ROSECAP INC/NY, DEF 14A, 1998-12-29

ROSECAP INC/NY
DEF 14A, 1998-12-29
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WESTBURY METALS GROUP, INC.
750 Shames Drive
Westbury, New York 11590

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 3, 1999 AT 2:00 P.M.

To the Shareholders of
Westbury Metals Groups, Inc.

Notice is hereby given that the Annual Meeting of Shareholders of
Rosecap, Inc. , a New York corporation (the "Company"), will be held at the
offices of the Company at 750 Shames Drive, Westbury, New York 11590 on February
3, 1999 at the hour of 2 p.m. local time for the following purposes:

(1) To re-elect the three (3) Directors of the Company for the
following fiscal year;

(2) To transact such other business as may properly come before the
Meeting.

Only shareholders of record at the close of business on December 28,
1998 are entitled to notice of and to vote at the meeting or any adjournment
thereof.

By Order of the Board of Directors

David W. Sass, Secretary

December 28, 1998

IF YOU WISH TO VOTE IN FAVOR OF EACH OF THE PROPOSALS AND FOR
THE NOMINEES PRESENTED, CHECK THE APPROPRIATE BOX AND SIGN,
DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IN
ANY EVENT, YOUR PROMPT RETURN OF SIGNED AND DATED PROXY WILL
BE APPRECIATED.

<PAGE>

ANNUAL MEETING OF STOCKHOLDERS

WESTBURY METALS GROUP, INC.

FEBRUARY 3, 1999
-----------------

PROXY STATEMENT
-----------------

GENERAL INFORMATION

Proxy Solicitation

This Proxy Statement is furnished to the holders of Common
Stock, $.001 par value per share ("Common Stock"), of Westbury Metals Group,
Inc. (the "Company") in connection with the solicitation of proxies on behalf of
the Board of Directors of the Company for use at the Annual Meeting of
Stockholders ("Annual Meeting") to be held February 3, 1999, or at any
continuation or adjournment thereof, pursuant to the accompanying Notice of
Annual Meeting of Stockholders. The purpose of the meeting and the matters to be
acted upon are set forth in the accompanying Notice of Annual Meeting of
Stockholders. The Board of Directors knows of no other business which will come
before the meeting.

Proxies for use at the meeting will be mailed to stockholders
on or about December 30, 1998 and will be solicited chiefly by mail, but
additional solicitation may be made by telephone, telegram or other means of
telecommunications by directors, officers, consultants or regular employees of
the Company. The Company may enlist the assistance of brokerage houses,
fiduciaries, custodians and other like parties in soliciting proxies. All
solicitation expenses, including costs of preparing, assembling and mailing the
proxy material, will be borne by the Company.

Revocability and Voting of Proxy

A form of proxy for use at the meeting and a return envelope
for the proxy are enclosed. Stockholders may revoke the authority granted by
their execution of proxies at any time before their effective exercise by filing
with the Secretary of the Company a written revocation or duly executed proxy
bearing a later date or by voting in person at the meeting. Shares represented
by executed and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are given, the proxies
intend to vote "FOR" each of the nominees for director as described in Proposal
No. 1. Proxies marked as abstaining will be treated

<PAGE>

as present for purposes of determining a quorum for the Annual Meeting, but will
not be counted as voting in respect of any matter as to which abstinence is
indicated. If any other matters properly come before the meeting or any
continuation or adjournment thereof, the proxies intend to vote in accordance
with their best judgment.

Record Date and Voting Rights

Only stockholders of record at the close of business on
December 28, 1998 are entitled to notice of and to vote at the Annual Meeting of
Shareholders or any continuation or adjournment thereof. Each share of Common
Stock is entitled to one vote per share. Any share of Common Stock held of
record on December 28, 1998 shall be assumed, by the Board of Directors, to be
owned beneficially by the record holder thereof for the period shown on the
Company's stockholder records. The affirmative vote of a majority of the
shareholders present in person or by proxy at the meeting is required for the
election of the directors to be elected by such shares. The present directors
and officers of the Company holding approximately 25% of the outstanding Common
Stock of the Company intend to vote "FOR" the slate of directors.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The By-Laws of the Company provide for a Board of Directors of
not less than three (3) members. The Board of Directors currently consists of
three (3) members. At the meeting, three (3) directors will be elected to serve
until the 1999 Annual Meeting of Stockholders and until their successors have
been elected and qualified. Present vacancy or vacancies which occur during the
year may be filled by the Board of Directors, and any directors so appointed
must stand for reelection at the next annual meeting of stockholders. All
current directors have been nominated for re-election. The nominees to be voted
on by stockholders are Messrs. Sherman, O'Hanlon and Riess.

All nominees have consented to be named and have indicated
their intent to serve if elected. The Company has no reason to believe that any
of these nominees are unavailable for election. However, if any of the nominees
become unavailable for any reason, the persons named as proxies may vote for the
election of such person or persons for such office as the Board of Directors of
the Company may recommend in the place of such nominee or nominees. It is
intended that proxies, unless marked to the contrary, will be voted in favor of
the election of Messrs. Sherman O'Hanlon and Riess.

<PAGE>

The Board of Directors recommends that the stockholders vote "FOR" the
election of the following three nominees (Item No. 1 on the proxy card).

NOMINEES FOR ELECTION

The Directors of the Company and a brief summary of their business experience
and certain other information with respect to them are set forth below:

Name Age Capacities In Which Served

Mandel Sherman 60 President, Chief Executive Officer
and Director

Michael A. O'Hanlon 51 Director

Michael Riess 58 Director

Mandel Sherman, President, Chief Executive Officer and Director

Mandel Sherman, 60, has been the President, Chief Executive Officer and Director
of Westbury Alloys, Inc. ("Westbury") since July 1996. From 1993 to 1995, Mr.
Sherman acted as an independent consultant to various investment firms. From
1983 to 1993, Mr. Sherman participated in numerous real estate ventures as both
an investor and manager of developments with an approximate total value in
excess of $30 million. From 1975 to 1983, Mr. Sherman served as the Chief
Executive Officer and President of Refinement International Company
("Refinement"), a company he founded in 1975. Refinement, a full service metals
processing company with financial capabilities and capital resources in precious
metals and specialty metals markets, exceeded annual sales of $350 million and
was publicly traded on the American Stock Exchange. From 1962 to 1975, Mr.
Sherman served as the President of Eastern Foundry Supplies ("EFS"), a company
he founded in 1962. EFS concentrated in the recovery of precious metals from the
electronic and jewelry industries. In 1967, Mr. Sherman was responsible for the
sale of EFS to Whittaker Corp., a California-based Company listed on the NYSE,
where Mr. Sherman remained as President with annual sales of approximately $10
million. Mr. Sherman received his BSBA in Business Administration from Boston
University in 1959.

Michael A. O'Hanlon, Director

Michael A. O'Hanlon, 51, has been the president and chief executive officer of
DVI, Inc., ("DVI") an independent specialty finance company that conducts a
medical equipment finance business and related medical receivables finance
business, since November 1995. Mr. O'Hanlon was president and chief operating
officer from September 1994 to November 1995. Previously, Mr. O'Hanlon served as
executive vice president of DVI since joining DVI in March, 1993. Prior to
joining DVI, Mr. O'Hanlon served as president and chief executive officer of
Concord Leasing, Inc., and its subsidiary, U.S. Concord, Inc. for nine years, a
company which provides medical, aircraft, shipping and industrial equipment
financing. Previously, Mr. O'Hanlon was a senior executive with Pitney Bowes
Credit
3

<PAGE>

Corporation. Mr. O'Hanlon received his Master of Science degree from the
University of Connecticut and his Bachelor of Business Administration from the
Philadelphia College of Textiles and Science. Mr. O'Hanlon became a director of
DVI in November, 1993.

