U S BRIDGE CORP, 10KSB, 1996-11-04

U S BRIDGE CORP
10KSB, 1996-11-04
BLANK CHECKS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1996

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

For the transition period from __________ to __________

Commission File Number 33-26782-NY

U.S. BRIDGE CORP.
(Exact name of registrant as specified in its charter)

Delaware 11-2974406
(State or other jurisdiction of (I.R.S. Employer Id. No.)
Incorporation or organization)

53-09 97th Place, Corona, New York 11368

(Address of principal executive offices) (Zip Code)

(718) 699-0100
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE

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

Common Stock, $.001 par value
(Title of Class)

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

<PAGE>

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

The aggregate market value of the voting stock on October 18, 1996
(consisting of Common Stock, $.001 par value per share) held by non-affiliates
was approximately $2,178.523 based upon the closing bid price for such Common
Stock on said date ($1.0625), as reported by a market maker. On such date, there
were 6,662,531 shares of Registrant's Common Stock outstanding. The issuer's
subsidiaries had aggregate revenues of $7,451,433 for its fiscal year ended June
30, 1996.

<PAGE>

PART I

ITEM 1DESCRIPTION OF BUSINESS

History

U.S. Bridge Corp. (the "Company") was incorporated as Colonial Capital
Corp., in the State of Delaware on September 11, 1988 under the name of Colonial
Capital Corp. The Company subsequently changed its name to Cofis International
Corp. during May 1991. Effective April 1994, in connection with the reverse
acquisition of its subsidiaries, Cofis changed its name to U.S. Bridge Corp.

In December, 1990, the Company effected a merger with Mercado Marketing
Corp., a medical device marketing company, principally of latex condoms,
whereby, the surviving corporation was Mercado Marketing Corp., a Delaware
corporation. Pursuant to which the Company changed its name to Mercado Marketing
Corp. This Company did not engage in any operations and did not receive any
revenues from operations, therefore, the Company continued to seek business
ventures.

In May 1991, the Company entered into an Agreement and Plan of Merger with
Cofis International Corp., and pursuant to which amended its certificate of
incorporation and changed its name to Cofis International Corp. This merger was
never consummated, however, the Company kept the name Cofis International Corp.

The Company was a development stage company, from its formation, with no
operations except the search for possible business acquisitions, until its
acquisition of both U.S. Bridge of N.Y., Inc. ("NY") and One Carnegie Court
Associates, Inc. ("One Carnegie") on April 25, 1994, (the "Acquisitions").
Pursuant to the Acquisitions the Company issued an aggregate of 3,540,000 shares
of its common stock, par value $.001 per share (the "Common Stock") to the
stockholders of NY and One Carnegie, 2,820,000 and 720,000, respectively, in
exchange for all their issued and outstanding shares. Joseph Polito, the
principal stockholder of NY and the sole stockholder of One Carnegie, received
in exchange for his shares in each company, 2,380,000 and 720,000 shares of
Common Stock, respectiveizations". Accordingly, both NY and One Carnegie became
subsidiaries of the Company.

In connection with the Acquisitions, the Company amended its Certificate of
Incorporation to (i) increase its authorized shares of Common Stock from
10,000,000 to 50,000,000 shares, (ii) increase the par value of the Common Stock
from $.0001 to $.001 par value, and (iii) to authorize 10,000,000 shares of
preferred stock, which shares may be issued in classes and series, pursuant to
the rights, designations and preferences as determined by the Board of
Directors.

<PAGE>

Recent Developments

In June 1996, NY received notice that its $3,900,000 bid to erect
structural steel for the Louis Vuitton N.A. 27 floor Office Tower at 57th Street
in Manhattan has been accepted by Tishman Construction Corp., as construction
manager. NY has commenced detailing the steel needed for the project and is
awaiting the execution of the contract.

On May 13, 1996, Joseph Polito, the Company's president entered into a
memorandum of understanding with an individual, Lubov Ulianova, whereby Mr.
Polito borrowed $300,000 from Mr. Ulianova, which loan was secured by 550,000
shares of the Company's Common Stock owned by Mr. Polito, which shares were put
into an escrow account, with Alan Berkun, as the escrow agent. The funds were
then loaned by Mr. Polito to the Company. The loan provided that upon the
Company's listing of its Common Stock on the Nasdaq SmallCap Stock market
("Nasdaq"), the Company would call its loan to the Company, which would and was
repaid by the issuance by the Company of 400,000 shares of Common Stock to Mr.
Ulianova as payment for the loan, which transaction was to be pursuant to
Regulation S under the Securities Act of 1933, as amended. In addition, Mr.
Polito granted Mr. Ulianova an option to purchase 600,000 shares at a price of
$1.50, which option was to expire 6 months from the listing of the Company's
securities on Nasdaq and which option may only be exercised if the bid price for
the Company's Common Stock is at least $3.00. The Company's Common Stock was
approved for listing on Nasdaq on July 25, 1996 at which time the loan was
repaid. The option has not been exercised to date. These matters were reviewed
for the Company by its special counsel Alan Berkun, Esq.

In May 1996, Lehrer McGovern, Bovis, Inc. ("LMB"), as construction manager,
has informed NY that its bid to demolish certain existing structures and to
furnish and perform the erection of structural steel, as a subcontractor, for
the Gct has an estimated contract value of $3,350,000 to NY. The project is
subject to the approval of the owners of LMB and the parties entering into a
formal agreement. NY has begun detailing the steel for the project and is
awaiting the execution of the contract.

In April 1996, Eklec Co., the developer of the Palisades Power Mall project
in West Nyack, New York, has informed NY that its bid to perform the erection of
structural steel for the project has been accepted. The mall is estimated to be
approximately 3,900,000 square feet upon completion. The project is to be
performed in two phases at an estimated aggregate contract value of $8,200,000
reduced from $9,000,000. NY has entered into a contract and expects to commence
work on the project during July or August.

In September 1995, NY entered into a contract to be the general contractor
in the construction of a building in Queens, New York, with an estimated
contract value of $3,500,000. The project is considered a design and
construction project, whereby NY will work with the architect in deciding on the
materials to be used in order to cost effectively construct the building. The
signed contract has been submitted to the builder's bank for approval of its
terms and for a commitment for the project's financing.

<PAGE>

No approval has been obtained and NY believes that this project is
indefinitely on hold. Also in September 1995, NY entered into a contract to
furnish and erect the structural steel in the renovation of a building in New
York City with an estimated contract value of $1,600,000. This project has been
completed.

On August 9, 1995, NY, a 50.1% owned subsidiary of the Company, consummated
a public offering of 700,000 shares of its common stock and 494,500 (64,500
pursuant to the exercise of the underwriter's over-allotment option) common
stock purchase warrants at $5.00 per share and $.10 per warrant, respectively,
through State Street Capital Markets Corp. (formerly White Rock Partners & Co.,
Inc.) as underwriter. At such time certain selling shareholders and a selling
warrantholder sold through the underwriter 160,000 shares of NY's common stock
and 3,000,000 warrants, respectively. Each warrant exercisable for a period of
four years commencing August 7, 1996 and expiring August 8, 2000, to purchase
one share of Common Stock, at a purchase price of $6.00 per share. On September
1, 1995 the underwriter exercised its over-allotment option to purchase an
additional 91,850 shares of NY's common stock. At such time the Company
exercised its Special Warrant to purchase 5,665 shares of NY's common stock at
$2.50 per share, in order for the Company to retain over 50% of NY's Common
Stock. NY received net proceeds of $2,889,082 from the offering. The proceeds
from NY's public offering were apportioned as follows (i) approximately $262,000
was used to repay a bridge loan made to NY, (ii) approximately $735,000 was used
to repay certain promissory notes issued in NY's private placement in March,
1995, and (iii) approximately $1,892,082 was deposited into NY's general account
to obtain bonding and for project start up expenses and other operating costs.

On August 15, 1995, the Company issued 150,000 restricted shares of Common
Stock to Joseph Polito under the terms of the Company's Senior Management
Incentive Plan ("Management Plan") and a restricted share agreement, at no cost.
These shares were issued as compensation for Mr. Polito's work with the Company
and NY in the consummation of NY's initial public offering on August 9, 1995 and
for his continued employment with the Company. Of the shares issued to Mr.
Polito, 50,000 shares immediately vested and are owned by Mr. Polito without
restriction and the remaining 100,000 shares vest pursuant to restricted
periods, whereby 50,000 shares vest on each of August 15, 1996 and 1997. The
shares which have been issued subject to the restriction periods, bear a
restrictive legend to the effect that ownership of the restricted shares, and
the enjoyment of all rights appurtenant thereto, are subject to the
restrictions, terms and conditions provided in the Management Plan and the
restricted shares agreement. Such certificates have been deposited by Mr. Polito
with counsel for the Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to the Company of
all or any portion of the escrowed restricted shares and any distributions on
said shares in the event that they are forfeited or do not become vested in
accordance with the Management Plan and restricted shares agreement.

<PAGE>

dealer, in which Alan Berkun is the president and principal stockholder,
pending the Company's securities being quoted on the Nasdaq SmallCap Stock
Market. The sale of the 500,000 shares were registered pursuant to a
Registration Statement on Form S-8 filed by the Company on June 11, 1995. In
addition to the shares issued the consulting agreement provided for the payment
of a consulting fee of $4,000 per month for six months commencing June 1995, as
additional compensation. Pursuant to the terms of the consulting agreement in
addition to consulting services, Marlowe must utilize its best efforts to raise
a minimum of $750,000 for the Company upon the Company's securities being quoted
on the Nasdaq. No funds were raised by Marlowe for the Company. All 500,000
shares were resold pursuant to the S-8 registration statement filed by Alan
Berkun on behalf of the Company. On August 1, 1996, the Company amended its June
1995 agreement with Marlowe & Company ("Marlowe"), in which the Company agreed
to issue an additional 250,000 shares of Common Stock to Marlowe, which were
issued on August 1, 1996 and resold pursuant to Regulation S under the Act. Alan
Berkun acted as special counsel for the Company regarding these transactions.

On September 21, 1994, the Company formed a wholly owned subsidiary named
U.S. Bridge Corp. (Maryland). ("US Bridge MD"). The Company was incorporated in
the State of Delaware for the purpose of providing Waldorf Steel Fabricators,
Inc., with employees to perform steel fabrication work.

In September, 1995, NY engaged the services of a consultant to introduce
and provide services in helping NY obtain bonding from a company licensed in New
York, which company is to be recognized by the City and State of New York. This
consultant was paid a fee of $100,000 and has to date, introduced NY to Willis
Corroon, a consulting firm which works directly with several bonding companies.
NY made application to several bonding companies through its consultants and was
declined by all companies. NY has terminated its relationship with this
consultant.

Business of U.S. Bridge of N.Y., Inc.

U.S. Bridge of N.Y., Inc. ("NY"), was incorporated in the State of New York
on September 4, 1990, as Metro Steel Structures, Ltd. N.Y. filed an amendment to
its Certificate of Incorporation changing its name to its current name on
January 11, 1995. Additionally, NY amended the authorized capital of NY to (i)
increase the number of authorized shares of Common Stock from 200 to 10,000,000;
(ii) increase the par value from no par value to $.001 par value per share and
(iii) authorized 500,000 shares of Preferred Stock par value $.01 per share. As
of such date NY effected a 29,687.50 for one forward split of its Common Stock,
pursuant to which there became 950,000 sant to an agreement and plan of merger
by and between NY and the Company effective as of April 25, 1994, The Company
issued an aggregate of 3,540,000 shares of its common stock to the sole
stockholder of NY, Joseph Polito, whereby will receive 2,820,000 shares for all
the shares of NY and 720,000 shares for all the shares of common stock of One
Carnegie, Mr. Polito. The "Acquisitions" were accounted for as a
"recapitalization" of The Company. Accordingly, both NY and One Carnegie became
wholly owned subsidiaries of The Company, of which company Joseph Polito became
an 80% shareholder, which decreased to 75.4% upon the completion of the IPO.

<PAGE>

Immediately prior to the acquisition of NY by The Company, NY completed a
private placement offering of its Common Stock, whereby NY sold an aggregate of
148,200 shares (post stock split) of its Common Stock. NY received net proceeds
of $502,594 after the deduction of offering expenses of $47,406.

Pursuant to the terms of the acquisition, each subscriber in the private
placement exchanged each share of NY held prior to the acquisition for 20,000
post reverse split shares of common stock of The Company. The Company has agreed
to register the shares purchased in the private placement in a Registration
Statement under the Securities Act of 1933, as amended (the "Act"), one time
only, upon demand by any of the investors in the private placement, after June
30, 1995. The Company has agreed to include the securities offered in any
appropriate registration statement which it files under the Act during the two
year period ending June 30, 1996.

Public Offering

On August 14, 1995, NY consummated an initial public offering of 700,000
shares of its Common Stock and 494,500 (64,500 pursuant to the exercise of the
underwriter's over-allotment option) Common Stock purchase warrants at $5.00 per
share and $.10 per warrant, respectively, through State Street Capital Markets
Corp. (formerly White Rock Partners & Co., Inc.) as underwriter. At such time
certain selling shareholders and a selling warrantholder sold through the
underwriter 160,000 shares of Common Stock and 3,000,000 Warrants, respectively.
On September 1, 1995 the underwriter exercised its over-allotment option to
purchase an additional 91,850 shares of NY's Common Stock. At such time The
Company exercised its Special Warrant to purchase 5,665 shares of NY's Common
Stock at $2.50 per share, in order for The Company to retain over 50% of NY's
Common Stock. NY received net proceeds of $3,119,043 from the offering. The
proceeds from NY's public offering were apportioned as follows (i) approximately
$262,000 was used to repay a bridge loan made to NY, (ii) approximately $735,000
was used to repay certain promissory notes issued in NY's private placement in
March, 1995, and (iii) approximately $1,892,082 was deposited into NY's general
account as working capital to obtain bonding and for project start up expenses
and other operating costs.

The following table lists all companies in which Joseph Polito is either an
officer, director or principal shareholder, and any activities engaged in by
such companies with or any of its subsidiaries, as of June 30, 1996:

<PAGE>

<TABLE>

Year J. Polito's Activities with Place of
Company Name(1) of Inc. Title Ownership(%) with Company Business
<S> <C> <C> <C> <C> <C>

U.S. Bridge Corp.(2) 1988 Pres./Director 69.5% Parent Company Queens, NY

One Carnegie Court 1990 Pres./Director 100% Subsidiary of Bridge Waldorf, MD
Associates, Inc. (3)(5)(6)

R.S.J.J. Realty Co (4) 1983 Pres./Director 100% Leases the offices and Queens, NY
storage space to NY

Crowne Crane, Inc.(4) 1988 -- 50% Supplies cranes to NY Brooklyn, NY
for use in the erection of steel.

Atlas Gem Leasing, 1986 Pres./Director 100% Supplies welding machines Queens, NY
Inc. (4) and compressors to NY.

Atlas Gem Erectors 1986 Pres./Director 100% Sold certain construction No office
Co., Inc. (4)(7) contracts to NY
Ceased operations

Gem Steel Erectors 1966 Pres./Director 100% No Business relationship No office
Inc.(4)(8) Ceased Operations

Waldorf Steel 1990 Pres./Director 100% Provided steel to the Waldorf, MD
Fabricators, Inc.(3)(5) Company, ceased
operation in 8/1/95

U.S. Bridge Corp. 1966 Pres./Director 100% Leases steel fabricating Queens, NY
(Maryland) (4)(9) facilities from One Carnegie

U.S. Bridge of NY, Inc. 1990 Pres./Director 50.1% Provides steel erection for Queens, NY
Inc. (4)(10) buildings, roadway and bridge
repair projects
</TABLE>
(1) Except as disclosed hereunder no company listed is beneficially owned
by another entity, nor does any company have any subsidiaries. No company listed
has conducted any business operations under any name except for its corporate
name, except for U.S. Bridge Corp. See "-- History."

(2) Incorporated in the State of Delaware.

(3) Incorporated in the State of Maryland.

(4) Incorporated in the State of New York.

(5) One Carnegie owns the property, building and equipment which it leased
to Waldorf Steel Fabricators, Inc. ("Waldorf") prior to August 1, 1995, as of
which date it began leasing to US-MD.

(6) Formed in December 1990, One Carnegie is a wholly-owned subsidiary of
The Company. Mr. Polito, through his ownership of approximately 69.5% of the
outstanding shares of The Company may be deemed the beneficial owner of the
shares of One Carnegie owned by The Company.

(7) Ceased operations in September 1994.

(8) Ceased operations in March 1991.

(9) U.S. Bridge Corp. (Maryland) ("US-MD") was incorporated in the state of
Delaware on September 21, 1994 for the purpose of providing the labor for the
fabrication of steel by Waldorf, which it provided until August 1, 1995. It
currently leases the building and equipment, previously leased to US-MD, from
One Carnegie. It provides steel fabrication for projects of NY.

(10) Mr. Polito, through his ownership of approximately 65.9% of the
outstanding shares of The Company may be deemed the beneficial owner of the
shares of NY owned by the Company.

