Accounts receivable.............................................. (342,745) 448,935 (280,184)
Other receivables................................................ 74,657 (58,494) 35,652
Due from stockholder and related companies....................... 64,733 (126,991) 86,081
Inventories...................................................... 432 (99,686) 21,884
Costs in excess of billings on uncompleted contracts............. (42,121) 38,145 60,719
Prepaid commissions.............................................. (55,054) 39,140 (51,407)
Other current assets............................................. 78,949 (16,794) 6,212
Other assets..................................................... -- (7,625) 27,682
Accounts payable................................................. 22,832 (39,589) (95,438)
Accrued expenses................................................. 239,926 131,733 130,556
Billings in excess of costs on uncompleted contracts............. 70,397 (37,296) 19,906
------------- ------------- -------------
Net cash provided by operating activities............................ 3,125,926 3,549,151 2,676,299

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment.................................. (60,492) (166,122) (76,048)
Proceeds from sale of assets......................................... 12,127 750 8,694
Net proceeds from note receivable-related party...................... 117,255 -- --
------------- ------------- -------------
Net cash provided by (used in) investing activities.................. 68,890 (165,372) (67,354)

CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to stockholder......................................... (2,843,020) (3,549,318) (2,557,971)
------------- ------------- -------------
Net cash used in financing activities................................ (2,843,020) (3,549,318) (2,557,971)
------------- ------------- -------------
Net increase (decrease) in cash...................................... 351,796 (165,539) 50,974
Cash, beginning of year.............................................. 235,130 586,926 421,387
------------- ------------- -------------
Cash, end of year.................................................... $ 586,926 $ 421,387 $ 472,361
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes.

F-135
<PAGE>

THOMAS CONSTRUCTION

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1998

1. ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

The combined financial statements include the accounts and transactions of
Thomas Construction, Inc. (Thomas), Castle Associates, Inc. (Castle) and
Showplace Home Improvements, Inc. (Showplace), together referred to herein as
"the Company". All material intercompany transactions and accounts have been
eliminated in the accompanying combined financial statements.

The accompanying financial statements are presented on a combined basis as
each of the combined companies is owned by the same stockholder and the Company
comprises one operating segment primarily engaged in the home improvement
business in the St. Louis Metropolitan area. More specifically, Thomas is
engaged in the installation of maintenance-free siding, thermal replacement
windows, storm windows and doors, patio enclosures, as well as several related
items, for residential customers to whom credit is extended. Thomas may avail
itself of mechanics liens on customers' property in the event of non-payment of
amounts receivable. Castle is engaged in the construction of patio enclosures,
decks and room additions, and Showplace is engaged in the remodeling of kitchens
and bathrooms for residential customers to whom credit is extended.

REVENUE RECOGNITION

The Company recognizes revenues from fixed-price contracts on the
completed-contract method since the contracts are of a short duration. A
contract is considered complete upon installation.

Contract costs include all direct material and labor costs and those
indirect costs related to contract performance such as indirect labor, supplies,
tools, repairs and depreciation costs. General and administrative costs are
charged to expense as incurred. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are determined.

INVENTORIES

Inventories are recorded at the lower of cost (moving average basis) or
market. Inventories primarily consist of parts and supplies.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for major renewals
and improvements which increase the useful lives of assets are capitalized.
Maintenance, repairs and minor renewals are expensed as incurred. Assets are
depreciated on straight-line or accelerated methods over their estimated useful
lives which generally range from three to seven years.

WARRANTIES

The Company provides the retail customer with a one year warranty covering
workmanship, with an additional nine year warranty on the installation of
siding, soffit and fascia. The Company provides an

F-136
<PAGE>

THOMAS CONSTRUCTION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

1. ACCOUNTING POLICIES (CONTINUED)
accrual for future warranty costs based upon the relationship of prior years'
revenues to actual warranty costs. It is the Company's practice to classify the
entire warranty accrual as a current liability.

ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expense was
approximately $2,885,000, $2,798,000 and $2,877,000 in 1996, 1997 and 1998,
respectively.

INCOME TAXES

The companies comprising the Company have elected to be taxed as S
corporations under the provisions of Subchapter S of the Internal Revenue Code.
Under those provisions, the companies do not pay federal corporate income taxes
on their taxable income. Instead, the stockholder is liable for federal income
taxes on the companies' taxable income. Certain states in which the companies do
business do not recognize the federal S corporation rules and assess an income
tax at the corporate level. Accordingly, the provision for income taxes consists
only of state and local income taxes.

USE OF ESTIMATES

2. RELATED PARTY TRANSACTIONS

All of the Company's assets are pledged as collateral for outstanding bank
debt of an affiliated company owned by the Company's stockholder. The balance
outstanding amounts to approximately $1,174,000 as of December 31, 1998.

In 1993, the Company sold land for a total contract price of $850,000 to an
affiliated company owned by the Company's stockholder. A mortgage loan of
$145,113 was assumed by the buyer and the Company obtained an unsecured note
from the buyer for $705,379 for the balance of the selling price. The gain on
the sale, which amounted to $618,822, was deferred for financial reporting
purposes since the gain had not been realized through transactions with
unrelated parties. During 1998, the note receivable balance was transferred to
the Company's stockholder and the note balance, net of the deferred gain, has
been accounted for as a distribution to the stockholder amounting to $9,776.

No interest was charged on the note receivable in 1998. Interest income was
$37,745 and $36,344 for the years ended December 31, 1996 and 1997,
respectively.

F-137
<PAGE>

THOMAS CONSTRUCTION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

3. PROPERTY AND EQUIPMENT

Property and equipment at December 31 consists of the following:

<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Furniture, fixtures and equipment................................... $ 163,872 $ 156,091
Construction and computer equipment................................. 349,631 413,058
Computer software................................................... 44,647 51,048
----------- -----------
558,150 620,197
Less accumulated depreciation....................................... (342,300) (429,699)
----------- -----------
$ 215,850 $ 190,498
----------- -----------
----------- -----------
</TABLE>

4. UNCOMPLETED CONTRACTS

Costs and billings on uncompleted contracts at December 31 are as follows:

<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
Costs incurred on uncompleted contracts............................... $ 341,604 $ 267,026
Billings to date...................................................... 295,559 301,606
---------- ----------
$ 46,045 $ (34,580)
---------- ----------
---------- ----------
</TABLE>

These amounts are included in the accompanying combined balance sheets under
the following captions:

<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Costs in excess of billings on uncompleted contracts................ $ 240,331 $ 179,612
Billings in excess of costs on uncompleted contracts................ (194,286) (214,192)
----------- -----------
$ 46,045 $ (34,580)
----------- -----------
----------- -----------
</TABLE>

5. ACCRUED EXPENSES

Accrued expenses as of December 31 consist of the following:

<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
Wages................................................................. $ 454,484 $ 358,883
Payroll taxes......................................................... 44,198 22,224
401(k) contribution................................................... 64,111 73,237
Warranty.............................................................. 100,000 100,000
Insurance............................................................. 55,884 151,232
Other................................................................. 86,541 230,198
---------- ----------
$ 805,218 $ 935,774
---------- ----------
---------- ----------
</TABLE>

F-138
<PAGE>

THOMAS CONSTRUCTION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

6. LINE OF CREDIT

The Company has available a $100,000 revolving line of credit, all of which
is unused at December 31, 1998. Bank advances on the credit bear interest at
prime plus 1.5% (10% at December 31, 1998) and are collaterialized by
substantially all of the assets of the Company.

7. COMMITMENTS AND CONTINGENCIES

The Company leases an office building from its stockholder and also leases
equipment and vehicles from non-related parties under noncancelable operating
leases. Future minimum lease payments at December 31, 1998 are as follows:

<TABLE>
<CAPTION>
RELATED
PARTY OTHER
LEASE LEASES
------------ ----------
<S> <C> <C>
1999............................................................... $ 449,587 $ 210,346
2000............................................................... 449,587 89,537
2001............................................................... 449,587 16,667
2002............................................................... 449,587 4,639
2003............................................................... 449,587 4,639
Thereafter......................................................... 4,495,870 4,639
------------ ----------
Total............................................................ $6,743,805 $ 330,467
------------ ----------
------------ ----------
</TABLE>

The Company incurred rental expense under noncancellable operating leases
amounting to approximately $315,000, $654,000 and $717,000 for the years ended
December 31, 1996, 1997 and 1998, respectively ($367,000 in 1997 and $450,000 in
1998 under the related party lease).

In 1997, the Company began subleasing a portion of the office building.
Rental income under the subleases was approximately $42,000 in 1997 and $189,000
in 1998. Future minimum lease payments to be received under the sublease
agreements at December 31, 1998 are as follows:

<TABLE>
<S> <C>
1999.............................................................. $ 111,058
2000.............................................................. 72,794
2001.............................................................. 65,142
2002.............................................................. 65,142
2003.............................................................. 27,143
---------
Total........................................................... $ 341,279
---------
---------
</TABLE>

A related company uses vehicles which are leased by the Company from an
unrelated commercial lessor. The related company pays the monthly rentals on the
leases. Although the liability to the lessor is a direct obligation of the
Company, the related company is expected to pay the remaining rentals on the
leases. Future minimum lease payments required at December 31, 1998 for which
the Company is contingently liable amount to approximately $24,000.