Michael Riess, Director

Michael Riess, 58, has been the president of Materials Management Corporation
("MMC") since 1978, a consulting firm specializing in precious and nonferrous
metals. Mr. Riess is also associated with Prudential Securities. He has headed
the North American trading operations of the Gulf Oil Corporation, Brascam, Ltd.
and W.C. Heraeus, GmbH. He also managed Heraeus' U.S. precious metals refining
and has been involved in trading and marketing a broad range of materials,
including metals, scrap, and concentrates. A graduate of Middlebury College with
advanced degrees from Columbia University's Graduate School of Business and its
School of International Affairs, Mr. Riess was Professor of Finance at Columbia
for eight years. He has been a member of several commodity exchanges and is a
Director of the International Precious Metals Institute and the Center for the
Study of Futures Markets.

All directors shall serve for a term of one year or until their
respective successors have been duly elected and qualified.

During Fiscal Year 1997 the Board of Directors held one meeting.

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

As of December 28, 1998, there were 3,197,312 shares of Common Stock
outstanding. The following table sets forth as of December 28, 1998, the number
of shares of Common Stock of the Company and the percentage of that class owned
beneficially, within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended, and the percentage of the Company's voting
power owned by (i) all the directors of the Company who are stockholders; (ii)
all stockholders known by the Company to own more than five percent of the
Company's Common Stock; and (iii) all directors and officers as a group. All
shares set forth in the following table are entitled to one vote per share and
the named beneficial owner has sole voting and investment power.

Number of Shares
Name and Address Beneficially Owned(1) Percentage
Dartmouth Capital Partners(2)
210 Dartmouth Street
Pawtucket, RI 02860 832,500 26%

uMandel Sherman(3)
Westbury Alloys, Inc.
750 Shames Drive
Westbury, NY 11590 450,166 14.1%

<PAGE>

Number of Shares
Michael A. O'Hanlon
DVI, Inc.
500 Hyde Park
Doylestown, PA 18901 100,000 3.10%

Michael Riess
818 Lake Avenue
Greenwich, CT 06831 -0- -0-

Directors and Officers as a Group (3) 550,166 17.2%

(1) All share amounts reflect beneficial ownership determined pursuant to Rule
13d-3 under the Exchange Act, and include voting and investment power with
respect to shares of Common Stock of the Company.

(2) The members of this limited liability company are immediate family members
of Mr. Mandel Sherman, President and Chief Executive Officer of Westbury. Mr.
Sherman disclaims beneficial ownership of such shares.

(3) Does not include 832,500 shares owned by Dartmouth Capital Partners, a
company owned and controlled by Mr. Sherman's children.

<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the aggregate cash compensation paid by
the Company during each of the last three fiscal years to its Chief Executive
Officer.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

Summary Compensation Table
Annual Compensation Long Term Compensation
Name and principal All other
position Awards Payouts compen-
sation
Year Salary Bonus Other annual Restricted Securities LTIP Payouts
($) ($) compen- Stock awards Underlying ($)
sation Options/SARs (#)
Mandel
Sherman(1)
1998 $116,154 6,888
1997 $0
1996 $0

</TABLE>

(1) See the discussion of the Company's employment agreement with Mr. Sherman
described below.

CERTAIN TRANSACTIONS

On July 3, 1996, Westbury's predecessor, Westbury, LLC executed an
asset purchase agreement (the "Asset Purchase Agreement") where Westbury, LLC
purchased the assets of a unrelated New York corporation, Westbury Alloys, Inc.
("Westbury New York") for a purchase price of $650,000, payable as follows:
$550,000 in cash at or prior to closing and with a balance due in equal amounts
of $50,000 on January 31, 1997 and July 31, 1997. To fund this purchase
Westbury, LLC borrowed from Graco Holdings, Inc. ("Graco"), the sum of $550,000.
This loan has been repaid from the proceeds of certain bridge financing in the
amount of $700,000 (described below).
On July 16, 1996, the obligation due to Graco was assigned by Graco to another
affiliate of a former stockholder. In July 1996, Graco guaranteed Westbury,
LLC's line of credit ("Line of Credit") and deposited a letter of credit in the
amount of $2,600,000 as security for its guaranty.

On July 22, 1996, Lawrence Raskin, former president of Westbury New York
executed a five (5) year consulting agreement with Westbury to serve as a
consultant to Westbury in connection with transitional issues and continuing
conduct of Westbury's business. Mr. Raskin will receive a fee of $10,000 per
annum for his consulting services. As part of the consulting agreement, Westbury
signed a five year lease on its 10,200 square foot facilities at 750 Shames
Drive, Westbury, New York, with Mr. Raskin. The term of the lease expires on
July 31, 2003. Throughout the term of the lease, Westbury has the option to
renew the lease at a mutually agreeable rental at least 30 days prior to

<PAGE>

expiration. In addition, Westbury has an option to purchase the existing
facility space at the appraised fair market value, although not for less than
$1.2 million for the first three years. Westbury has no current intention to
exercise this option.

From time to time, Westbury borrowed funds from several affiliated
investment limited partnerships. These loans were repaid in July and August,
1997. Mandel Sherman, the president, director and a principal shareholder of the
Company is the general partner and manager of such affiliated entities.

In October, 1997, Westbury, LLC merged into Westbury Alloys, Inc., a
Delaware corporation. The membership interests in Westbury, LLC were converted
into 1,850,000 shares of common stock of Westbury Alloys, Inc. in proportion to
the interest held by each member.

In December, 1997, seven investors provided bridge financing in the
amount of $700,000 and received promissory notes. As additional consideration
for each dollar loaned, the investors in the bridge financing received one Class
A Redeemable Warrant (the "Bridgeholders' Warrant"), which permits the
Bridgeholders to purchase 700,000 shares of the Company's Common Stock at an
exercise price of $2.25 per share for a period of two years from the closing of
the bridge financing. The Notes have been converted into 233,333 Shares of the
Company's Common Stock in accordance with the terms of the Company's Private
Offering Memorandum dated January 28, 1998 (described below).

On January 1, 1998, Westbury entered into a three-year employment
agreement with Mandel Sherman. Under the agreement, Mr. Sherman's compensation
is $175,000 annually. In addition, Mr. Sherman will receive 10% of the pretax
profits of the Company in each year in excess of $500,000 to a maximum of
$175,000 per year. This agreement has been assumed by the Company. In addition,
the Company has taken out a $1,000,000 keyman life insurance policy for Mr.
Sherman.

The Agreement terminates upon the death or disability of Mr. Sherman and
permits the Company to terminate the agreement, without further payment
obligation to Mr. Sherman, upon the commission of certain acts, and to terminate
the Agreement for any other reason, provided that the Company pays to him a
severance payment equal to the aggregate base salary otherwise owed to him over
the remaining term of the Agreement. Pursuant to the terms of the Agreement, in
the event that Mr. Sherman is not nominated or re-elected to serve as a member
of the Board of Directors, either he or the Company may terminate his employment
with the Company and in such event, he shall be entitled to continue to receive
his base salary as set forth in the Agreement for the remainder of the term.

The Agreement also contains certain confidentiality and non-compete
provisions which are operative during the term of the Agreement. The
confidentiality provisions remain in effect after termination of employment.

In July, 1996, the original members of Westbury, LLC, subscribed for
membership interests of $100,000, in the aggregate, in Westbury, LLC. Such
interests were converted into Westbury

<PAGE>

Common Stock at the time of the merger between Westbury, LLC and Westbury. These
subscriptions were paid in December, 1997.

On March 31, 1998, the Company completed a reverse merger of its wholly
owned subsidiary, Westbury Acquisition Corp. a New York corporation ("WAC") with
Westbury Alloys, Inc., a Delaware corporation ("Westbury") pursuant to which
Westbury has become a wholly owned subsidiary of the Company. Westbury provides
a broad range of processing and refining services in connection with the
reclamation of precious and specialty metals from scrap materials. Pursuant to
the merger, the principals of Westbury have become the principals of the Company
and have become the largest shareholders of the Company.