NY was formed by Joseph Polito, its president, to serve primarily as a
general contractor for public and private sector construction projects. The
public sector projects are those sponsored by federal, state and local
governmental authorities in New York State and the metropolitan areas.

<PAGE>

Previously, Mr. Polito, through other entities has furnished and provided
steel erection as a subcontractor for private and governmental construction
projects. From its commencement of operations in June 1993 and until recently,
NY has provided steel erection for building, roadway and bridge repair projects
for general contractors who have been engaged by private and
municipal/governmental clients. NY as of June 30, 1996 has completed 17 projects
as a subcontractor with an aggregate project value of $12,987,215 and is
currently engaged in 7 projects as a subcontractor with an aggregate value of
approximately $17,400,000. In addition, NY has signed a contract for the
Palisades Power Mall project but has not commenced the project. NY plans on
continuing to undertake projects as a subcontractor, but upon receipt of bonding
will focus on obtaining projects as a general contractor.

<TABLE>
<CAPTION>
Schedule of Completed Contracts

Project Name Contract Amount Contract Date Type of Contract
- ------------ --------------- ------------- ----------------
<S> <C> <C> <C>
39th Street Bridge $2,867,276 June 1993 Lump-Sum
Robert Moses Causeway 540,118 December 1994 Lump-Sum
Van Wyck 146,000 April 1992 Lump-Sum
Centereach 186,500 June 1995 Lump-Sum
Pro-Camera 50,275 August 1995 Lump-Sum
VDC 75,000 August 1995 Lump-Sum
39th Street (Demolition) 709,645 February 1993 Lump-Sum
New England Thruway 2,409,058 June 1993 Lump-Sum
Honeywell 1,100,000 June 1993 Joint Venture (1)
Cross Bronx Expressway 60,176 March 1994 Lump-Sum
KISKA Construction Corp.-USA/
Robert Moses Causeway 559,603 December 1994 Lump-sum
McKay Enterprises, Inc./
Kasciuszko Bridge 2,220,218 June 1993 Lump-sum
201 East 80th Street 1,600,000 May 1995 Lump-sum
South Avenue Plaza 275,000 May 1996 Lump-Sum
Others 188,346 N/A N/A
$ 12,987,215

</TABLE>

(1) Joint venture with John P. Picone, Inc. ("Picone"), whereby NY entered
into a consulting agreement with Picone, who was awarded the project. The
agreement provides that for 50% of the profits of the project NY would provide
Picone with its expertise in steel erection, supply qualified workers and
oversee the rehabilitation of the bridge. Picone put NY's employees on its
payroll and incurred all the expenses of the project.

(2) Total estimated project value of a collection of smaller projects
completed.

Inasmuch as NY purchased steel from Waldorf, and now from US-MD, or leases
equipment from Crown Crane, Ltd. or Atlas Gem Leasing, Inc., NY shall check
prices in the industry prior to engaging in any such transactions and will
transact business with such companies only on terms which may be considered
similar. The audit committee of the Board of Directors intends to exercise
reasonable judgment and take such steps as they deem necessary under all of the
circumstances in resolving any specific conflict of interest which may occur and
will determine what, if any, specific measures, such as retention of an
independent advisor, independent counsel or special committee, may be necessary
appropriate. The fact that Joseph Polito is an officer, director and principal
shareholder in other companies including those that transact business with The
Company and NY, opens the potential that there may be conflicts of interest in
decisions made by Mr. Polito, which may compromise his fiduciary duty to The
Company and NY. Any remedy under state law, in the event such circumstances
arise, would most likely be prohibitively expensive and time consuming. See "--
Suppliers and Subcontractors."

<PAGE>

Bridge and Roadway Construction Industry

Throughout the country, inclusive of the New York metropolitan area and
surrounding areas, there are increasing signs of deterioration of the roadways
and bridges, which are the critical links in the country's transportation
network infrastructure. Many bridges and roadways in the New York metropolitan
and surrounding areas are considered in poor condition and require major repairs
or replacement, which make them eligible for federal funds for repairs. In 1983
the bridge over the Mianus River in Connecticut collapsed. Soon thereafter the
federal government enacted legislation whereby all bridges must be inspected
every two years. In connection therewith, the federal government increased the
amount of accessibility of federal funds to repair the country's infrastructure
inclusive of its roadways and bridges.

The 1991 InterModal Surface Transportation Efficiency Act authorized
expenditures of $151 billion over six years in order to repair and replace the
country's roadways and bridges pursuant to certain criteria as to current
conditions and usage of said roadways and bridges. This legislation has only
recently begun to benefit the construction industry. Through the repair and
replacement of bridges and roadways are primarily the responsibility of the
state and federal agencies and municipalities, this responsibility is also
placed on those companies which require improvements in the transportation
infrastructure, in order to provide for or supplement their own transportation
network requirements. These companies are responsible to build and maintain
bridges and roadways for their use and for use by the general pubic, where
appropriate, with the approval of the state and federal agencies and
municipalities, which are necessary for their transportation network (i.e.,
Railroads).

Marketing

NY obtains its projects primarily through the process of competitive
bidding. Accordingly, NY's marketing efforts include; (i)itoring trade journals
including Engineering Record News, Dodge Report and Brown's Letter, Inc., (iii)
monitoring daily newspapers and real estate publications, (iv) membership and
networking in affiliated organizations including Allied Building Trades, (v)
maintaining contracts with developers and other general contractors and (vi)
requesting notification from various government agencies as to bid solicitations
being requested.

In response to bid requests, NY submits a proposal detailing its
qualifications, the services to be provided and the cost of the services to the
soliciting entity which then, based on its evaluation of the proposals
submitted, awards the contract to the successful bidder. Generally, the contract
for a project is awarded to the lowest bidder, although other factors may be
taken into consideration.

The Contract Process

<PAGE>

NY submits its bids after a detailed review of the project specification,
an internal review of NY's capabilities and equipment availability and an
assessment of whether the project is likely to attain targeted profit margins.
In bidding on contracts there are two types of bid requests, at the option of
the client requesting the bids, a unit cost bid and a lump-sum bid. The unit
cost bid is based upon a cost per unit basis, where a lump sum bid obligates NY
to complete the project at a fixed price. In a lump-sum bid the risk of
estimating the quantity of units required for a particular project is on NY
while in a unit cost bid NY must estimate the per unit cost, not the number of
units needed. Any increase in NY's unit cost over its unit bid price or cost
over its lump-sum bid, whether due to inefficiency, faulty estimates, weather,
inflation or other factors, must be borne by NY and may adversely affect its
results of operations. While Mr. Polito has been in the construction business
for many years, NY and Mr. Polito have just recently started bidding on projects
as a general contractor and may incur unanticipated expenses, problems or
difficulties which may affect its bid prices and project profitability. Though
NY has been the low bidder on several public sector and private sector bids it
has not commenced any project as a general contractor. NY has entered into two
contracts for private sector projects, both of which are currently awaiting
banking approval. See "-- NY," "-- Insurance and Bonding" and "Risk Factors."

Upon receipt by a New York City agency that a bid submitted has been
declared the low bid, the city's procurement policy requires that the New York
Finance Committee approve all funds to be allocated to such project. During this
time NY which was the low bidder must provide the Department of Transportation
with such documents as are required, including a payment and performance bond,
in order to be approved to undertake the project. Once the New York City Finance
Committee has cleared the allocation of funds for a project and the Department
of Transportation has cleared all the documentation required to be submitted by
the contractor, a starting date and time table is set up for the project.

Most government contracts provide for termination of the contract at the
election of the customer, although in such event NY is generally entitled to
receive a small cancellation fee. Many of NY's contracts are also subject to
completion requirements with liquidated damages assessed against it if schedules
are not met.

Contracts as a subcontractor and general contractor often involve work
periods in excess of one year. Revenue on uncompleted fixed price contracts is
recorded under the percentage of completion method of accounting. NY begins to
recognize profit on its contracts when it first accrues direct costs. Pursuant
to construction industry practice, a portion of billings may be retained by the
customer until certain contractual obligations are fulfilled.

NY anticipates acting as general contractor on most projects received in
the future and will need to hire subcontractors to perform certain jobs such as
electrical and mechanical work. As general contractor, NY will be responsible
for the performance of the entire contract, including work assigned to
subcontractors. Accordingly, NY is subject to liability associated with the
failure of subcontractors to perform as required under the contract. NY may
require its su performance, although affirmative action regulations require NY
to use its best efforts to hire minority subcontractors for a portion of the
project and some of these subcontractors may not be able to obtain surety bonds.

In connection with both public and private sector contracts, NY will be
required to provide bid and performance surety bonds guaranteeing its
performance. NY's ability to obtain surety bonds depends upon its
capitalization, working capital, past performance, management expertise and
other factors. Surety companies consider such factors in light of the amount of
NY's surety bonds then outstanding and the surety companies' current
underwriting standards, which may change from time to time. See "-- Insurance
and Bonding."

NY has and anticipates continuing to bid as a subcontractor at the request
of other general contractors. Although NY has not been required to provide bonds
to such general contractors when acting as a subcontractor, it may be required
to furnish bonds guaranteeing its performance as a subcontractor in the future.
Currently, NY is serving as a subcontractor on seven projects. See "-- Work in
Progress; Backlog and Seasonality."

Insurance and Bonding

NY maintains general liability and excess liability insurance, insurance
covering its construction equipment and workers' compensation insurance, in
amounts its believes are consistent with industry practices. NY carries
liability insurance of $1,000,000 per occurrence which management believes its
adequate for its current operations.

NY will be required to provide a surety bond on most of the project it
receives as a general contractor. NY's ability to obtain bonding, and its
bonding capacity, is primarily determined by NY's net worth, liquid working
capital (consisting of cash and accounts receivable) and the number and size of
projects under construction. The larger the project and/or the more projects in
which NY is engaged, the greater the bonding, net worth and liquid working
capital requirements. Therefore, NY may be required to maintain certain levels
of tangible net worth in connection with establishing and maintaining bonding
limits. As a practical matter such limits may limit dividends, if any, which
might have been declared and which would limit corporate funds available for
other purposes.

Bonding requirements vary depending upon the nature of the project to be
performed. NY anticipates paying a fee to bonding companies of between 1 1/4% to
3 1/2% of the amount of the contracts to be performed. Since these fees are
generally payable at the beginning of a project, NY must maintain sufficient
working capital to satisfy the fee prior to receiving revenue from the project.
Bonding fees are a line item in the submitted bid and are included as part of
NY's billing of its client. If NY does not secure bonding from a company or
companies licensed in the State of New York and other states where NY may bid on
public sector projects, NY will be unable to bid on these projects as a general
contractor. NY has approached several New York licensed bonding companies and is
currently undeth such

<PAGE>

companies, but as of the date hereof has not been approved by any company
to receive bonding. In order to obtain bonding, in addition to credit checks and
other due diligence disclosure requirements bonding companies look at NY's
capitalization, working capital, past performance, management's expertise and
other factors. The bonding companies require companies receiving bonding to have
certain amounts of capital and liquid assets, and will base the amount of
bonding it will issue based on a formula, devised by the bonding company,
usually based on certain industry standards, which takes into account such
factors.

As a general contractor, NY anticipates bidding on both private and public
sector projects as a general contractor, all of which require bonding, in the
form of bid and/or performance bonds. A bid bond is a bond issued by a bonding
company which is usually in an amount equal to 10% of the bid price and which
guarantees that the contractor will be able to produce such other additional
documents and information required in order to commence the project including
the issuance of a performance bond. A performance bond is a guarantee by a
surety, customarily 100% of the value of the contract amount, that the
contractor will complete the project pursuant to the terms and conditions of the
contract. Most government contracts provide for termination of the contract at
the election of the customer, although in such event, NY is generally entitled
to receive a small cancellation fee. Many of NY's contracts are also subject to
completion requirements with liquidated damages assessed against it if schedules
are not met. NY has not been materially adversely affected by these provisions
in the past as a subcontractor.

Work in Progress; Backlog and Seasonality

The following is a listing of the projects as of June 30, 1996 which NY is
currently engaged in as a subcontractor:
<TABLE>

Backlog Estimated
Customer/ Contract Amount at Completion Type of % of job
Project Name(1) Amount Contract Date 6/30/96 Date Contract Completed
<S> <C> <C> <C> <C> <C> <C>
Perini Corporation/
Stillwell Avenue Bridge $ 8,376,728 June 93/Oct. 94 $ 753,900 June 1997 Lump-sum 91%
Perini Corporation/
39th Street Bridge 2,867,276 June 1993 21,500 March 1997 Lump-sum 99%
Eklec Co./
Palisades Power Mall 8,050,000 June 1996 7,969,500 June 1996 Lump-sum 1%
McKay Enterprises, Inc./
Reconstruction of 4th
Avenue Bridge 420,996 November 1994 218,900 December 1996 Lump-sum 48%
Lehrer McGovern, Bovis, Inc./
Grand Central Station 3,309,033 June 1996 3,110,500 June 1997 6%
Tishman Construction/
Louis Vuitton N.A. 3,908,000 June 1996 3,829,800 March 1997 2%
Williamsburg Bridge 2,517,651 May 1996 2,039,300 December 1997 Lump-sum 19%
Total Signed Contracts $29,449,684 $17,943,400
=========== ===========

</TABLE>

For the years ended June 30, 1996 and 1995, NY had 3 and 2 customers,
respectively, VJB Construction, Inc., DeFoe Construction, Inc., and Perini
Corporation and McKay Enterprises, Inc. and Perini Corporation, respectively,
comprising four projects, which accounted for an aggregate of approximately 62%
and 58%, respectively, of total revenues. At June 30, 1996 and 1995, amounts due
from the above customers with respect to such projects represented approximately
46% and 70%, respectively, of total accounts receivable. The discontinuance of
any of these projects, or a general economic downturn in the State of New York,
in which the projects are located, could have a material adverse affect on NY's
results of operations.Though NY does not believe its business is seasonal, its
operations slow during the winter months due to the decreased productivity of
the workers, thereby increasing costs as well as the inability to work in severe
weather conditions.

Suppliers and Subcontractors

<PAGE>

For the year ended June 30, 1996, NY received 100% of the steel fabrication
it required from US-MD a subsidiary of U.S. Bridge Corp., the parent of NY.
US-MD provides NY with fabricated steel, which it also sells to other
subcontractors and general contractors. Prior to August 1, 1995, Waldorf Steel
Fabricators, Inc., a company wholly owned by Joseph Polito provided most of the
steel used by NY. NY also receives steel from several other suppliers, none of
which account for 10% of the steel purchased by NY. The price paid and the terms
for the steel purchased from US-MD were comparable to competitive prices and
terms and therefor, in the event US-MD is unable to continue to provide NY with
the bulk of the steel it requires, NY believes it will be able to acquire it
through other suppliers.

NY currently depends upon various vendors to supply spare parts, cranes and
other heavy equipment and its ability to hire skilled workers depends upon its
ability to comply with certain union agreements and contracts. NY rents cranes
from Crown Crane, Ltd., a company of which Joseph Polito is a 50% shareholder
and rents generators and other equipment from Atlas Gem Leasing, Inc., a company
which is wholly owned by Joseph Polito. NY believes that there are a sufficient
number of vendors, so that in the event any individual or group of vendors can
no longer service NY's needs, NY will be able to find other vendors at
competitive prices. NY does hire skilled steel workers represented by the
International Union of Structural Ironworkers, local 40, operating engineers
locals 14, 14B, 15, 15A, 15C and 15D and cement masons local 780 (collectively
referred to as the "Unions") and must comply with agreements with the Unions,
which agreements regulate all employment issues between NY and the Union
employees including pay, overtime, working conditions, vacations benefits, etc.,
and which agreements expire on June 30, 1999. NY believes that it has a good
relationship with the Unions and is in compliance with all union agreements. No
assurance can be given that NY will continue to be in compliance with the Unions
or successfully negotiate extensions to NY's agreements with such Unions. In the
event problems or conflicts with the Unions arise or there is a loss of skilled
steel and operating engineers, this would have a detrimental effect on NY's
operations.

NY's success as a general contractor, in part, will be dependent upon its
ability to hire workers and comply with union contracts and agreements and its
ability to oversee and retain qualified subcontractors to perform certain work.
Although NY believes that it will be able to attract s it bids as general
contractor, there can be no assurances. NY will be responsible for performance
of the entire contract, including the work done by subcontractors. Accordingly,
NY may be subject to substantial liability if a subcontract fails to perform as
required. Also there may be unanticipated difficulties in hiring and overseeing
subcontractors that NY is currently not aware of.

Competition

All aspects of NY's business is and will continue to be highly competitive.
NY is one of many subcontractors which erect and furnish steel for projects,
many of whom have substantially greater sales and financial resources than that
of NY. When contractors seek construction contracts, they request bids of
several subcontractors as to the different requirements of the project. These
subcontractors compete primarily as to price, name recognition and prior
performance.