In December 1998, the Company received correspondence asserting a claim
involving a former employee of an entity related to the Company through common
ownership. Management of the Company

F-139
<PAGE>

THOMAS CONSTRUCTION

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
believes the claim against the Company is totally without merit and, as such,
will not have a material adverse effect on the Company's combined financial
position or results of operations.

8. EMPLOYEE BENEFIT PLAN

Effective January 1, 1995, the Company established a defined contribution
401(k) profit-sharing plan and trust for the benefit of all of its employees,
subject to certain age and service requirements. Plan participants may make
salary reduction contributions to the plan which are subject to Internal Revenue
Service contribution limitations. Company contributions to the plan are made
from the Company's current or accumulated earnings and are at the discretion of
Company management. Company contributions to the plan were approximately
$50,000, $64,000 and $73,000 for the years ended December 31, 1996, 1997 and
1998, respectively.

9. SUBSEQUENT EVENTS

Effective January 1, 1999, the Company was acquired by ThermoView
Industries, Inc. (ThermoView), for $11,095,000 in cash, 301,425 shares of common
stock of ThermoView at an estimated fair value of $1,500,000 and 400,000 shares
of Series B preferred stock of ThermoView at an estimated fair value of
$2,000,000. The acquisition agreement provides for additional consideration to
be paid if Thomas exceeds certain targeted levels of operating results.

10. YEAR 2000 READINESS (UNAUDITED)

The Company has initiated an assessment of the possible impact of Year 2000
issues to assure it is prepared to effectively deal with transactions in the
Year 2000 and beyond. This "Year 2000 Problem" creates risk for the Company from
unforeseen sources in its own computer systems and from third parties with whom
the Company deals on financial transactions.

The Company intends to achieve uninterrupted, high quality performance from
its computer systems before, during and after 2000. The Company has determined
that modifications are required for certain existing systems to become Year 2000
compliant. These system modifications are in the process of being implemented.
The cost of assessment and ultimate assurance as to readiness is being expensed
as incurred. Total incremental spending by the Company is not expected to be
significant to the Company's operations, liquidity or capital resources.

In addition to taking every reasonable step to secure its internal systems
and external relationships, the Company is further developing contingency plans
to assure that unexpected failures will not adversely affect operations. The
Company intends to monitor these procedures through the rollover of 1999 into
2000 and to implement quickly alternate solutions if necessary.

However, despite the Company's efforts and contingency plans, noncompliant
computer systems could have a material adverse effect on the Company's
operations, or its financial condition.

F-140
<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors
Precision Window Mfg., Inc.

We have audited the accompanying balance sheets of Precision Window Mfg.,
Inc. as of December 31, 1996, 1997 and 1998 and the related statements of
operations and retained earnings and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Precision Window Mfg., Inc.
at December 31, 1996, 1997 and 1998 and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998 in
conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Louisville, Kentucky
May 21, 1999

F-141
<PAGE>
PRECISION WINDOW MFG., INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
----------------------------------------
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash.................................................................. $ 3,053 $ 3,003 $ 422
Accounts receivable................................................... 424,901 368,363 447,524
Notes receivable...................................................... 229,668 63,481 46,564
Income taxes receivable............................................... -- 94,816 --
Inventories........................................................... 307,095 389,419 455,038
Other current assets.................................................. 10,741 13,249 41,383
------------ ------------ ------------
Total current assets................................................ 975,458 932,331 990,931

Property and equipment, net............................................. 104,394 133,391 110,168
------------ ------------ ------------
Total assets...................................................... $ 1,079,852 $ 1,065,722 $ 1,101,099
------------ ------------ ------------
------------ ------------ ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable--bank.................................................... $ 80,000 $ 229,000 $ 140,000
Accounts payable...................................................... 343,688 359,938 267,354
Accrued expenses...................................................... 71,437 87,980 100,100
Income taxes payable.................................................. 37,292 -- 125,097
Current portion of long-term debt..................................... 184,360 127,470 86,123
------------ ------------ ------------
Total current liabilities......................................... 716,777 804,388 718,674

Long-term debt.......................................................... 168,828 96,453 12,180

Stockholders' equity:
Class A common stock, no par value--
15,000 shares authorized, 152 shares issued and
outstanding......................................................... 152 152 152
Class B common stock, no par value--
15,000 shares authorized, 10,486 shares issued and outstanding...... 1,216 1,216 1,216
Retained earnings..................................................... 192,879 163,513 368,877
------------ ------------ ------------
Total stockholders' equity........................................ 194,247 164,881 370,245
------------ ------------ ------------
Total liabilities and stockholders' equity........................ $ 1,079,852 $ 1,065,722 $ 1,101,099
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-142
<PAGE>
PRECISION WINDOW MFG., INC.

STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Sales................................................................... $ 5,695,675 $ 6,431,708 $ 6,547,964
Cost of sales........................................................... 4,974,109 5,738,665 5,499,617
------------ ------------ ------------
Gross profit............................................................ 721,566 693,043 1,048,347

Selling, general and administrative expenses............................ 354,695 630,111 642,543
Depreciation and amortization........................................... 57,114 44,608 48,914
------------ ------------ ------------
Income from operations.................................................. 309,757 18,324 356,890

Other income (expense):
Interest expense...................................................... (41,911) (41,921) (27,196)
Other................................................................. (1,775) 1,415 2,413
------------ ------------ ------------
(43,686) (40,506) (24,783)
------------ ------------ ------------
Income (loss) before income taxes....................................... 266,071 (22,182) 332,107

Income tax expense...................................................... 101,292 7,184 126,743
------------ ------------ ------------
Net income (loss)....................................................... 164,779 (29,366) 205,364

Retained earnings, beginning of year.................................... 28,100 192,879 163,513
------------ ------------ ------------
Retained earnings, end of year.......................................... $ 192,879 $ 163,513 $ 368,877
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-143
<PAGE>
PRECISION WINDOW MFG., INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss).......................................................... $ 164,779 $ (29,366) $ 205,364
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization............................................ 57,114 44,608 48,914
Write-off of note receivable............................................. -- 130,680 --
Changes in operating assets and liabilities:
Accounts receivable...................................................... (242,546) 56,538 (79,161)
Income taxes receivable.................................................. 41,776 (94,816) 94,816
Inventories.............................................................. (123,049) (82,324) (94,079)
Other current assets..................................................... 2,425 (2,508) 326
Accounts payable......................................................... 242,548 16,250 (92,584)
Accrued expenses......................................................... (49,376) 16,543 12,120
Income taxes payable..................................................... 37,292 (37,292) 125,097
----------- ----------- -----------
Net cash provided by operating activities.................................. 130,963 18,313 220,813

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment........................................ (36,841) (73,604) (25,692)
Advances on notes receivable............................................... (100,000) -- --
Payments received on notes receivable...................................... 106,562 35,506 16,917
----------- ----------- -----------
Net cash used in investing activities...................................... (30,279) (38,098) (8,775)

FINANCING ACTIVITIES
Net activity on note payable--bank......................................... 40,000 149,000 (89,000)
Proceeds from long-term debt............................................... 105,550 51,238 1,850
Payments on long-term debt................................................. (250,521) (180,503) (127,469)
----------- ----------- -----------
Net cash provided by (used in) financing activities........................ (104,971) 19,735 (214,619)
----------- ----------- -----------
Net decrease in cash....................................................... (4,287) (50) (2,581)
Cash, beginning of year.................................................... 7,340 3,053 3,003
----------- ----------- -----------
Cash, end of year.......................................................... $ 3,053 $ 3,003 $ 422
----------- ----------- -----------
----------- ----------- -----------

Supplemental disclosure of cash flow information:
Cash paid (received) for:
Interest............................................................... $ 45,263 $ 37,663 $ 30,957
Income taxes........................................................... 85,095 139,292 (93,170)
</TABLE>

SEE ACCOMPANYING NOTES.

F-144
<PAGE>
PRECISION WINDOW MFG., INC.

NOTES TO FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

The Company is engaged in the manufacturing and distribution of all
architectural styles of vinyl and composite window systems. The manufacturing
plant is in St. Louis, Missouri with sales to customers in the remodeling
industry primarily in the Midwest to whom credit is extended.

REVENUE RECOGNITION

The Company recognizes revenues when products are shipped.

INVENTORIES

Inventories are recorded at the lower of cost (moving average basis) or
market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for major renewals
and improvements which increase the useful lives of assets are capitalized.
Maintenance, repairs and minor renewals are expensed as incurred. Assets are
depreciated on straight-line or accelerated methods over their estimated useful
lives which generally range from 5 to 7 years.

WARRANTIES

The Company provides its customers with various warranty programs on its
products. The Company provides an accrual for future warranty costs based upon
the relationship of prior years' revenues to actual warranty costs. It is the
Company's practice to classify the entire warranty accrual as a current
liability.

ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expense was
approximately $60,000, $46,000 and $63,000 in 1996, 1997 and 1998, respectively.