In order to maintain and maximize the current sales growth of West Tech,
Inc., a borrowing facility of $2,000,000 for the financing of accounts
receivable was made by a commercial lender in October 1998. A Director of the
Company is an Officer of the commercial lender.

The Company paid to the firm of McLaughlin & Stern, LLP during the year
ended June 30, 1998, the sum of $67,641 for various legal services. David W.
Sass, the Secretary of the Company, is a member of said firm.

AUDIT MATTERS

A representative of the firm of Citron Cooperman & Company, independent
auditors, will not be present at the Annual Meeting of Shareholders.

The Company's 1998 Annual Report on Form 10-KSB to shareholders will be
mailed separately from this Proxy Statement.

OTHER BUSINESS TO BE TRANSACTED

As of the date of this Proxy Statement, the Board of Directors knows of
no other business to be presented for action at the Annual Meeting of
Stockholders. As for any business that may properly come before the Annual
Meeting or any continuation or adjournment thereof, the Proxies confer
discretionary authority to the person named therein. These persons will vote or
act in accordance with their best judgment with respect thereto.

ANNUAL REPORT TO STOCKHOLDERS

The Annual Report to Stockholders for the year ended June 30, 1998 is
being mailed to stockholders with this Proxy Statement.

<PAGE>

STOCKHOLDER PROPOSAL - 1999 ANNUAL MEETING

Any stockholder proposals to be considered by the Company for inclusion
in the proxy material for the 1999 Annual Meeting of Stockholders must be
received by the Company at its principal executive offices by June 30, 1999.

The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
meeting, please sign the proxy and return it in the enclosed envelope.

BY ORDER OF THE BOARD OF DIRECTORS

David W. Sass, SECRETARY

New York, New York
December 28, 1998

<PAGE>

PROXY

This Proxy is Solicited on Behalf of the Board of Directors

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a shareholder in
Westbury Metals Group, Inc., a New York corporation ("Westbury"), hereby
appoints Mandel Sherman and David W. Sass, and each of them acting jointly, if
more than one be present, to be the true and lawful attorneys and proxies for
the undersigned, to vote all shares of Westbury as the undersigned is entitled
to vote, with all powers the undersigned would possess if personally present, at
the annual meeting of shareholders of Westbury to be held on February 3, 1999 or
any adjournment thereof, on the following matters as designated below and, in
their discretion, on such other matters as may properly come before the meeting.
This proxy will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted FOR the following
Proposals.

1. ELECTION OF DIRECTORS

For all nominees listed below Withhold Authority to
(Except as Marked to the Vote All Nominees Listed
Contrary) ________ Below _______

Mandel Sherman, Michael A. O'Hanlon and Michael Riess

(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name on the line provided below.)

- ----------------------------------------------------------------------------
OTHER MATTERS: Granting the proxies discretionary authority to vote upon any
other unforseen matters which are properly brought before the meeting as
management may recommend.

The undersigned hereby revokes any and all other proxies heretofore
given by the undersigned and hereby ratifies all that the above named proxies
may do at such meetings, or at any adjournments thereof, by virtue hereof.

When shares are held by joint tenants, both should sign. When signing as
attorney, as executor, administrator, trustee or guardian, please give full
title as such and also state the name of the stockholder of record for whom you
act. If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.

Dated:__________, 1999

--------------
Signature

--------------
Signature, if held jointly

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY USING THE ENCLOSED
ENVELOPE

WESTBURY METALS GROUP, INC.

ANNUAL REPORT

FOR THE YEAR ENDED

JUNE 30, 1998

<PAGE>

WESTBURY METALS GROUP, INC.
750 Shames Drive
Westbury, New York 11590

Dear Shareholders:

Thank you for your trust and confidence expressed by your investment in Westbury
Metals Group. Inc. Since our origin as an operating Company in March of 1998
several key elements have been put in place to position our Company for its
future growth.

West Tech, Inc. our industrial metals manufacturing division was acquired from
Anton Noll in March of 1998. The New Jersey manufacturing plant was closed and
operations were reestablished at our Westbury, New York facility. This division
has experienced dynamic growth as a Westbury Metals Group company. In September
we established a two million-dollar credit line for the financing of accounts
receivable.

Our negotiations to be selected as the exclusive supplier of auto catalysts for
Stillwater Mining Corp. of Columbus, Montana, the only major domestic platinum
mine, were completed. This innovative alliance, is the first of its kind in
perhaps twenty years between a major producer and an outside service
organization. Platinum group scrap of this type helps provide the
diversification we seek for our processing division, Westbury Alloys, Inc. In
September a new facility at 900 Shames Drive, Westbury. NY, adjacent to our
existing building, was purchased to house our catalyst operations.

Sales personnel have been added to bolster the activities of our manufacturing
and processing divisions. In addition, David Nadler, a Certified Public
Accountant with many years of experience joined us in April with
responsibilities as Chief Financial Officer and Treasurer. Michael Huber joined
Westbury in July of 1998 as Vice President of Westbury International, our
trading and risk management division. Mr Huber comes to us after having spent
the past ten years as a senior executive with Bank Boston/Rhode Island Hospital
Trust in their precious metals trading department.

A long-term delivery contract for the delivery five million troy ounces of
silver from Peru has been secured. This contract relates to between twenty-five
and thirty million dollars of sales in silver alone.

<PAGE>

Acquisitions have already proven to be an important factor to Westbury's growth
and diversification. From the stand point of metal market activity, competitive
pressure and availability of acquisitions, the timing for expansion is ideal.
Expansion of our silver-based industrial products division will be the emphasis
of the first phase of our ongoing growth. The global use of silver in industrial
applications rose five percent in 1997 to over two hundred and forty million
troy ounces, which translates into an opportunity for Westbury. To move ahead
with our acquisition strategy, we must increase our capital.

We at the Company are confident as to the future. With additional financing,
1999 should be an exciting time of growth for Westbury.

Sincerely,

Manny Sherman
President
<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

[x] Annual report pursuant to section 13 or 15(d) of The Securities Exchange Act
of 1934 ("Exchange Act") [Fee Required]

For the fiscal year ended June 30, 1998

[ ] 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 33-42408-NY

WESTBURY METALS GROUP, INC.
(Formerly Rosecap, Inc.)
(Name of small business issuer in its charter)

New York 11-3023099
(State or other jurisdiction (I.R.S. Employer of
incorporation or organization) Identification No.)

750 Shames Drive, Westbury, New York 11590
(Address of principal executive offices) (Zip Code)

Issuer's telephone number: (516) 997-8333

Securities Registered under Section 12(b) of the Exchange Act:
None

Securities Registered under Section 12(g) of the Exchange Act:
Title of Each Class: Common Stock, Par Value $.001

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of issuer'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. []

1
<PAGE>

The issuer's net revenues for its most recent fiscal were $2,031,033.

The aggregate market value of the issuer's voting stock held as of September 30,
1998 by non-affiliates of the issuer, based upon the average of the closing bid
and asked prices on that date was approximately $540,000.

As at September 30, 1998, 3,197,312 shares of the issuer's Common Stock, $.001
par value, were outstanding.

Transitional Small Business Disclosure Format (Check one):
Yes . No X .

2
<PAGE>

This Form 10-KSB contains forward-looking statements. Additional written and
oral forward-looking statements may be made by the Company from time to time in
Securities and Exchange Commission ("SEC") filings and otherwise. The Company
cautions readers that results predicted by forward-looking Statements,
including, without limitation, those relating to the Company's future business
prospects, revenues, working capital, liquidity, capital needs and income are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those indicated in the forward-looking statements due to
risks and factors identified in this Form 10-KSB and as may be identified from
time to time in the Company's future filings with the SEC.

Item 1. Business

General

On June 18 1998, the Company name was changed from Rosecap, Inc. to Westbury
Metals Group, Inc.(the "Company"). On March 31, 1998 Rosecap, Inc. entered into
a merger between Westbury Acquisition Corp. ("WAC", a wholly owned subsidiary of
the Company, and Westbury Alloys, Inc., ("estbury" a Delaware Corporation, the
surviving entity. The merger is a reverse merger whereby the principals of
Westbury became the principals and the largest shareholders of the Company. The
Company commenced operating the business of Westbury after the consummation of
the merger. Prior to the merger, the Company, which was incorporated in 1990,
had not conducted any operations and reported as a development stage enterprise.