As a general contractor, NY will be competing with many larger, established
and more experienced contractors, who have name recognition and relationships
with the federal and state municipalities and agencies as well as private
companies which request bids on the projects NY intends bidding on. NY is a
general contractor which specializes, but not exclusively, in bridge and roadway
repair and replacement as well as the furnishment and erection of steel
structures for buildings. NY's competitors are numerous and many have
substantially greater marketing, financial, bonding and human resources.

Government Regulation

NY must comply with the Occupational Safety and Health Administration
("OSHA"), a federal agency which regulates and enforces the safety rules and
standards for the construction industry. In addition, NY must also comply with a
wide range of other state and local rules and regulations applicable to its
business, including regulations covering labor relations, safety standards,
affirmative action and the protection of the environment including requirements
in connection with water substance discharge. Continued compliance with OSHA and
the broad federal, state and local regulatory network is essential and costly
and the failure to comply with such regulations, or amendments to current laws
or regulations imposing more stringent requirements may have an adverse effect
on NY's operations. NY believes that it is in substantial compliance with all
applicable laws and regulations.

One Carnegie Court Associates, Inc. ("One Carnegie")

One Carnegie was incorporated in the State of Maryland on December 14,
1990, for the sole purpose of acquiring certain land, building, machinery and
equipment, in the St. Charles Business Park, Waldorf, Maryland which it acquired
on January 14, 1991. The acquisition by One Carnegie comprised 13 acres of
property, a 4 1/2 acre [170,000 square foot] building and the machinery and
equipment for the fabrication of steel. The note issued pursuant to the purchase
of this property is personally guaranteed by the Company's president and
principal shareholder, Joseph Polito. This under-roof facility is equipped with
equipment capable of fabricating structural steel of approximately 24,000 tons
per year.

One Carnegie rented this land, building, machinery and equipment to Waldorf
Steel Fabricators, Inc., a Maryland corporation, ("Waldorf") an affiliate of the
Company, which corporation is wholly owned by Joseph Polito, pursuant to the
terms of a lease agreement. Waldorf facilitated the steel fabrication for NY as
well as for other subcontractors and contractors. The Company believes that the
terms of the lease of the property by Waldorf was equivalent to that which would
be obtained from an unaffiliated third party. On August 1, 1995, One Carnegie
entered into a lease surrender agreement with Waldorf, whereby as of August 1,
1995 Waldorf

<PAGE>

ceased operations. Pursuant to such agreement, Waldorf surrendered the
premises and waived any and all rights to possession of such premises.
Simultaneously, One Carnegie entered into a lease agreement with U.S. Bridge MD.
Such lease expires on December 31, 2001 and provides for monthly rental payments
of $50,000. The lease also provides for all real estate taxes and operating
costs to be paid directly by U.S. Bridge of MD. In connection with the lease,
U.S. Bridge MD paid approximately $82,000 on account towards rent to One
Carnegie on October 2, 1995.

Employees

As of June 30, 1995, the Company had three executive officers and no
employees. As of June 30, 1996, NY had three executive officers, two
administrative assistants, one comptroller, and two employees in the accounting
department. NY employs such number of union employees, depending on the number
and size of projects engaged in, ranging from 25-100 employees on a full-time
and part-time basis. These union employees are represented by the International
Union of Structural Ironworkers, locals 40, Operating Engineers locals 14, 14B,
15 15A, 15C and 15D. NY's contracts with these Unions, which agreements regulate
all employment issues between NY and the union employees including pay,
overtime, working conditions, vacations, benefits, etc., which agreements expire
on June 30, 1999. NY considers relations with the unions and their employees to
be good.

ITEM 2.DESCRIPTION OF PROPERTY

The Company's offices are located at the offices of NY, which leases
approximately 25,000 square of executive office space and utilizes approximately
24,000 square feet of storage space at 53-09 97th Place, Corona, New York 11368.
The lease is with an affiliate company, RSJJ Realty Corp., which is owned by the
Company's majority stockholder and the Company's president, Joseph Polito,
pursuant to a lease agreement expiring in March 1998. NY pays rent of $20,000
per month. NY also leases a yard for storage material pursuant to an oral
agreement which requires monthly payments of $3,500. The Company believes that
the terms of this lease are comparable and competitive with that which would
have been negotiated with an unaffiliated landlord.

In addition, the Company, through One Carnegie, owns 13 acres of property
in St. Charles Business Park, Waldorf, Maryland, inclusive of a 4 1/2 acre
[170,000 square foot] building. In connection with the acquisition of the
property and equipment, One Carnegie entered into a $3,000,000 installment loan
agreement, which loan was collateralized by all the property and equipment owned
by One Carnegie and personally guaranteed by the Company's majority shareholder
and an affiliated company. The loan bears interest at a rate of 11% until
December 1994, at which time it increases to 13% for the term of the loan. On
October 21, 1993, One Carnegie entered into a forbearance agreement with the
lender, restructuring certain terms and provisions of the loan.

<PAGE>

On December 13, 1994, in connection with the original acquisition of the
property and equipment, One Carnegie signed a modification to the forbearance
agreement with the lender. Pursuant to such modification agreement, the lender
has agreed not to accelerate and demand full payment of the note and to allow
One Carnegie to reduce its monthly payments to $40,000 pursuant to a new two (2)
year amortization schedule provided by the lender. Such modification agreement
required One Carnegie to make timely payments after December 31, 1994, which One
Carnegie has not complied with.

On October 12, 1995, in connection with the original acquisition of the
property and equipment, One Carnegie signed a letter agreement to the
modification agreement discussed above with the lender. Pursuant to such letter
agreement, although One Carnegie was in default as at June 30, 1996, the lender
has agreed not to accelerate and demand full payment of the note and to allow
One Carnegie to bring the indebtedness current in accordance with the two year
amortization schedule discussed above. As of October 18, 1996, One Carnegie was
in default in connection with the letter agreement.

This under-roof facility is equipped with equipment capable of fabricating
structural steel of approximately 24,000 tons per year. The Company leases the
facility to a related party on terms believed to be equivalent to those which
would be obtained from an unaffiliated third party.

ITEM 3.LEGAL PROCEEDINGS

NY is a party to legal proceedings in the ordinary course of its business.
NY and its subsidiaries believe that the nature and number of these proceedings
are typical for a construction firm of its size and scope and that none of these
proceedings is material to its financial condition. NY, in March, 1995 was
served with a summons and complaint with respect to the commencement of an
action in the Supreme Court of the State of New York, pursuant to the personal
injury of a worker at a construction site. The worker was not an employee of NY,
but was employed by another subcontractor at the job site. NY, through its
insurance company is defending the action, and has served an answer to the
complaint. The amount demanded is below NY's insurance policy maximum, and NY
believes that its insurance coverage will completely cover any awards or
settlement.

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

Neither the Company nor NY submitted any matters to a vote of their
security holders during its fiscal year ended June 30, 1996.

<PAGE>

PART II

ITEM 5.MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company's Common Stock, $.001 par value per share, is currently traded
sporadically and on a limited basis in the over-the-counter market on the OTC
Bulletin Board. The following table sets forth representative high and low
closing bid prices by calendar quarters as reported by a market maker, during
the periods provided for herein. Bid quotations represent prices between
dealers, do not include resale mark-ups, mark-downs or other fees or
commissions, and do not necessarily represent actual transactions. Prior to
August 25, 1994 there was no trading market for the Company's Common Stock.

Calendar Quarter Bid Prices
Ended (1) Low High

08/25/94 - 09/30/94 3 1/2 4
10/01/94 - 12/31/94 2 4
01/01/95 - 03/31/95 1 1/2 1 1/2
04/01/95 - 06/30/95 5/8 2
07/01/95 - 09/30/95 1/4 1 1/4
10/01/95 - 12/31/95 1/4 1
01/01/96 - 03/31/96 1 1/4 2
04/01/96 - 06/30/96 2 1/4 3
07/01/96 - 09/30/96 1 1/2 3 1/8
10/01/96 - 10/18/96 1 2
- --------------------------

(1) The Company's Common Stock began trading on the Nsadaq SmallCap Stock
Market on July 25, 1996.

As of October 18, 1996, the number of registered holders of record of the
Common Stock, $.001 par value, of the Company was 117 as determined by the
Company's stockholder records, and does not include beneficial owners at the
Common Stock whose shares are held in names of various security holders, dealers
and clearing agencies. The Company believes there are in excess of 300
beneficial holders of the Common Stock.

<PAGE>

Company is not presently subject to any contractual or similar restriction
on its present or future ability to pay such dividends.

Of the 6,662,531 shares of the Company's Common Stock presently
outstanding, 400,000 were issued in July 1996, 500,000 was issued in June 1996,
250,000 was issued in August 1996, 3,540,000 were issued in April 1994, 20,000
were issued in August 1994, 1,282,155 were issued between April and June 1994,
10,000 were issued in January 1995, and 500,000 shares were issued in June 1995,
all of such shares are "restricted securities", which in the future, may be sold
upon compliance with Rule 144 adopted under the Securities Act of 1933, as
amended (the "Act"), or other applicable exemptions from the registration
requirements of the Act. On June 16, 1995 pursuant to the filing of a
Registration Statement on Form S-8 with the Securities and Exchange Commission,
the Company registered the public sale of 500,000 shares, previously issued to a
broker-dealer, as consideration for a two (2) year consulting agreement.
Pursuant to the consulting agreement, such consultant will serve as a financial
consultant and advisor to the Company on a non-exclusive basis for a period of
twenty-four (24) months commencing on June 1, 1995. Such agreement was amended
on August 1, 1996 and an additional 250,000 shares were issued under Regulation
S under the Act. In addition, pursuant to a loan to the Company's president,
which loan was then loaned to the Company, the Company issued 400,000 as
repayment of the loan in July 1996, such shares were issued pursuant to
Regulation S under the Act.

Rule 144 provides, in essence, that a person holding "restricted
securities" for a period of two years may sell every three months in brokerage
transactions an amount equal to the greater of: (a) one percent of the Company's
outstanding shares of Common Stock; (b) the average weekly reported volume of
trading for the securities on all national exchanges and/or through the
automated quotation system of a registered securities association during the
four (4) calendar week period preceding each transaction; or (c) the average
weekly trading volume in the securities reported through the consolidated
transaction reporting system during the four (4) calendar week period. Rule 144
also requires that current information about the securities must be available to
shareholders and brokers.

Persons who are not "affiliates" of the Company, as that term is defined
under the Act, who have been non-affiliates for the ninety (90) days immediately
preceding the sale, and who have owned their shares for a period of at least
three (3) years, may sell such shares without limitation.

The Company has paid no dividends and has no present plan to pay dividends.
Payment of future dividends will be determined from time to time by its Board of
Directors, based upon its future earnings, if any, financial condition, capital
requirements and other factors. The Company is not presently subject to any
contractual or similar restriction on its present or future ability to pay such
dividends.

<PAGE>

ITEM 6MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis for the years ended June
30, 1996 and 1995 are that of the Company's subsidiaries since the Company
itself did not have any material operations of its own.

GENERAL

On April 25, 1994, after giving effect to a 1-for-4 reverse stock split, US
Bridge Corp. ("the Company") issued 2,820,000 and 720,000 shares, respectively,
of its common stock to the stockholders of U.S. Bridge of N.Y., Inc. ("NY") and
One Carnegie Court Associates, Ltd. "(One Carnegie") in exchange for all of
their issued and outstanding shares.

The acquisition by the Company has been treated as a recapitalization for
accounting purposes. Accordingly, after such transaction and before NY's private
offering and initial public offering, NY was a wholly owned subsidiary of the
Company. As of June 30, 1996 NY is a 50.01% owned subsidiary and One Carnegie is
a wholly owned subsidiary of the Company.

On September 21, 1994, the Company formed a wholly owned subsidiary named
U.S. Bridge of Maryland Corp. ("US Bridge MD"). US Bridge MD was incorporated in
the State of Delaware for the purpose of providing material and labor to perform
fabrication work for US Bridge of NY and other unrelated parties.

One Carnegie was incorporated in the State of Maryland and is a wholly
owned subsidiary of the Company. One Carnegie was incorporated on December 14,
1990 for the purposes of acquiring on January 14, 1991, land, building,
machinery and equipment. One Carnegie rented said facilities to an affiliate
under terms pursuant to a signed lease agreement through August 1995. Subsequent
to August 1995, said facilities have been rented to US Bridge MD.

NY was formed by Joseph Polito, its President, to serve primarily as a
general contractor for public and private sector construction projects. The
public sector projects are sponsored by Federal, State and local Government
authorities in New York State and the Metropolitan areas. Previously, Mr.
Polito, through other entities, furnished and provided steel erection as a
subcontractor for private and governmental construction projects. From its
commencement of operations in June 1993, NY provided steel erection services for
building, roadway and bridge repair projects for genand municipal/government
clients. NY plans to continue to undertake projects as a subcontractor, but will
focus on obtaining projects as a general contractor in both the public and
private sectors.

In the New York Metropolitan area, there are an abundance of subcontractors
known to the NY who have significant experience and are competitive with respect
to pricing and level of service. NY will be responsible for performance of the
entire contract, including the work done

<PAGE>

by subcontractors. Accordingly, NY may be subject to substantial liability
if a subcontractor fails to perform as required. Also there may be unanticipated
difficulties in hiring and overseeing subcontractors that NY is currently not
aware of. In the event the bonding company pays a claim related to a
subcontractor's non-performance or similar event, the bonding company has
recourse against NY. NY requires bonding from a New York licensed bonding
company in order to bid on projects as a general contractor.

In order to obtain bonding, in addition to credit checks and other due
diligence disclosure requirements, bonding companies require that the company
receiving bonding to have certain amounts of capital and liquid assets, which
will base the amount of bonding it will issue based on a formula, devised by
each individual bonding company, which primarily takes into account NY's capital
and liquid assets. In order for NY to obtain and maintain bonding, it must
adhere to the requirements stipulated in the bonding agreements which vary with
each bonding company. The bonding costs for each bond are incorporated in the
contract price of each job. These costs are carried as a line item in the
requisition and paid by the customer. Any monies taken from the working capital
for this purpose will be replaced as the monthly requisition payments are
received from the customer. Bonding requirements vary depending upon the nature
of the projects to be performed. NY anticipates paying a fee to bonding
companies of between 1 1/4% to 3 1/2% of the amount of the contracts to be
performed. Since these fees are generally payable at the beginning of a project,
NY must maintain sufficient working capital to satisfy the fee prior to
receiving from the project.

Though NY does not believe its business is seasonal, its operations are
generally slow in the winter months due to the decrease in worker productivity
due to weather conditions. Accordingly, NY may experience a seasonal pattern in
its operating results with lower revenue in the third quarter of each fiscal
year. Interim results may also be affected by the timing of bid solicitation,
the stage of completion of major projects and revenue recognition policies.

The Company's operations are substantially controlled by Mr. Pog shares and
may be considered the beneficial owner of the shares of NY. Mr. Polito is also a
100% shareholder of R.S.J.J. Realty Corp. ("RSJJ"). RSJJ leases the
administrative offices and storage space to NY at a cost of $20,000 per month
pursuant to a signed lease agreement expiring on March 31, 1998. Lastly, Mr.
Polito has ownership interests in Waldorf Steel Fabricators, Inc. (which ceased
operations on August 1, 1995), Crown Crane, Inc., Atlas Gem Leasing, Inc., Atlas
Gem Erectors Co., Inc. and Gem Steel Erectors.

NY recognizes revenue under the percentage of completion method. Cost of
contract revenues include all direct material and labor costs and those indirect
costs related to contract performance. The asset, costs and estimated earnings
in excess of billings on uncompleted contracts, represents costs and estimated
earnings in excess of amounts billed through June 30, 1996. Billings in excess
of costs and estimated earnings on uncompleted contracts, represents billings
which exceed costs and estimated earnings on individual uncompleted contracts
through June 30, 1996.

<PAGE>

RESULTS OF OPERATIONS

Year ended June 30, 1996 as compared to the year ended June 30, 1995

Contract revenues for the years ended June 30, 1996 and 1995 amounted to
$7,401,433 and $6,671,649, respectively. This net increase amounting to $729,784
or approximately 11% is a direct result of the Company obtaining additional
contracts during the year. During the year ended June 30, 1996 the Company has
obtained new contracts and additional change orders to previous contract
amounting to approximately $22,500,000. Included in contract revenues are
revenues from joint venture profit sharing agreements on certain projects. Joint
ventures revenues for the year ended June 30, 1996 amounted to approximately
$200,000 as compared to the year ended June 30, 1995 which amounted to $680,000.
Accordingly, revenues for the year ended June 30, 1996 from the Company's core
business, construction contract, increased by approximately $1,209,784 as
compared to the year ended June 30, 1995.

The Company's gross profit for the year ended June 30, 1996 is 37% as
compared to June 30, 1995 which was 43%. This decrease in gross profit is
partially due to the Company's revising its contract cost estimates for jobs
coming to an end in the current period, pursuant to the percentage of completion
method. As discussed previously, the Company revenue from profit sharing
agreements on certain projects during the year ended June 30, 1996 decreased by
approximately $470,000, which reduced the gross profit by an equal amount.

