MCCLENDON TRANSPORTATION GROUP INC
10SB12G, 2000-08-07
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   Form 10-SB



      GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
       Under Section 12(b) or (g) of the Securities Exchange Act of 1934

                       McClendon Transportation Group, Inc.
                      ------------------------------------
                     (Name of Small Business in its Charter)

             Nevada                                       22-3714235
------------------------------------                 ------------------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

              121 South Lafayette Street, Lafayette, Alabama 36362
              ----------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number (334-864-9311)

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

        Title of each class                    Name of each exchange on which
        to be to registered                    each class is to be registered

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

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

           Securities to be registered under Section 12(g) of the Act:

                          Common Stock par value $.001
                          ----------------------------
                                (Title of class)

                          ----------------------------
                                (Title of class)


<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE

                                     PART I

ITEM 1.   Description of Business                                            1

ITEM 2.   Management's Discussion and Analysis or Plan of Operation          4

ITEM 3.   Description of Property                                            6

ITEM 4.   Security Ownership of Certain Beneficial Owners and Management     7

ITEM 5.   Directors, Executive Officers, Promoters and Control Persons       7

ITEM 6.   Executive Compensation                                             8

ITEM 7.   Certain Relationships and Related Transactions                     8

ITEM 8.   Description of Securities                                          8


                                     PART II

ITEM 1.   Market Price of and Dividends on the Registrant's Common
            Equity and Other Stockholder Matters                             9

ITEM 2.   Legal Proceedings                                                  9

ITEM 3.   Changes in and Disagreements with Accountants                      9

ITEM 4.   Recent Sales of Unregistered Securities                            10

ITEM 5.   Indemnification of Directors and Officers                          10

                                    PART F/S                                 10

                                    PART III

ITEM 1.   Index to Exhibits                                                  10

ITEM 2.   Description of Exhibits                                            10

Signature Page                                                               11




                                        i
<PAGE>


                                     PART I

ITEM 1.  Description of Business.

         McClendon Transportation Group, Inc. (Transportation") was incorporated
in the State of Delaware on February 20, 1996 as RDA Services,  Inc. ("RDA"). In
November,  1999,  RDA acquired  100% of the assets of Glenn  McClendon  Trucking
Company, Inc., an Alabama corporation ("McClendon Trucking") in a reverse merger
transaction  and RDA changed its name to  McClendon  Transportation  Group,  Inc
("Transportation").  In March, 2000 Transportation  merged into its wholly owned
subsidiary,  a Nevada  corporation  with the same name.  The merger was effected
solely for the purpose of changing  the  Company's  state of domicile to Nevada.
Transportation  has no operations and acts as a holding company.  Operations are
conducted  through  Transportation's  subsidiary,  McClendon  Trucking  . Unless
otherwise  indicated  herein,  all  references to the  "Company" or  "McClendon"
include both Transportation and McClendon Trucking.

         The Company operates a medium-haul, irregular route, truckload carrying
business of general commodities. The McClendon Trucking fleet transports freight
primarily throughout the eastern United States.

         Headquartered in LaFayette,  Alabama,  McClendon Trucking grew from one
truck at inception in 1933 to today's fleet of  approximately  200 company owned
trucks, 900 dry-van trailers,  three maintenance and storage terminals, and over
230 owner-operator  contract drivers,  servicing customers throughout the United
States.  McClendon has affiliations  with 147 trucking  companies which gives us
access to over 5,000 additional trucks nationwide. McClendon Trucking offers dry
load  transportation  services in the  truckload  carrier  market  primarily  to
high-volume, time-sensitive customers.

         We have secured and maintained  strong  customer  relationships  by (1)
focusing on technology;  (2) operating premium, late model equipment; (3) hiring
experienced  drivers;  and (4) maintaining an efficient cost structure.  We have
written  contracts with most of our customers.  The contracts  generally require
the  customer  to use  McClendon  Trucking  for a  specified  minimum  amount of
shipments each year.

     Through  the use of our  satellite-based  communication  system,  which  is
complemented by our fully  integrated  mainframe  computer  system,  dispatchers
monitor the location and delivery  schedules of all  shipments  and equipment to
coordinate  routes and maximize  utilization  of our equipment and drivers.  Our
electronic data  interchange  systems enable us to exchange data directly with a
third party or with a customer's freight payment agent or bank.

     Our  productive,  cost-efficient  use of  technology  is a  differentiating
factor in our market share  battle.  We utilize a satellite  based  tracking and
communications  system to monitor  operating  efficiency,  fleet  management and
customer  service and to maintain direct  communication  between our drivers and
fleet managers.  Our electronic data interchange system allows customers and the
company to communicate  electronically providing real-time information flow such
as delivery, local distribution, and account payment instructions; customers can
receive   updates  on  cargo  position,   estimated   delivery  time  and  other
information.  In addition,  we monitor engine idle time, speed,  performance and
other factors affecting operating efficiency.

McClendon's driver training and safety program

     We mandate a stringent  driver  training  and safety  program to ensure our
drivers are  well-trained,  carefully  screened and commercial  drivers' license
qualified.  Our program has included  pre-employment  and periodic  drug testing
since 1987.

                                       1
<PAGE>

McClendon focuses on customer service

         McClendon  Trucking  organized customer service teams that are assigned
geographically  and connect the Sales Force and Operations  Division directly to
the customer. The customer service teams offer our customers the following:

         o        Customer  service  24-hours  a day,  7  days  a  week  through
                  toll-free  WATS, with the flexibility and authority to provide
                  immediate response.

         o        Access to on-line  dispatch  and  satellite  tracking  systems
                  centralized into McClendon  Trucking's  mainframe  information
                  system,  to  give  the  customer  instantaneous  responses  to
                  questions on virtually any aspect of their shipment.

         o        Modern  equipment  that is well  maintained  and  backed  by a
                  preventative maintenance program.

Our Growth Strategy

         Our current strategy is to capitalize on the trends toward core carrier
consolidation,  private fleet  conversions,  dedicated  fleets and  just-in-time
(time definite) supply-chain inventory management. Core carrier consolidation is
a result  of  shippers  attempting  to lower  costs by  reducing  the  number of
carriers used.  Private fleet  conversions are taking place due to the number of
smaller  carriers  that  cannot  compete  on a  long-term  basis with the larger
carriers.  The  dedicated  trend  occurred  due to  shippers  choosing to use an
outside provider for trucking service needed on demand.  The trend most directly
affecting McClendon Trucking is just-in-time inventory management. An increasing
number of  companies  are having  inventory  arrive just in time in an effort to
lower warehousing  costs.  Increasing the  owner-operator  segment of our fleet,
coupled with the strategic acquisition of contract carriers will allow McClendon
Trucking to leverage  its 98% on time  performance  and  service  reputation  in
penetration of this growth segment of the market.

         Our strategy is to identify and acquire  mid-size  trucking  companies,
primarily  with annual  revenues  between $10  million  and $100  million,  that
possess  strong market  positions,  sound  management and a commitment to a high
level of  service  and  quality.  We have no  assurance  that we will be able to
identify  appropriate  candidates or that such  candidates  will be available on
terms  acceptable  to us.  In the  alternative,  even if we do  locate  suitable
candidates,  we may not have the  capital to finance  the  acquisition  on terms
agreeable to us, if at all.

CONCERNS AND CONSIDERATIONS ASSOCIATED WITH OUR BUSINESS

McClendon Trucking is dependent on fuel availability

         Motor  carrier  service is dependent  upon the  availability  of diesel
fuel.  Historically,  our fuel  expenses have been at or below  industry  norms.
McClendon Trucking  continually  monitors fuel usage, miles per gallon, cost per
mile and cost per gallon.  We have not experienced any difficulty in maintaining
fuel  supplies  sufficient  to support  our  operations.  Shortages  of fuel and
rationing  of petroleum  products  could have a material  adverse  effect on our
operations and profitability. We are protected by a fuel surcharge clause in our
contract,  and in the event of  increases  in fuel prices or fuel tax rates,  we
pass these increases on to our customers.

                                       2
<PAGE>

Competition in the trucking industry

         The trucking industry is highly  competitive and fragmented.  McClendon
Trucking  competes  primarily with other dry-load  contract  carriers,  internal
shipping conducted by existing and potential  customers and, to a lesser extent,
railroads.  Deregulation  of the trucking  industry during the 1980's created an
influx of new  truckload  carriers  which,  along with  certain  other  factors,
continues  to  create  substantial  downward  pressure  on the  industry's  rate
structure. Competition for the freight transported is based primarily on service
and  efficiency  and, to a lesser  degree,  on freight  rates.  Our revenues and
operating results will be adversely affected if we fail to compete successfully

Our business is subject to governmental regulation

         The  trucking   industry  is  subject  to   regulatory   oversight  and
legislative  changes that can affect the  economics of the industry by requiring
certain  operating  practices  or  influencing  the demand for, and the costs of
providing  services to shippers.  The Intermodal  Surface  Transportation  Board
(ISTB) and various state  agencies have broad powers,  generally  governing such
matters as authority to engage in motor carrier  operations,  rates and charges,
accounting  systems,  certain  mergers,   consolidations  and  acquisitions  and
periodic financial reporting.