Products and Services

On March 30, 1998, West Tech, Inc. was formed as a subsidiary of the
Company for the manufacture and sale of silver in various forms and shapes,
plating salts as well as tin and tin-lead anodes used in manufacturing. In the
near future the Company anticipates a broader product line to include precious
metal casting grains, alloys, and mill products. In May,1998 the Company
acquired the registered trade name "Onic" for use in the manufacture and sale of
its high quality tin products.

From its facilities in Westbury, New York the Company provides a broad range of
processing, refining and financial services in connection with the reclamation
of precious and specialty metals from primary and secondary sources. The Company
reclaims principally gold, silver, platinum and palladium from scrap and
residues from the electronics, jewelry, petroleum, dental, chemical, automotive,
mining

1
<PAGE>

and aerospace industries. After controlled weighing, sampling, and assaying to
determine values and to settle with the customer, the Company either purchases
the precious metal or returns metal to the customer. Through its wholly
98% owned Peruvian subsidiary Alloy Trading S.A., the Company imports metals
for its own use as well as for direct sales to third parties.

The Company has not encountered significant difficulties in purchasing scrap or
raw materials for its refining process. Management is constantly searching for
improved sources of materials and believes that if any one source of raw
materials becomes unavailable, alternative sources of supply can be found at
comparable prices, but there can be no assurance thereof.

On July 1, 1998 Westbury International, Inc., was formed to provide trading and
risk management services. Activities include metals leasing, inventory
financing, cash and forward purchases and sales for internal metals management
requirements and as a profit center dealing with third parties.

Research and Development

The Company is engaged in various research and development activities at its
Westbury, New York facility. The Company is researching and developing refining
and processing techniques that produce less environmental waste. The Company
researches and develops different preparations of precious and specialty metals
constantly upgrading equipment and processing capabilities. No assurance can be
given that the Company's research efforts will be successful.

Consultants

Under a five-year (5) consulting agreement dated July 22, 1996, Lawrence Raskin,
former president of the Company's predecessor, has agreed to serve as an advisor
in connection with the conduct of the business for an annual fee of $10,000. Mr.
Raskin has extensive knowledge of the precious and specialty metals industry and
knowledge of Westbury in particular.

From time to time the Company retains consultants to assist in specific
requirements of product development and plant operations as well as the
administrative areas of computer systems and business plan development.

Competition

The precious metals refining industry is highly competitive. Many of
the companies with which the Company currently competes or may

<PAGE>

compete in the future have greater financial, technical, marketing, sales and
customer support resources, as well as greater name recognition and better
access to customers. The precious metals refining industry is highly
competitive.

Environmental Matters

The Company's environmental concerns are central to its business. The refining
activities are subject to extensive and rigorous government regulations designed
to protect the environment from wastes, emissions and from hazardous substances,
particularly with respect to the emissions of air pollutants, the discharge of
cooling water, and the disposal and storage of hazardous substances.

The Company is in compliance with present federal, state and local air and water
pollution controls, and intends to remain so. However, evolving federal, state
and local air and water pollution control legislation and regulations will
continue to affect the Company's operations and long-range planning. During the
fiscal year the Company did not need to make any capital expenditures to comply
with environmental laws and regulations.

The Company cannot predict the direction of future laws or regulations designed
to protect the environment and control the discharge and disposal of hazardous
waste materials or their impact on the Company's operations. Consequently, the
Company is unable to predict with any certainty its total future expenditures
for installation of pollution control facilities or for legal and administrative
expenditures. New and expanding laws, regulations, administrative policies and
control levels, new pollution control technology and cost-benefit analysis based
on future market conditions are all factors which will affect future
expenditures.

Employees

As of September 30, 1998 the Company had 24 employees, seven (7) of whom were in
administration, six (6) of whom were in marketing and sales and eleven (11) of
whom were in operations. All employees are full-time. The Company's employees
are not unionized and the Company believes that its relations with its employees
are satisfactory.

Sales and Marketing

The Company maintains a highly experienced sales force for its customers who
require processing and refining services in connection

3
<PAGE>

with the reclamation of precious and specialty metals from secondary sources. An
expanding network of suppliers has been established to procure catalyst
materials from the automotive industry from which platinum and palladium are
recovered. The Company has entered into an exclusive agreement with Stillwater
Mining Corp. the largest miners of platinum group metals in the Northern
Hemisphere for the processing of these catalytic materials.

Item 2. Properties

The Company has a lease on its premises at 750 Shames Dr., Westbury, New York,
which expires July 31, 2003. The facility is approximately 10,200 square feet
and serves as the Corporate Headquarters. As part of this lease agreement the
Company has an option to renew the lease at a mutually agreeable rental at least
30 days prior to expiration. The Company also has the option to buy the premises
at the end of the lease term. The Company has no current intention to exercise
this option

The Company has purchased an approximately 13,000 square foot adjoining building
at 900 Shames Dr., Westbury, New York, which currently houses its catalyst
activities. The Company paid $510,000 for the property, including a mortgage in
the amount of $325,000.

Small administrative offices are also maintained in Lima, Peru and Pawtucket,
Rhode Island.

Item 3. Legal Proceedings

There are no pending legal proceedings to which the Company or any of its
subsidiaries is a party, other than ordinary, routine litigation incidental to
the business, none of which individually or in the aggregate is material to the
financial condition or to the business of the Company.

4
<PAGE>

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

At the annual meeting of shareholders of the Corporation held on June 18,1998,
the following persons were elected directors of the corporation with the votes
set opposite their names:

Mandel Sherman 2,065,979 5,000
Michael A. O'Hanlon 2,065,979 5,000
Michael Riess 2,065,979 5,000

Shareholders also approved a name change for the Company from
Rosecap, Inc. to Westbury Metals Group, Inc. by a vote of 2,065,979
in favor and 5,000 against, and ratified and approved a Qualified
Stock Option Plan for the Company by a vote of 1,999,261 in favor and
68,660 against.

5
<PAGE>

PART II

Item 5. Market for Company's Common Equity and Related Stockholder
Matters

The following table sets forth the high and low closing bid prices for
the periods indicated as reported by the National Association of Securities
Dealers Automated Quotation System (NASDAQ) between dealers and do not include
retail mark-ups, mark-downs, or commissions and do not necessarily represent
actual transactions. The Company commenced trading on the Bulletin Board in
September, 1998 under the symbol WMET.

Low High
Calendar Year 1997:

First Quarter Not Traded Not Traded
Second Quarter Not Traded Not Traded
Third Quarter Not Traded Not Traded
Fourth Quarter Not Traded Not Traded

Calendar Year 1998:

First Quarter Not Traded Not Traded
Second Quarter Not Traded Not Traded

- ----------

At September 30, 1998, the Company had 132 holders of record of its
Common Stock.

The Company has paid no cash dividends on its Common Stock to date and it
does not anticipate declaring or paying any cash dividends in the foreseeable
future.

6
<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations

General

The Company has positioned itself through its subsidiaries to engage in four
significant areas of the precious metals business.

Westbury International, Inc.
Trading and risk management services, including metals leasing, financing
arrangements, cash and forward purchases and sales for internal metals
management requirements. This newly formed entity will be responsible for
the ongoing management and operations of the Peruvian subsidiary.

It is expected that long-term contracts for metals will be entered into
for both the procurement and sales of precious metals on both a domestic
and international basis.

West Tech, Inc.
Manufacture and sale of precious and base metal products for use by
industry.

Westbury Alloys, Inc.
Refining services to accumulators and manufacturers of precious metals.
Catalyst procurement and collection for the purpose of processing and
recovery of platinum group metals.