As of June 30, 1996, the Company has a backlog of approximately
$17,943,400. Backlog represents the amount of revenue the Company expects to
realized from work to be performed on uncompleted contracts in progress and from
contractual agreements which work has not yet begun.

General and administrative expenses have increased by $391,644 or 15% to
$3,003,890 for the year ended June 30, 1996 from $2,612,246 for the year ended
June 30, 1995. The increase in o an increase in consulting fees amounting to
$150,000 in connection with the process in obtaining additional contracts which
resulted in approximately $22,000,000 of additional contracts. Additional, the
Company's payroll and related payroll taxes and benefits increased by
approximately $150,000 for the administrative staff of US Bridge MD. The
remaining increase was attributable to professional fees and other miscellaneous
general or corporate overhead expenses.

During the year ended June 30, 1996, the Company has provided an allowance
for doubtful accounts amounting to $1,000,000 against the contract receivable.
The majority of the allowance has been provided for one unrelated party who is
experiencing a cash flow problem. Management is currently negotiating with this
customer and has not commenced legal action as of September 27, 1996. In
managements opinion, the allowance for doubtful accounts at June 30, 1996, will
be sufficient to absorb any losses that may be sustained from a settlement with
this customer.

<PAGE>

Liquidity and Capital Resources

At June 30, 1996, the Company's consolidated working capital amounted to
$1,528,934. As of June 30, 1996, the Company's net contract receivable amounted
to $3,613,665, of which approximately $723,000 or 20% has been collected through
September 27, 1996.

Net cash used for operating activities amounted to $2,055,771 for the year
ended June 30, 1996. The major components of such use of cash was directly
attributed to the increases in accounts receivable and costs and estimated
earnings in excess of billing on uncompleted contracts of $2,318,819. For the
year ended June 30, 1995, the net cash used for operating activities amounted to
$994,615 principally attributable to increases in account receivable and costs
and estimated earnings in excess of billings on uncompleted contracts. In the
past two years the Company's business has shifted towards the municipal and
government markets. Municipal contract generally require the contractor to
accumulate more costs before they can requisition the municipality for payment.
Accordingly, costs and estimated earnings in excess of billing's on uncompleted
contracts have increased principally for this reason.

Contract receivables for the year ended June 30, 1996 as compared to the
year ended June 30, 1995 has increased by $1,692,488 before recording an
allowance for uncollectibles. The increase is principally attributable to one
customer who has been experiencing a cash flow problem. As of June 30, 1996 the
Company has provided an allowance of $1,000,000 which management believes will
be sufficient to absorb any future loss.

With regards to financing activities, the Company provided $2,249,177 of
cash for the year ended June 30, 1996. Such cash was provided primarily by
$3,104,252 from the Company's subsidiary's initial public offering and repayment
of notes payable amounting to $1,071,649.

During September 1994, the Company's subsidiary, NY, entered into an
instaiquidate delinquent payroll taxes of approximately $231,535 and remove a
tax lien filed by such authority. The agreement requires that NY pay $25,000 per
month until such amount is fully paid. As per the terms of the agreement, NY
must also pay timely all current payroll taxes. As of June 30, 1996 NY has not
made all the required monthly payments and has not paid timely all current
payroll taxes. Additionally, US Bridge MD also became delinquent with regard to
its payroll taxes which amounted to $93,423 as of June 30, 1996. The total
payroll tax liability as of June 30, 1996, excluding the related penalty and
interest amounted to $382,135

On August 14, 1995 NY successfully completed its public offering. As a
result, it sold 791,850 shares which included 91,850 shares in connection with
the exercise of the underwriter's over-allotment options and 494,500 warrants
which included 64,500 warrants pursuant to the underwriter's over-allotment
option. NY yielded a total net proceeds of $2,077,903 after deducting
underwriter selling expenses and expense allowance, repayment of bridge loans
and promissory notes and related accrued interest to the bridge lenders and
private investors, and the

<PAGE>

pre-payment of the first two year's financial consulting agreement with the
underwriter. Simultaneously with the offering, NY charged all deferred offering
costs incurred to additional paid-in capital which totalled $903,820.

In connection with the initial public offering of NY, the Company's
ownership percentage in NY was reduced to 49.95% before the exercise of the
special warrant as discussed below. Accordingly, at June 30, 1996 the Company's
minority interest amounting to $2,409,028 which represents the effect of NY's
private offering and the initial public offering and the cumulative effect of
NY's operations since the private offering and initial public offering.

On September 9, 1995, the Company purchased at $2.50 per share 5,665 common
shares of NY by exercising its right pursuant to the terms of a special warrant
issued only to such stockholder. As a result, the Company increased its
ownership of NY to 50.01% from 49.95%.

Lastly, in connection with NY's IPO, the Company recorded a gain of
$832,571 as a result of reducing its ownership percentage to 50.01% of NY.

On October 12, 1995, in connection with the original acquisition of the
property and equipment, One Carnegie signed with the lender a letter agreement
revising the modification agreement. Pursuant to such letter agreement, One
Carnegie was in default as of June 30, 1996. The mortgage has been classified as
current at June 30, 1996, since One Carnegie has not paid the required monthly
installments timely as stipulated in the letter agreement thereby allowing the
lender to call the loan at anytime.

On May 13, 1996, an unrelated party loaned the Company's President $300,000
pursuant to a memorandum of understanding. The loan bears interest at 1% above
prime, and its due 90 days from receipt of funds. Simultaneously therewith, on
May 20, 1996, the Company's President loaned the Company the $300,000. As
collateral for the loan, the unrelated party received from the Company's
President 550,000 share of common stock. Upon the Company being listed on
NASDAQ, the Company will liquidate such loan by issuing 400,000 shares of newly
registered shares pursuant to Regulati the Company issued 400,000 to such
unrelated party for satisfaction of the loan.

Additionally, the Company's President issued to such unrelated party an
option to purchase 600,000 share at $1.50 per share from the day the funds are
received until six months after the Company attains NASDAQ listing. The option
may be exercised at any time within the exercise period subject to a minimum bid
prize of $3 per share. Lastly, the Company's President may borrow an additional
$100,000 under the same terms as discussed above for a period of 30 days.

As of June 30, 1996, of the total due to officer amounting to $358,779,
$275,500 represents the remaining amount owed for the original $300,000 loan and
the remaining balance amounting to $83,279 represents advances made by the
President to the Company's subsidiaries which bear no interest and are due on
demand.

<PAGE>

ITEM 7. FINANCIAL STATEMENTS

See attached Financial Statements.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors.

The names, ages and positions of the Company's executive officers and
directors are as follows:
<TABLE>

Name Age Position with the Company
<S> <C> <C>
Joseph M. Polito 61 President and Director
Ronald J. Polito 36 Secretary and Director
Steven J. Polito 33 Treasurer and Director

</TABLE>

All directors hold office until the next annual meeting of stockholders or
until their successors are elected and qualify. Vacancies on the Board of
Directors may be filled by the remaining directors. Officers are elected
annually by, and serve at the discretion of the Board of Directors. There are no
family relationships between or among any officers or directors of the
Corporation, except that Joseph Polito is the father of both Steven and Ronald
Polito.

Joseph M. Polito has been the president and director of the Company from
the date of the Acquisitions in April 1994 to present. Mr. Polito has been the
president and a director of NY since its inception in 1990 and prior to the
Acquisitions in April 1994 was the sole shareholder of NY. Prior to the
Acquisitions, the Company was a shell company with no operations named Cofis
International Corp., which was formed in September 1988 as Colonial Capital
Corp. Mr. Polito oversees the running of all of the Company's operations. From
December 1990 to present, Mr. Polito has been the president and sole director
and shareholder of One Carnegie Court Associates, Inc. ("One Carnegie"), a
wholly owned subsidiary of Bridge. Mr. Polito is the president and sole director
and shareholder of Waldorf Steel Fabricators, Inc. ("Waldorf"), a company which
fabricated steel prioreholder of Gem Steel Erectors, Inc., a non-operating
entity. Neither Atlas nor Gem Steel have transacted any business or other
operations since ceasing operations and neither company has any present
intention to resume operations. From 1983 to present, Mr. Polito has been the
President and 100% shareholder of R.S.J.J. Realty Corp., a company which owns
and leases real property. From 1986 to present, Mr. Polito has been the
president and 100% shareholder of Atlas Gem Leasing, Inc., a company which
leases generators and other construction equipment. From 1988 to present, Mr.
Polito has been a 50% shareholder of Crown Crain, Ltd., a company which leases
cranes for construction projects. Mr. Polito is currently Chairman of the Steel
Institute of New York, Co-Chairman of the International Union of Structural
Ironworkers, locals 40, 361 and 417 union fund and a current director and past
president of Allied Metal Building, an industry organization authorized to
negotiate with the structural iron worker local 40 and 361, operating engineers
local 14 and local 15a and 15d, cement masons local 780 as well as chairman of
the negotiating committee solely for the structural engineers. Mr. Polito is a
member of the safety committee for the City of New York, Building Trade
Employers Association.

Ronald J. Polito has been the secretary, treasurer and a director of the
Company from the date of the Acquisitions in April, 1994 to present. Mr. Polito
has been the secretary and a director of NY since its inception in 1990. Mr.
Polito oversees the daily progress on all projects in process and analysis of
the final costs and profits of jobs completed and the preparation and bidding on
new projects. From its inception in 1990 until March 1995, Mr. Polito was also
the treasurer of NY. From 1985 until the present, Mr. Polito has been the
secretary of Gem Steel Erectors, Inc. From December 1990 to present, Mr. Polito
has been the secretary of One Carnegie and Waldorf. From 1983 to present Mr.
Polito has been the secretary of R.S.J.J. Realty Corp. Mr. Polito received a
Bachelor of Science Degree in Civil Engineering from Brooklyn Polytechnical
Institute in 1981. Ronald J. Polito is the son of Joseph M. Polito.

Steven J. Polito has been a director of the Company since the date of the
Acquisitions in April 1994. Mr. Polito was elected treasurer of NY in March
1995. He had previously been a Project Manager and has been a director of the NY
since its inception in 1990. Mr. Polito oversees the daily operations for
projects in process and projects completed, including; purchasing and leasing of
materials and machinery and the distribution of labor. From 1988 until April
1994, Mr. Polito worked as a Project Manager of Atlas Gem Erectors Cand erected
steel structures. Steven J. Polito is the son of Joseph M. Polito. From 1988 to
present, Mr. Polito has been the treasurer of Gem Steel Erectors, Inc. From 1988
to present, Mr. Polito has been the treasurer of One Carnegie, Waldorf and
R.S.J.J. Realty Corp.

Significant Employees of NY

John G. Bauer, has been the chief administrative officer (a non-executive
position) of the Company since February 1995. From March 1992 to February 1995,
Mr. Bauer was the President of Dynamic Construction Consulting, Inc., a company
which provided construction management

<PAGE>

services. From July 1988 to March 1992, Mr. Bauer was a Vice President of
Tishman Construction Corp. of N.Y., a construction company.

Michael Panayi, has been a structural engineer for the Company since the
commencement of operations in June 1993. Prior to his employment with the
Company, Mr. Panayi was a structural engineer for Atlas from 1987.

As permitted under Delaware Corporation Law, the Corporation's certificate
of incorporation eliminates the personal liability of the directors to the
Corporation or any of its shareholders for damages for breaches of their
fiduciary duty as directors.

As a result of the inclusion of such provision, stockholders may be unable
to recover damages against directors for actions taken by them which constitute
negligence or gross negligence or that are in violation of their fiduciary
duties. The inclusion of this provision in the Corporation's Certificate of
Incorporation may reduce the likelihood of derivative litigation against
directors and other types of shareholder litigation.

Compliance with Section 16(a) of the Exchange Act

The Company was not subject to the requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, during the period covered by this
Report. In general, Section 16(a) requires a Company's officers, directors and
persons who beneficially own more than ten percent of a registered class of the
Company's equity securities to file reports of securities ownership and changes
in such ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than ten percent beneficial owners also are required by
rules promulgated by the SEC to furnish the Company with copies of all Section
16(a) forms they file.

ITEM 10. EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following provides certain information concerning all Plan and Non-Plan
(as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded to,
earned by, paid by NY, the Company's subsidiary, during the years ended June 30,
1995, 1994 and 1993.

<PAGE>

<TABLE>
<CAPTION>
Summary Compensation Table

Annual Compensation

(a) (b) (c) (d) (e) (f)
Name and Principal Other Annual Options/
Position Year (1) Salary($) Bonus($) Compensation SARS
- ------------------ -------- --------- -------- ------------ ----

<S> <C> <C> <C> <C> <C>
Joseph Polito 1996 $300,000 - $111,911(2) -
President and Director 1995 378,000 - 68,200 (2) -
1994 300,000 - 13,800 (2) -

Ronald Polito 1996 $125,000 - $15,144 (3) -
Secretary and Director 1995 121,000 - 21,200 (3) -
1994 109,600 - 17,451 (3) -

Steven Polito 1996 $94,000 - $ 8,275 (4) -
Treasurer and Director 1995 91,575 - 9,900 (4) -
1994 19,980 - - -
</TABLE>

(1)The Company did not engage in any operations prior to June, 1993 and,
therefore, did not compensate any of its executive officers prior to such time.

(2)Includes (i) the payment of premiums on a life insurance policy of
$54,362, $46,000 and $5,119 (ii) the payment of travel expenses of $50,000,
$22,200 and $23,139 for the years ended June 30, 1996, 1995 and 1994,
respectively and the payment of an automobile lease of $7,549 for the year ended
June 30, 1996. See " - Employment Agreements."

(3)Includes (i) payments on the lease of an automobile of $5,416, $8,000
and $8,574, (ii) the payment of premiums on a term life insurance policy of
$4,684, $5,800 and $8,877 and (iii) a travel allowance of $2,971, $7,400 and $0,
for the years ended June 30, 1996, 1995 and 1994, respectively.

(4)Includes payment on a lease automobile of $5,304 & $6,700 and a travel
allowance of $2,971 & $3,200 for the years ended June 30, 1996 and 1995.

Stock Options

The following table sets forth certain information concerning the grant of
stock options made during the year ended June 30, 1996 under the Corporation's
1994 Senior Management Incentive Plan.

<PAGE>

<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)

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

Individual Grants
- -------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
% of Total
# of Securities Options/SAR's
underlying Granted to
Options/SAR's Employees in Exercise or Base
Name Granted(1) Fiscal Year Price ($/SH) Expiration Date
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph M. Polito 25,000 100% $5.50 04/04/99
===========================================================================================
</TABLE>

(1) Represents incentive stock options granted under the Corporation's 1994
Senior Management Incentive Plan (the "Management Plan"). Options granted under
this Management Plan are intended to qualify as incentive stock options under
the Internal Revenue Code of 1986, as amended. Under the terms of the Management
Plan, options may be granted to officers, key employees, directors and
consultants of the Corporation for a maximum term of 10 years. Options granted
to directors, who are not officers or employees, or to consultants, do not
qualify as incentive stock options. The option price per share may not be less
than the fair market value of the Corporation's shares on the date the option is
granted. However, options granted to persons owning more than 10% of the
Corporation's Common Stock may not have a term in excess of five years and may
not have an option price of less than 110% of the fair market value per share of
the Corporation's shares on the date the option is granted.

The following table contains information with respect to employees of the
Corporation concerning options held as of June 30, 1996.
<TABLE>
<CAPTION>

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

=======================================================================================
(a) (b) (c) (d) (e)
- ---------------------------------------------------------------------------------------
Value of
Number of Unexercised In-
Unexercised The-Money
Options/SAR's at Options/SAR's
FY-End (#) at FY-End($)
Shares Acquired Value Realized($) Exercisable/ Exercisable/
Name on Exercise (#) Unexercisable Unexercisable(1)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph M. Polito 0 0 7,500/17,500 0/0
=======================================================================================
</TABLE>

(1) Based upon the average bid and asked prices for such Common Stock on
October 18, 1996 ($1.875), as reported by a market maker. Since the Options are
exercisable at $5.50, there is no value to such options as of such date.

<PAGE>

Employment Agreement

Joseph Polito entered into an employment agreement with NY dated April 4,
1995, whereby Mr. Polito shall devote 80% of his business time to the affairs of
NY. The agreement is for a term of approximately three years expiring June 30,
1998. Pursuant to the terms of the agreement Mr. Polito is to receive an annual
salary of $300,000 per annum until June 30, 1996 with 10% yearly escalations,
subject to adjustment by the Board of Directors. Mr. Polito is also to receive a
yearly non-accountable expense allowance of $50,000. Mr. Polito received stock
options under the NY's 1994 Senior Management Incentive Plan to purchase 25,000
share at $5.00 per share, vesting at the rate of 7,500 in each of April, 1996
and 1997 and 10,000 in April, 1998. Mr. Polito also has the right to receive a
yearly bonus equal to five percent (5%) of the first $1,000,000, upon reaching
$1,000,000 and five percent (5%) of the next $500,000, upon reaching $1,500,000
and five percent (5%) after $1,500,000, of all the pre-tax profits of NY. NY
shall pay to Mr. Polito a monthly draw of $10,000 against the bonus. Pursuant to
the agreement NY shall pay the premiums on a $3,500,000 life insurance policy
for the benefit of individuals as directed by Mr. Polito, with an estimated
yearly premium of $80,000. The agreement restricts Mr. Polito from competing
with NY for a period of one year after the termination of his employment. The
agreement provides for severance compensation to be paid to Mr. Polito if his
employment with NY is terminated or there is a decrease in responsibilities or
duties following a change in control of NY. The severance compensation shall be
made in one payment equal to three times the aggregate annual compensation paid
to the Employee during the preceding calendar year.