INCOME TAXES

Income taxes are provided for under the liability method, which takes into
account differences between financial statement treatment and tax treatment of
certain transactions.

USE OF ESTIMATES

F-145
<PAGE>
PRECISION WINDOW MFG., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. INVENTORIES

Inventories at December 31 consist of the following:

<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Raw materials............................................ $ 250,617 $ 298,315 $ 382,035
Work in process.......................................... 27,500 8,560 9,329
Finished goods........................................... 28,978 82,544 63,674
---------- ---------- ----------
$ 307,095 $ 389,419 $ 455,038
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

3. PROPERTY AND EQUIPMENT

Property and equipment at December 31 consists of the following:

<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Furniture, fixtures and equipment........................ $ 486,896 $ 560,501 $ 586,192
Automobiles and trucks................................... 89,904 89,904 89,904
Leasehold improvements................................... 67,634 67,634 67,634
---------- ---------- ----------
644,434 718,039 743,730
Less accumulated depreciation and amortization........... 540,040 584,648 633,562
---------- ---------- ----------
$ 104,394 $ 133,391 $ 110,168
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

4. ACCRUED EXPENSES

Accrued expenses as of December 31 consist of the following:

<TABLE>
<CAPTION>
1996 1997 1998
--------- --------- ----------
<S> <C> <C> <C>
Wages....................................................... $ 34,095 $ 41,247 $ 52,783
Warranty.................................................... 12,500 12,500 12,500
Sales taxes................................................. 23,732 24,263 29,717
Other....................................................... 1,110 9,970 5,100
--------- --------- ----------
$ 71,437 $ 87,980 $ 100,100
--------- --------- ----------
--------- --------- ----------
</TABLE>

5. LINE OF CREDIT

The Company has available a $300,000 line of credit of which $140,000 was
outstanding at December 31, 1998. Advances bear interest at 9.5% and are
collaterialized by accounts receivable and inventories. The line of credit was
repaid and terminated in connection with Company's acquisition discussed in Note
10.

F-146
<PAGE>
PRECISION WINDOW MFG., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT

Long-term debt at December 31 consists of the following:

<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ---------
<S> <C> <C> <C>
Note payable, interest at prime plus 1%, maturing in
October 1999, with monthly payments of principal of
$1,835................................................... $ -- $ 40,330 $ 18,310
Note payable related party, interest at 9.25%, maturing in
September 1999, with monthly principal and interest
payments of $5,000....................................... 145,230 100,861 43,355
Equipment notes payable, interest ranging from 11% to 17%,
maturing through July 2000, monthly principal and
interest payments of $2,283.............................. 58,970 54,329 36,638
Notes payable, interest ranging from 8.5% to 10%........... 148,988 28,403 --
---------- ---------- ---------
353,188 223,923 98,303
Less current portion....................................... 184,360 127,470 86,123
---------- ---------- ---------
$ 168,828 $ 96,453 $ 12,180
---------- ---------- ---------
---------- ---------- ---------
</TABLE>

The following is a schedule by years of future maturities of long-term debt
as of December 31, 1998:

<TABLE>
<S> <C>
1999............................................................... $ 86,123
2000............................................................... 12,180
---------
Total.............................................................. $ 98,303
---------
---------
</TABLE>

7. INCOME TAXES

Significant components of income tax expense for the years ended December 31
are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
---------- --------- ----------
<S> <C> <C> <C>
Current:
Federal................................................... $ 86,523 $ 6,360 $ 108,469
State..................................................... 14,769 824 18,274
---------- --------- ----------
$ 101,292 $ 7,184 $ 126,743
---------- --------- ----------
---------- --------- ----------
</TABLE>

Income tax expense differs from the amounts computed by applying the
statutory U.S. Federal income tax rate to income (loss) before income taxes
primarily as a result of state taxes and certain expenses not deductible for
income tax purposes.

F-147
<PAGE>
PRECISION WINDOW MFG., INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. LEASE COMMITMENTS

The Company leases its manufacturing facility and certain equipment and
vehicles under noncancelable operating leases. Future minimum lease payments at
December 31, 1998 are as follows:

<TABLE>
<S> <C>
1999.............................................................. $ 108,008
2000.............................................................. 27,403
2001.............................................................. 1,705
---------
Total............................................................. $ 137,116
---------
---------
</TABLE>

The Company incurred rental expense under noncancelable operating leases
amounting to approximately $96,000, $151,000 and $160,000 in 1996, 1997 and
1998, respectively.

9. MAJOR CUSTOMERS

Approximately 88% of the Company's sales for each of the three years in the
period ended December 31, 1998 were from three customers. Accounts receivable
from these customers amounted to approximately $296,000, $106,000 and $232,000
at December 31, 1996, 1997 and 1998, respectively.

10. SUBSEQUENT EVENT

On January 5, 1999, the Company was acquired by ThermoView Industries, Inc.
(ThermoView) for $1,800,000 in cash, 112,053 shares of ThermoView common stock
at an estimated fair value of $450,000 and a seller note for $1,200,000. The
Company sells primarily to ThermoView's retail segment.

11. YEAR 2000 READINESS (UNAUDITED)

The Company intends to achieve uninterrupted, high quality performance from
its computer systems before, during and after 2000. The cost of assessment and
ultimate assurance as to readiness is being expensed as incurred. Total
incremental spending by the Company is not expected to be significant to the
Company's operations, liquidity or capital resources.

However, despite the Company's efforts and contingency plans, noncompliant
computer systems could have a material adverse effect on the Company's
operations, or its financial condition.

F-148
<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Boards of Directors
Thermo-Shield Company, Inc.
Thermo-Shield of America (Wisconsin), Inc.
Thermo-Shield of America (Michigan), Inc.
Thermo-Shield of America (Arizona), Inc.

We have audited the accompanying combined balance sheets of Thermo-Shield
Company, Inc., Thermo-Shield of America (Wisconsin), Inc., Thermo-Shield of
America (Michigan), Inc., and Thermo-Shield of America (Arizona), Inc. (together
referred to herein as the "Company" or "The Thermo-Shield Company") as of
December 31, 1996, 1997 and 1998 and the related combined statements of
operations and retained earnings and cash flows for each of the three years in
the period ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of The
Thermo-Shield Company at December 31, 1996, 1997 and 1998 and the combined
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998 in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

Louisville, Kentucky

May 21, 1999

F-149
<PAGE>
THE THERMO-SHIELD COMPANIES

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------
1996 1997 1998
---------- ---------- ------------
<S> <C> <C> <C>

ASSETS

Current assets:
Cash..................................................................... $ 192,263 $ 211,716 $ 231,166
Accounts receivable...................................................... 144,813 214,722 225,727
Employee receivables..................................................... 18,601 56,073 67,262
Due from related party................................................... 2,622 18,185 60,000
Costs in excess of billings on uncompleted contracts..................... 101,804 138,998 218,128
Deferred income taxes.................................................... 40,000 20,000 103,000
---------- ---------- ------------
Total current assets................................................. 500,103 659,694 905,283

Property and equipment:
Furniture, fixtures and equipment........................................ 116,643 164,135 176,823
Leasehold improvements................................................... 510 73,793 134,043
---------- ---------- ------------
117,153 237,928 310,866
Less accumulated depreciation and amortization........................... (70,456) (94,191) (135,442)
---------- ---------- ------------
Net property and equipment................................................. 46,697 143,737 175,424

Note receivable, related party............................................. 138,354 147,261 156,169

Other assets............................................................. 10,100 18,177 28,101
---------- ---------- ------------
Total assets......................................................... $ 695,254 $ 968,869 $ 1,264,977
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

F-150
<PAGE>
THE THERMO-SHIELD COMPANIES

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------
1996 1997 1998
---------- ---------- ------------
<S> <C> <C> <C>

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable......................................................... $ 223,307 $ 343,907 $ 577,420
Accrued wages............................................................ 42,279 95,995 136,527
Accrued payroll taxes.................................................... 18,886 6,381 18,962
Accrued income taxes..................................................... 122,564 168,696 173,407
Billings in excess of costs on uncompleted contracts..................... 87,123 58,722 120,323
Loans from related parties............................................... -- 197,000 54,500
---------- ---------- ------------
Total current liabilities............................................ 494,159 870,701 1,081,139

Deferred income taxes...................................................... -- 18,000 28,000

Stockholders' equity:
Thermo-Shield Company, Inc.
Common stock, no par value--50,000 shares authorized, 1,000 shares
issued and outstanding................................................. 1,000 1,000 1,000
Thermo-Shield of America (Wisconsin), Inc.
Common stock, $1.00 par value--9,000 shares authorized, 100 shares
issued and outstanding................................................. 100 100 100
Thermo-Shield of America (Michigan), Inc.
Common stock, no par value--60,000 shares authorized, 1000 shares
issued and outstanding................................................. -- 1,000 1,000
Thermo-Shield of America (Arizona), Inc.
Common stock, Class A voting, no par value--50,000 shares authorized,
3,000 shares issued and outstanding.................................... -- 3,000 3,000
Common stock, Class B non-voting, no par value--50,000 shares authorized,
none issued and outstanding............................................ -- -- --
Additional paid-in capital............................................... -- 5,000 5,000
Retained earnings (deficit).............................................. 199,995 70,068 145,738
---------- ---------- ------------
Total stockholders' equity........................................... 201,095 80,168 155,838
---------- ---------- ------------
Total liabilities and stockholders' equity........................... $ 695,254 $ 968,869 $ 1,264,977
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-151
<PAGE>
THE THERMO-SHIELD COMPANIES