Year 2000

Management believes that there is no impact to the Company as it relates to the
Year 2000.

Liquidity, Capital Resources and Other Financial Data

During the fiscal year ended June 30, 1998, the Company issued 1,167,312 shares
of common stock and received proceeds, net of offering costs, of $3,234,039.

The Company has been relying on a gold consignment program and internally
generated funds to finance its metal purchase, inventories and accounts
receivable. Inventories are stated at market value. Consistent with other
companies that refine and produce precious metal fabricated products, customers
and suppliers on a consignment basis furnish some of the Company's gold and
silver requirements. Title to the consigned gold and silver remains with the
Consignor. The value of consigned gold and silver held by the Company is not
included in the Company's inventory and there is no related liability recorded.
At June 30, 1998, the company held 7,915 troy ounces of gold at a value of
$2,345,300 of Gold and Silver under a consignment agreement with Republic
National Bank for which the Company is

7
<PAGE>

charged a consignment fee based on the current rates. There can be no assurances
that fluctuations in the precious metals markets and credit would not result in
an interruption of the Company's gold supply or the credit arrangements
necessary to allow the Company to support its accounts receivable and continue
the use of consigned gold.

In general all of the Company's operating entities are capital intensive.
The cash requirements are primarily used to facilitate the acquisition and
maintenance of metal inventories and receivables. In order to maintain and
maximize the current sales growth of West Tech, Inc., a borrowing facility of
$2,000,000 for the financing of accounts receivable has been approved by a
commercial lender and will be available by October 1998. A Director of the
Company is an Officer of the commercial lender.

The Company will have an additional requirement for funds in order to
maximize its potential as it relates to the various segments of activity. Based
upon anticipated future financing requirements of the Company, management
expects that the Company may, from time to time, engage in additional financings
of a character and in amounts to be determined.

Prior to the Merger, the Company (a development stage enterprise) had
earned a commission of $45,000 that was unrelated to operations. This
non-recurring revenue has been reflected with other income.

The significant factors relating to the pro forma loss incurred for the
fiscal year ended June 30, 1998 were amortization and depreciation of $246,739.

In fiscal 1999 the portion of amortization attributable to intangibles is
expected to be reduced from approximately $150,000 to approximately $30,000 due
mainly to the write-off of acquired customer lists in 1998.

Additional staffing for executive, administrative and sales functions as well as
significant start up costs for West Tech, Inc. and the catalyst operation
accounted for the balance of the current year's loss as reflected in Note 16 in
the Notes to the Consolidated Financial Statements. Management does not
anticipate any significant increase in staff other than that required by
Westbury International, Inc.

Management believes that operations will improve for the year ended
June 30, 1999, as a result of changing from a less efficient start-up
environment in its West Tech Metal Fabricating operation, and its reprocessing
of catalytic converters, to more efficient operations and increased volume in
all its operations. Management believes that as the volume increases it will be
able to control its overall overhead. Additional contributions to profitability
are expected to be generated by the newly formed trading and risk management
services operations. However, there can be no assurance that management will be
successful in its efforts.

8
<PAGE>

Item 7. Financial Statements.

F-1 through F-13
9

<PAGE>

Item 8. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure.

None.

PART III

Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.

Directors and Executive Officers

Name Age Position

Mandel Sherman 59 President, Chief Executive
Officer and Director

Michael A. O'Hanlon 51 Director

Michael Riess 57 Director

David W. Sass 62 Secretary

David Nadler 51 Treasurer

Mandel Sherman, President, Chief Executive Officer and Director

Mandel Sherman, 59, has been the President, Chief Executive Officer and
Director of Westbury since July 1996. From 1993 to 1995, Mr. Sherman acted as an
independent consultant to various investment firms. From 1983 to 1993, Mr.
Sherman participated in numerous real estate ventures as both an investor and
manager of developments with an approximate total value in excess of $30
million. From 1975 to 1983, Mr. Sherman served as the Chief Executive Officer
and President of Refinement International Company ("Refinement", a company he
founded in 1975. Refinement, a full service metals processing company with
financial capabilities and capital resources in precious metals and specialty
metals markets, exceeded sales of $350 million and was publicly traded on the
American Stock Exchange. From 1962 to 1975, Mr. Sherman served as the President
of Eastern Foundry Supplies ("EFS"), a company he founded in 1962. EFS
concentrated in the recovery of precious metals from the electronic and jewelry
industries. In 1967, Mr. Sherman was responsible for the sale of EFS to
Whittaker Corp., a California-based Company listed on the NYSE, where Mr.
Sherman remained as President with sales of approximately $10 million. Mr.
Sherman received his BSBA in Business Administration from Boston University in
1959.

10
<PAGE>

Michael A. O'Hanlon, Director

Michael A. O'Hanlon, 51, has been the president and chief executive
officer of DVI, Inc., since November, 1995 and served as executive vice
president of DVI since joining DVI in March, 1993. DVI is an independent
specialty finance company that conducts a medical equipment finance business and
related medical receivables finance business. Mr. O'Hanlon became a director of
DVI in November, 1993. Prior to joining DVI, Mr. O'Hanlon served as president
and chief executive officer of Concord Leasing, Inc., and its subsidiary, U.S.
Concord, Inc. for nine years. Concord Leasing provides medical, aircraft,
shipping and industrial equipment financing. Previously, Mr. O'Hanlon was a
senior executive with Pitney Bowes Credit Corporation. Mr. O'Hanlon received his
Master of Science degree from the University of Connecticut and his Bachelor of
Business Administration from the Philadelphia College of Textiles and Science.

Michael Riess, Director

Michael Riess, 57, has, since 1978, been the president of Materials
Management Corporation ("MMC"), a consulting firm specializing in precious and
nonferrous metals. He has headed the North American trading operations of the
Gulf Oil Corporation, Brascam, Ltd. and W.C. Heraeus, GmbH. He also managed
Heraeus' U.S. precious metals refining and has been involved in trading and
marketing a broad range of materials, including metals, scrap, and concentrates.
A graduate of Middlebury College with advanced degrees from Columbia
University's Graduate School of Business and its School of International
Affairs, Mr. Riess was Professor of Finance at Columbia University for eight
years. He has been a member of several commodity exchanges and is a Director of
the International Precious Metals Institute and the Center for the Study of
Futures Markets.

David W. Sass, Secretary

David W. Sass, 62, has, for the past 37 years, been a practicing attorney
in New York City and is currently a senior partner in the law firm of McLaughlin
& Stern, LLP, counsel to the Company. Mr. Sass is a director of Pallet
Management Systems, Inc. a company engaged in the manufacture and repair of
wooden pallets and other packaging services; a director of The Harmat
Organization, Inc., a real estate development company; a director of Genisys
Reservation Systems, Inc., a company engaged in the development of a
computerized limousine reservation system and a member and Vice Chairman of the
Board of Trustees of Ithaca College.

David Nadler, Chief Financial Officer

David Nadler, 51, joined the Company as the chief financial
officer and controller in March, 1998. From 1993 to when he joined

11
<PAGE>

the Company, Mr. Nadler was a director, executive vice president, CFO and
controller, with responsibility for the management of all financial and
accounting functions at Merchants Overseas, E&C Imports, a Rhode Island
distributor of jewelry products. From 1988 to 1993, he was a partner of the
public accounting firm of Leventhal, Zupnick, Berg & Co. Prior to this, Mr.
Nadler was vice president of British American Petroleum, a publicly-traded
syndicator of oil and gas drilling programs. From 1974 to 1986, he was principal
of David Nadler & Company, CPA, P.C., which provided accounting, tax and
financial consulting services. Mr. Nadler is a graduate of Pace University and a
member of the AICPA and of the New York State Society of Certified Public
Accountants.

All of Westbury's executive officers devote their full business time to
the affairs of the Company.