Steven and Ronald Polito receive annual salary compensations of $94,000 and
$125,000, respectively, from NY, which compensation levels commenced in March
1995 and April 1994, respectively. Both individuals also receive a car allowance
equal to the monthly lease payments on their automobiles and the payment of
premiums on life insurance policies of which they choose their beneficiaries.
Neither individual has entered into an employment agreement with NY or the
Company.

1994 Senior Management Incentive Plan

In December, 1994, the Board of Directors adopted the 1994 Senior
Management Incentive Plan (the "Management Plan"), which was adopted by
shareholder consent. The Plan provides for the issuance of up to 150,000 shares
of the Company's Common Stock in connection with the issuance of stock options
and other stock purchase rights to executive officers and other key employees.
The Board of Directors, subject to shareholder approval, have authorized an
increase in the number of shares issuable under the Management Plan to 1,000,000
shares. The Company issued 150,000 restricted shares to Joseph Polito in August
1995, of which 100,000 shares are vested, and whereby 50,000 shares vest on
August 1997.

was prompted by the Company's desire to provide the Board with sufficient
flexibility regarding the forms of incentive compensation which the Company will
have at its disposal in rewarding executive officers, key employees and
consultants who render significant services to the Company. The Board of
Directors intends to offer key personnel equity ownership in the Company through
the grant of stock options and other rights pursuant to the Management Plan to
enable the Company to attract and retain qualified personnel

<PAGE>

without unnecessarily depleting the Company's cash reserves. The Management
Plan is designed to augment the Company's existing compensation programs and is
intended to enable the Company to offer executives, key employees and
consultants a personal interest in the Company's growth and success through
awards of either shares of Common Stock or rights to acquire shares of Common
Stock.

The Management Plan is intended to attract and retain key executive
management personnel whose performance is expected to have a substantial impact
on the Company's long-term profit and growth potential by encouraging and
assisting those persons to acquire equity in the Company. It is contemplated
that only those executive management employees (generally the Chairman of the
Board, Vice-Chairman, Chief Executive Officer, Chief Operating Officer,
President and Vice-Presidents of the Company) who perform services of special
importance to the Company will be additional management employees and has not
engaged in any solicitations or negotiations with respect to the hiring of any
management employees. As of the date of this Prospectus, the Company's officers
and directors are Joseph Polito and his sons, Ronald and Steven, though the Plan
also includes Messrs. Bauer and Panayi. A total of 150,000 shares of Common
Stock are reserved for issuance under the Management Plan. It is anticipated
that awards made under the Management Plan will be subject to three-year vesting
periods, although the vesting periods are subject to the discretion of the
Administrator.

Unless otherwise indicated, the Management Plan is to be administered by
the Board of Directors or a committee of the Board, if one is appointed for this
purpose (the Board or such committee, as the case may be, shall be referred to
in the following description as the "Administrator"). Subject to the specific
provisions of the Management Plan, the Administrator will have the discretion to
determine the recipients of the awards, the nature of the awards to be granted,
the dates such awards will be granted, the terms and conditions of awards and
the interpretation of the Management Plan, except that any award granted to any
employee of the Company who is also a director of the Company shall also be
subject, in the event the persons serving as members of the Administrator of
such plan at the time such award is proposed to be granted do not satisfy the
requirements regarding the participation of "disinterested persons" set forth in
Rule 16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to the approval of an auxiliary committee
consisting of not less than two individuals who are considered "disinterested
persons" as defined under Rule 16b-3. As of the date hereof, the Company has not
yet determined who will serve on such auxiliary committee, if one is required.
The Management Plan generally provides that, unless the Administrator determines
otherwise, each option or right granted under a plan shall become exercisable in
full upon certain "change of control" events as described in the Management
Plan, or subject to any right or option granted under the Management Plan
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Administrator will make appropriate adjustments to
such plans and the classes, number of shares and price per share of stock
subject to outstanding rights or options. Generally, the Management Plan may be
amended by action of the Board of

<PAGE>

Directors, except that any amendment which would increase the total number
of shares subject to such plan, extend the duration of such plan, materially
increase the benefits accruing to participants under such plan, or would change
the category of persons who can be eligible for awards under such plan must be
approved by affirmative vote of a majority of stockholders entitled to vote. The
Management Plan permits awards to be made thereunder until November, 2004.

Directors who are not otherwise employed by the Company will not be
eligible for participation in the Management Plan. The Management Plan provides
for four types of awards: stocks options, incentive stock rights, stock
appreciation rights (including limited stock appreciation rights) and restricted
stock purchase agreements, as described below.

Stock Options. Options granted under the Management Plan may be either
incentive stock options ("ISOs") or options which do not qualify as ISOs
("non-ISOs"). ISOs may be granted at an option price of not less than 100% of
the fair market value of the Common Stock on the date of grant, except that an
ISO granted to any person who owns capital stock representing more than 10% of
the total combined voting power of all classes of Common Stock of the Company
("10% stockholder") must be granted at an exercise price of at least 110% for
the fair market value of the Common Stock on the date of the grant. The exercise
price of the non-ISOs may not be less than 85% of the fair market value of the
Common Stock on the date of grant. Unless the Administrator determines
otherwise, no ISO or non-ISO may be exercisable earlier than one year from he
date of grant. ISOs may not be granted to persons who are not employees of the
Company. ISOs granted to persons other than 10% stockholders may be exercisable
for a period of up to ten (10) years form the date of grant; ISOs granted to 10%
stockholders may be exercisable for a period of up to five years from he dated
of grant. No individual may be granted ISOs that become exercisable in any
calendar year for Common Stock having a fair market value at the time of grant
in excess of $100,000. Non-ISOs may be exercisable for a period of up to
thirteen (13) years from the date of grant.

Payment for shares of Common Stock purchases pursuant to exercise of stock
options shall be paid in full in (i) cash, by certified check or, at the
discretion of the Administrator, (ii) by shares of Common Stock having a fair
market value equal to the total exercise price oar (iii) by a combination of (i)
and (ii) above. The provision that permits the delivery of already owned shares
of stocks as payment for the exercise of an option may permit "pyramiding". In
general, pyramiding enables a holder to start with as little as one share of
common stock and, by using the shares of common stock acquired in successive,
simultaneous exercises of the option, to exercise the entire option, regardless
of the number of shares covered thereby, with no additional cash or investment
other than the original share of common stock used to exercise the option.

Upon termination of employment or consulting services, an optionee will be
entitled to exercise the vested portion of an option for a period of up to three
months after the date of termination, except that if the reason for termination
was a discharge for cause, the option shall expire immediately, and if the
reason for termination was for death or permanent disability of the

<PAGE>

optionee, the vested portion of the option shall remain exercisable for a
period of twelve (12) months thereafter.

Incentive Stock Rights. Incentive stock rights consist of incentive stock
units equivalent to one share of Common Stock in consideration for services
performed for the Company. Each incentive stock unit shall entitle the holder
thereof to receive, without payment of cash or property to the Company, one
share of Common Stock in consideration for services performed for the Company or
any subsidiary by the employee, subject to the lapse of the incentive periods,
whereby the Company shall issue such number of shares upon the completion of
each specifiservices of the holder with the Company terminate prior to the end
of the incentive period relating to the units awarded, the rights shall
thereupon be null and void, except that if termination is caused by death or
permanent disability, the holder or his/her heirs, as the case may be, shall be
entitled to receive a pro rata portion of the shares represented by the units,
based upon that portion of the incentive period which shall have elapsed prior
to the death or disability.

Stock Appreciation Rights (SARs). SARs may be granted to recipients of
options under the management Plan. SARs may be granted simultaneously with, or
subsequent to , the grant of a related option and may be exercised to the extent
that the related option is exercisable, except that no general SAR (as
hereinafter defined) may be exercised within a period of six months of the date
of grant of such SAR and no SAR granted with respect to an ISO may be exercised
unless the fair market value of the Common Stock on the date of exercise exceeds
the exercise price of the ISO. A holder may be granted general SARs ("granted
SARs") or limited SARs ("limited SARs"), or both. General SARs permit the holder
thereof to receive an amount (in cash, shares of Common Stock or a combination
of both) equal to the number of SARs exercised multiplied by the excess of the
fair market value of the Common Stock on the exercise date over the exercise
price of the related option. Limited SARs are similar to general SARs, except
that, unless the Administrator determines otherwise, they amy be exercised only
during a prescribed period following the occurrence of one or more of the
following "Change of Control" transaction: (i) the approval of the Board of
Directors of consolidation or merger in which the Company is not the surviving
corporation, the sale of all of substantially all the assets of the Company, or
the liquidation or dissolution of the Company; (ii) the commencement of a tender
or exchange offer for the Company's Common ible into Common Stock) without the
prior consent of the Board; (iii) the acquisition of beneficial ownership by any
person or other entity (other than the Company or any employee benefit plan
sponsored by the Company) of securities of the Company representing 25% or more
of the voting power of the Company's outstanding securities; or (iv) if during
any period of two years or less, individuals who at the beginning of such period
constitute the entire Board cease to constitute a majority of the Board, unless
the election, or the nomination for election, of each new director is approved
by at least a majority of the directors then still in office.

<PAGE>

The exercise of any portion of either the related option or the tandem SARs
will cause a corresponding reduction in the number of shares remaining subject
to the option or the tandem SARs, thus maintaining a balance between outstanding
options and SARs.

Restricted Stock Purchase Agreements. Restricted stock purchase agreements
provide for the sale by the Company of shares of Common Stock at prices to be
determined by the Board, which shares shall be subject to restrictions on
disposition for a stated period during which the purchaser must continue
employment with the Company in order to retain the shares. Payment must be made
in cash. If termination of employment occurs for any reason within six months
after the date of purchase, or for any reason other than death or by retirement
with the consent of the Company of the Company after the six-month period but
prior to the time that the restrictions on disposition lapse, the Company shall
have the option to reacquire the shares at the original purchase price.

Restricted shares awarded under the Management Plan will be subject to a
period of time designated by the Administrator (the "restricted period") during
which the recipient must continue to render services to the Company before the
restricted shares will become vested. The Administrator may also impose other
restrictions, terms and conditions that must be fulfilled before the restricted
shares may vest.

Upon the grant of restricted shares, stock certificates registered in the
name of the recipient will be issued and such shares will constitute issued and
outstanding shares of Common Stock for all corporate purposes. The holder will
have the right to vote the restricted shares and to receive all regular cash
dividends (and such other distributions as the Administrator may designate), if
any, which are paid or distributed on the restricted shares, and generally to
exercise all other rights as a holder of Common Stock, except that, until the
end of the restricted period; (i) the holder will not be entitled to take
possession of the stock certificates representing the restricted shares and (ii)
the holder will not be entitled to sell, transfer or otherwise dispose of the
restricted shares. A breach of any restrictions, terms or conditions established
by the Administrator with respect to any restricted shares will cause a
forfeiture of such restricted shares.

Upon expiration of the applicable restriction period and the satisfaction
of any other applicable conditions, all or part of the restricted shares and any
dividends or other distributions not distributed to the holder (the "retained
distributions") thereon will become vested. Any restricted shares and any
retained distributions thereon which do not so vest will be forfeited to the
Company. If prior to the expiration of the restricted period a holde of a total
disability (in each case as defined in the Management Plan), or dies, then,
unless otherwise determined by the Administrator at the time of the grant, the
restricted period applicable to each award of restricted shares will thereupon
be deemed to have expired. Unless the Administrator determines otherwise, if a
holder's employment terminates prior to the expiration of the applicable
restricted period for any reason other than as set forth above, all restricted
shares and any retained distributions thereon will be forfeited.

<PAGE>

Accelerating of the vesting of the restricted shares shall occur, under the
provisions of the Management Plan, on the first day following the occurrence of
any of the following: (a) the approval by the stockholders of the Company of an
"Approved Transaction"; (b) a "Control Purchase"; or (c) a "Board Change."

An "Approved Transaction" is defined as (A) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of Common Stock would be converted into cash,
securities or other property other than a merger of the Company in which the
holders of the Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, or (C) the adoption of any plan or proposal for
the liquidation of dissolution of the Company.

A "Control Purchase" is defined as circumstances in which any person (as
such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
corporation or other entity (other than the Company or any employee benefit plan
sponsored by the Company) (A) shall purchase any Common Stock of the Company (or
securities convertible into the Company's Common Stock) for cash, securities or
any other consideration pursuant to a tender offer or exchange offer, without
the prior consent of the Board of Directors, or (B) shall become the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the then outstanding securities of
the Company ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors (calculated
as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire
the Company's securities).

A "Board Change" is defined as circumstances in which, during any period of
two consecutive years or less, individuals who at the beginning of such period
constitute the entire Board shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by the company's
stockholders, of each new director was approved by a vote of at least a majority
of the directors then still in office.

1994 Employee Stock Option Plan

In December, 1994, the Board of Directors adopted the 1994 Employee Stock
Option Plan (the "Employee Plan"), which was adopted by shareholder consent. The
Employee Plan provides for the issuance of up to 150,000 shares of the Company's
Common Stock in connection with the issuance of stock options key employees. The
Board of Directors, subject to shareholder approval, have authorized an increase
in the number of shares issuable under the Employee Plan to 1,000,000 shares.

<PAGE>

The Employee Plan is intended to assist the Corporation in attracting and
retaining qualified employees for the Corporation. The Board of Directors intend
to offer employees, equity ownership in the Corporation through the grant of
stock options, in order for the Corporation to attract and retain qualified
personnel, without depleting the Corporation's cash reserves. Management
believes that, in view of the Corporation's anticipated operations over the next
several years, the Corporation may be faced with an increasing demand for
additional qualified personnel, the Corporation will require a wide array of
compensation alternatives. The Employee Plan is designed to augment the
Corporation's existing compensation programs and is intended to enable the
Corporation to offer employees a personal interest in the Corporation's growth
and success through the granting of stock options.

The Employee Plan is intended to attract and retain key employees, whose
performance is expected to enhance the growth and success and profitability of
the Corporation by encouraging and assisting those persons to acquire equity in
the Corporation. Under the Employee Plan, options to purchase an aggregate of
not more than 150,000 shares of Common Stock may be granted from time to time to
key employees, advisors and independent consultants to the Corporation and its
subsidiaries. It is anticipated that awards made under the Employee Plan will be
subject to vesting periods, although the vesting periods are subject to the
discretion of the Board of Directors or Administrator of the plan. If approved,
awards under the Employee Plan may be made until January 1, 2004 when the
Employee Plan terminates.

The Board of Directors is charged with administration of the Employee Plan.
The Board is generally empowered to interpret the Employee Plan, prescribe rules
and regulations relating thereto, determine the terms of the option agreements,
amend them with the consent of the optionee, determine the employee determine
the number of shares subject to each option and the exercise price thereof. The
per share exercise price for incentive stock options ("ISOs") will not be less
than 100% of the fair market value of a share of the Common Stock on the date
the option is granted (110% of fair market value on the date of grant of an ISO
if the optionee owns more than 10% of the Common Stock of the Corporation).

Options will be exercisable for a term determined by the Board which will
not be less than one year. Options may be exercised only while the original
grantee has a relationship with the Corporation or a subsidiary of the
Corporation which confers eligibility to be granted options or up to ninety (90)
days after termination at the sole discretion of the Board. In the event of
termination due to retirement, the Optionee, with the consent of the Board,
shall have the right to exercise his option at any time during the twelve (12)
month period after such retirement. Options may be exercised up to twelve (12)
months after death or total and permanent disability. In the event of certain
basic changes in the Corporation, including a change in control of the
Corporation (as defined in the Employee Plan) in the discretion of the Board,
each option may become fully and immediately exercisable. ISOs are not
transferable other than by will or the laws of descent and distribution. Options
may be exercised during the holder's lifetime only by the holder, his or her
guardian or legal representative.