         The Federal Motor  Carrier Act of 1980  commenced a program to increase
competition  among motor carriers and to diminish the level of regulation in the
industry. Following this deregulation,  applicants have more easily been able to
obtain  operating  authority,  and  interstate  motor carriers such as McClendon
Trucking  have been able to  implement  certain  rate  changes  without  federal
approval.

         We are, and will continue to be, subject to intense  competition in our
targeted markets. Significant competitive factors which will affect future sales
in the marketplace include regulatory approvals, performance and pricing.

         We are  required  to  adhere  to a wide  variety  of other  regulations
governing  the  operation of our business.  Noncompliance  with local,  state or
federal  requirements  can  result in  serious  penalties  that  could  harm our
business.  Although  we  believe  that our  operations  comply  with  applicable
regulations,  there can be no  assurance  that  subsequent  adoption  of laws or
interpretations  of  existing  laws will not  regulate,  restrict  or  otherwise
adversely affect our business.

OUR EMPLOYEES

         We currently have 247 full-time employees. The personnel is distributed
as follows: officers - 6; managers - 9; clerical - 75; salesmen - 3; mechanics -
31; drivers -123.

ADDITIONAL INFORMATION

         We are  subject to the  informational  requirements  of the  Securities
Exchange  Act of 1934 (the  "Exchange  Act") that  requires us to file  reports,
proxy  statements  and  other  information  with  the  Securities  and  Exchange
Commission.  Such  reports,  proxy  statements  and  other  information  may  be
inspected at public  reference  facilities of the Commission at Judiciary Plaza,
450 Fifth Street N.W., Washington D.C. 20549;  Northwest Atrium Center, 500 West
Madison Street,  Suite 1400, Chicago,  Illinois 60661; 7 World Trade Center, New
York, New York,  10048;  and 5670 Wilshire  Boulevard,  Los Angeles,  California
90036. Copies of such material can be obtained from the Public Reference Section
of the Commission at Judiciary  Plaza, 450 Fifth Street N.W.,  Washington,  D.C.
20549 at prescribed rates.

                                       3
<PAGE>

ITEM 2.  Management's Discussion and Analysis or Plan of Operation.

         The following  discussion  and analysis of our financial  condition and
results  of  operations  should  be  read  in  conjunction  with  the  financial
statements  and the  related  notes  appearing  subsequently  in Part F/S.  This
discussion contains  forward-looking  statements based upon current expectations
that  involve  substantial  risks  and  uncertainties.  You can  identify  these
statements  by   forward-looking   words  such  as  "may,"   "will,"   "expect,"
"anticipate,"  "believe," "estimate" and "continue" or similar words. You should
be aware that our actual  results and the timing of certain  events could differ
materially from those anticipated in these forward-looking  statements and could
have an adverse  effect on our  business,  results of  operations  and financial
conditions.

         The Company cautions readers that any such  forward-looking  statements
made  by or  on  behalf  of  the  Company  are  based  on  management's  current
expectations and beliefs,  but are not guarantees of future performance.  Actual
results  could  differ  materially  from  those  expressed  or  implied  in  the
forward-looking statements.

         The  following  financial  analysis  reflects the  operations  of Glenn
McClendon  Trucking  Company  Inc.  since prior to the reverse  merger RDA was a
shell structure and had no assets or liabilities.

RESULTS OF OPERATIONS

         Total  revenues for year ended December 31, 1999 compared to year ended
December 31, 1998

         Total  revenues  decreased  from  $61,748,800 in 1998 to $48,448,406 in
1999.  This decrease in revenues  resulted  primarily  from the shrinking of the
operating  territory  from all 48 contiguous  states at the beginning of 1998 to
approximately  26 states in the Midwest,  East and Southeast at the end of 1999.
This resulting change reduced the total fleet size,  customer base and resulting
revenues.  This decrease was made to help increase the fleet  utilization in the
Company's more profitable traffic lanes.

         Cost of Sales (operating  expenses)  decreased from $62,827,975 in 1998
to $48,547,127 in 1999, a decrease of $14,280,848.  This decrease  resulted from
the reduced  operating  territories  and the  resulting  increase in total fleet
utilization

         Salaries, Wages and Benefit Expenses decreased from $19,581,373 in 1998
to $13,159,108  in 1999, a decrease of  $6,422,265.  This decrease was primarily
due to two  factors.  The main factor is the  previously  mentioned  decrease in
fleet size.  This  resulted in a decrease in both the number of company  drivers
and support personnel.  The second factor is the continued shifting from company
drivers who are  employees to lease  drivers who are not  employees;  therefore,
their compensation is not reflected as salaries.

         Operations and Maintenance  Expense  decreased from $12,052,533 in 1998
to  $8,024,183 in 1999, a decrease of  $4,028,350.  This decrease is a result of
the decreased number of tractors in the fleet. This decrease in the fleet caused
a reduction in fuel expense,  repairs and  maintenance  expense,  and recruiting
expense.  These expenses represent the majority of the variable expenses and are
directly linked to the number of tractors in service.

                                       4
<PAGE>

         Taxes  and  License  Expenses  decreased  from  $1,360,007  in  1998 to
$885,851 in 1999, a decrease of $474,156.  This item is composed mainly of state
and  federal  fuel  taxes  as well as the tag  expense  for the  tractors.  This
decrease is a direct result of the decrease in the number of tractors.

         Insurance  and Claims  Expense  decreased  from  $3,773,905  in 1998 to
$2,537,758 in 1999, a decrease of $1,236,147.  This decrease is primarily due to
a  reduction  in actual  losses.  The  Company  is self-  insured  for the first
$100,000 on all liability  and cargo claims.  More  stringent  hiring  practices
instituted in 1997 as well as other safety  policy  changes  implemented  in the
past several  years  combined to  dramatically  decrease  the actual  number and
severity of accidents and losses in the current year.

         Communications and Utilities Expense decreased from $884,696 in 1998 to
$623,083  in 1999,  a  decrease  of  $261,613.  Approximately  $132,000  of this
decrease is related to decreased satellite tracking costs on the tractors.  This
decrease in costs  resulted  from the  decrease in the number of  tractors.  The
remaining  decrease  resulted  from  the  overall  decrease  in the cost of long
distance service.

         Depreciation Expense decreased from $5,357,246 in 1998 to $3,535,824 in
1999, a decrease of  $1,821,422.  This decrease is primarily due to the decrease
in Company  owned  tractors from 455 units at the beginning of 1998 to 178 units
at the end of 1999  combined with an  approximate  decrease of 330 Company owned
trailers over the same time period.

         Rent and Purchased Transportation Expense increased from $19,474,901 in
1998 to $20,465,177 in 1999, an increase of $990,276.  The largest  component of
this category is the expense for leased drivers. These drivers are not employees
of the Company and own their own tractors and pay their own maintenance and fuel
bills. The number of leased drivers  increased from 157 at the beginning of 1998
to 201 at the end of 1999.

         During 1999 the Company had a $683,857  gain on the disposal of assets.
This  resulted  from the sale of over 60 tractors and over 250  trailers  during
1999.

         Interest  Expense  decreased  from  $2,660,403 in 1998 to $1,786,011 in
1999,  a decrease  of  $874,392.  This  decrease  was  accomplished  through the
decrease  in the  outstanding  loan  balance  with  Navistar on  equipment  from
$17,243,699  at the  beginning  of 1998 to  $13,861,824  at December 31, 1998 to
$8,927,960 at December 31, 1999. This reduction was achieved through the sale of
equipment and the  retirement of the related debt. The majority of the equipment
was sold for a price that was at or near the debt balance owed on it.

         During 1999 the Company was able to book a  settlement  with its former
liability insurance carrier, Carolina Casualty. This one-time settlement allowed
the Company to write off  non-cash  insurance  liability  reserves  and accounts
payable balances resulting in an extraordinary gain of $1,106,951.

         Net cash  decreased  from  $512,298 at December  31, 1998 to $20,290 at
December 31, 1999, a decrease of $492,008.  Working  Capital was at a deficit of
$16,818,412  at December  31, 1998 as  compared  to a deficit of  $7,798,394  at
December 31, 1999, a decrease in deficit of $9,020,018.  The Company's source of
funding  operations  included  an  operating  line  of  credit  through  Systran
Financial Services  Corporation  secured by the Company's accounts receivable as
well as loans through  Columbus Bank and trust Company  secured by various other
assets.