All directors shall serve for a term of one year or until their
respective successors have been duly elected and qualified. It is anticipated
that outside directors will receive $500 for each meeting attended in person and
$250 for each meeting attended telephonically as well as reimbursement for
out-of-pocket expenses. In addition, each outside director will receive an
option to purchase 15,000 shares of Common Stock at an exercise price of $3.00
per share. These options will vest each year over a period of three years. As of
September 30, 1998, no options have been granted to directors.

Item 10. Executive Compensation

Employment Agreement

On January 1, 1998, Westbury entered into a three-year employment agreement with
Mr. Sherman, a stockholder, director and chief executiveofficer of the Company.
Under the agreement, Mr. Sherman's compensation is $175,000 annually. In
addition, Mr. Sherman will receive 10% of the pretax profits of the Company in
each year in excess of $500,000 to a maximum bonus of $175,000. This employment
agreement has been assumed by the Company upon the completion of the Merger. In
addition, the Company has taken out a $1,000,000 keyman life insurance policy
for Mr. Sherman.

12
<PAGE>

Consulting Agreements

On July 22, 1996, Westbury entered into a five-year consulting agreement
with Lawrence Raskin, former president of the Company's predecessor, Westbury
Alloys, Inc. The agreement provides for an annual salary of $10,000 for his
consulting services. The Consulting Agreement also contains certain
confidentiality and non-competition provisions which are operative during the
term of the agreement and for given periods of time after termination thereof.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

Summary Compensation Table

Name and Principal Long-Term Compensation
Position Annual Compensation Awards Payouts
Other
Annual Restricted All Other
Compen- Stock Options/ LTIP Compen-
Year Salary Bonus sation Award(s) SARs Payouts sation

Mandel Sherman 1998 $166,154 - - - - - $6,888
President
1997 $ -0- - - - - -
$
1996 $ -0- - - - - - -

</TABLE>

13
<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and
Management.

The following table sets forth as of September 30, 1998, the number of
shares of Common Stock of the Company and the percentage of that class owned
beneficially, within the meaning of Rule 13d-3 promulgated under the Exchange
Act, and the percentage of the Company's voting power owned by (i) all
shareholders known by the Company to beneficially own more than five percent of
the Company's Common Stock; (ii) each director of the Company; and (iii) all
directors and officers as a group. All shares set forth in the following table
are entitled to one vote per share and the named beneficial owners have sole
voting and investment power. Each percentage set forth in the following table
assumes the exercise of all stock options exercisable by the named individual or
group as of September 30, 1998 or within 60 days thereafter.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

Number of Shares
Name and Address Beneficially Percentage
Owned(1)
Dartmouth Capital
Partners(2)
210 Dartmouth Street 832,500 26.0%
Pawtucket, RI 02860
Mandel Sherman(3)
Westbury Alloys, Inc.
750 Shames Drive
Westbury, NY 11590 450,166 14.1%
Michael A. O'Hanlon
DVI, Inc.
500 Hyde Park
Doylestown, PA 18901 100,000 3.1%

Michael Riess -0- -0-
818 Lake Avenue
Greenwich, CT 06831

Directors and Officers as 550,166 17.2%
a Group (3)
</TABLE>

(3) Does not include 832,500 shares owned by Dartmouth Capital Partners, a
company owned and controlled by Mr. Sherman's children.

14
<PAGE>

Item 12. Certain Relationships and Related Transactions

On July 3, 1996, Westbury's predecessor, Westbury Alloys, LLC
executed an asset purchase agreement (the "Asset Purchase Agreement") where
Westbury Alloys, LLC purchased the assets of a unrelated New York corporation,
Westbury Alloys, Inc. ("Westbury New York") for a purchase price of $650,000,
payable as follows: $550,000 in cash at or prior to closing and with a balance
due in equal amounts of $50,000 on January 31, 1997 and July 31, 1997. To fund
this purchase Westbury Alloys, LLC borrowed from Graco Holdings, Inc. ("Graco"),
the sum of $550,000. This loan has been repaid from the proceeds of certain
bridge financing in the amount of $700,000 (described below). On July 16, 1996,
the obligation due to Graco was assigned by Graco to another affiliate of a
former stockholder. In July 1996, Graco guaranteed Westbury Alloys, LLC's line
of credit ("Line of Credit") and deposited a letter of credit in the amount of
$2,600,000 as security for its guaranty.

On July 22, 1996, Lawrence Raskin, former president of Westbury New York
executed a five (5) year consulting agreement with Westbury to serve as a
consultant to Westbury in connection with transitional issues and continuing
conduct of Westbury's business. Mr. Raskin will receive a fee of $10,000 per
annum for his consulting services. Westbury signed a five year lease on its
10,200 square foot facilities at 750 Shames Drive, Westbury, New York, with Mr.
Raskin. The term of the lease expires on July 31, 2003. Throughout the term of
the lease, Westbury has the option to renew the lease at a mutually agreeable
rental at least 30 days prior to expiration. In addition, Westbury has an option
to purchase the existing facility space at the appraised fair market value,
although not for less than $1.2 million for the first three years. Westbury has
no current intention to exercise this option.

In October, 1997, Westbury Alloys, LLC merged into Westbury Alloys, Inc.,
a Delaware corporation. The membership interests in Westbury Alloys, LLC were
converted into 1,850,000 shares of common stock of Westbury Alloys, Inc. in
proportion to the interest held by each member.

On January 1, 1998, Westbury entered into a three-year employment
agreement with Mandel Sherman. Under the agreement, Mr. Sherman's compensation
is $175,000 annually. In addition, Mr. Sherman will receive 10% of the pretax
profits of the Company in each year in excess of $500,000 to a maximum bonus of
$175,000 per year. This agreement has been assumed by the Company. In addition,
the Company

15
<PAGE>

has taken out a $1,000,000 keyman life insurance policy for Mr.
Sherman.

In July, 1996, the original members of Westbury Alloys, LLC, subscribed
for membership interests of $100,000, in the aggregate, in Westbury Alloys, LLC.
Such interests were converted into Westbury Common Stock at the time of the
merger between Westbury Alloys, LLC and Westbury.

In order to maintain and maximize the current sales growth of West Tech,
Inc., a borrowing facility of $2,000,000 for the financing of accounts
receivable has been approved by a commercial lender and will be available by
October 1998. A Director of the Company is an Officer of the commercial lender.

16
<PAGE>

PART IV

Item 13. Exhibits and Reports on Form 8-K.

Schedules and Reports on Form 8-K

(A)(1) The following financial statements are included in Part II, Item
7:

Independent Auditors' Reports

Consolidated Balance Sheets as at June 30, 1998 and 1997.

Consolidated Statements of Operations for the Years Ended June 30,
1998 and 1997

Consolidated Statements of Stockholders' Equity for the Years Ended June 30,
1998 and 1997.

Consolidated Statements of Cash Flows for the Years Ended June
30,1998 and 1997

Notes to Consolidated Financial Statements

Schedules are omitted for the reason that they are not required, are not
applicable, or the required information is included in the financial statements
or notes thereto.

(B) Reports on Form 8-K - Not applicable.
(C) Exhibits. The following exhibits are filed as part of the Company's
report. Where such filing is made by incorporation by reference (I/B/R)
to a previously filed statement or report, such statement or report is
identified in parenthesis.

Official Exhibit

Number Description

[3](a)* Certificate of Incorporation, as amended.

[3](b)* By-Laws.

4* Form of Common Stock Certificate

10* Form of Employment Agreement with Mandel Sherman.

[27]* Financial Data Schedule

* Filed herewith.

<PAGE>

INDEPENDENT AUDITORS' REPORT

To The Board of Directors and Stockholders
Westbury Metals Group, Inc.