<PAGE>

Options granted pursuant to the Employee Plan may be designated as ISOs,
with the attendant tax benefits provided under Section 421 and 422A of the
Internal Revenue Code of 1986. Accordingly, the Employee Plan provides that the
aggregate fair market value (determined at the time an ISO is granted) of the
Common Stock subject to ISOs exercisable for the first time by an employee
during any calendar year (under all plans of the Corporation and its
subsidiaries) may not exceed $100,000. The Board may modify, suspend or
terminate the Employee Plan; provided, however, that certain material
modifications affecting the Plan must be approved by the shareholders, and any
change in the Employee Plan that may adversely affect an optionee's rights under
an option previously granted under the Employee Plan requires the consent of the
optionee.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information at October 18, 1996,
based upon information obtained by the persons named below, with respect to the
beneficial ownership of shares of Common Stock by (i) each person known by the
Company to be the owner of 5% or more of the outstanding shares of Common Stock;
(ii) by each officer and director; (iii) and by all officers and directors as a
group.
<TABLE>
<CAPTION>

Percent of
Number of Common Stock
Name Shares Owned

<S> <C> <C>
Joseph Polito (1)(2) 4,261,156 62.5%
c\o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368

Steven Polito (2) 50,000 *
c\o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368

Ronald Polito (3) 50,000 *
c\o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368

All officers and directors
as a group (3 persons) (1)-(4) 4,361,156 64.0%
</TABLE>

* Less than 1%.

<PAGE>

(footnotes from previous page)

(1) Includes 150,000 shares of Common Stock issued pursuant to the terms of
the Company's Senior Management Incentive Plan. Does not include an aggregate of
251,000 shares gifted by Mr. Polito, of which 181,000 shares were gifted to
members of Mr. Polito's family (50,000 shares of each of Ronald and Steven
Polito) and 70,000 shares were gifted to employees of the Company, as of January
23, 1995. Mr. Polito disclaims beneficial ownership of all shares transferred to
his family members.

(2) Joseph Polito is the father of Steven and Ronald Polito.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On July 1, 1991, One Carnegie leased to Waldorf Steel Fabricators, Inc.,
"Waldorf", an affiliate owned by the Company's majority stockholder, the
facilities it purchased in January 1991. Such lease is for five (5) years and
provides for monthly rental payments of $50,000. Pursuant to such lease
agreement, any funds collected in excess of the total annual rent of $600,000 is
to be credited to the next respective subsequent year. The lease also provides
for all real estate taxes and operating costs to be paid directly by the lessee.
All of the rental income was derived and the entire rent receivable balance of
$975,378 and $709,844 as of June 30, 1995 and 1994, respectively, is due from
Waldorf. One Carnegie has made a $975,398 and $300,000 provision related to such
receivables at June 30, 1995 and 1994, respectively. Pursuant to an assignment
agreement entered during 1994, Waldorf has assigned all of its rights, title and
interests in certain accounts receivable amounting to $571,172 to One Carnegie
as collateral to secure the amounts owed to One Carnegie.

As a part of the acquisition of NY and One Carnegie, pursuant to the
consent of the Board of Directors and the written consent of shareholders
holding approximately 68.1% of the outstanding shares, the Company's (i) amended
its certificate of incorporation to (a) change the Company's name from Cofis
International Corp., to U.S. Bridge Corp., (b) authorized a 1-for-4 reverse
stock split, (c) increase the par value on the Company's Stock from $.0001 to
$.001 per share, (d) increase the authorized shares of Common Stock from
10,000,000 shares to 50,000,000 shares and (e) authorized the issuance of
10,000,000 shares of preferred stock, which shares are to be issued upon the
terms, designations and preferences as determined by the Company's Board of
Directors; (ii) authorized the actions necessary to effect and consummate the
agreement and plan of reorganization and the issuance of shares of Common Stock
to The Company and One Carnegie and (iii) to elect Joseph Polito, Ronald Polito
and Steven Polito as directors of the Company. In connection with the
Acquisitions, the Company changed its fiscal year from December 31 to June 30.

On June 13, 1993, NY executed an agreement to pay $400,000 in connection
with the purchase from Atlas Gem Erectors Co., Inc. ("Atlas") of six existing
contracts to perform steel erection services, which included the following
projects; Stillwell Avenue, 39th Street Bridge Rehabilitation, Honeywell Street
Bridge, New England Throughway, Lemon Creek and

<PAGE>

Kosciuszko Bridge projects. Atlas is wholly owned by Joseph Polito. Upon
the sale of the contracts to NY and its completion of its final project in
September 1994, Atlas ceased operations. During June 1994, Atlas agreed to
capitalize such debt in exchange for 320,000 shares of the Company's Common
Stock. As a result of such conversion, NY's additional paid in capital had been
increased by $400,000. The shares received by Atlas were issued to its sole
shareholder, Joseph Polito, simultaneously with the conversion.

On August 27, 1994, the Company purchased a resort hotel located in
Liberty, New York named Swan Lake Hotel from the Resolution Trust Corporation
("RTC"), for the total purchase price of $450,000. The RTC as the conservator of
the Yorkline Federal Savings Association. Simultaneously with the acquisition of
the hotel, the Company, assigned the title of the is conversion of approximately
$1,202,694 of debt to equity. Prior to, but in connection with the assignment of
the property to Mr. Polito, Mr. Polito retired $900,000 and $302,694 of debt on
April 30, 1994 and June 30, 1994, respectively, for an aggregate of 962,155
shares of the Company's Common Stock. The hotel has not been occupied for over
four years and has deteriorated significantly due to deterioration through
weather infiltration, vandalism and lack of maintenance. The hotel consists of
five buildings and 323 rooms. Mr. Polito has no current plans to renovate this
hotel at this time and in the event that he decides to renovate this property he
will use a general contractor located in the area of the hotel to perform the
renovation and will not use the Company to perform any of the renovations.

NY leases its administrative office space and certain storage space from
R.S.J.J. Realty Corp., an affiliate owned by the Company's majority stockholder,
Joseph Polito, based on a signed lease agreement expiring on March 31, 1998 with
a rental payment of $20,000 per month. Mr. Polito is the majority shareholder of
the Company, he owns approximately 69.5% of the outstanding shares of the
Company and therefore, may be deemed to control the shares of NY owned by the
Company which is 50.1% of the outstanding shares.

During the years ended June 30, 1995 and 1994 NY purchased from Waldorf
Steel Fabrications, Inc. ("Waldorf") approximately $478,000 and $3,085,786,
respectively, of fabricated steel. Such amounts paid to Waldorf represented
approximately 58% and 82% of the total steel purchased by NY for the years ended
June 30, 1995 and 1994, respectively. From July 1995 to September 1995, NY paid
Waldorf approximately $180,000 for fabrication services. In addition, Atlas Gem
Erectors Co., Inc. paid $193,538 of NY's general and administrative expenses for
the years ended June 30, 1994. Amounts payable related to such transactions
total $134,549 and are included in accounts payable at June 30, 1994. Such
amounts are non-interest bearing. Said affiliates are under the common control
of the majority stockholder of the Company.

In June 1995, the Company issued Marlowe 500,000 shares of Common Stock
pursuant to the terms of a consulting agreement, 250,000 of which are being held
in escrow by Alan Berkun, counsel for Marlowe & Company ("Marlowe"), a National
Association of Securities Dealer's, Inc. member broker dealer, in which Alan
Berkun is the president and principal stockholder, pending the Company's
securities being quoted on the Nasdaq SmallCap Stock

<PAGE>

Market. The sale of the 500,000 shares were registered pursuant to a
Registration Statement on Form S-8 filed by the Company on June 11, 1995. In
addition to the shares issued the consulting agreement provided for the payment
of a consulting fee of $4,000 per month for six months commencing June 1995, as
additional compensation. Pursuant to the terms of the consulting agreement in
addition to consulting services, Marlowe must utilize its best efforts to raise
a minimum of $750,000 for the Company upon the Company's securities being quoted
on the Nasdaq. No funds were raised by Marlowe for the Company. All 500,000
shares were resold pursuant to the S-8 registration statement filed by Alan
Berkun on behalf of the Company. On August 1, 1996, the Company amended its June
1995 agreement with Marlowe & Company ("Marlowe"), in which the Company agreed
to issue an additional 250,000 shares of Common Stock to Marlowe, which were
issued on August 1, 1996 and resold pursuant to Regulation S under the Act. Alan
Berkun acted as special counsel for the Company regarding these transactions.

On August 1, 1995, One Carnegie entered into a lease surrender agreement
with Waldorf. Pursuant to such agreement, Waldorf surrendered the premises and
waived any and all rights to possession of such premises, whereby as of such
time Waldorf ceased operations. Simultaneously, One Carnegie entered into a
lease agreement with U.S. Bridge MD. Such lease expires on December 31, 2001 and
provides for monthly rental payments of $50,000. The lease also provides for all
real estate taxes and operating costs to be paid directly by U.S. Bridge of MD.
In connection with the lease, U.S. Bridge MD paid approximately $82,000 on
account towards rent to One Carnegie on October 2, 1995.

On September 1, 1995, in conjunction with the underwriter of NY's public
offering exercising its over-allotment option to purchase 91,850 additional
shares of NY's common stock, the Company exercised its Special Warrant and
purchased 5,665 shares of NY's Common Stock at $2.50 per share.

On October 11, 1995, NY paid One Carnegie $50,000 on behalf of U.S. Bridge
MD for fabrication services performed by U.S. Bridge MD. Such payment was
treated as an on account payment by NY to U.S. Bridge MD. From July 1995 to
October 1995 NY paid U.S. Bridge MD approximately $183,000 for the labor
associated with the fabrication of steel.

On May 13, 1996, Joseph Polito, the Company's president entered into a
memorandum of understanding with an individual, Lubov Ulianova, whereby Mr.
Polito borrowed $300,000 from Mr. Ulianova, which loan was secured by 550,000
shares of the Company's Common Stock owned by Mr. Polito, which shares were put
into an escrow account, with Alan Berkun as the escrow agent. The funds were
then loaned by Mr. Polito to the Company. The loan provided that upon the
Company's listing of its Common Stock on the Nasdaq SmallCap Stock market
("Nasdaq"), the Company would call its loan to the Company, which would and was
repaid by the issuance by the Company of 400,000 shares of Common Stock to Mr.
Ulianova as payment for the loan, which transaction was to be pursuant to
Regulation S under the Securities Act of 1933, as amended. In addition, Mr.
Polito granted Mr. Ulianova an option to purchase 600,000 shares at a price of
$1.50, which option was to expire 6 months from the listing of the Company's

<PAGE>

securities on Nasdaq and which option may only be exercised if the bid
price for the Company's Common Stock is at least $3.00. The Company's Common
Stock was approved for listing on Nasdaq on July 25, 1996 at which time the loan
was repaid. The option has not been exercised to date.

The terms of Joseph Polito's employment agreement are described in the
Executive Compensation section of this report.

PART IV

ITEM 1EXHIBITS AND REPORTS ON FORM 8-K

(a) The following financial statements of the Company are included as Part
II, Item 8:

<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors Report F-1

Consolidated Balance Sheet F-2

Consolidated Statements of Operations F-3

Consolidated Statement of Stockholders' Equity F-4

Consolidated Statements of cash flows F-5 - F-6

Consolidated Notes to financial statements F-7 - F-22
</TABLE>
(b) During the last quarter, the Company filed no reports on Form 8-K.

(c) The Exhibits not filed herewith have been previously filed with the
Securities & Exchange Commission and incorporated by reference herein.

<S> <C> <C>
2.1 - Agreement and Plan of Reorganization dated effective as of April 25, 1994.
3.1 - Certificate of Incorporation of the Company filed June 15, 1994.
3.2 - By-Laws of the Company.
3.3 - Specimen Common Stock Certificate.
4.1 - Form of Special Warrant.
4.2 - Form of restricted stock agreement issued to Joseph Polito
10.1 - Lease Agreement between One Carnegie Court Associates and
Waldorf Steel Fabrications, Inc., dated March 27, 1990.
10.2 - Promissory note from the Company to Trinity Industries, Inc.

<PAGE>

10.3 - Forbearance Agreement between the Company and Trinity Industries, Inc., dated October 14, 1993.
10.4 - Lease Agreement between R.S.J.J. Realty Corp. and NY, dated June 30, 1993
10.5 - Employment Agreement of Joseph Polito
10.6 - The Company's Senior Management Incentive Plan.
10.7 - The Company's Employee Stock Option Plan.
10.8 - Agreement between Iron Workers Local Union 40 and NY.
10.9 - Agreement between Local Union 14, 14B, 15, 15A, 15C, 15D, International Union of Operating Engineers,
AFL-CIO and NY.
10.10 - Agreement between Local 780 and NY.
10.11 - Agreement to capitalize the $400,000 of debt.
10.12 - Consulting Agreement with Marlowe and Company.
10.13 - Lease surrender agreement between One Carnegie and Waldorf dated August 1, 1995.
10.14 - Lease Agreement between One Carnegie and U.S. Bridge Corp.(Maryland), dated August 1, 1995.
24.1 - Consent of Scarano & Lipton, P.C.
</TABLE>

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, this 30th day of October, 1996.

U.S. BRIDGE CORP.

By: /s/ Joseph M. Polito
Joseph M. Polito, President

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

\s\ Joseph M. Polito President and Director
Joseph M. Polito (Principal Executive 10/30/96
Officer) Date

\s\ Ronald J. Polito Secretary and Director
Ronald J. Polito 10/30/96
Date

\s\ Steven J. Polito Treasurer (Chief Financial 10/30/96
Steven J. Polito Officer and Chief Accounting Date
Officer and Director

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

Page
Number

Independent auditors' report F-1

Consolidated balance sheet F-2

Consolidated statements of operations F-3

Consolidated statement of stockholders' equity F-4

Consolidated statements of cash flows F-5 - F-6

Notes to consolidated financial statements F-7 - F-22

<PAGE>

INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholders of
U.S. Bridge Corp. and Subsidiaries

We have audited the accompanying consolidated balance sheet of U.S. Bridge
Corp. and its Subsidiaries (the "Company") as of June 30, 1996 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years ended June 30, 1996 and 1995. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, based on our audits, the consolidated financial statements
referred to above present fairly, in all material respects, the consolidated
financial position of the Company as of June 30, 1996, and the consolidated
results of its operations and cash flows for the years ended June 30, 1996 and
1995, in conformity with generally accepted accounting principles.

Scarano & Lipton, P.C.
Garden City, New York
September 27, 1996

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1996

ASSETS
<S> <C>
Current assets:
Cash $399,652
Contracts and retainage receivable, net 3,613,665
Costs and estimated earnings in excess of billings
on uncompleted contracts 2,433,524
Other current assets 55,116

Total current assets 6,501,957

Property and equipment, net 3,042,090

Deferred Compensation 33,000
Deferred consulting costs, net 239,583

Total assets $ 9,816,630
============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable, including cash overdrafts of $63,274 $936,445
Accrued expenses 397,729
Payroll taxes payable 382,135
Mortgage payable 2,735,531
Notes payable 145,837
Billings in excess of costs and estimated earnings
on uncompleted contracts 16,567
Due to officer 358,779

Total current liabilities 4,973,023

Minority interest 2,409,028

Commitments and contingencies (Note 13) -

Stockholders' equity:
Preferred stock, authorized 10,000,000, issued and outstanding
-0- shares -

Common stock, $.001 par value, authorized 50,000,000 shares,
issued and outstanding 6,162,530 5,766
Additional paid-in capital 2,641,002
Accumulated deficit (212,189)

Total stockholders' equity 2,434,579

Total liabilities and stockholders' equity $9,816,630

</TABLE>

See accompanying notes to consolidated financial statements.

F-2

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30,

1996 1995
-------------------
<S> <C> <C>
Revenue:
Contract revenue $7,401,433 $6,671,649
Rental income 50,000 600,000
------ -------

Total revenue 7,451,433 7,271,649
--------- ---------

Costs and expenses:
Cost of contract revenues 4,668,473 3,780,169
General and administrative expenses 3,003,890 2,612,246
Bad debt expense 1,019,127 675,699
--------- -------

Total costs and expenses 8,691,490 7,068,114
---------

(Loss) income from operations before other income (expense),
minority interest and (benefit) provision for
income taxes (1,240,057) 203,535

Other income (expenses):

Interest expense (341,610) (455,402)
Unusual item (Note 10c) (441,863) (198,137)
Gain on sale of subsidiary's stock (Note 11) 832,571 -
Interest income 27,766 -
------ -

Total other income (expenses) 76,864 (653,539)
------ --------

Loss before minority interest and (benefit)
provision for income taxes (1,163,193) (450,004)

Minority interest in net loss 342,802 30,817
------- ------

Loss before (benefit) provision for income taxes (820,391) (419,187)

(Benefit) provision for income taxes (860,960) 274,571
-------- -------

Net income (loss) $ 40,569 $ (693,758)
========= ==========

Net income (loss) per common equivalent share:

(Loss) income from operations before other income (expense),
minority interest and (benefit) provision for
income taxes $(.20) $ .04

Loss before minority interest (benefit) provision
for income taxes $(.19) $ (.08)
===== ======

(Benefit) Provision for income taxes $(.14) $ .05
===== =====

Net income (loss) $ NIL $(.13)
===== =====

Weighted average number of common shares outstanding 6,137,530 5,523,363
========= ==========

</TABLE>

See accompanying notes to consolidated financial statements.