COMBINED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS

<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------
1996 1997 1998
------------ ------------- -------------
<S> <C> <C> <C>
Contract revenues.................................................... $ 8,084,602 $ 12,394,611 $ 14,905,796
Cost of revenues earned.............................................. 3,885,275 5,708,579 6,669,722
------------ ------------- -------------
Gross profit......................................................... 4,199,327 6,686,032 8,236,074
Selling, general and administrative expenses......................... 3,773,163 6,572,619 8,004,876
Depreciation and amortization........................................ 12,750 23,735 41,251
------------ ------------- -------------
Income from operations............................................... 413,414 89,678 189,947

Other income:
Interest income.................................................... 8,592 10,099 15,662
Other.............................................................. -- 500 31,586
------------ ------------- -------------
8,592 10,599 47,248
------------ ------------- -------------
Income before income taxes........................................... 422,006 100,277 237,195
Income tax expense (benefit)......................................... 165,000 129,000 (63,000)
------------ ------------- -------------
Net income (loss).................................................... 257,006 (28,723) 300,195
Retained earnings, beginning of year................................. 61,998 199,995 70,068
Distributions to stockholders........................................ (119,009) (101,204) (224,525)
------------ ------------- -------------
Retained earnings, end of year....................................... $ 199,995 $ 70,068 $ 145,738
------------ ------------- -------------
------------ ------------- -------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-152
<PAGE>
THE THERMO-SHIELD COMPANIES

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss).......................................................... $ 257,006 $ (28,723) $ 300,195
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization............................................ 12,750 23,735 41,251
Deferred income taxes.................................................... (6,000) 38,000 (73,000)
Changes in operating assets and liabilities:
Accounts receivable...................................................... (48,921) (69,909) (11,005)
Other receivables........................................................ (18,601) (37,472) (11,189)
Due from related party................................................... (2,622) (15,563) (41,815)
Costs in excess of billings on uncompleted contracts..................... (61,336) (37,194) (79,130)
Other assets............................................................. 1,500 (8,077) (9,924)
Accounts payable......................................................... 40,752 120,600 233,513
Accrued expenses......................................................... 31,945 41,211 53,113
Accrued income taxes..................................................... 117,184 46,132 4,711
Billings in excess of costs on uncompleted contracts..................... 42,232 (28,401) 61,601
----------- ----------- -----------
Net cash provided by operating activities.................................. 365,889 44,339 468,321

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment........................................ (45,709) (120,775) (72,938)
Increase in note receivable, related party................................. (8,908) (8,907) (8,908)
----------- ----------- -----------
Net cash used in investing activities...................................... (54,617) (129,682) (81,846)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in loans from related parties.......................... -- 197,000 (142,500)
Increase in common stock................................................... -- 9,000 --
Distributions to stockholders.............................................. (119,009) (101,204) (224,525)
----------- ----------- -----------
Net cash provided by (used in) financing activities........................ (119,009) 104,796 (367,025)
----------- ----------- -----------
Net increase in cash....................................................... 192,263 19,453 19,450
Cash, beginning of year.................................................... -- 192,263 211,716
----------- ----------- -----------
Cash, end of year.......................................................... $ 192,263 $ 211,716 $ 231,166
----------- ----------- -----------
----------- ----------- -----------
Supplemental disclosure of cash flow information:
Cash paid for income taxes............................................... $ 5,289 $ 46,832 $ 51,525
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

SEE ACCOMPANYING NOTES.

F-153
<PAGE>
THE THERMO-SHIELD COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

The combined financial statements include the accounts and transactions of
Thermo-Shield Company, Inc., Thermo-Shield of America (Wisconsin), Inc.,
Thermo-Shield of America (Michigan), Inc. and Thermo-Shield Of America
(Arizona), Inc. together referred to herein as "the Company" or "Thermo-Shield".
All material intercompany transactions and accounts have been eliminated in the
accompanying combined financial statements.

The accompanying financial statements are presented on a combined basis as
the same stockholder owns 80% of Thermo-Shield of America (Michigan), Inc. and
100% of each of the other combined companies, and the Company comprises one
operating segment primarily engaged in the home improvement business in
Illinois, Wisconsin, Indiana, Michigan and Arizona. More specifically, the
Company is engaged in cabinet refacing and in the installation of
maintenance-free siding and thermal replacement windows for residential
customers to whom credit is extended. The Company may avail itself of mechanics
liens on customers' property in the event of non-payment of amounts receivable.

REVENUE RECOGNITION

Contract costs include all direct material and labor costs and those
indirect costs related to contract performance such as indirect labor and
supplies. General and administrative costs are charged to expense as incurred.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Expenditures for major renewals
and improvements which increase the useful lives of assets are capitalized.
Maintenance, repairs and minor renewals are expensed as incurred. Assets are
depreciated on straight-line or accelerated methods over their estimated useful
lives which generally range from three to ten years.

ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expense was
approximately $61,000, $118,000 and $133,000 for the years ended December 31,
1996, 1997 and 1998, respectively.

INCOME TAXES

Thermo-Shield Co., Inc. and Thermo-Shield of America (Wisconsin), Inc. have
elected to be taxed as "C" corporations. Accordingly, income taxes are provided
for under the liability method, which takes into account differences between
financial statement treatment and tax treatment of certain transactions.

F-154
<PAGE>
THE THERMO-SHIELD COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

1. ACCOUNTING POLICIES (CONTINUED)
Thermo-Shield of America (Michigan), Inc. and Thermo-Shield of America
(Arizona), Inc. have elected to be taxed as S corporations under the provisions
of Subchapter S of the Internal Revenue Code. Under those provisions, the
companies do not pay federal corporate income taxes on their taxable income.
Instead the stockholder is liable for federal income taxes on the companies'
taxable income.

USE OF ESTIMATES

2. RELATED PARTY TRANSACTIONS

On November 3, 1997, the Company began leasing its primary place of business
from the majority stockholder of the Company. Lease expense and the related
lease commitment are included in related party amounts disclosed in Note 6.

The Company has a note receivable due from the majority stockholder at an
interest rate of 7.0%. Amounts owed the Company were $138,354, $147,261 and
$156,169 at December 31, 1996, 1997 and 1998, respectively.

The Company has amounts due from the majority stockholder of $2,622, $18,185
and $60,000 at December 31, 1996, 1997 and 1998, respectively.

The Company has non-interest bearing loans from related parties payable on
demand of $197,000 and $54,500 at December 31, 1997 and 1998, respectively.

3. UNCOMPLETED CONTRACTS

Costs and billings on uncompleted contracts at December 31 are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Costs incurred on uncompleted contracts................ $ 178,085 $ 218,254 $ 330,003
Billings to date....................................... (163,404) (137,978) (232,198)
----------- ----------- -----------
$ 14,681 $ 80,276 $ 97,805
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

F-155
<PAGE>
THE THERMO-SHIELD COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

3. UNCOMPLETED CONTRACTS (CONTINUED)
These amounts are included in the accompanying combined balance sheets under
the following captions:

<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- -----------
<S> <C> <C> <C>
Costs in excess of billings on uncompleted contracts.... $ 101,804 $ 138,998 $ 218,128
Billings in excess of costs on uncompleted contracts.... (87,123) (58,722) (120,323)
---------- ---------- -----------
$ 14,681 $ 80,276 $ 97,805
---------- ---------- -----------
---------- ---------- -----------
</TABLE>

4. LINES OF CREDIT

The Company has available a $500,000 line of credit, all of which is unused
at December 31, 1998. Bank advances on the credit bear interest at the bank's
prime rate (7.75% at December 31, 1998) and are secured by a blanket lien on all
the assets of Thermo-Shield Company, Inc. and Thermo-Shield of America
(Wisconsin), Inc., and a personal guaranty of the majority stockholder.

On January 9, 1999, the Company entered into an additional $300,000 line of
credit with a bank. The line bears interest at the bank's prime rate and is
secured by a blanket lien on all the assets of Thermo-Shield Company, Inc. and
Thermo-Shield of America (Wisconsin), Inc.