         Earnings per share in 1999 were ($.33)  before  extraordinary  gain and
($.11) per share after  extraordinary  gain.

                                       5
<PAGE>

         The Company  currently  believes that it has adequate cash resources to
fund current operations. There can be no assurance,  however, that the Company's
actual  capital needs will not exceed  anticipated  levels,  or that the Company
will generate sufficient revenues to fund its operations in the absence of other
sources.  To finance its growth  plan,  the Company is  considering  a number of
alternatives,  including additional equity financing.  There can be no assurance
that any such  transactions will be available at terms acceptable to the Company
or that the  Company  will have  sufficient  working  capital to fund its growth
plan.

Our operations were not affected by Year 2000 compliance issues

         To date, we have not been affected by Year 2000 compliance problems. We
conducted a  comprehensive  Year 2000  initiative  with  respect to our internal
business-critical  systems. This initiative  encompassed  information technology
systems and  applications,  as well as  non-information  technology  systems and
equipment with embedded technology,  such as fax machines and telephone systems.
None of  these  systems  were  affected  by the  passage  into  the  Year  2000.
Nonetheless,  we have no assurance that we will not experience  isolated  system
failures as a result of customer or other third party technical problems. If so,
our business  could be harmed and we could suffer  disruptions in our ability to
schedule or receive payment for our services.

ITEM 3.  Description of Property.

         The corporate  offices for McClendon  Trucking are located at 121 South
Lafayette Street,  Lafayette,  AL 36362. The telephone number is (334) 864-9311.
The  offices  are  leased for a  five-year  term from  January  1, 2000  through
December 31, 2005 at a monthly rental of $11,000. (See "Certain Relationship and
Related Transactions")

         Our  operations   center,   located  at  810  South  LaFayette  Street,
LaFayette,  Alabama, is our main maintenance terminal and training facility. The
property  is  collateral  for a  $480,000  note to be paid in  installments  and
maturing on October 1, 2004.

         We own two  additional  maintenance  facilities  at 1516  Alduc  Court,
Montgomery,   Alabama  and  33  Market  Street,  Charleston,   Tennessee.  These
facilities are pledged to Navistar Financial  Corporation as collateral security
for a loan.

         Our  properties  at  the  following   locations  are  for  sale.  These
properties were pledged as security for lines of credit,  and upon sale, the net
proceeds after expenses will be utilized to satisfy the credit lines:

        1.  U.S. #17 and A1A (S.R. #200), Yulee, Florida
        2.  Lawrence Country Road #48 (Route 1, Box 165-A), Courtland, Alabama
        3.  Northern By-pass, Montgomery, Alabama
        4.  Albany, Georgia (under sale)
        5.  Georgia Highway No. 194, Durand, Georgia
        6.  Findowrie Street (Route 3, Box 712), Eden, North Carolina
        7.  102 Anderson Drive, US Highway 76 By-pass, Laurens, South Carolina

These parcels were operated as terminals for our trucks when  alternate  parking
accommodations were not available. However, there is no need for such facilities
at the present time.

                                       6
<PAGE>

ITEM 4.  Security Ownership of Certain Beneficial Owners and Management.

         The  following  table  sets  forth,  as  of  March  31,  2000,  certain
information  regarding  beneficial  ownership  of the common  stock by (i) those
persons   beneficially   holding   more   than   five   percent   of   McClendon
Transportation's  common stock,  (ii) McClendon  Transportation's  directors who
beneficially  own shares of the common  stock,  (iii) the officers  named in the
Compensation table below, and (iv) all of McClendon  Transportation's  directors
and officers as a group.

Name and Address                   Amount  of Shares                  Percent
Of Beneficial Owner (1)           of Beneficial Owner                 of Class
-----------------------           -------------------                 --------

Hugh F. McClendon                      7,795,000                       39.9%

James W. McClendon                     7,795,000                       39.9%

H. Glenn Scarborough                     -0-                           -0-

All Officers and Directors
As a Group (3 persons)                15,590,000                       79.8%
--------------------
(1) For purposes of this table, a person is considered to "beneficially own" any
shares with respect to which he/she  directly or indirectly has or shares voting
or  investment  power  or of  which  he or she  has the  right  to  acquire  the
beneficial  ownership within 60 days. Unless otherwise  indicated and subject to
applicable  community  property  law,  voting  power  and  investment  power are
exercised  solely by the person named above or shared with members of his or her
household.

ITEM 5.  Directors, Executive Officers, Promoters and Control Persons.

         The McClendon Transportation directors and executive officers and their
ages as of the date of this document are as follows:

 Name                     Age       Position
 ----                     ---       --------
Hugh F. McClendon         42        Chairman, Chief Executive Officer
James W. McClendon        40        President, Chief Operating Officer, Director
H. Glenn Scarborough      35        Vice President of Finance, Director

Biographical Information

Hugh F.  McClendon  --Hugh F. McClendon has been Chairman of the Board and Chief
Executive  Officer for the past 6 years.  He formerly  served as Executive  Vice
President.  He began his career with McClendon  Trucking in 1979. Mr.  McClendon
has served on the Board of Directors of the Alabama Trucking Association and the
Truckload  Carriers  Conference  of  the  American  Trucking  Association.   Mr.
McClendon received his B.A. from Auburn University in 1979.

James W. McClendon  --James W. McClendon has been President and Chief  Operating
Officer  since 1995 and Vice  Chairman of the Board since 1993. He has been with
McClendon  Trucking since 1980. He formerly  served as  Secretary-Treasurer  and
Vice President of Administration from 1983-1988. Mr. McClendon received his B.A.
from Auburn University in 1980.

H. Glenn Scarborough --Mr.  Scarborough has been Vice President of Finance since
1998.  Mr.  Scarborough is a CPA who began his career in public  accounting.  He
also worked in the hospitality,  manufacturing and telecommunications industries
before joining McClendon in December,  1998. Mr.  Scarborough  received his B.A.
from the University of Georgia in 1986.

                                       7
<PAGE>

ITEM 6.  Executive Compensation.

         Compensation for the officers and directors of the Company is presented
below. There are no other benefits or compensation provided.

Aggregated Option Exercises in last Fiscal year and Fiscal year-end Option Value

         The Company  does not have any officer or director  stock  option plan.
The Company intends to incorporate one after a public offering. The Company does
not  have  an  employee  stock  option  plan  (ESOP).  The  Company  intends  to
incorporate one after a public offering.

         The following table shows all the cash compensation paid by the Company
as well as certain other compensation paid during the fiscal years indicated, to
the President and others who received total annual salary and bonus in excess of
$100,000.

<TABLE>
<CAPTION>

                                                                       Long Term Compensation
                                            -----------------------------------------------------------------------
                      Annual compensation                      Awards                                Payouts
                      -------------------   ------------------------------------------------   --------------------
(a)                      (b)      (c)        (d)       (e)               (f)          (g)        (h)        (i)
                                                     Other
Name and                                             Annual           Restricted               All Other
Principal                                            Compen             Stock        Options     LTIP      Compen-
Position                 Year   Salary      Bonus    sation($)         Awards($)       SARs     Payouts($) sation($)
--------------------------------------------------------------------------------------------------------------------
<S>                      <C>    <C>          <C>
Hugh F. McClendon
Chairman, CEO            1999   $403,266     N/A---------------------------------------------------------------------

James W. McClendon
President, COO           1999    144,373     N/A---------------------------------------------------------------------

H. Glenn Scarborough
Vice President-Finance   1999    102,680     N/A---------------------------------------------------------------------
</TABLE>

ITEM 7.  Certain Relationships and Related Transactions.

         The Company's offices located at 121 South LaFayette Street, LaFayette,
Alabama 36862 are leased  pursuant to an agreement with  McClendon  Enterprises.
McClendon  Enterprises  is an  Alabama  partnership  owned  by  James  and  Hugh
McClendon.  The rent of $11,000 per month is  consistent  with market  rates for
similar properties in the area.

ITEM 8.  Description of Securities.

COMMON STOCK

         The Company has  100,000,000  shares of Common  Stock,  par value $.001
authorized.  Each  outstanding  share of common  stock is  entitled to one vote,
either  in  person or by proxy,  on all  matters  that may be voted  upon by the
owners thereof at meetings of the shareholders.

         The holders of common stock (i) have equal ratable  rights to dividends
from funds legally  available  therefor,  when,  and if declared by the Board of
Directors  of the  Company;  (ii) are  entitled  to share  ratably in all of the
assets of the Company available for distribution to holders of common stock upon
liquidation,  dissolution or winding up of the affairs of the Company;  (iii) do
not have preemptive, subscription or conversion rights, or redemption or sinking
fund provisions  applicable thereto; and (iv) are entitled to one non-cumulative
vote per share on all matters on which  shareholders may vote at all meetings of
shareholders.