F-3

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

Common
stock
Additional Retained Total
paid-in (deficit) Stockholders'
Shares Amount capital earnings equity

<S> <C> <C> <C> <C> <C> <C> <C>
Balances at June 30, 1994 5,482,530 $5,086 $2,049,682 $441,000 $2,495,768

Issuance of common stock in consideration
for loans made to the Company 20,000 20 34,980 - 35,000

Issuance of common stock in consideration
for the payment of
Subsidiary's debt 10,000 10 7,490 - 7,500

Issuance of common stock in consideration
for services 500,000 500 499,500 - 500,000

Net loss for the year ended
June 30, 1995 - - - (693,758) (693,758)
--- --- --- -------- -------

Balances at June 30, 1995 6,012,530 5,616 2,591,652 (252,758) 2,344,510

Issuance of common stock in consideration
for services pursuant to senior management
incentive plan 150,000 150 49,350 - 49,500

Net income for the year ended
June 30, 1996 - - - 40,569 40,569
--- --- --- ------ ------

Balances at June 30, 1996 6,162,530 $5,766 $2,641,002 $(212,189) $2,434,579
========= ====== ========== ========= ==========

</TABLE>

See accompanying notes to consolidated financial statements.

F-4

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,
<TABLE>
<CAPTION>

1996 1995
------- ----
<S> <C> <C>
Operating activities:
Net income (loss) $40,569 $(693,758)
Adjustments to reconcile net (loss) income to net
cash (used for) provided by operating activities:
Depreciation and amortization 882,549 483,166
Minority interest in net loss (342,802) (30,817)
Bad debt expense 1,019,127 675,699
Gain on sale of subsidiary's stock (832,571) -
Changes in assets and liabilities:
Contracts and retainage receivable (1,711,424) (550,379)
Rent receivable - (409,844)
Costs and estimated earnings in excess of
billings on uncompleted contracts (607,395) (1,026,504)
Other current assets (18,750) (15,696)
Accounts payable 489,597 52,561
Accrued expenses (189,545) 73,901
Payroll taxes payable 62,570 191,361
Billings in excess of costs and estimated
earnings on uncompleted contracts 16,567 (17,518)
Income taxes payable (864,263) 273,213
-------- -------
Net cash used for operating activities (2,055,771) (994,615)
---------- -------

Investing activities:
Purchase of equipment - (11,275)
Other assets - 4,981
- -----
Net cash (used for) provided by investing
activities - (6,294)
- ------

Financing activities:
Principal Payments on mortgage payments (164,992) (163,090)
Proceeds from (repayments to) officer 358,779 (46,390)
Decrease (increase) in deferred offering costs 103,554 (103,554)
Proceeds from notes payable - 1,472,000
Repayment of notes payable (1,071,649) (254,514)
Repayment of loans to affiliates (80,767) (65,947)
Proceeds from issuance of Subsidiary's
common stock and warrants 3,104,252 190,000
---------
Net cash provided by financing activities 2,249,177 1,028,505
--------- ---------

Net increase in cash 193,406 27,596
Cash, beginning 206,246 178,650
------- -------
Cash, ending $399,652 $206,246
======== ========

</TABLE>

See accompanying notes to consolidated financial statements.

F-5

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,

1996 1995
---- ----
<S> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 236,610 $ 327,863
============ =============

Supplemental disclosure of non-cash financing activities:
Capitalization of stockholder and affiliate loans in
exchange for common stock $ - $ 7,500
============ =============

In connection with the issuance of common stock, 20,000 shares were issued
as consideration for loans
made to the Company $ - $ 35,000

In connection with the issuance of common stock, 500,000 shares
were issued as consideration for services $ - $ 500,000
============ =============

In connection with the issuance of the Subsidiary's common stock, 160,000
shares of Subsidiary's common stock were issued as
consideration for loans made to Subsidiary $ - $ 640,000
============ =============

In connection with issuance of common stock, 150,000 shares were
issued as deferred compensation $ 49,500 $ -
============ ==========

</TABLE>
F-6

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 1 - ORGANIZATION

US Bridge Corp. "the Company" was incorporated in the State of Delaware on
September 11, 1988 under the name of Colonial Capital Corp. The Company
subsequently changed its name to Cofis International Corp. ("Cofis") during May
1991. Effective April 1994, in connection with the reverse acquisition of its
subsidiaries, (See Note 12a) Cofis changed its name to US Bridge Corp.

US Bridge of N.Y. Inc. ("US Bridge NY") is a New York Corporation and as of
June 30, 1996 is a 50.1% owned subsidiary of the Company which provides steel
erection to contractors pursuant to governmental construction projects. The
Company's ownership in US Bridge NY was diluted to a 50.1% as a result of US
Bridge NY's initial public offering ("IPO") completed on August 14, 1995. Prior
to the IPO the Company owned 85.6% of US Bridge NY. US Bridge NY was
incorporated on September 4, 1990.

One Carnegie Court Associates, Ltd. "One Carnegie", was incorporated in the
State of Maryland and is a wholly owned subsidiary of the Company. One Carnegie
was incorporated on December 14, 1990 for the purposes of acquiring on January
14, 1991, building, machinery and equipment. One Carnegie rents said facilities
to US Bridge of Maryland Corp. ("US Bridge MD"). US Bridge MD is a wholly owned
subsidiary of the Company.

US Bridge MD was incorporated in the State of Delaware for the purpose of
providing laborers to perform fabrication work for US Bridge of NY and other
unrelated customers.

Effective April 1994, the Company has adopted a new fiscal year that ends
on June 30, which is the same year end date as its subsidiaries. In connection
therewith, the Company has reported its operations for the twelve months ended
June 30, in order to correspond with its operating subsidiaries.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Consolidated statements

The consolidated financial statements at June 30, 1996 and 1995 include the
accounts of the Company and its majority owned subsidiaries, US Bridge NY, One
Carnegie and US Bridge MD, after elimination of all significant intercompany
transactions and accounts.

b) Contracts and retainage receivables

Contracts and retainage receivables represent amounts billed but
uncollected on completed construction contracts and construction contracts in
progress.

The Company utilizes the allowance method of recognizing uncollectible
receivable. The allowance method recognizes bad debt expense based on a review
of the individual accounts outstanding, and the Company's prior history of
uncollectible receivable. As of June 30, 1996, an allowance has been established
for receivable which are deemed uncollectible.

F-7

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

c) Property and equipment

Property and equipment are recorded at cost. Depreciation is provided using
the straight- line method over the estimated useful lives of the related assets
which range from 10 to 40 years.

d) Deferred offering costs

Deferred offering costs consisted of professional fees related to the
initial public offering of US Bridge NY. Deferred offering costs have been
charged to additional paid-in capital upon the completion of the offering.

e) Deferred financing costs

Deferred financing costs consisted of shares issued to investors pursuant
to US Bridge NY's private offering memorandum and have been amortized on a
monthly basis until the earlier of March 1996, the due date of the related
promissory notes, or the initial public offering of US Bridge of NY.

f) Deferred consulting costs

Deferred consulting costs consist of consulting fees in the form of common
stock issued to a broker dealer. A portion of the deferred consulting costs
amounting to $250,000 are being amortized on a monthly basis until June 1997,
the expiration date of the related consulting agreement. The remaining $250,000
portion will be amortized commencing August 10, 1996, which represents the
commencement date with which the Company was quoted on the NASDAQ Small Cap
Stock Market System. ("NASDAQ")

g) Contract acquisition costs

Contract acquisition costs consisted of costs of acquiring existing
contracts from an affiliate of the Company and were amortized on a straight line
basis over the lives of the respective long term contracts which ranged from one
to three years.

h) Income taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" which
requires the use of the "liability method" of accounting for income taxes.
Accordingly, deferred tax liabilities and assets are determined based on the
difference between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. Current income taxes are based on the
year's taxable income for Federal, State and City income tax reporting purposes.

F-8

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

i) Revenue recognition

US Bridge of NY recognizes revenue and costs from fixed-price and
modified-price contracts for all current contracts under the percentage of
completion method. Cost of contract revenues include all direct material and
labor costs and those indirect costs related to contract performance. General
and administrative expenses are accounted for as period costs and are,
therefore, not included in the calculation of the estimates to complete
construction contracts in progress. Material project losses are provided for in
their entirety without reference to the percentage of completion. As contracts
can extend over one or more accounting periods, revision in costs and earnings
estimated during the course of the work are reflected during the accounting
period in which the facts become known.

The asset, "costs and estimated earnings in excess of billings on
uncompleted contracts", represents costs and estimated earnings in excess of
amounts billed on respective uncompleted contracts at the end of each period.

"Billings in excess of costs and estimated earnings on uncompleted
contracts," represents billings which exceed costs and estimated earnings on
respective uncompleted contracts at the end of each period.

j) Net income (loss) per share

Net income (loss) per share for the years ended June 30, 1996 and 1995 are
based upon the weighted average number of common shares outstanding during the
respective years.

k) Use of estimates

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

l) Statements of cash flows

For purposes of statements of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.

F-9

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

m) Impact of recently issued accounting standards

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
Statement 121 also addresses the accounting for long- lived assets that are
expected to be disposed of. The Company adopted Statement 121 during the year
ended June 30, 1996.

n) Accounting for stock-based compensation

The Company has elected earlier adoption of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation", which
requires the recognition of compensation expense for stock-based awards based
upon the fair value of the award at the grant date.

o) Fair value disclosure as of June 30, 1996

The carrying value of cash, accounts receivable, accounts payable and
accrued expenses and short-term debt are a reasonable estimate of their fair
value. The carrying value of the long-term debt including the current portion
approximate fair value based upon the interest factors for the debt being based
upon the prime rate which reflects market value.

p) Reclassifications

Certain reclassifications have been made to the June 30, 1995 consolidated
financial statements in order to conform to the June 30, 1996 presentation.

NOTE 3 - CONTRACT AND RETAINAGE RECEIVABLE

At June 30, 1996, contract and retainage receivable consist of the
following:

Contracts in progress $1,038,344
Completed contracts 2,718,681
Retainage 683,366
---------
4,440,391

Less: allowance for doubtful accounts 1,000,000

$3,440,391

F-10

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 4 - CONTRACTS IN PROGRESS

At June 30, 1996, costs and estimated earnings in excess of billings and
billings in excess of costs and estimated earnings on uncompleted contracts
consist of the following:

Costs incurred on uncompleted contracts $ 7,079,625
Profits earned to date 3,914,660
---------
10,994,285

Less: billings to date 8,577,328

$2,416,957

Included in the accompanying balance sheet under the following captions at
June 30, 1996:

Costs and estimated earnings in excess of
billings on uncompleted contracts $2,433,524
Billings in excess of costs and estimated
earnings on uncompleted contracts (16,567)

$2,416,957

NOTE 5 - BACKLOG

The following schedule summarizes changes in backlog on contracts during
the year ended June 30, 1996. Backlog represents the amount of revenue the
Company expects to realize from work to be performed on uncompleted contracts in
progress at year end and from contractual agreements on which work has not yet
begun.

Backlog balance at July 1, 1995 $2,464,372
New contracts during the year ended
June 30, 1996 22,570,424
----------

25,034,796
Less: contract revenue earned during the year
ended June 30, 1996 7,091,396

Backlog balance at June 30, 1996 $17,943,400
===========

F-11

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 6 - PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following at June 30, 1996:

Land $ 550,000
Building 2,200,000
Equipment 1,261,924
---------
4,011,924
Less: accumulated depreciation (969,834)

$3,042,090

All property and equipment are pledged pursuant to a mortgage payable. (See
Note 8).

NOTE 7 - ACCRUED EXPENSES

Accrued expenses consist of the following at June 30, 1996:

Wages and related union benefits $ 22,462
Professional fees 20,000
Insurance expense 118,934
Rent 22,500
Interest and penalties 170,102
Other 43,731
---------

$ 397,729

NOTE 8 - MORTGAGE PAYABLE

On October 12, 1995, in connection with the original acquisition of the
property and equipment, One Carnegie signed with the lender a letter agreement
revising the modification agreement discussed below. Pursuant to such letter
agreement, One Carnegie was in default as of June 30, 1996. The mortgage has
been classified as current at June 30, 1996, since One Carnegie has not paid the
required monthly installments timely as stipulated in the letter agreement
thereby allowing the lender to call the loan at anytime.

On December 13, 1994, One Carnegie signed a modification to the first
forbearance agreement with the lender. Pursuant to such modification agreement,
the lender agreed not to accelerate and demand full payment of the note and
allowed One Carnegie to reduce the monthly payments to $40,000 pursuant to a new
two (2) year amortization schedule provided by the lender. Such modification
agreement required One Carnegie to make timely payments after December 31, 1994,
which One Carnegie did not make timely.

F-12

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 8 - MORTGAGE PAYABLE (Cont'd)

The above terms had been previously modified as follows. On February 1,
1991, One Carnegie originally entered into a $3,000,000 installment loan with
interest at 11% per annum through November 1994, with interest increasing to 13%
per annum in December 1994; monthly payments including interest of $50,000
through November 1993, increasing to $60,000 in December 1993 and increasing to
$177,430 on December 14, 1994 until January 15, 1996, the due date of the loan.
The mortgage is collateralized by all property and equipment of One Carnegie and
is personally guaranteed by the majority stockholder of the Company and an
entity owned by such stockholder.

On October 21, 1993, One Carnegie signed the first Forbearance Agreement
staying foreclosure and restructuring the terms under the above original
mortgage agreement. The respective terms under said agreement required One
Carnegie to make monthly payments of $50,000 to October 14, 1994, a $60,000
payment on November 14, 1994, and monthly payments of $177,430 thereafter until
maturity on January 15, 1996. Interest is payable at 11% per annum. Upon the
earlier to occur of October 14, 1994 or a public or private issuance by One
Carnegie of either equity or debt with a term of three (3) years or more
(including sale/leaseback or other off balance sheet financing), or any
combination thereof, One Carnegie was required to pay to the mortgagor the
amount sufficient to pay in full all interest then accrued and unpaid on the
indebtedness and to reduce the outstanding principal amount of the indebtedness
to $2,331,965 which is the amount that would have been outstanding on such date
had One Carnegie timely made all of the payments based on the original mortgage
agreement. Pursuant to such forbearance agreement, the Mortgagor may terminate
immediately, irrevocably and without notice such forbearance agreement if One
Carnegie defaults on such terms.

One Carnegie did not make the required payment on October 14, 1994 to
reduce the outstanding principal amount of the indebtness to $2,331,965 pursuant
to such forbearance agreement. The lender did not but could have accelerated and
demanded the total balance due under the note and could terminate the
forbearance agreement immediately, irrevocably and without notice.

NOTE 9 - INCOME TAXES

Effective July 1, 1992, the Company has adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". Income taxes
are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes related
primarily to differences between the financial and tax basis of assets and
liabilities. The deferred tax assets and liabilities represent the future tax
return consequences of these temporary differences, which will either be taxable
or deductible when the assets and liabilities are recovered or settled. The
Company's only such significant item relates primarily to net operating loss
carryfowards (NOL's).

F-13

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 9 - INCOME TAXES (Cont'd)

The Company has elected not file a consolidated income tax return with its
subsidiaries. As such, at June 30, 1996 the Company has federal net operating
loss carryforwards of approximately $215,000 which expires during 2008.

The reconciliation of income tax computed at the federal statutory tax rate
to income tax expense is as follows:

Federal statutory income tax benefit rate 34% Increases (reductions)
resulting from:
State and local income taxes net of federal benefit (6%)

Effective income tax benefit rate 28%

The tax effects of significant item comprising the Company and its
subsidiary's net deferred tax assets as of June 30 1996 is as follows:

Net operating loss carryforwards $1,700,000
Less valuation allowance (1,700,000)

Long-term portion of deferred tax assets $ -0-
=========

At June 30, 1996, a 100% valuation allowance, in the approximate amount of
$1,700,000 has been provided for the Company and its subsidiaries to reduce the
net deferred tax assets for the amount by which the deferred tax asset related
to the NOLs exceeded the net deferred tax liability resulting from all other
temporary differences. The Company and its subsidiaries have provided the
allowance since management could not determine that it was "more likely than
not" that the benefits of the deferred tax assets would be realized.