5. INCOME TAXES

Significant components of income tax expense (benefit) for the years ended
December 31 are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal................................................. $ 136,000 $ 71,000 $ 6,000
State................................................... 35,000 20,000 4,000
---------- ---------- ----------
171,000 91,000 10,000

Deferred:
Federal................................................. (5,000) 32,000 (62,000)
State................................................... (1,000) 6,000 (11,000)
---------- ---------- ----------
(6,000) 38,000 (73,000)
---------- ---------- ----------
Income tax expense (benefit).............................. $ 165,000 $ 129,000 $ (63,000)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

F-156
<PAGE>
THE THERMO-SHIELD COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES (CONTINUED)
A reconciliation of income tax expense (benefit) with the expected amount
computed by applying the federal statutory income tax rate to income before
income taxes for the years ended December 31 is as follows:

<TABLE>
<CAPTION>
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Income tax provision computed at statutory rate........... $ 143,482 $ 34,094 $ 80,646
State taxes, net of federal effect........................ 22,440 17,160 (4,620)
Effect of S corporations.................................. -- 97,678 (88,570)
Other..................................................... (922) (19,932) (50,456)
---------- ---------- ----------
Income tax expense (benefit).............................. $ 165,000 $ 129,000 $ (63,000)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Significant components of the Company's deferred tax assets and liabilities
consist of the following as of December 31:

<TABLE>
<CAPTION>
1996 1997 1998
--------- ---------- ----------
<S> <C> <C> <C>
Deferred tax assets:
Cash/accrual basis difference............................ $ 39,957 $ 22,042 $ 103,903
--------- ---------- ----------
Total deferred tax assets................................ 39,957 22,042 103,903
--------- ---------- ----------
Deferred tax liabilities:
Property and equipment................................... 3,365 (17,741) (27,576)
Other.................................................... (3,322) (2,301) (1,327)
--------- ---------- ----------
Total deferred tax liabilities............................. 43 (20,042) (28,903)
--------- ---------- ----------
Net deferred tax asset..................................... $ 40,000 $ 2,000 $ 75,000
--------- ---------- ----------
--------- ---------- ----------
</TABLE>

6. COMMITMENTS AND CONTINGENCIES

The Company leases a main office building from its majority stockholder and
other office facilities from non-related parties under noncancellable operating
leases. Future minimum lease payments at December 31, 1998 are as follows:

<TABLE>
<CAPTION>
RELATED
PARTY OTHER
LEASE LEASES
------------ ----------
<S> <C> <C>
1999............................................................... $ 96,000 $ 67,853
2000............................................................... 96,000 61,755
2001............................................................... 96,000 7,526
2002............................................................... 96,000 --
2003............................................................... 96,000 --
Thereafter......................................................... 368,000 --
------------ ----------
Total.............................................................. $ 848,000 $ 137,134
------------ ----------
------------ ----------
</TABLE>

The Company incurred rental expense under noncancellable operating leases
amounting to approximately $42,000, $116,000 and $203,000 for the years ended
December 31, 1996, 1997 and 1998, respectively

F-157
<PAGE>
THE THERMO-SHIELD COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

6. COMMITMENTS AND CONTINGENCIES (CONTINUED)
($16,000 in 1997 and $96,000 in 1998 under the related party lease; and there
was no related party rent expense in 1996).

The Company is contingently liable for an irrevocable letter of credit
outstanding from a bank to Lowe's Companies, Inc. in the amount of $50,000. The
letter of credit is security for performance on Thermo-Shield contracts sold
through Lowe's stores.

7. SUBSEQUENT EVENTS

On March 23, 1999, a majority of the net assets of Thermo-Shield Co., Inc.
and Thermo-Shield of America (Wisconsin), Inc., and 100% of the capital stock of
Thermo-Shield of America (Michigan), Inc., and Thermo-Shield of America
(Arizona), Inc. were acquired by ThermoView Industries, Inc.

8. YEAR 2000 READINESS (UNAUDITED)

However, despite the Company's efforts and contingency plans, noncompliant
computer systems could have a material adverse effect on the Company's
operations, or its financial condition.

F-158
<PAGE>
[INSIDE BACK COVER]

The images on the inside back cover page include a map of our facilities,
pictures of a variety of our windows and the inside of one of our warehouses.
The descriptions of the map and pictures are clockwise from the top left-hand
corner.

1. Map of the United States showing the locations of our retail, manufacturing
and credit facilities and our corporate office.

2. A picture showing a few of our basic window styles including bow,
double-hung, tilt slider, hopper and bay windows.

3. A picture of one of our warehouses filled with custom made windows ready for
delivery and installation.

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON
ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO
SELL ONLY THE SHARES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THE
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary............................. 1
Risk Factors................................... 6
Forward-Looking Statements..................... 12
Use of Proceeds................................ 13
Dividend Policy................................ 13
Price Range of Common Stock.................... 14
Capitalization................................. 15
Dilution....................................... 16
Selected Historical and Pro Forma Financial
Data......................................... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 19
Business....................................... 35
Management..................................... 47
Certain Transactions........................... 55
Principal Stockholders......................... 58
Description of Capital Stock................... 60
Shares Eligible for Future Sale................ 64
Underwriting................................... 67
Legal Matters.................................. 69
Experts........................................ 69
Where You Can Find More Information............ 70
Index to Financial Statements.................. F-1
</TABLE>

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

THROUGH AND INCLUDING , 1999 (THE 25TH DAY AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THESE SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO A DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITER AND WITH RESPECT TO AN UNSOLD ALLOTMENT OR SUBSCRIPTION.

3,500,000 SHARES

[LOGO]

COMMON STOCK

SOUTHWEST SECURITIES
EBI SECURITIES CORPORATION

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses payable by the
registrant in connection with this offering (excluding underwriting discounts
and commissions). All amounts shown except the SEC and NASD fees are estimates.

<TABLE>
<S> <C>
SEC registration fee............................................ $ 11,740
NASD filing fee................................................. 2,405
Nasdaq National Market listing fee.............................. 95,000
Underwriters' nonaccountable expense allowance.................. 945,000
Legal fees and expenses......................................... 400,000
Accounting fees and expenses.................................... 1,000,000
Blue sky fees and expenses...................................... 10,000
Printing and engraving costs.................................... 500,000
Transfer agent fees and expenses................................ 5,000
Miscellaneous fees and expenses................................. 30,855
---------
Total......................................................... $3,000,000
---------
---------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145(a) of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify any person (including his estate or personal
representative) who was, is or is threatened to be made a party in a threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, because he is or was a director against
liability incurred in the proceeding if: (i) he conducted himself in good faith;
(ii) he reasonably believed that his conduct was in or not opposed to the best
interests of the corporation; and (iii) in the case of any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful.
Indemnification may be made against the obligation to pay a judgment,
settlement, penalty, fine or reasonable expenses (including counsel fees)
incurred with respect to a proceeding. Pursuant to Section 145(e), a corporation
may pay for or reimburse the reasonable expenses incurred by a director in
advance of final disposition of the action, suit or proceeding if the director
undertakes to repay such advance upon an ultimate determination that he is not
entitled to indemnification by the corporation.

A director who has been successful, on the merits or otherwise, in the
defense of any action, suit or proceeding to which he was a party because he is
or was a director of the corporation is entitled to indemnification against
actual and reasonable expenses incurred by him in connection with the
proceeding. Unless limited by its certificate of incorporation, a Delaware
corporation may indemnify and advance expenses to an officer, employee or agent
of the corporation to the same extent that it may indemnify and advance expenses
to directors. An officer of the corporation is also entitled to mandatory
indemnification to the same extent as a director.

The indemnification and advancement of expenses provided by or granted
pursuant to Section 145 is not exclusive of any rights to which those seeking
indemnification or advancement of expenses may otherwise be entitled. Section
145(g) empowers a Delaware corporation to purchase and maintain insurance on
behalf of its directors, officers, employees or agents against liability
asserted against or incurred by the individuals in those capacities, whether or
not the corporation would have the power under Section 145 to indemnify them
against such liability. The registrant has purchased and maintains directors'
and officers' liability insurance. The registrant has also entered into an
agreement with each of its directors which requires the registrant to indemnify
the director to the fullest extent permitted by Delaware law.

II-1
<PAGE>
The registrant's certificate of incorporation and bylaws require it to
indemnify its directors to the fullest extent permitted by applicable state or
federal laws. The bylaws further permit the registrant to indemnify its officers
to the same extent that it indemnifies directors and to such further extent,
consistent with law, as may be provided by general or specific action of the
board of directors, or contract.

Under Section 8 of the underwriting agreement filed as Exhibit 1.1 hereto,
the underwriters have agreed to indemnify, under certain circumstances, the
registrant, its directors, officers and persons who control the registrant
against certain liabilities which may be incurred in connection with the
offering, including certain liabilities under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Unless otherwise noted herein, the issuance of securities in the
transactions described below and for the period from July 1997 are deemed to be
exempt from registration under the Securities Act, either pursuant to the
exemption from registration contained in Section 4(2) thereof, or under the
provisions of Regulation D or Rule 701, each as promulgated under the Securities
Act. In the case of sales in reliance upon Regulation D, to the best of the
registrant's knowledge, such sales were made solely to investors who represented
in writing that they, or whom the registrant reasonably believed, were
accredited investors and to not more than 35 non-accredited investors, all of
whom purchased the securities for investment and not with a view to the
distribution thereof. All sales were made without general solicitation or
general advertising. Restrictions have been imposed upon the resale of such
securities, including placement of legends thereon describing such restrictions.

The following table describes the sale transactions and exemptions relied
upon by the registrant.