                                       8
<PAGE>

         The Company's  transfer agent is Manhattan  Transfer  Registrar Co., 58
Dorchester Road, Lake Ronkonkoma, New York.

                                     PART II

ITEM 1.  Market Price of and Dividends on the Registrant's Common Equity and
         Other Stockholder Matters.

         There has been no  established  public trading market for the Company's
securities  since its  inception on February 26, 1996.  However,  the  Company's
securities are traded on the national  Quotation Bureau pink sheets with no bid
and no offer.  The Company's  trading symbol is MCLG. As of April 30, 2000 there
were  19,548,000  shares  outstanding,  and the Company has 27  shareholders  of
record.  No  dividends  have  been  paid to  date,  and the  Company's  Board of
Directors does not anticipate paying dividends in the foreseeable future.

ITEM 2.  Legal Proceedings.

         The following  matters  represent  contingent  liabilities  which might
exceed $25,000:

         1.       Navistar  Financial  Corporation vs. Glenn McClendon  Trucking
                  Company,  Inc., et al. This action is in the Circuit Court for
                  Montgomery County,  Alabama. It has been on the administrative
                  docket since August,  1998,  subject to terms of a forbearance
                  and settlement agreement between the parties.

         2.       State of  Alabama  Department  of Revenue  vs.Glenn  McClendon
                  Trucking  Co.,  Inc.,  is  a  1999  administrative  proceeding
                  assessing  approximately $54,000 in state use taxes is pending
                  departmental conference(s).

         3.       McClendon  operates  a  self-insured   workers'   compensation
                  program  under the  supervision  of the Alabama  Department of
                  Industrial  Relations.  Open  claims  include  18 cases in the
                  Circuit Courts of Chambers and Montgomery  counties in Alabama
                  and 2 litigated  cases in Georgia.  This matter is ongoing and
                  standard  within the industry.  The Company  believes that its
                  maximum  liability  on the  aggregate  20  pending  claims  is
                  $700,000.

         4.       Under  our  current  Liberty  Mutual  insurance  coverage  for
                  vehicle   liability   claims,  we  continue  a  self-insurance
                  retention level of $100,000 per incident.

         McClendon Transportation is not presently a party to any other material
litigation, nor is any such litigation threatened to our knowledge.

ITEM 3.  Changes in and Disagreements with Accountants.

         We  have  had  no  changes  in or  disagreements  with  accountants  on
accounting or financial disclosure matters.

                                       9
<PAGE>

ITEM 4.  Recent Sales of Unregistered Securities.

         The following  unregistered  securities of the Company have been issued
in the past three years.

         1.       On November 11, 1999,  the Company  issued  95,000  restricted
                  shares to each of four  affiliates for an aggregate of 380,000
                  shares.  Said shares were issued pursuant to an exemption from
                  registration pursuant to Section 4(2) of the Securities Act of
                  a933, as amended (the "Act").

         2.       On March 27, 2000, the Company issued 17,000 restricted shares
                  to a non-affiliate in  consideration of $4.00 per share.  Said
                  shares were issued pursuant to an exemption from  registration
                  under Section 4(2) of the Act.

         3.       On March 27, 2000, the Company issued 11,000,000 shares to two
                  affiliates  pursuant to an exemption from  registration  under
                  Section 4(2) of the Act.

         4.       On April 6, 2000, the Company issued 31,000  restricted shares
                  to three non-affiliates  in consideration of $5.00 per shares.
                  Said  shares  were  issued   pursuant  to  an  exemption  from
                  registration pursuant to Section 4(2) of the Act.

         5.       On  April 6,  2000 the  Company  issued  3,400,000  restricted
                  shares  to a  non-affiliate  as collateral security for a loan
                  in the principal amount of $3,250,000. Said shares were issued
                  pursuant to an exemption from  registration under Section 4(2)
                  of the Act.

ITEM 5.  Indemnification of Directors and Officers.

The Bylaws of the Company  provide that the Company will  indemnify its officers
and directors for costs and expenses  incurred in connection with the defense of
actions,  suits or proceedings where the officer or director acted in good faith
an in the manner he reasonably believed to be in the Company's best interest and
is a party by reason of his status as an officer or  director,  absent a finding
of negligence or misconduct in the performance of his duties.

                                    PART F/S

The Financial  Statements of McClendon  Transportation  Group, Inc., required by
Regulation  S-B  commence  on page F-1  hereof  and are  incorporated  herein by
reference.

                                    PART III

ITEM 1 & 2.       Index to Exhibits and Description of Exhibits.


3.1.     Articles of Incorporation.
3.2.     By-Laws.
10.1     Lease for 121 South Lafayette Street
10.2     Form of Equipment and Service Agreement with contract drivers
10.3     Renewal Term Note with Columbus Bank & Trust Company


                                       10
<PAGE>


                                   SIGNATURES

         In accordance  with Section 12 of the Securities  Exchange Act of 1934,
the registrant caused this registration  statement to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                       MCCLENDON TRANSPORTATION GROUP, INC.


Date: August 4, 2000                   By: /s/ James W. McClendon
                                           ------------------------------
                                           James W. McClendon, President





                                       11
<PAGE>


<TABLE>

<CAPTION>


                      MCCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                                 BALANCE SHEETS
                             MARCH 31, 2000 AND 1999



                                                               UNAUDITED     UNAUDITED
                                                                  2000          1999
                                                              -----------   -----------


                    ASSETS
<S>                                                           <C>           <C>
CURRENT ASSETS
  Cash and cash equivalents ................................  $   663,255   $  577,659
  Restricted investments ...................................    1,125,000      100,213
  Accounts receivable
    Trade ..................................................    3,935,912    4,623,412
    Other ..................................................      164,480      415,274
  Inventories ..............................................      199,552      248,993
  Prepaid expenses                                              1,860,650    3,090,474
                                                              -----------  -----------
          Total current assets .............................    7,948,849    9,056,025

FIXED ASSETS (net of accumulated
  depreciation and amortization) ...........................    8,665,709   12,346,862

OTHER ASSETS                                                      293,151      456,234
                                                              -----------  -----------
          Total assets .....................................  $16,907,709  $21,859,121

     LIABILITIES AND STOCKHOLDERS' EQUITY

                 LIABILITIES

CURRENT LIABILITIES
  Bank overdraft ...........................................  $ 1,839,612  $   475,930
  Short-term borrowings ....................................    6,783,607    5,333,000
  Current maturities of long-term debt .....................    3,766,888    4,756,809
  Accounts payable .........................................    1,956,209    2,645,322
  Accrued taxes other than income ..........................      190,119      174,689
  Other accrued expenses ...................................    2,268,631    3,491,392
  Estimated income taxes payable                                 (155,375)    (260,074)
                                                              -----------  -----------
          Total current liabilities ........................   16,649,691   16,617,068

LONG-TERM DEBT (less current maturities) ...................    8,193,345   10,946,775

DEFERRED INCOME TAXES ......................................    2,824,390    3,066,918
                                                               ----------- -----------
          Total liabilities ................................    27,667,426  30,630,761
                                                               ----------- -----------
             STOCKHOLDERS' EQUITY

COMMON STOCK ...............................................       10,000       10,000
PAID-IN CAPITAL ............................................      144,883       94,883
RETAINED EARNINGS ..........................................  (10,914,600)  (8,876,523)
                                                               ----------- -----------
          Total stockholders' equity .......................  (10,759,717)  (8,771,640)

          Total liabilities and stockholders' equity ....... $ 16,907,709  $21,859,121
                                                               ==========  ===========
</TABLE>


<PAGE>


                      MCCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                         STATEMENTS OF RETAINED EARNINGS
                 FOR THE QUARTER ENDED MARCH 31, 2000 AND 1999




                                                  UNAUDITED       UNAUDITED
                                                    2000             1999
                                              ---------------    -------------


Balance, January 1 ........................   $   (10,033,314)   $  (9,256,772)

  Net income (loss)........................          (881,286)         454,982

  Dividends declared ......................                 -          (74,733)
                                              ---------------    -------------
Balance, March 31 .........................   $   (10,914,600)   $  (8,876,523)
                                              ===============    =============

<PAGE>

<TABLE>

<CAPTION>


                      MCCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                              STATEMENTS OF INCOME
                 FOR THE QUARTER ENDED MARCH 31, 2000 AND 1999




                                                                   UNAUDITED     UNAUDITED
                                                                      2000         1999
                                                                  -----------   -----------