NOTE 10 - NOTES PAYABLE

a) Line of credit $250,000

During August 1994, the Company secured a $250,000 credit line with a bank
at an interest rate of one and one half percent (11/2%) above the prime rate.
Interest is payable on the first day of each month which commenced October 1,
1994. Said credit line is payable on demand. At June 30, 1996 the balance was
$145,837.

b) Bridge Loan

On January 10, 1995, pursuant to a private transaction, US Bridge NY sold
to one (1) individual 10 units comprising one (1) promissory note totaling
$252,000 and 3,000,000 warrants purchased for $30,000 which provided for the
right to acquire 3,000,000 common shares of US Bridge NY. Each unit was
comprised of a $25,200 12% promissory note and 300,000 warrants for $3,000 for a
total price of $28,200 per unit. The warrants were identical and exercisable
under the same term as the IPO warrants of US Bridge NY. The promissory note
which beared interest at twelve percent (12%) was repaid on August 14, 1995 upon
completion of US Bridge NY's Initial Public Offering

F-14

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 10 - NOTES PAYABLE (Cont'd)

c) Promissory Notes

On January 16, 1995 an Underwriter commenced and privately offered on a
best-efforts basis, sixteen (16) units of US Bridge NY securities at a price of
$55,000 per unit. Each unit consisted of a promissory note in the principal
amount of $45,000 bearing interest at 12% per annum, and 10,000 shares of common
stock at $1.00 per share. The 160,000 shares sold in this offering were assigned
a value of 100% of the initial public offering price of $5.00 per share. In
relation to the common stock sold in the offering, US Bridge NY recorded
deferred financing costs of $640,000 (160,000 shares at $5.00 per share less
original cost of $1.00 per share). Deferred financing costs were amortized on a
monthly basis until the earlier of March 1996, the due date of the related
promissory notes or the initial public offering of US Bridge NY. As a result,
for the years ended June 30, 1996 and 1995 US Bridge NY recorded amortization
expense of $441,863 and $198,137, respectively. The holders of such shares
included their shares in US Bridge NY's initial public offering. The offering
was completed on March 9, 1995 resulting in all sixteen (16) units being sold
netting proceeds to US Bridge NY of approximately $696,851.

The placement agent received a commission of 10% and a non-accountable
expense allowance of 3% of the gross proceeds of the offering.

d) Line of credit $200,000

On January 17, 1995, US Bridge NY borrowed $200,000 pursuant to a
promissory note with a financial institution at a rate of 81/2% per annum.
Interest was payable on the last day of each month beginning January 31, 1995.
Such note was fully collaterized by a $200,000 certificate of deposit and it was
due on June 21, 1996. Accordingly, as of June 30, 1996 the loan was repaid.

NOTE 11 - MINORITY INTEREST

In connection with US Bridge NY's private placement on March 9, 1995 (see
Note 10c) and its IPO (see Note 12c(i)), the Company's interest in US Bridge NY
was reduced to 49.95% before its exercise of the special warrant. On September
9, 1995 the Company purchased at $2.50 per share, 5,665 shares of common stock
of US Bridge NY by exercising its right pursuant to the terms of a special
warrant issued only to the Company. As a result, the Company increased its
ownership in US Bridge NY to 50.01% from 49.95%. As of June 30, 1996, the
minority interest balance amounting to $2,409,028 is a result of all of the
above transactions and the proportionate share of income and losses attributable
to the minority stockholders.

Lastly, in connection with US Bridge NY's IPO, the Company generated net
proceeds of $3,104,880 and recorded a gain of $832,571 as a result of reducing
its ownership percentage to 50.01% of US Bridge NY.

F-15

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 12 - STOCKHOLDERS' EQUITY

a) Recapitalization

On April 24, 1994, after giving effect to a 1-for-4 reverse stock split,
the Company issued 2,820,000 and 720,000 shares, respectively, of its common
stock to the stockholders of US Bridge NY and One Carnegie in exchange for all
of their issued and outstanding shares. The acquisition by the Company has been
treated as a recapitalization for accounting purposes. Accordingly, after such
transaction and before US Bridge NY's private offering and initial public
offering, US Bridge NY was a wholly owned subsidiary of the Company. As of June
30, 1996 US Bridge NY is a 50.01% owned subsidiary and One Carnegie is a wholly
owned subsidiary of the Company.

b) Issuance of shares

(i) On August 15, 1995, the Company issued 150,000 shares of common stock
to its President pursuant to the terms of the Company's Senior Management
Incentive Plan. Such shares were issued as compensation for the President's
efforts with the Company and US Bridge NY in the consummation of US Bridge NY's
initial public offering on August 14, 1995. Of the total 150,000 shares issued
to the President, 50,000 shares are immediately vested without restrictions and
the remaining 100,000 shares vest pursuant to the restricted periods, whereby
50,000 shares vest on each August 15, 1996 and 1997.

(ii) On June 16, 1995 pursuant to Form S-8 Registration Statement filed
with Securities and Exchange Commission the Company registered and issued
500,000 shares to a broker dealer as consideration for a two year consulting
agreement. Pursuant to the consulting agreement, the consultant will serve as a
financial consultant and advisor to the Company on a non-exclusive basis for a
period of twenty-four (24) months commencing on June 1, 1995. Of the total
500,000 shares issued to the consultant, 250,000 of such shares were to be held
in escrow and released to the consultant upon the approval of the Company's
common stock on NASDAQ. The Company had also agreed that upon NASDAQ approval,
an additional 100,000 shares of restricted stock were to be issued to the
consultant. Pursuant to a consent of the Board of Directors, the company amended
such consulting agreement whereby such shares in escrow were released to such
consultant during February 1996 even though the Company was not listed on NASDAQ
until July 25, 1996. Lastly, the Board of Directors further amended the
consulting agreement to increase the additional number of shares from 100,000 to
250,000. Accordingly during August 1996, the Company issued 250,000 restricted
shares to such consultant.

F-16

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 12 - STOCKHOLDERS' EQUITY (Cont'd)

c) Equity transaction of US Bridge NY

(i) Initial public offering

On August 14, 1995 US Bridge NY successfully completed its public offering.
As a result, US Bridge NY sold 791,850 shares which included 91,850 shares in
connection with the exercise of the underwriter's over-allotment options and
494,500 warrants which included 64,500 warrants pursuant to the underwriter's
over-allotment option. US Bridge NY yielded a total net proceeds of $2,077,903
after deducting underwriter selling expenses and expense allowance, repayment of
bridge loans and promissory notes and related accrued interest to the bridge
lenders and private investors, and the pre-payment of the first two year's
financial consulting agreement with the underwriter. Simultaneously with the
offering, US Bridge NY charged all deferred offering costs incurred to
additional paid-in capital which totalled $903,820.

In connection with the initial public offering of US Bridge NY, the
Company's ownership percentage in US Bridge NY was reduced to 49.95% before the
exercise of the special warrant as discussed below. Accordingly, at June 30,
1996 the Company's minority interest amounting to $2,377,577 represents the
effect of US Bridge NY's private offering and the initial public offering and
the cumulative effect of US Bridge NY's operations since the private offering
and initial public offering.

(ii) Special Warrant

On September 9, 1995, the Company purchased at $2.50 per share 5,665 common
shares of US Bridge NY by exercising its right pursuant to the terms of a
special warrant issued only to such stockholder. As a result, the Company
increased its ownership of US Bridge NY to 50.01% from 49.95%.

F-17

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 13 - COMMITMENT AND CONTINGENCIES

a) Leases

US Bridge NY leases its administrative offices pursuant to a signed lease
agreement with an affiliate owned by the Company's majority stockholder which
requires monthly payments of $20,000. Such lease expires on March 31, 1998.
Under such lease agreement, US Bridge NY is required to make future minimum
lease payments as follows:

Year Ending
June 30,
1997 $ 240,000
1998 180,000
----------

Total $ 420,000
==========

Included in selling, general and administrative expenses is rent expense
which amounted to $240,000 for the years ended June 30, 1996 and 1995. US Bridge
NY also leases a yard for storage material pursuant to a oral agreement which
requires monthly payments of $3,500. As a result, total rent expense for the
years ended June 30, 1996 and 1995 amounted to $282,000.

b) Significant customers and vendors

1.For the year ended June 30, 1996 and 1995, US Bridge NY had three (3) and
two (2) unrelated customers respectively, which accounted for approximately
sixty two (62%) and fifty-eight (58%) respectively, of total revenues. At June
30, 1996 and 1995 amounts due from such customers represented 46% and 70%,
respectively, of total accounts receivable.

2. For the years ended June 30, 1996 and 1995 US Bridge NY purchased from
Waldorf Steel Fabrications, Inc. ("Waldorf") approximately $180,333 and $478,000
respectively, of the materials and labor necessary to perform steel erection
services. Effective August 1, 1995, Waldorf ceased operations. Said vendor is
under the common control of the President of the Company. Lastly, for the years
ended June 30, 1996 and 1995, US Bridge NY paid $622,050 and $271,495
respectively, to US Bridge of Maryland, Inc. ("US Bridge MD") for certain
materials and labor necessary to perform steel erection services. US Bridge MD
is a wholly owned subsidiary of Bridge Corp.

c) Seasonality

US Bridge NY operates in an industry which may be seasonal, generally due
to inclement weather occurring during the winter months. Accordingly, US Bridge
NY, may experience a seasonal pattern in its operating results with lower
revenue in the third quarter of each fiscal year. Quarterly results may also be
affected by the timing of bid solicitations by governmental authorities or the
stage of completion of major projects.

F-18

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 13 - COMMITMENT AND CONTINGENCIES (Cont'd)

d) Bonding requirements

US Bridge NY is required to provide bid and/or performance bonds in
connection with governmental construction projects. To date, US Bridge NY has
been able to sufficiently obtain bonds for all its projects, but there can be no
assurance that it will be able to continue to do so. In addition, new or
proposed legislation in various jurisdictions may require the posting of
substantial additional bonds or require other financial assurances for
particular projects.

e) Payroll taxes

During September 1994, US Bridge NY entered into an installment agreement
with a tax authority in order to liquidate delinquent payroll taxes of
approximately $231,535 and remove a tax lien filed by such authority. The
agreement required US Bridge NY to pay $25,000 per month until such amount is
fully paid. As per the terms of the agreement, US Bridge NY must also pay timely
all current payroll taxes. As of June 30, 1996 US Bridge NY has not made all the
required monthly payments and has not paid timely all current payroll taxes.
Additionally, US Bridge MD also became delinquent with regards to its payroll
taxes which amounted to approximately $93,423 as of June 30, 1996. The total
payroll tax liability as of June 30, 1996, excluding the related penalty and
interest amounted to $382,135.

f) Employment agreement

On April 4, 1995, US Bridge NY entered into an employment agreement with
its President and Director for a term of approximately three (3) years expiring
on June 30, 1998. The employment agreement provides for an annual salary of
$300,000 with a 10% annual escalation. Pursuant to the agreement, the President
and Director is also entitled to receive a $50,000 per year non-accountable
expense allowance payable in equal weekly installments. The President and
Director is also entitled to receive an annual bonus of $50,000 if the Company
nets $1,000,000 before taxes in any year and an additional $25,000 for each
$500,000 of additional pre-tax profits. Advances against such bonus are equal to
$10,000 payable monthly until the end of the employment agreement. At such time
any excess advances will be re-paid to US Bridge NY. No advances have been made
as of June 30, 1996 under this agreement.

F-19

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 13 - COMMITMENT AND CONTINGENCIES (Cont'd)

f) Employment agreement (Cont'd)

In addition, the President and Director were be granted options to purchase
25,000 shares of US Bridge NY's common stock, all of which options shall be
vested as of the dates outlined as follows. The options shall be exercisable
commencing April 4, 1996 and continuing until April 4, 2004; providing, however,
options to purchase 7,500 shares shall become vested and exercisable on April 4,
1996 and April 4, 1997, respectively, 10,000 vesting on April 4, 1998. The
option shall contain such other terms and conditions as set forth in the stock
option agreement. The exercise price of the options shall be equal to the 110%
of the stock price in the initial public offering. The foregoing options are
intended to qualify as incentive stock options. Lastly, US Bridge NY, pursuant
to such agreement will pay premiums on a $3,500,000 life insurance policy for
the benefit of individuals as directed by such President and Director. Any cash
surrender value is US Bridge NY's property until the employment agreements ends.
The estimated premium on such policy is $80,000 per year.

NOTE 14 - RELATED PARTY TRANSACTIONS

a) Due to officer

On May 13, 1996, an unrelated party loaned the Company's President $300,000
pursuant to a memorandum of understanding. The loan bears interest at 1% above
prime, and its due 90 days from receipt of funds. Simultaneously therewith, the
Company's President loaned the Company the $300,000. As collateral for the loan,
550,000 shares of the Company's common stock owned by the President were put in
an escrow account. Upon the Company being listed on NASDAQ, the Company will
liquidate such loan by releasing 400,000 shares from the escrow account to such
unrelated party pursuant to Regulation "S" under the Securities Act of 1933, as
amended. Accordingly, during September 1996, the Company released 400,000 to
such unrelated party for satisfaction of the loan.

Additionally, the Company's President issued to such unrelated party an
option to purchase 600,000 share at $1.50 per share from the day the funds are
received until 6 months after the Company attains NASDAQ listing. The option may
be exercised at any time within the exercise period subject to a minimum bid
prize of $3 per share. Lastly, the Company's President may borrow an additional
$100,000 under the same terms as discussed above for a period of 30 days.

F-20

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 14 - RELATED PARTY TRANSACTIONS (Cont'd)

b) Rental income

On July 1, 1991, One Carnegie leased to Waldorf Steel Fabricators Inc.,
"Waldorf", an affiliate owned by the Company's majority stockholder, the
facilities it purchased in January 1991. Such lease is for five (5) years and
provides for monthly rental payments of $50,000. Pursuant to such lease
agreement, any funds collected in excess of the total annual rent of $600,000 is
to be credited to the next respective subsequent year. The lease also provides
for all real estate taxes and operating costs to be paid directly by lessee. All
of the rental income was derived and the entire rent receivable balance of
$975,699 as of June 30, 1996 and 1995, respectively, is due from Waldorf. The
Company has provided a $943,398 provision related to such receivables at June
30, 1995, which represents 100% of the rent receivable. Pursuant to an
assignment agreement entered during 1994, Waldorf has assigned all of its
rights, title and interests in certain accounts receivable amounting to $571,172
to One Carnegie as collateral to secure the amounts owed to One Carnegie.

c) Acquisition of contracts

On June 15, 1993, US Bridge NY signed an agreement to pay $400,000 in
connection with its purchase of certain of Atlas Gem Erectors, Co. Inc.'s
("Atlas Gem") existing contracts to perform steel erection services. The
purchase price was determined based on 4% of the approximate total value of the
contracts purchased. Atlas Gem is an affiliate owned by the Company's President.
Such amount due was payable simultaneously with the Company's collection of
revenue. The payment amount was computed by multiplying the purchase price by
the percentage generated as a result of dividing related project revenue
collected to date (progress payments) by the total project revenue. The Company
has recorded $100,000 of amortization expense for the year ended June 30, 1995.
Accordingly, as of June 30, 1995 such contract acquisition costs were fully
amortized.

d) Purchase of material and labor

For the years ended June 30, 1996 and 1995 US Bridge NY purchased from
Waldorf Steel Fabrications, Inc. ("Waldorf") approximately $180,333 and $478,000
respectively, of the materials and labor necessary to perform steel erection
services. Effective August 1, 1995, Waldorf ceased operations. Said vendor is
under the common control of the President of the Company. Lastly, for the years
ended June 30, 1996 and 1995, US Bridge NY paid $622,050 and $271,495
respectively, to US Bridge of Maryland, Inc. ("US Bridge MD") for certain
materials and labor necessary to perform steel erection services. US Bridge MD
is a wholly owned subsidiary of Bridge Corp.

e) Office leases

F-21

<PAGE>

U.S. BRIDGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995

NOTE 14 - RELATED PARTY TRANSACTIONS (Cont'd)

f) Employment agreement

On April 4, 1995 US Bridge NY entered into an employment agreement with its
President and Director for a term of approximately three (3) years expiring on
June 30, 1998. The employment agreement provides for an annual salary of
$300,000 with a 10% annual escalation. Pursuant to the agreement, the President
and Director is also entitled to receive a $50,000 per year non-accountable
expense allowance payable in equal weekly installments. The President and
Director is also entitled to receive an annual bonus of $50,000 if the Company
nets $1,000,000 before taxes in any year and an additional $25,000 for each
$500,000 of additional pre-tax profits. Advances against such bonus are equal to
$10,000 payable monthly until the end of the employment agreement, at such time
any excess advances will be re-paid to US Bridge NY. No advances have been made
as June 30, 1996 under this agreement.

NOTE 15 - SUBSEQUENT EVENTS

Issuance of shares

During August 1996, the Company issued 250,000 shares of restricted stock
pursuant to a consulting agreement entered on during June 1995.

F-22

<PAGE>

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in Part II, Item 7 of this Form 10-KSB and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000846464

<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 399,652
<SECURITIES> 55,116
<RECEIVABLES> 4,440,391
<ALLOWANCES> (1,000,000)
<INVENTORY> 2,433,524
<CURRENT-ASSETS> 6,501,957
<PP&E> 4,011,924
<DEPRECIATION> (969,834)
<TOTAL-ASSETS> 9,816,630
<CURRENT-LIABILITIES> 4,973,023
<BONDS> 0
0
0
<COMMON> 5,766
<OTHER-SE> 2,428,813
<TOTAL-LIABILITY-AND-EQUITY> 9,816,630
<SALES> 7,451,433
<TOTAL-REVENUES> 7,451,433
<CGS> 4,668,473
<TOTAL-COSTS> 8,691,490
<OTHER-EXPENSES> (342,802)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 755,707
<INCOME-PRETAX> 0
<INCOME-TAX> (860,960)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 832,571
<CHANGES> 0
<NET-INCOME> 40,569
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>