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
1. July 1, 1997 Thermo-Tilt Window Company 2,621,967 shares of the Section 4(2)
Common Stock registrant's common stock issued
to 10 individuals or entities
upon incorporation of
Thermo-Tilt in exchange for cash
or property contributed by such
individuals or entities.

2. October 22, 1997 Options to Purchase Thermo-Tilt Options to purchase 536,285 Section 4(2)
Common Stock shares of the registrant's
common stock at $0.87 per share
granted to three consultants and
one employee for services to be
rendered. Options to purchase
7,247 shares of common stock at
$0.87 per share transferred to
the former spouse of one
consultant.

3. November 13, 1997 Thermo-Tilt Common Stock 231,907 shares of the Regulation D
registrant's common stock sold
to one accredited investor for
$5.40 per share.
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
4. January 19, 1998 Options to Purchase Thermo-Tilt Options to purchase 144,942 Section 4(2)
Common Stock shares of the registrant's
common stock at $3.45 per share
granted to Stephen A. Hoffmann
for services to be rendered
pursuant to an employment
agreement with Thermo-Tilt.
Options to purchase 39,859
shares of common stock at $3.45
per share transferred to Mr.
Hoffmann's former spouse.

5. January 19, 1998 Options to Purchase Thermo-Tilt Options to purchase 28,988 Section 4(2)
Common Stock shares of the registrant's
common stock at $3.45 per share
granted to Nelson E. Clemmens
for services to be rendered
pursuant to an employment
agreement with Thermo-Tilt.

6. March 30, 1998 Options to Purchase Thermo-Tilt Options to purchase 14,495 Section 4(2)
Common Stock shares of the registrant's
common stock at $3.45 per share
granted to R. Jerry Falkner in
connection with investor
relations services to be
performed by R.J. Falkner &
Company, Inc.

7. March 30, 1998 Options to Purchase Thermo-Tilt Options to purchase 14,495 Section 4(2)
Common Stock shares of the registrant's
common stock at $3.45 per share
granted to Anthony V. Yonadi in
connection with consulting
services to be performed by Mr.
Yonadi.

8. March 31, 1998 Thermo-Tilt Common Stock 266,127 shares of the Regulation D
registrant's common stock sold
to 16 accredited investors and
24 nonaccredited investors for
$3.45 per share.
</TABLE>

II-3

<PAGE>

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
9. April 1, 1998 Options to Purchase Thermo-Tilt Options to purchase 14,495 Section 4(2)
Common Stock shares of the registrant's
common stock at $3.45 per share
granted to Coffin
Communications, Inc. in
connection with consulting
services to be performed by
Coffin.

10. April 15, 1998 Options Incentive stock options to Section 4(2) or Rule
purchase 266,667 shares of 701
common stock at $3.45 per share
granted to Stephen A. Hoffmann
pursuant to the registrant's
1998 employee stock option plan.

11. April 15, 1998 Options Options to purchase 100,000 Section 4(2)
shares of common stock at $3.45
per share granted to John H.
Cole for services to be rendered
pursuant to an employment
agreement with the registrant.

12. April 20, 1998 Options Options to purchase 41,667 Section 4(2)
shares of common stock at $3.45
per share granted to James J.
TerBeest for services to be
rendered pursuant to an
employment agreement with the
registrant.

13. April 25, 1998 Common 258,334 shares issued to Regulation D
principals of American Home
Developers Co., Inc. upon its
acquisition by the registrant.

14. April 30, 1998 Common 162,000 shares issued to Regulation D
principals of Primax Window Co.
upon its acquisition by the
registrant.

15. April 30, 1998 Common 373,334 shares issued to Regulation D
principals of Rolox of Kansas
City, Inc. and Rolox of Wichita,
Inc. upon their acquisition by
the registrant.
</TABLE>

II-4

<PAGE>

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
16. June 12, 1998 to 10% Cumulative Convertible 2,980,000 shares of Series A Regulation D
October 15, 1998 Series A Preferred Stock preferred stock sold to 56
accredited investors for $5.00
per share.

17. June 24, 1998 Common 580 shares issued to Some Day Section 4(2)
Corp. for consulting services
rendered

18. July 1, 1998 Options Non-qualified stock options to Section 4(2) or Rule
purchase 43,334 shares of common 701
stock at $6.15 per share granted
to two key employees pursuant to
the registrant's 1998 employee
stock option plan.

19. July 9, 1998 Common 122,416 shares issued to Regulation D
principals of American Home
Remodeling upon its acquisition
by the registrant.

20. July 9, 1998 Common 116,667 shares issued to Regulation D
principals of Five Star
Builders, Inc. upon its
acquisition by the registrant.

21. November 1, 1998 Options Incentive stock options to Section 4(2) or Rule
purchase 66,667 shares of common 701
stock at $6.90 per share granted
to Nelson E. Clemmens pursuant
to the registrant's 1998
employee stock option plan.

22. November 1, 1998 Warrants Warrants to purchase 41,667 Section 4(2)
shares of common stock at an
exercise price of $30.00 per
share, subject to adjustment,
expiring in November 2003,
issued to EBI Securities
Corporation in connection with
merger and acquisition and
related services rendered.

23. January 1, 1999 Common; 10% Cumulative 100,475 shares of common stock Regulation D
Convertible Series B Preferred and 400,000 shares of Series B
Stock preferred stock issued to
principals of Thomas
Construction, Inc. upon its
acquisition by the registrant.
</TABLE>

II-5

<PAGE>

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
24. January 1, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 116,667 shares of 701
common stock at $15.93 per share
granted to six key employees
pursuant to the registrant's
1998 employee stock option plan.

25. January 1, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 240,041 shares of 701
common stock at $15.93 per share
granted to 227 key employees
pursuant to the registrant's
1999 stock option plan.

26. January 5, 1999 Common 37,351 shares issued to Regulation D
principals of Precision Window
Mfg., Inc. upon its acquisition
by the registrant.

27. March 4, 1999 Common 29,255 shares issued to certain Regulation D
former principals of Leingang
Siding and Window, Inc. in
connection with earn-out
agreement entered into upon the
registrant's acquisition of
Leingang.

28. March 4, 1999 Common 29,031 shares issued to certain Regulation D
former principals of Thermal
Line Windows, L.L.P. in
connection with earn-out
agreement entered into upon the
registrant's acquisition of
Thermal Line.

29. March 4, 1999 Common 20,973 shares issued to certain Regulation D
former principals of North
Country Thermal Line, Inc. in
connection with earn-out
agreement entered into upon the
registrant's acquisition of
North Country.

30. March 23, 1999 Common 185,006 shares issued to a Regulation D
principal of Thermo-Shield Group
upon the registrant's
acquisition of Thermo-Shield.
</TABLE>

II-6

<PAGE>

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
31. March 23, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 33,334 shares of common 701
stock at $25.86 per share
granted to one key employee
pursuant to the registrant's
1999 stock option plan.

32. March 31, 1999 Common 2,899 shares issued to Some Day Section 4(2)
Corp. for consulting services
rendered.

33. April 19, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 16,000 shares of common 701
stock at $19.38 per share
granted to 9 key employees
pursuant to the registrant's
1999 stock option plan.

34. April 23, 1999 9.6% Cumulative Convertible 6,000 Series C shares sold to 2 Section 4(2) or
Series C Preferred Stock; accredited investors for $1,000 Regulation D
Warrant per share. Warrants to purchase
400,000 shares of common stock
at an exercise price of $18.00
per share, subject to
adjustment, expiring in April
2004, issued to two accredited
investors in connection with
sale of Series C.

35. May 10, 1999 Options Non-qualified stock options to Section 4(2) or Rule
purchase 7,500 shares of common 701
stock at $11.64 per share
granted to three outside
directors pursuant to the
registrant's 1999 stock option
plan.

36. June 30, 1999 Common 18,000 shares issued to Section 4(2)
principals of Primax Window Co.
in connection with earn-out
agreement entered into upon
acquisition of Primax.

37. July 8, 1999 Warrant Warrants to purchase 555,343 Section 4(2)
shares of common stock at an
exercise price of $0.03 per
share, subject to adjustment,
expiring in July 2007, issued to
one accredited investor.
</TABLE>

II-7

<PAGE>

<TABLE>
<CAPTION>
DATE TITLE AMOUNT EXEMPTION
---------------------- -------------------------------- -------------------------------- ---------------------
<C> <S> <C> <C> <C>
38. July 29, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 66,667 shares of common 701
stock at $11.43 per share
granted to Robin C. Edwardsen
pursuant to the registrant's
1999 stock option plan.

39. July 29, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 33,334 shares of common 701
stock at $11.43 per share
granted to John H. Cole pursuant
to the registrant's 1999 stock
option plan.

40. July 29, 1999 Options Incentive stock options to Section 4(2) or Rule
purchase 41,667 shares of common 701
stock at $11.43 per share
granted to James J. TerBeest
pursuant to the registrant's
1999 stock option plan.

41. July 29, 1999 Options Non-qualified stock options to Section 4(2) or Rule
purchase 20,000 shares of common 701
stock at $11.43 per share
granted to Robert D. Freibert
pursuant to the registrant's
1999 stock option plan.
</TABLE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS.