<S>                                                               <C>           <C>
OPERATING REVENUES
  Freight revenues .............................................  $10,026,085   $12,543,336
  Other revenues ...............................................       53,137        25,782
                                                                  -----------   -----------
          Total revenues .......................................   10,079,222    12,569,118
                                                                  -----------   -----------
OPERATING EXPENSES
  Salaries, wages and benefits .................................    2,698,838     3,884,616
  Operations and maintenance ...................................    1,917,164     2,209,002
  Taxes and licenses ...........................................      175,953       242,583
  Insurance and claims .........................................      588,956       861,928
  Communications and utilities .................................      136,730       176,030
  Depreciation and amortization ................................      538,895       990,000
  Rent and purchased transportation ............................    4,627,761     4,513,821
  (Gain) loss on sale of fixed assets and other ................            0      (199,795)
                                                                  -----------   -----------
          Total operating expenses .............................   10,684,297    12,678,185
                                                                  -----------   -----------
          Operating income (loss) ..............................     (605,075)     (109,067)
                                                                  -----------   -----------
OTHER INCOME (EXPENSE)
  Interest income ..............................................       79,536        34,701
  Interest expense .............................................     (331,382)     (563,807)
  Miscellaneous expense ........................................      (24,365)      (13,796)
                                                                  -----------   -----------
          Total other income (expense) .........................     (276,211)     (542,902)
                                                                  -----------   -----------
          Loss before provision for income tax expense
            (benefit) and extraordinary item ...................     (881,286)     (651,969)

EXTRAORDINARY ITEM (Insurance settlement with Carolina Casualty)            0     1,106,951

PROVISION FOR INCOME TAX EXPENSE
  (BENEFIT) ....................................................            -             -
                                                                  -----------   -----------
          Net income (loss) ....................................  $  (881,286)  $   454,982
                                                                  ===========   ===========

<PAGE>


<CAPTION>

                      MCCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                            STATEMENTS OF CASH FLOWS
                 FOR THE QUARTER ENDED MARCH 31, 2000 AND 1999



                                                                 UNAUDITED     UNAUDITED
                                                                    2000          1999
                                                                -----------   -----------


<S>                                                             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) .................................................    $(881,286)   $  454,892
                                                                  ---------    ----------
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
      Depreciation and amortization ..........................      538,895       990,000
      Deferred income taxes ..................................        5,130       275,218
      (Gain) loss on sale of fixed assets ....................            0      (199,795)
      Changes in current assets and liabilities:
        Accounts receivable ..................................      327,509        89,913
        Inventories ..........................................       11,045        43,889
        Prepaid expenses .....................................    1,161,085        49,610
        Accounts payable .....................................      (77,770)      206,775
        Other current liabilities ............................     (363,010)     (682,687)
                                                                -----------   -----------
          Total adjustments ..................................    1,602,884       772,923
                                                                -----------   -----------

          Net cash provided by operating activities ..........      721,598     1,227,905
                                                                -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of fixed assets ................................       (5,867)     (976,215)
  Proceeds from sale of fixed assets .........................            0       619,000
  Other assets - net .........................................       31,723       (53,767)
                                                                -----------   -----------
          Net cash provided by investing activities ..........       25,856      (410,982)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Bank overdraft - net .......................................      909,005      (194,006)
  Restricted investments - net ...............................   (1,000,000)            0
  Short-term borrowings - net ................................      923,105      (193,904)
  Proceeds of long-term debt .................................            0     2,312,500
  Principal payments on long-term debt .......................     (936,599)   (2,601,419)
  Dividends paid .............................................            -       (74,733)
                                                                -----------   -----------
          Net cash used in financing activities ..............     (104,489)     (751,562)
                                                                -----------   -----------

          Net increase (decrease) in cash and cash equivalents      642,965        65,361

          Cash and cash equivalents, January 1 ...............       20,290       512,298
                                                                -----------   -----------
          Cash and cash equivalents, March 31 ................  $   663,255   $   577,659
                                                                ===========   ===========

</TABLE>

<PAGE>



                                TABLE OF CONTENTS

INDEPENDENT AUDITORS' REPORT................................Page      1

FINANCIAL STATEMENTS
   Balance Sheet...........................................           2
   Statements of Stockholders' Equity (Deficiency).........           3
   Statements of Operations................................           4
   Statements of Cash Flows................................           5
   Notes to Financial Statements...........................      6 - 20





<PAGE>


Robinson,                                        Members
Grimes &                                         - SEC and Private Companies
Company, P.C. Certified Public Accountants         Practice Sections of the
                                                   American Institute of C.P.A.s
                                                 - Georgia Society of C.P.A.s



Independent Auditors' Report

The Directors and Stockholders
McClendon Transportation Group, Inc.
Lafayette, Alabama

We have  audited the  accompanying  balance  sheet of  McClendon  Transportation
Group, Inc. as of December 31, 1999, and the related statements of stockholders'
equity (deficiency), operations, and cash flows for each of the two years in the
period  ended   December  31,  1999.   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 McClendon Transportation Group,
Inc. as of December 31,  1999,  and the results of its  operations  and its cash
flows  for each of the two years in the  period  ended  December  31,  1999,  in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 15 to the
financial statements,  the Company has experienced  significant operating losses
and is currently in default on certain debt. These conditions raise  substantial
doubt  about its  ability to continue  as a going  concern.  Management's  plans
regarding  those  matters are also  described in Notes 15 and 16. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

/s/ Robinson, Grimes & Company, P.C.
------------------------------------
    Robinson, Grimes & Company, P.C.

Certified Public Accountants
Columbus, Georgia

May 31, 2000




<PAGE>
<TABLE>
<CAPTION>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                                  BALANCE SHEET
                                DECEMBER 31, 1999

                                     ASSETS
<S>                                                                             <C>
CURRENT ASSETS
    Cash and cash equivalents ...............................................   $     76,020
    Restricted investments ..................................................        201,548
    Accounts receivable
         Trade ..............................................................      4,353,589
         Other ..............................................................        338,617
    Inventories .............................................................        210,597
    Prepaid expenses ........................................................      3,021,736
                                                                                ------------
         Total current assets ...............................................      8,202,107

FIXED ASSETS (net of accumulated depreciation) ..............................      9,198,743

OTHER ASSETS ................................................................        231,740
                                                                                ------------
    Total assets ............................................................   $ 17,632,590
                                                                                ============

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)


                                  LIABILITIES

 CURRENT LIABILITIES
    Bank overdraft ..........................................................   $  1,262,885
    Short term borrowings ...................................................      4,301,862
    Current maturities of long term debt ....................................     11,097,818
    Accounts payable ........................................................      2,154,953
    Accrued taxes other than income .........................................        154,077
    Other accrued expenses ..................................................      2,093,500
    Estimated income taxes payable ..........................................        113,000
                                                                                ------------
                Total current liabilities ...................................     21,178,095

  LONG TERM DEBT (less current maturities) ..................................      3,980,612

   DEFERRED INCOME TAXES ...................................................      2,406,000
                                                                                ------------
                Total liabilities ..........................................     27,564,707
                                                                                ------------

                        STOCKHOLDERS' EQUITY (DEFICIENCY)

  COMMON STOCK (par value .001, 100,000,000 shares
  authorized, 16,100,000 shares issued and outstanding) ....................         16,100
  PAID IN CAPITAL ..........................................................         88,783
  ACCUMULATED DEFICIT ......................................................    (10,037,000)
                                                                                ------------
                Total stockholders' equity (deficiency) ....................     (9,932,117)
                                                                                ------------
                Total liabilties and stockholders' equity (deficiency) .....   $ 17,632,590
                                                                                ============

See Notes to Financial Statements.

                                       -2-

<PAGE>

                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>


                                                          COMMON STOCK
                                                   --------------------------
                                                      NUMBER                        PAID IN       ACCUMULATED       EQUITY
                                                    OF SHARES        AMOUNT         CAPITAL         DEFICIT      (DEFICIENCY)
                                                   ----------    ------------    ------------    ------------    ------------
<S>                                                <C>           <C>             <C>             <C>             <C>
Balance, January 1, 1998 .....................     15,590,000    $     15,590    $     89,293    $ (5,809,928)   $ (5,705,045)

   Net loss ..................................                                                     (3,131,753)     (3,131,753)

   Dividends declared ($.02 per share) .......                                                       (315,091)       (315,091)
                                                   ----------    ------------    ------------    ------------    ------------
Balance, December 31, 1998 ...................     15,590,000          15,590          89,293      (9,256,772)     (9,151,889)

   Aquistion of assets of

     RDA Services, Inc. ......................        510,000             510            (510)

   Net loss ..................................                                                       (592,699)       (592,699)

   Dividends declared ($.01 per share) .......                                                       (187,529)       (187,529)
                                                   ----------    ------------    ------------    ------------    ------------
Balance, December 31, 1999 ...................     16,100,000    $     16,100    $     88,783    $(10,037,000)   $ (9,932,117)
                                                 ============    ============    ============    ============    ============


See Notes to Financial Statements.