We have audited the accompanying consolidated balance sheet of Westbury Metals
Group, Inc. (formerly known as Rosecap, Inc.) and subsidiaries as of June 30,
1998, and the related consolidated statements of operations, stockholders'
equity and cash flows for the year then ended. 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 audit. We did not audit the financial statements of
Alloy Trading S.A., a 98% owned subsidiary, which statements reflect total
assets of $508,432 as of June 30, 1998; there were no revenues as they have been
eliminated in consolidation. Those statements were audited by other auditors
whose report has been furnished to us, and our opinion, insofar as it relates to
the amounts included for Alloy Trading S.A., is based solely on the report of
the other auditors. We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the 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 financial statement presentation. We believe that our audit and the
report of other auditors provide a reasonable basis for our opinion. In our
opinion, based on our audit and the report of other auditors, the consolidated
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Westbury Metals Group, Inc. and
subsidiaries as of June 30, 1998, and the results of their operations and their
cash flows for the year then ended in conformity with generally accepted
accounting principles.

CITRIN COOPERMAN & COMPANY, LLP

New York, New York
September 18, 1998

F-1

<PAGE>
SCOTT & GUILFOYLE
5 DAKOTA DRIVE - SUITE 206
LAKE SUCCESS, NEW YORK 11042

PAUL J. Scott, C.P.A. (516) 775-0600
RICHARD T. Guilfoyle, C.P.A. FAX (518) 328-4638

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Rosecap, Inc.

We have audited the accompanying balance sheets of Rosecap, Inc.
(a development stage company) as of June 30, 1997 and 1996, and
the related statements of operations, stockholders' equity and
cash flows for the years ended June 30, 1997, 1996 and 1995 and
for the period August 24, 1990 (inception) to June 30, 1997.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Rosecap, Inc. (a development stage company) as of June 30,
1997 and 1996 and the results of its operations and its cash
flows for the years ended June 30, 1997, 1996, 1995 and for the
period August 24, 1990 (inception) to June 30, 1997 in conformity
with generally accepted accounting principles.

Lake Success, New York
August 6, 1997

F-1A
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND 1997

1998 1997
--------------- -------------
ASSETS

CURRENT ASSETS:
Cash $ 877,520 $ 7,502
Accounts receivable 788,749
Inventory 835,565
Prepaid expenses and other current assets 348,795
--------------- -------------
Total Current Assets 2,850,629 7,502
--------------- -------------

PROPERY PLANT AND EQUIPMENT:
Property and equipment 599,843
Accumulated depreciation and amortization (162,695)
--------------- -------------
Net Property Plant and Equipment 437,148
--------------- -------------

OTHER ASSETS:
Goodwill - net of accumulated amortization of $75,612 647,216
Deposits 113,177
--------------- -------------
Total Other Assets 760,393
--------------- -------------

TOTAL ASSETS $4,048,170 $ 7,502
=============== =============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Due to customers $ 455,553 $
Accounts payable and accrued expenses 528,246 1,938
--------------- -------------
Total Current Liabilities 983,799 1,938
--------------- -------------

STOCKHOLDERS' EQUITY:
Common stock $.001 par value; Authorized
50,000,000 shares; issued and
outstanding 3,197,312 shares and 87,500 shares
at June 30, 1998 and 1997, respectively 3,197 88
Capital in excess of par value 3,173,171 42,241
Accumulated deficit (111,997) (36,765)
--------------- -------------
Total Stockholders' Equity 3,064,371 5,564
--------------- -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,048,170 $ 7,502
=============== =============

See accompanying notes to consolidated financial statements.
F-2

<PAGE>

WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997

1998 1997
--------------- --------------
Revenues:
Sales $1,425,315 $
Refining fees 552,451
Other income 53,267
--------------- --------------

Total revenues 2,031,033
--------------- --------------

Cost and expenses:
Cost of sales 1,335,607
Cost of refining 263,997
Selling, general and administrative 430,862 7,383
Depreciation and amortization 37,495
Interest 38,304
--------------- --------------

Total costs and expenses 2,106,265 7,383
--------------- --------------

Net loss $ (75,232) $ (7,383)
======================================

Net loss per share - basic $ (.08)
Net loss per share - diluted $ (.08)

Average shares outstanding - basic 919,495 66,062
Average shares outstanding - diluted 919,495 66,062

See accompanying notes to consolidated financial statements.

F-3

<PAGE>

WESTBURY METALS GROUP, INC. AND SUBSIDIARIES
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997

Common Stock Capital in Total
excess of Accumulated Stockholders'
Shares Amount par value Deficit Equity

Balance, June 30, 1996 62,500 $ 63 $ 37,266 $ (29,382) $ 7,947

Issuance of common
shares, May 10, 1997 25,000 25 4,975 5,000

Net loss for the year
ended June 30, 1997 (7,383) (7,383)

-------------- -------------- -------------- --------------- -----------------
Balance, June 30, 1997 87,500 88 42,241 (36,765) 5,564

Common Stock Dividend
March 31, 1998 92,500 92 (92)

Common stock issued
upon merger with
Westbury Alloys, Inc.
March 31, 1998 1,850,000 1,850 98,150 100,000

Common stock issued
in private placement
March 31, 1998 814,503 815 2,015,224 2,016,039

Common stock issued
upon conversion of
bridgeholder loans
March 31, 1998 233,333 233 699,767 700,000

Common stock issued
in private placement
May 8, 1998 119,476 119 317,881 318,000

Net loss for the year
ended June 30, 1998 (75,232) (75,232)

-------------- -------------- -------------- --------------- -----------------
3,197,312 $ 3,197 $3,173,171 $ (111,997) $ 3,064,371
============== ============== ============== =============== =================

See accompanying notes to consolidated financial statements.

F-4

<PAGE>

WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997

1998 1997
----------------- ------------------

Operating activities:
Net loss $ (75,232) $ (7,383)

Adjustments to reconcile net loss to net cash
used in operating activities net
of assets and liabilities acquired in merger:
Depreciation and amortization 37,495

Changes in assets and liabilities:
Accounts receivable (661,582)
Inventories (794,707)
Prepaid expenses and other current assets 404,178
Deposits (75,969)
Due to customers (189,619)
Accounts payable and other current liabilities (120,441) (798)
----------------- ------------------

Net cash used in operating activities (1,475,877) (8,181)

Investing activities:
Property, plant and equipment (98,512)

Financing activities:
Issuance of common stock 2,334,039 5,000

----------------- ------------------
Net increase (decrease) in cash 759,650 (3,181)

Cash from merged subsidiary 110,368

Beginning Cash Balance 7,502 10,683
----------------- ------------------

Ending Cash Balance $ 877,520 $ 7,502
================= ==================

Supplemental cash flow information:
Cash paid for interest $ 22,518

See accompanying notes to consolidated financial statements.

F-5

</TABLE>

<PAGE>

WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

On June 18, 1998, the Company name was changed from Rosecap, Inc. to Westbury
Metals Group, Inc. ("WMG"). On March 31, 1998 the Company entered into a merger
between Westbury Acquisition Corp. ("WAC"), a wholly owned subsidiary of the
Company, and Westbury Alloys, Inc., ("Westbury") a Delaware Corporation, the
surviving entity. The merger is a reverse merger whereby the principals of
Westbury became the principals and the largest shareholders of the Company. The
Company commenced operating the business of Westbury after the consummation of
the merger. Prior to the merger, the Company, which was incorporated in 1990,
had not conducted any operations and reported as a development stage enterprise.
Westbury reclaims principally gold, silver, platinum and palladium from scrap
and residues from the electronics, jewelry, petroleum, dental, chemical,
automotive, mining and aerospace industries. After controlled weighing,
sampling, and assaying to determine values and to settle with the customer,
Westbury either purchases the precious metal or returns metal to the customer.
Through its Peruvian subsidiary Alloy Trading S.A. ("Alloy"), Westbury imports
metals for its own use as well as for direct sales to third parties.

Alloy, a 98% owned subsidiary of Westbury, was incorporated in Peru in 1996. The
remaining 2% of the capital stock of Alloy is owned by the two local managers of
Alloy. The long range purpose of Alloy is to develop trading opportunities
between Peruvian companies and their counterparts worldwide and to explore
opportunities in metal related activities including gold and silver bullion,
transactions with the mining industry, jewelry manufacturers, and other similar
activities.