The following exhibits are filed as part of this registration statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------
<C> <C> <S>
1.1 -- Form of Underwriting Agreement
1.2 -- Form of Representatives' Warrant Agreement

3.1* -- Restated Certificate of Incorporation of the registrant

3.1(a)* -- Certificate of Amendment of Restated Certificate of Incorporation of the registrant

3.1(b) -- Second Certificate of Amendment of Restated Certificate of Incorporation of the registrant

3.2* -- Certificate of Designation of the registrant (9.6% Cumulative Convertible Series C Preferred
Stock)

3.2(a)* -- Certificate of Amendment of Certificate of Designation of the registrant (9.6% Cumulative
Convertible Series C Preferred Stock)

3.3* -- Amended and Restated By-Laws of the registrant

4.1* -- Specimen common stock certificate
</TABLE>

II-8
<PAGE>

10.1* -- ThermoView Industries, Inc. 1998 Employee Stock Option Plan

10.2* -- ThermoView Industries, Inc. 1999 Stock Option Plan

10.3* -- Stock Option Agreement, dated as of October 22, 1997, by and between Thermo-Tilt Window Company
and LD Capital, Inc.

10.4* -- Stock Option Agreement, effective as of October 22, 1997, by and between the registrant and
Stephen A. Hoffmann

10.5* -- Stock Option Agreement, dated as of October 22, 1997, by and between Thermo-Tilt Window Company
and Nelson E. Clemmens

10.6* -- Employment and Noncompetition Agreement, dated as of January 13, 1998, by and between
Thermo-Tilt Window Company and Stephen A. Hoffmann

10.7* -- First Amendment to Employment and Noncompetition Agreement, dated as of April 15, 1998, by and
between Thermo-Tilt Window Company and Stephen A. Hoffmann

10.8* -- Executive Employment Agreement, dated as of April 15, 1998, by and between the registrant and
Stephen A. Hoffmann

10.9* -- Stock Option Agreement, dated as of January 13, 1998, by and between the registrant and Stephen
A. Hoffmann

10.10* -- Option Certificate, dated as of April 15, 1998, by and between the registrant and Stephen A.
Hoffmann

10.11* -- Employment and Noncompetition Agreement, dated as of January 19, 1998, by and between
Thermo-Tilt Window Company and Nelson E. Clemmens

10.12* -- Stock Option Agreement, dated as of January 19, 1998, by and between Thermo-Tilt Window Company
and Nelson E. Clemmens

10.13* -- First Amendment to Employment and Noncompetition Agreement, dated as of April 15, 1998, by and
between Thermo-Tilt Window Company and Nelson E. Clemmens

10.14* -- Amended and Restated Employment and Noncompetition Agreement, dated as of April 15, 1998, by
and between the registrant and Nelson E. Clemmens

10.15* -- First Amendment to Amended and Restated Employment and Noncompetition Agreement, dated as of
November 1, 1998, by and between the registrant and Nelson E. Clemmens

10.16* -- Option Certificate, dated as of November 1, 1998, by and between the registrant and Nelson E.
Clemmens

10.17 -- Amended and Restated Employment and Noncompetition Agreement, dated as of June 26, 1999, by and
between the registrant and Richard E. Bowlds

10.18 -- Amended and Restated Employment and Noncompetition Agreement, dated as of July 28, 1999, by and
between the registrant and John H. Cole

10.19* -- Stock Option Agreement, dated as of April 15, 1998, by and between the registrant and John H.
Cole

10.20 -- Stock Option Agreement, dated as of July 29, 1999, by and between the registrant and John H.
Cole

10.21 -- Amended and Restated Employment and Noncompetition Agreement, dated as of July 28, 1999, by and
between the registrant and James J. TerBeest

10.22* -- Stock Option Agreement, dated as of April 20, 1998, by and between the registrant and James J.
TerBeest
</TABLE>

II-9

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------
<C> <C> <S>
10.23 -- Stock Option Agreement, dated as of July 29, 1999, by and between the registrant and James J.
TerBeest

10.24* -- Employment Agreement, dated as of April 29, 1998, by and between ThermoView Merger Corp. and
Charles L. Smith

10.25* -- Employment Agreement, dated as of January 5, 1999, by and between Precision Window Mfg., Inc.
and Charles L. Smith

10.26* -- Lease, dated as of November 1, 1998, by and between the registrant and Glenn Lyon Development
Corporation

10.27* -- Warrant, dated as of November 1, 1998, by and between the registrant and EBI Securities
Corporation

10.28* -- Loan Agreement, dated as of August 31, 1998, by and among the registrant, then-existing
subsidiaries of the registrant (collectively, "Borrowers") and PNC Bank, National Association
("PNC")

10.29* -- Joinder to Loan Documents and Amendment to Loan Documents (Thomas Construction, Inc.), dated as
of January 1, 1999, by and among Borrowers and PNC

10.30* -- Joinder to Loan Documents and Amendment to Loan Documents (Precision Window Mfg., Inc.), dated
as of January 5, 1999, by and among Borrowers and PNC

10.31* -- Joinder to Loan Documents and Amendment to Loan Documents (Thermo-Shield), dated as of July 8,
1999, by and among Borrowers and PNC

10.32* -- Securities Purchase Agreement, dated as of April 23, 1999, by and among the registrant, Brown
Simpson Strategic Growth Fund, Ltd ("Brown Ltd."). and Brown Simpson Strategic Growth Fund,
L.P. ("Brown L.P.", which together with Brown Ltd., "Brown Simpson")

10.33* -- Registration Rights Agreement, dated as of April 23, 1999, by and among the registrant and
Brown Simpson

10.34* -- Stock Purchase Warrant by and between the registrant and Brown L.P.

10.35* -- Amendments to Stock Purchase Warrant, by and between the registrant and Brown L.P.

10.36* -- Stock Purchase Warrant by and between the registrant and Brown Ltd.

10.37* -- Amendments to Stock Purchase Warrant, by and between the registrant and Brown Ltd.

10.38* -- Securities Purchase Agreement, dated as of July 8, 1999, between the registrant and GE Capital
Equity Investments, Inc.

10.39* -- Stock Purchase Warrant, by and between the registrant and GE Capital Equity Investments, Inc.

10.40* -- Form of Management Indemnification Agreement

10.41* -- Agreement and Plan of Merger, dated as of April 23, 1998, by and among the registrant,
ThermoView Merger Corp., American Home Developers Co., Inc. and the Shareholders of American
Home Developers Co., Inc.

10.42* -- Agreement and Plan of Merger, dated as of April 29, 1998, by and among the registrant,
ThermoView Merger Corp., Primax Window Co. and the Shareholders of Primax Window Co.

10.43* -- Lease, dated April 29, 1998, between Charles L. Smith and Primax Window Co.
</TABLE>

II-10

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------
<C> <C> <S>
10.44* -- Agreement and Plan of Merger, dated as of April 29, 1998, by and among the registrant,
ThermoView Merger Corp., Rolox of Wichita, Inc. and the Shareholders of Rolox of Wichita,
Inc.

10.45* -- Lease, dated April 29, 1998, by and between Robert L. Cox and Rolox, Inc.

10.46* -- Lease, dated April 29, 1998, by and between Robert L. Cox, Robert L. Cox II and Rolox, Inc.

10.47* -- Lease, dated April 29, 1998, by and between L & D Partnership and Rolox, Inc.

10.48* -- Lease, dated April 29, 1998, by and between LBD, L.L.C. and Rolox, Inc.

10.49* -- Asset Purchase Agreement, dated May 27, 1998, by and between TD Windows, Inc. and Allhom Eagles
Windows & Doors, Inc.

10.50* -- Agreement and Plan of Merger, dated as of July 9, 1998, by and among the registrant,
ThermoView/AHR Merger Corp., American Home Remodeling, Pacific Exteriors, Incorporated and
the Shareholders of American Home Remodeling and Pacific Exteriors, Incorporated.

10.51* -- Agreement and Plan of Merger, dated as of July 9, 1998, by and among the registrant,
ThermoView/FSB Merger Corp., Five Star Builders, Inc. and the Shareholders of Five Star
Builders, Inc.

10.52* -- Asset Purchase Agreement, dated July 21, 1998, by and among the registrant, NuView Industries,
Inc. and Douglas E. Miles.

10.53* -- Stock Purchase Agreement, dated August 14, 1998, by and between Alvin W. Leingang and the
registrant.

10.54* -- Net Lease, dated January 1, 1997, between Al Leingang and Leingang Siding and Window, Inc.

10.55* -- First Amendment to Lease, dated as of August 14, 1998, by and between Al Leingang and Leingang
Siding and Window, Inc.

10.56* -- Lease, dated August 16, 1995, between Wayne Kluck and Leingang Siding and Window, Inc.

10.57* -- First Amendment to Lease, dated as of August 14, 1998, by and between Alvin W. Leingang and
Leingang Siding and Windows, Inc.

10.58* -- Stock Purchase Agreement, dated August 14, 1998, by and among Alvin W. Leingang, Steven B. Hoyt
and the registrant.

10.59* -- Standard Commercial Lease, dated January 2, 1996, by and between Alvin W. Leingang and Thermal
Line Windows, L.L.P.