                                       -3-



<PAGE>



                       McCLENDON TRANSPORTATION GROUP, INC
                               LAFAYETTE, ALABAMA
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<CAPTION>

                                                                1999            1998
                                                           ------------    ------------
<S>                                                        <C>             <C>
OPERATING REVENUES
    Freight revenues ...................................   $ 48,267,343    $ 61,626,123
    Other revenues .....................................        404,222         122,677
                                                           ------------    ------------
          Total operating revenues .....................     48,671,565      61,748,800
                                                           ------------    ------------
OPERATING EXPENSES
    Salaries, wages and benefits .......................     13,168,293      19,581,373
    Purchased transportation (owner operators) .........     19,399,640      16,982,430
    Other rent expense .................................      1,745,839       2,492,471
    Operations and maintenance .........................      7,099,219      12,052,533
    Taxes and licenses .................................        885,851       1,360,007
    Insurance and claims ...............................      2,537,758       3,773,905
    Communications and utilities .......................        607,015         844,696
    Depreciation and amortization ......................      3,535,823       5,357,246
    (Gain) loss on sale of fixed assets and other ......       (225,802)        383,314
                                                           ------------    ------------
             Total operating expenses ..................     48,753,636      62,827,975
                                                           ------------    ------------
             Operating loss ............................        (82,071)     (1,079,175)
                                                           ------------    ------------

OTHER INCOME (EXPENSE)
    Interest income ....................................         57,795          85,337
    Interest expense ...................................     (1,786,010)     (2,660,403)
    Miscellaneous expense ..............................        (70,676)       (137,107)
                                                           ------------    ------------
             Total other income (expense) ..............     (1,798,891)     (2,712,173)
                                                           ------------    ------------
             Loss before provision for income tax
               benefit and extraordinary item ..........     (1,880,962)     (3,791,348)

PROVISION FOR INCOME TAX BENEFIT .......................       (181,312)       (659,595)
                                                           ------------    ------------

LOSS BEFORE EXTRAORDINARY ITEM .........................     (1,699,650)     (3,131,753)

EXTRAORDINARY ITEM (NOTE 7) ............................      1,106,951               0
                                                           ------------    ------------
             Net loss ..................................   $   (592,699)   $ (3,131,753)
                                                           ============    ============
BASIC AND DILUTED LOSS PER SHARE
    Loss before extraordinary item .....................        $ (0.11)       $ (0.20)
    Extraordinary item .................................           0.07              0
                                                           ------------    ------------
             Net loss ..................................        $ (0.04)       $ (0.20)
                                                           ============    ============
WEIGHTED AVERAGE NUMBER OF SHARES ......................     15,652,000     15,590,000
                                                           ============    ============

See Notes to Financial Statements.

                                       -4-

<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<CAPTION>

                                                                  1999          1998
                                                              -----------    -----------
<S>                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss ..............................................   $  (592,699)   $(3,131,753)
                                                              -----------    -----------
    Adjustments to reconcile net loss to net cash
         provided by operating activities:
           Depreciation and amortization ..................     3,535,823      5,357,246
           Deferred income taxes ..........................      (385,700)      (883,571)
           (Gain) loss on sale of fixed assets ............      (683,857)       227,124
           Forgiveness of debt ............................    (1,106,951)             0
           Changes in current assets and liabilities:
               Accounts receivable ........................       436,393      1,777,874
               Inventories ................................        82,285         63,505
               Prepaid expenses ...........................       118,348     (1,310,781)
               Accounts payable ...........................      (283,594)      (369,494)
               Other current liabilities ..................      (621,165)       267,491
                                                              -----------    -----------
                  Total adjustments .......................     1,091,582      5,129,394
                                                              -----------    -----------
                  Net cash provided by operating activites        498,883      1,997,641
                                                              -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of fixed assets ...........................    (1,103,916)    (1,922,025)
    Proceeds from sale of fixed assets ....................     1,198,844      2,028,811
    Other assets - net ....................................       170,719         68,088
                                                              -----------    -----------
                  Net cash provided by investing activities       265,647        174,874
                                                              -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Bank overdraft - net ..................................       592,949       (197,876)
    Restricted investments  - net..........................      (101,335)       475,000
    Short term borrowings  - net...........................      (745,042)      (262,473)
    Proceeds of long term debt ............................     4,361,304      1,861,525
    Principal payments on long term debt ..................    (5,121,155)    (3,771,502)
    Dividends paid ........................................      (187,529)      (315,091)
                                                              -----------    -----------
                  Net cash used in financing activities ...    (1,200,808)    (2,210,417)
                                                              -----------    -----------
                  Net decrease in cash and cash equivalents      (436,278)       (37,902)
                  Cash and cash equivalents, January 1 ....       512,298        550,200
                                                              -----------    -----------
                  Cash and cash equivalents, December 31 ..   $    76,020    $   512,298
                                                              ===========    ===========

</TABLE>

See Notes to Financial Statements.
                                       -5-
<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 1:       Nature of Operations

              The Company is a medium-haul,  irregular route,  truckload carrier
              of  general   commodities   which  transports   freight  primarily
              throughout the Southeastern  and Eastern United States.  No single
              customer accounted for more than 5% of revenue for 1998 or 1999.

              On November 11,  1999,  Glenn  McClendon  Trucking  Company,  Inc.
              (GMTC) merged into RDA Services,  Inc. (RDA).  GMTC was treated as
              the acquirer and RDA as the acquiree.  The resulting merged entity
              was  then  renamed  McClendon   Transportation   Group,  Inc.  For
              accounting  purposes,  the  acquisition  has  been  treated  as an
              acquisition  with all costs in excess of any cash received charged
              to expense.

NOTE 2:       Summary of Significant Accounting Policies

              Accounts Receivable - Trade - Trade receivables  represent amounts
              due from various  companies for shipment  services.  Bad debts are
              normally  accounted for using the allowance  method,  based on the
              credit  worthiness of its customers,  as well as general  economic
              conditions.

              Inventories - Inventories consist of fuel, tires, and repair parts
              and are  valued at the lower of cost or  market,  with cost  being
              determined by the first-in, first-out method.

              Fixed Assets and Related  Depreciation  and  Amortization  - Fixed
              assets are stated at cost and are depreciated on the straight-line
              method for financial reporting purposes. For income tax reporting,
              the  Company  uses  accelerated   methods.  The  cost  of  revenue
              equipment  includes  items  such as  tires,  air  deflectors,  and
              communication  equipment  used in or on the tractors and trailers.
              Maintenance,  repairs and minor renewals are expensed as incurred,
              while  additions and major  renewals are  capitalized.  The useful
              lives presently  employed for computing  depreciation on principal
              classes of fixed assets for financial reporting purposes are:

                      Buildings and land improvements         10 - 40 years
                      Revenue equipment:
                           Tractors                           6 years
                           Trailers                           8 years
                      Furniture and fixtures                  5 - 10 years
                      Other fixed assets                      5 - 20 years


                                       -6-

<PAGE>

                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 2:       Summary of Significant Accounting Policies (Continued)

              Revenue  equipment  is  depreciated  to  a  20%  salvage value for
              trailers and a 15% salvage value for tractors.

              Revenue  Recognition  - Revenue  is  recognized  when the shipment
              is completed and bills of lading received.

              Income Taxes - Deferred  income taxes are provided for differences
              in the timing of reporting income for financial  statement and tax
              purposes,  and result  primarily from  differences in depreciation
              methods.

              Statements of Cash Flows - For purposes of the  statements of cash
              flows,  the Company  considers all highly liquid debt  instruments
              purchased  with a  maturity  of  three  months  or less to be cash
              equivalents.

              Reclassifications - Certain items in the 1998 financial statements
              have been  reclassified in order to be in conformity with the 1999
              statement presentation.

              Fair  Value  of  Financial  Instruments  -  The  carrying  amounts
              reflected  in  the  balance  sheet  for  cash,   receivables   and
              short-term  borrowings  approximate  their values due to the short
              maturities. Management is unable to estimate the fair value of its
              other financial instruments.

              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  and the  reported  amounts of  revenues  and  expenses
              during the  reporting  period.  Actual  results  could differ from
              those estimates.

              Earnings (Loss) Per Share - Basic earnings (loss) per common share
              is  calculated  by  dividing  net  earnings  (loss) by the average
              number of  common  shares  outstanding  during  the year.  Diluted
              earnings  (loss)  per  common  share is  calculated  by  adjusting
              outstanding   shares,   assuming  conversion  of  all  potentially
              dilutive  securities.  The Company has a simple capital  structure
              with no potentially dilutive securities.

                                       -7-

<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 3:       Accounts Receivable

              Trade accounts receivable are summarized as follows:

                    Trade accounts receivable                        $4,466,470
                    Allowance for doubtful accounts                    (112,881)
                                                                     ----------

                           Total accounts receivable - trade         $4,353,589
                                                                     ==========
              Accounts receivable other than trade are summarized as follows:

                    Officers and employees (Note 11)                $   122,486
                    Insurance premium refunds                            35,361
                    Miscellaneous                                       180,770
                                                                     ----------
                            Total accounts receivable - other       $   338,617
                                                                    ===========


NOTE 4:       Prepaid Expenses

              Prepaid expenses are summarized as follows:

                    Insurance, including deposits                    $2,545,943
                      Taxes, licenses and permits                       418,491
                      Other                                              57,302
                                                                     ----------
                            Total prepaid expenses                   $3,021,736
                                                                     ==========

                                       -8-

<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 5:       Fixed Assets and Related Depreciation

              Major  classes of fixed assets and  accumulated  depreciation  are
summarized as follows:

                    Land                                        $      338,944
                      Buildings and land improvements                1,696,967
                      Revenue equipment                             27,704,954
                    Furniture, fixtures and other                    3,336,609
                                                                --------------
                                                                    33,077,474
                      Accumulated depreciation                     (23,878,731)
                                                                 -------------

                           Fixed assets - net                    $   9,198,743
                                                                 =============
NOTE 6:    Short-Term Borrowings

           Short-term borrowings consists of the following:

           $5,000,000 line of credit from Systran Financial Services
           Corporation,  with interest at prime plus 2%, accounts
           receivable as collateral. Borrowings on the line of credit
           are limited by various restrictions on the above
           collateral                                                 $3,802,323

           Demand note from Columbus Bank & Trust                         13,049

           Unsecured note from Valley National Bank, interest at 8.50%   250,000

           Note payable - stockholders                                    49,990

           Other                                                         186,500
                                                                      ----------
                                                                      $4,301,862
                                                                      ==========

                                       -9-
<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 7:       Other Accrued Expenses

              Other accrued expenses are summarized as follows:

                    Accrued self-insured liability claims (See below)  $ 542,880
                    Accrued workers' compensation (Note 14)            1,028,049
                    Other accrued expenses                               522,571
                                                                      ----------

                         Total other accrued expenses                 $2,093,500
                                                                      ==========

              During 1998, the Company  negotiated  with its previous  liability
              insurance  carrier for  forgiveness  of $1,106,951 of  outstanding
              claims under its old policy. The forgiveness was accepted, subject
              to certain  contingencies  which  were not  resolved  until  1999.
              Accordingly,  this debt  forgiveness  income is  recognized in the
              1999 statement of operations as an  extraordinary  item. There was
              no tax effect on the forgiveness.

                                      -10-

<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 8:       Long-Term Debt

              Long-term debt consists of the following:
<TABLE>

<CAPTION>

                                                                                      MATURITIES
                                                                               -------------------------
                                                                                 CURRENT      LONG-TERM
                                                                               -----------    ----------
<S>                                                                            <C>            <C>
              Note payable - equipment: Navistar Financial Corporation.
                See below.                                                    $  7,599,038      $      0
              Note payable - equipment: Navistar Financial Corporation,
                weekly payments total $9,205 as of  December 31, 1999,
                including  interest at 9.50%, final payment due December,
                2002                                                               369,367        959,554
              Notes payable - equipment:
                Associates  Commercial   Corporation,   monthly  payments  total
                $33,098 as of December 31, 1999, including interest at 9.25%,
                final payment due April, 2001                                      399,855        127,464
              Note payable - equipment:
                TBCC  Funding  Trust I,  monthly  payments  total  $75,034 as of
                December 31, 1999 including interest at 10.4%, final payment
                due March, 2002                                                    754,974        985,341
              Note payable - equipment:
                Financial Federal Credit, Inc. monthly principal payments
                of $36,100 plus interest at 10.75%, final payment due July,
                2002                                                               433,200        685,346
              Note payable - real estate:
                Columbus Bank & Trust Co., interest only through October,
                2000, thereafter, monthly pay   ment of $12,235, including
                interest at prime plus 2%, final payment due October, 2004          15,343        464,657
              Note payable - Columbus Bank & Trust Company.  See below.          1,500,000              0
              Note payable - vehicles:
                Ford Credit, monthly payments total $2,314, including
                interest at 2.90%, final payment due September, 2003                26,041         73,250
              Accrued workers' compensation (Note 14)                                    0        685,000
                                                                                  --------      ---------

                           Total notes payable                                 $11,097,818     $3,980,612
                                                                               ===========     ==========
</TABLE>

                                      -11-

<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 8:       Long-Term Debt (Continued)

              During  1998,  the  Company   restructured  certain  of  its  debt
              obligations  with  Navistar  Financial  Corporation.  Terms of the
              restructuring  allowed for  cancellation of $3,131,348 of the debt
              in exchange for accelerated payments and additional collateral for
              the remaining  obligations.  The adjusted loan balance,  after the
              planned cancellation,  was approximately  $11,583,000 as of August
              1998.  The  terms  required  that a  certain  amount  be repaid by
              February  28,  1999,  at which  time  the  above  amount  would be
              cancelled.  While the  Company  reduced its fleet and paid down on
              the debt  significantly,  the total had not been  retired  by that
              date. Accordingly all applicable amounts were reflected as current
              maturities  as of  December  31,  1998,  since,  according  to the
              agreement,  Navistar  could  elect to  reinstate  the total  debt.
              However,  Navistar formally agreed to an extension and the Company
              made additional  payments in an effort to comply with the terms of
              the agreement. As of April 30, 2000 the outstanding balance of the
              adjusted loan was approximately $3,766,000.

              Subsequent  to December  31, 1999,  the Company and Navistar  have
              agreed,  in  principle,  to  a  revised  restructuring  agreement,
              whereby in addition to the forgiveness  mentioned above,  Navistar
              will convert  approximately  $1,000,000 of the  remaining  debt to
              equity in the Company.  Other remaining notes will also have terms
              modified  by  the  new  restructuring   agreement.   However,  for
              financial  statement  purposes,  the notes  remain  classified  as
              current  liabilities as the agreement has not yet been  finalized.
              The  $3,131,348 is expected to be  recognized as debt  forgiveness
              income in 2000.

              In addition,  subsequent  to December  31,  1999,  the Company and
              Columbus  Bank  &  Trust  Company  agreed,  in  principle,  to the
              conversion of  approximately  $1,500,000  of debt to equity.  This
              debt was remaining  from the previous  line of credit loan,  which
              was taken over by Systran Financial Services  Corporation in 1999,
              as discussed in Note 6. Similarly,  due to the tentative nature of
              the  agreement,  the  $1,500,000 has continued to be classified as
              current debt at December 31, 1999.

              Equipment notes are  collateralized  by substantially  all revenue
              equipment  with a total  book value of  approximately  $7,394,000.
              Personal endorsements by the Company's principal  stockholders are
              also used as collateral on certain notes.

                                      -12-

<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA

                          NOTES TO FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 8:       Long-Term Debt - (Continued)

              Aggregate maturities under these arrangements for years subsequent
to December 31, 1999 are as follows:

                    2000                                     $11,097,818
                    2001                      $2,083,635
                    2002                       1,285,456
                    2003                         479,532
                    2004                         131,989
                                                               3,980,612
                                               ---------      ----------
                               Total                         $15,078,430
                                                              ==========

                                      -13-



<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 9:       Operating Leases

              The Company has acquired  trailers  through  operating leases with
              various leasing companies with an option to purchase the equipment
              at its fair market  value at the end of the lease.  The leases are
              for periods of 6 - 7 years;  however,  after 3 years the lease may
              be canceled by the Company upon meeting  specified  conditions  in
              the  contract.  Under a terminal  rental  adjustment  clause,  the
              Company guarantees a 20% residual value.

              The  Company  also leases  certain  real  estate  properties  from
              McClendon  Enterprises (a related party).  See Note 11. Below is a
              schedule  of future  minimum  payments  under the above  operating
              leases:



<TABLE>

                                                              McCLENDON          TOTAL
                                             TRAILER         ENTERPRISES       OPERATING
                                             LEASES            LEASES            LEASES
                                           ----------         ---------        ----------
<S>                                        <C>                <C>              <C>
       Amounts due during:
            2000                            $ 820,776         $ 132,000         $ 952,776
            2001                              760,357           132,000           892,357
            2002                               48,627           132,000           180,627
            2003                                    0           132,000           132,000
            2004                                    0           132,000           132,000
                                            ---------         ---------         ---------
              Total five year payments     $1,629,760         $ 660,000        $2,289,760
                                           ==========         =========        ==========
</TABLE>

              During  1997,  the Company  started a program  whereby the Company
              leases tractors with qualified drivers from independent operators,
              ("owner-operators").    Owner-operator    expense    amounted   to
              $19,399,640 and $16,982,430 for 1999 and 1998,  respectively,  and
              is  reflected  on  the   Statements  of  Operations  as  Purchased
              Transportation.