10.60* -- First Amendment to Lease, dated as of August 14, 1998, by and between Alvin W. Leingang and
Thermal Line Windows, L.L.P.

10.61* -- Equipment Lease, dated as of January 2, 1996, by and between North Country Thermal Line, Inc.
and Thermal Line Windows, L.L.P.

10.62* -- First Amendment to Equipment Lease, dated as of August 14, 1998, by and between North Country
Thermal Line, Inc. and Thermal Line Windows, L.L.P.

10.63* -- Equipment Lease, dated as of January 2, 1996, by and between North Country Thermal Line, Inc.
and Thermal Line Windows, L.L.P.

10.64* -- First Amendment to Equipment Lease, dated as of August 14, 1998, by and between North Country
Thermal Line, Inc. and Thermal Line Windows, L.L.P.
</TABLE>

II-11

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- -----------------------------------------------------------------------------------------------
<C> <C> <S>
10.65* -- Equipment Lease, dated as of January 2, 1996, by and between Alvin W. Leingang and Thermal Line
Windows, L.L.P.

10.66* -- Amendment to Equipment Lease, dated as of January 2, 1997, by and between Alvin W. Leingang and
Thermal Line Windows, L.L.P.

10.67* -- Second Amendment to Equipment Lease, dated as of August 14, 1998, by and between Alvin W.
Leingang and Thermal Line Windows, L.L.P.

10.68* -- Asset Purchase Agreement, dated November 18, 1998, by and between Thermal Line Windows, L.L.P.
and North Country Thermal Line, Inc.

10.69* -- Stock Purchase Agreement, dated January 5, 1999, by and among Charles L. Smith, Robert L. Cox,
Richard Ahrendts and the registrant.

10.70* -- Non-Negotiable Promissory Note, dated January 5, 1999, from the registrant to and in favor of
Charles L. Smith.

10.71* -- Non-Negotiable Promissory Note, dated January 5, 1999, from the registrant to and in favor of
Robert L. Cox.

10.72* -- Stock Purchase Agreement, dated December 22, 1998, by and between Rodney H. Thomas and the
registrant.

10.73* -- Furniture and Fixture Lease, dated as of January 1, 1999, by and between Investors Property
Holding I, LLC and Thomas Construction, Inc.

10.74* -- Lease, dated December 30, 1996, by and among Rodney H. Thomas, Dawn S. Thomas and the
registrant

10.75* -- Stock Purchase Agreement, dated March 23, 1999, by and among Joel S. Kron, Jonathan D. Kron and
the registrant

10.76* -- Asset Purchase Agreement, dated March 23, 1999, by and between Thermo-Shield Company, Inc.,
Thermo-Shield of America (Wisconsin), Inc. and the registrant

10.77* -- Lease, dated November 3, 1997, by and between JSK Properties, L.L.C. and the registrant

16.1* -- Letter from Singer, Lewak, Greenbaum & Goldstein, LLP regarding change in independent
accountants

21.1* -- Subsidiaries of the registrant.

23.1 -- Consent of Stites & Harbison (included in Exhibit 5.1)

23.2 -- Consent of Ernst & Young LLP

23.3 -- Consent of Singer, Lewak, Greenbaum & Goldstein, LLP

23.4 -- Consent of Rodney W. Melby

24.1* -- Powers of attorney

27.1 -- Financial Data Schedule
</TABLE>

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

* Previously filed.

(b) FINANCIAL STATEMENT SCHEDULES.

All financial statement schedules are omitted, as the required information
is inapplicable or the information is present in the financial statements and
related notes included in the prospectus.

II-12
<PAGE>
ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

II-13
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Louisville, Commonwealth of Kentucky, on the 30th day of September, 1999.

THERMOVIEW INDUSTRIES, INC.

By: /s/ STEPHEN A. HOFFMANN
-----------------------------------------
Stephen A. Hoffmann,
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
Chairman of the Board and
/s/ STEPHEN A. HOFFMANN Chief Executive Officer
- ------------------------------ (principal executive September 30, 1999
Stephen A. Hoffmann officer)

RICHARD E. BOWLDS* Vice Chairman of the Board
- ------------------------------ and Executive Vice September 30, 1999
Richard E. Bowlds President-Acquisitions

NELSON E. CLEMMENS*
- ------------------------------ President and Director September 30, 1999
Nelson E. Clemmens

CHARLES L. SMITH*
- ------------------------------ Chief Operating Officer September 30, 1999
Charles L. Smith

JOHN H. COLE* Chief Financial Officer
- ------------------------------ (principal financial and September 30, 1999
John H. Cole accounting officer)

J. SHERMAN HENDERSON, III*
- ------------------------------ Director September 30, 1999
J. Sherman Henderson, III

DELORES P. KESLER*
- ------------------------------ Director September 30, 1999
Delores P. Kesler
</TABLE>

II-14
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
MICHAEL A. TOAL*
- ------------------------------ Director September 30, 1999
Michael A. Toal
</TABLE>

<TABLE>
<S> <C> <C> <C>
*By: /s/ STEPHEN A. HOFFMANN
-------------------------
Stephen A. Hoffmann
ATTORNEY-IN-FACT
</TABLE>

II-15
<PAGE>
INDEX TO EXHIBITS

1.2 -- Form of Representatives' Warrant Agreement

3.1* -- Restated Certificate of Incorporation of the registrant

3.1(a)* -- Certificate of Amendment of Restated Certificate of Incorporation of the registrant

3.1(b) -- Second Certificate of Amendment of Restated Certificate of Incorporation of the registrant

3.2* -- Certificate of Designation of the registrant (9.6% Cumulative Convertible Series C Preferred
Stock)

3.2(a)* -- Certificate of Amendment of Certificate of Designation of the registrant (9.6% Cumulative
Convertible Series C Preferred Stock)

3.3* -- Amended and Restated By-Laws of the registrant

4.1* -- Specimen common stock certificate

5.1 -- Opinion and consent of Stites & Harbison

10.1* -- ThermoView Industries, Inc. 1998 Employee Stock Option Plan

10.2* -- ThermoView Industries, Inc. 1999 Stock Option Plan

10.3* -- Stock Option Agreement, dated as of October 22, 1997, by and between Thermo-Tilt Window Company
and LD Capital, Inc.

10.4* -- Stock Option Agreement, effective as of October 22, 1997, by and between the registrant and
Stephen A. Hoffmann

10.5* -- Stock Option Agreement, dated as of October 22, 1997, by and between Thermo-Tilt Window Company
and Nelson E. Clemmens

10.6* -- Employment and Noncompetition Agreement, dated as of January 13, 1998, by and between
Thermo-Tilt Window Company and Stephen A. Hoffmann

10.7* -- First Amendment to Employment and Noncompetition Agreement, dated as of April 15, 1998, by and
between Thermo-Tilt Window Company and Stephen A. Hoffmann

10.8* -- Executive Employment Agreement, dated as of April 15, 1998, by and between the registrant and
Stephen A. Hoffmann

10.9* -- Amended and Restated Stock Option Agreement, dated as of January 13, 1998, by and between the
registrant and Stephen A. Hoffmann

10.10* -- Option Certificate, dated as of April 15, 1998, by and between the registrant and Stephen A.
Hoffmann

10.11* -- Employment and Noncompetition Agreement, dated as of January 19, 1998, by and between
Thermo-Tilt Window Company and Nelson E. Clemmens

10.12* -- Stock Option Agreement, dated as of January 19, 1998, by and between Thermo-Tilt Window Company
and Nelson E. Clemmens

10.13* -- First Amendment to Employment and Noncompetition Agreement, dated as of April 15, 1998, by and
between Thermo-Tilt Window Company and Nelson E. Clemmens

10.14* -- Amended and Restated Employment and Noncompetition Agreement, dated as of April 15, 1998, by and
between the registrant and Nelson E. Clemmens
</TABLE>

E-1
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- ------------------------------------------------------------------------------------------------
<C> <C> <S>
10.15* -- First Amendment to Amended and Restated Employment and Noncompetition Agreement, dated as of
November 1, 1998, by and between the registrant and Nelson E. Clemmens

10.16* -- Option Certificate, dated as of November 1, 1998, by and between the registrant and Nelson E.
Clemmens

10.17 -- Amended and Restated Employment and Noncompetition Agreement, dated as of June 26, 1999, by and
between the registrant and Richard E. Bowlds

10.18 -- Amended and Restated Employment and Noncompetition Agreement, dated as of July 28, 1999, by and
between the registrant and John H. Cole

10.19* -- Stock Option Agreement, dated as of April 15, 1998, by and between the registrant and John H.
Cole

10.20 -- Stock Option Agreement, dated as of July 29, 1999, by and between the registrant and John H.
Cole

10.21 -- Amended and Restated Employment and Noncompetition Agreement, dated as of July 28, 1999 by and
between the registrant and James J. TerBeest

10.22* -- Stock Option Agreement, dated as of April 20, 1998, by and between the registrant and James J.
TerBeest

10.23 -- Stock Option Agreement dated as of July 29, 1999, by and between the registrant and James J.
TerBeest.