                                      -14-
<PAGE>



                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE   9:     Operating Leases (Continued)

              Other rent expense is summarized as follows:

                                                   1999              1998
                                               -----------        ----------
             Trailer leases                    $   888,966        $1,351,372
             McClendon Enterprises leases          229,500           229,500
             Spotting service                      388,192           541,435
             Other rents                           239,181           370,164
                                               -----------        ----------

                    Total                       $1,745,839        $2,492,471
                                                ==========        ==========

NOTE 10:      Income Taxes

              The Company's net carrying basis of long-term  assets exceeded its
              tax basis for such assets by approximately  $6,197,000 at December
              31, 1999. See Note 2.

              Net deferred tax  liabilities  in the  accompanying  balance sheet
              reflect the  liabilities  associated  with temporary  differences,
              principally depreciation of fixed assets.

              Provision for income tax benefit is summarized as follows:

                                                           1999          1998
                                                       -----------   -----------
                      Current tax expense:
                         Federal                       $   161,716   $  104,758
                         State                              42,672      119,218
                      Deferred tax benefit                (385,700)    (883,571)
                                                       -----------   -----------

                       Net provision for income
                        tax benefit                    $  (181,312)  $ (659,595)
                                                       ===========   ===========

              The income tax benefit  differs  from the income tax benefit  that
              would result from applying statutory rates to pretax income.  This
              is due primarily to the payment of per diems to drivers, which are
              only partly tax deductible.

                                      -15-



<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 11:      Related Party Transactions

              McClendon Enterprises

              The Company leases its present  operating  facility and other real
              estate from McClendon Enterprises,  a partnership comprised of the
              two Company  stockholders.  For both  financial  statement and tax
              purposes,  the leases have been  classified  as operating  leases.
              Total rent expense on these leases was $229,500 for 1999 and 1998,
              respectively.

              The  Company  had $38,198  outstanding  at December  31, 1999 from
              McClendon  Enterprises for a loan made for building  improvements.
              The non-current  portion of this note has been included with other
              assets in the accompanying financial statements for 1998.

              Other

              The  Company's  two  stockholders  are  obligated  to a previously
              redeemed  stockholder  on notes  executed to acquire the  previous
              stockholder's stock. The balance of these notes as of December 31,
              1999 was $432,595 with quarterly  principal and interest  payments
              due through 2001. The Company has declared  periodic  dividends to
              the stockholders to assist in these payments.

              The  Company  has a loan  outstanding  from a  stockholder  in the
              amount  of  $49,990.   This  amount  is  included  in   short-term
              borrowings.

              The Company  also has  various  loans and other  receivables  from
              certain officers and stockholders, summarized as follows:

              Stockholder notes receivable, interest at 7%         $     91,000
              Other stockholder receivables                               9,677
              Other officer and employee receivables                     21,809
                                                                   -------------

                               Total                               $     122,486
                                                                   =============

                                      -16-



<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 12:      Profit Sharing Plan

              The  Company  maintains a qualified  defined  contribution  profit
              sharing plan with 401(k)  provisions  covering  substantially  all
              employees with over one year of service.  Contributions based on a
              percentage of compensation are determined annually by the board of
              directors.  The Company made 401(k) contributions totaling $37,991
              and $50,755 to the Plan for the years ending December 31, 1999 and
              1998, respectively.

NOTE 13:      Supplemental Disclosures of Cash Flow Information

              Cash paid during the year for:

                                                      1999               1998
                                                  -----------        -----------
                    Interest                      $ 1,786,010        $ 2,660,403
                    Taxes                         $   302,179        $         0

              Non-Cash  Financing  Activity - The  Company  refinanced  parts of
              certain loans with Navistar Financial  Corporation as disclosed in
              Note 8. As part of this refinancing, certain equipment with agreed
              values  was  turned in to  Navistar  as payment on the debt in the
              amount of $634,000 and  $1,905,000 for the year ended December 31,
              1999 and 1998, respectively.

NOTE 14:      Contingencies

              Self-Insurance Plans

              The Company is partially self-insured with respect to various risk
              areas as follows:

                    Liability, Cargo and Physical Damage

                    For automobile liability, the Company is responsible for any
                    claims  less than  $100,000  and for claims in excess of the
                    $1,000,000  policy limit.  The Company also has a $4,000,000
                    umbrella policy per occurrence.

                                      -17-



<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 14:      Contingencies (Continued)

                    For general  liability,  the Company is responsible  for any
                    claims  less  than  $10,000  and for  claims  in  excess  of
                    $1,000,000  per  occurrence.  The  policy  has a  $2,000,000
                    annual  aggregate  limit.  The Company also has a $4,000,000
                    annual aggregate umbrella policy.

                    For cargo damage,  the Company is responsible for any claims
                    less than  $100,000 and for claims in excess of the $300,000
                    policy limit.

                    For physical damage to the revenue equipment, the Company is
                    responsible for any claims less than $1,000.

                    Worker's Compensation

                    The Company is also  self-insured  with  respect to worker's
                    compensation. Claims in excess of $300,000 are covered by an
                    insurance policy.  The Company is responsible for any claims
                    less than  $300,000.  Due to the  uncertainty  of  estimated
                    outstanding claims, such claims were accounted for on a cash
                    basis prior to 1996. As a result of state  requirements,  an
                    actuarial valuation was obtained in 1996 which estimated the
                    expected future claims. Accordingly, the Company accrued, in
                    1996, the estimated present value of claims  outstanding and
                    those   incurred  but  not   reported.   These  values  have
                    subsequently  been adjusted based on increases and decreases
                    to estimated  claims as computed by the Company's  insurance
                    carrier.  The next  actuarial  valuation  is expected in the
                    fourth quarter of 2000.

                    Group Health

                    The Company has elected to self-insure  for its group health
                    insurance   coverage.   Blue   Cross-Blue   Shield  acts  as
                    administrator   for  the  plan   whereby   the   Company  is
                    responsible  for all health  claims,  not to exceed  $50,000
                    annually,  per insured individual.  The claims are accounted
                    for on a cash basis.

                    Credit Risks

                    The Company extends credit across  different  industries and
                    geographic   areas  and  requires  no  collateral  from  its
                    customers.

                                      -18-



<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 15:      Going Concern

              As shown in the accompanying financial statements, the Company has
              experienced  significant  operating  losses  and has  deficits  in
              working capital and net worth.  As a result,  the Company has been
              in  violation  of  various  covenants  of loan  agreements.  These
              factors raise  substantial  doubt about the  Company's  ability to
              continue as a going concern.

              Management  is working  with its  primary  lenders to monitor  the
              status of its indebtedness and is currently  evaluating methods to
              reduce costs and improve  results of operations.  During 1998, the
              Company   refinanced   certain   liabilities  with  its  liability
              insurance  carrier  reflecting a debt forgiveness of approximately
              $1.1 million. In addition, as reflected in Note 8, the Company has
              tentatively  renegotiated  certain debt  obligations with Navistar
              Financial  Corporation and Columbus Bank & Trust Company, that are
              expected  to  further  reduce  its  outstanding   indebtedness  by
              approximately  $5,631,000 through a combination of forgiveness and
              equity conversion.  Additionally, certain equipment and other idle
              facilities have been sold and/or listed for disposition.  Finally,
              during 1999,  the Company  signed  certain  agreements to effect a
              reorganization plan as more fully described in Note 16.

              If the Company is unsuccessful in its efforts, it may be necessary
              to undertake  such other actions as may be appropriate to preserve
              asset  value.   The  financial   statements  do  not  include  any
              adjustments,  other than the  classification  of long-term debt as
              disclosed  in Note 8, that might  result  from the outcome of this
              uncertainty.

                                      -19-



<PAGE>


                      McCLENDON TRANSPORTATION GROUP, INC.
                               LAFAYETTE, ALABAMA
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

NOTE 16:      Reorganization

              During June, 1999, the Company initiated a plan of reorganization.
              As a result the Company entered into a reverse merger  transaction
              with RDA  Services,  Inc. in November,  1999 whereby RDA Services,
              Inc.  purchased  Glenn  McClendon  Trucking  Company,  Inc. (GMTC)
              through issuance of its stock. RDA Services, Inc. then changed its
              name  to  McClendon   Transportation  Group,  Inc.  The  principal
              shareholders of GMTC retained 90% of the stock of the newly merged
              Company.   The  transaction  also  included   refinancing  certain
              portions  of  the  line-of-credit  agreement,  as  well  as  other
              long-term  debt  obligations  as  discussed  in Note  8. To  date,
              certain of the above items are still subject to contingent events.

                                      -20-



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