On March 30,1998 West Tech, Inc. ("West Tech") was formed as a subsidiary of
Westbury (with ownership being subsequently transferred to WMG) for the
manufacture and sale of silver in various forms and shapes, plating salts as
well as tin and tin-lead anodes used in manufacturing. In the near future the
Company anticipates a broader product line to include precious metal casting
grains, alloys, and mill products. In May of 1998 the Company acquired the
registered trade name Onic for use in the manufacture and sale of its high
quality tin products.

Westbury Realty Management Corp. (WRMC) was formed in June of 1998 for the
purpose of acquiring the property that is presently being rented by Westbury for
its processing of catalyst materials. This acquisition should be completed by
September 30, 1998. There was no financial activity during the reporting period.

Gold and silver comprise the major portion of the value of Westbury's precious
metal inventory, which may be held under certain consignment agreements (see
Note 4). The prices of gold and silver are subject to fluctuations and are
expected to continue to be affected by world market conditions. At June 30, 1998
all inventory owned by Westbury was fully hedged to protect against market
fluctuations. Market gains or losses as well as all trading activities are
included in "Cost of sales". It is the Company's policy that all metal
transactions are fully hedged and should result in no gains or losses due to
market fluctuations. Hedging consists of the sale or purchase of forward
contracts for the physical delivery of metals. When the Company purchases
precious metal it sells a forward contract to protect against fluctuating market
prices, conversely when the company sells precious metals it buys a contract to
close the transaction. Futures contracts are measured at market value with
unrealized gains and losses reflected in operations during the period. Westbury
maintains inventories of precious metals in various states of processing.
Westbury also maintains inventories at independent outside refineries. Such
inventories are carried on its books at current market value.

F-6
<PAGE>

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the operations of WMG for the
period from July 1, 1997 through June 30, 1998 and the operations of Westbury,
Alloy and West Tech, from April 1, 1998 through June 30, 1998. All significant
intercompany balances and transactions have been eliminated in consolidation.

USE OF ESTIMATES
The preparation of financial statements requires the Company's management to
estimate the current effects of transactions and events whose ultimate outcomes
may not be determinable until future years. Consequently, actual results could
differ from those estimates.

TRANSLATION OF FOREIGN CURRENCIES
Translation adjustments result from the process of translating Alloy's financial
statements from their local currency to U.S. dollars. Assets and liabilities
in foreign currencies are translated into U.S. dollars at the rate in effect on
the balance sheet date. Revenues and expenses are translated at the average
rate for the period. Translation adjustments were not significant. Where
amounts denominated in a foreign currency are converted to U.S. dollars by
remittance or repayment, the realized exchange differences are not material
and are included in determining net loss for the period.

INVENTORY AND DUE TO CUSTOMERS

The Company's customers have the option of receiving cash in lieu of the refined
precious metals. Since the Company bears the risk of loss, it is the policy
of the Company to record all precious metals received for refining as inventory
and an offsetting liability due to customers.

Inventories which consist of precious metals, are stated at their market value.
Quantities are determined based upon physical count.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost and depreciated using
straight-line methods over the estimated useful lives of the assets ranging from
5 years to 39 years.

AMORTIZATION OF INTANGIBLE ASSETS
Intangible assets consist of goodwill, which is the excess of the purchase
price over the fair value of assets acquired in business combinations accounted
for as purchases. Goodwill is amortized on a straight-line basis over the
period benefited, 24 years. The goodwill relates to the Westbury Alloys, Inc.
and Subsidiaries acquisition. Goodwill is reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable. Impairment would be recognized in operating results if a
permanent diminution in value were to occur.

INCOME TAXES
The Company accounts for income taxes under the provisions of Statement 109,
Accounting for Taxes issued by the Financial Accounting Standards Board.
Under such statement, the tax benefits of tax operating loss carryforwards are
recorded to the extent available less a valuation allowance if it is more
likely than not that some portion of the deferred tax asset will not be
realized.

NET INCOME (LOSS) PER COMMON SHARE
Basic net income (loss) per common share is calculated using the weighted
average number of common shares outstanding during the period. Diluted income
(loss) per share is calculated by including all dilutive potential common
shares such as stock options and warrants. Potential common shares are not
included for all periods presented because they would be anti-dilutive.

F-7
<PAGE>

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS
Effective July 1, 1996, the Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of". This
statement requires that long-lived assets and certain identifiable intangibles
to be held and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of assets may not be
recoverable. There was no significant impact on the Company's results of
operations or financial position.

STOCK BASED COMPENSATION
The Company accounts for stock-based compensation using the intrinsic value
method in accordance with APB No. 25, "Accounting for Stock Issued to
Employees". Effective July 1, 1996, the Company adopted the disclosure
requirements of SFAS No. 123, "Accounting for Stock-Based Compensation", which
require the disclosure of pro forma net income and earnings per share as if the
Company adopted the fair value-based method in measuring compensation expense
as of the beginning of fiscal 1996 (See Note 13).

NEW REPORTING PRONOUNCEMENT
The Company will implement the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 130, Reporting Comprehensive Income, SFAS No. 131,
Disclosures About Segments of an Enterprise and Related Information, and SFAS
No. 132, Employers' Disclosures about Pensions and Other Post-retirement
Benefits which require the Company to report and display certain information
related to comprehensive income, operating segments, and employee benefits
plans, respectively, as required in 1998. Adoption of these statements will not
impact the Company's financial position or results of operations.

FAIR VALUE FINANCIAL INSTRUMENTS
The Company considers the fair value of all financial instruments to be not
materially different from their carrying value at year end.

NOTE 2 - CONCENTRATION OF CREDIT RISK

The Company maintains its cash in bank accounts which, at times, may exceed
federally insured limits. The Company has not experienced any losses in such
accounts. The Company believes it is not exposed to any significant credit risk.

NOTE 3 - ADVANCES TO CUSTOMERS

Advances to customers arise as a result of the Company advancing finished metal
or cash to the customer prior to the subsequent settled amount. At the request
of the customer, the Company may advance up to 90% of the expected settlement
value of the metal to the customer. The Company occasionally advances or
consigns metal to its customers. These advances are charged against future
transactions with the customer.

NOTE 4 - INVENTORIES

Inventories are stated at current market value. Consistent with other
companies that refine and produce precious metal fabricated products, some of
the Company's gold and silver requirements are furnished by customers and
suppliers on a consignment basis. Title to the consigned gold and silver
remains with the Consignor. The value of consigned gold and silver held by
the Company is not included in the Company's Balance Sheet. At June 30, 1998
the Company held $2,345,300 under a consignment agreement with Republic
National Bank. The Company's gold and silver requirements are provided from a
combination of owned inventories, precious metals which have been purchased and
sold for future delivery, and gold and silver received from suppliers and
customers on a consignment basis.

F-8

<PAGE>

NOTE 5 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets at June 30, 1998 substantially
consist of a value added tax credit from the Peruvian government of $245,847
and of payments in advance of Peruvian income tax of $56,886. Alloy may
request the reimbursement of the value added tax credit to the local tax
administration and is entitled to also receive reimbursement of the payments
in advance of income taxes.

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 1998 consists of the following:

Machinery and equipment $487,777
Furniture and fixtures 54,135
Leasehold improvements 31,646
Vehicles 26,285
----------------
599,843
Less accumulated depreciation and amortization 162,695
----------------
Property, plant and equipment - net $437,148
================

NOTE 7 - GOODWILL

Goodwill arose from the capitalization of the equity accounts of the
subsidiaries at the time of the merger and from goodwill on the books of the
subsidiary, as follows:

Westbury Alloys, Inc. (capitalization of equity accounts at merger) $422,828
Westbury Alloys, Inc. (prior acquisition) 300,000
-------
722,828
Accumulated amortization 75,612
-------
$647,216
=======

Management has determined that goodwill would be amortized over twenty-four
years.

NOTE 8 - LOANS PAYABLE

The Company has entered into an agreement with Republic National Bank to
provide the Company with the gold used in production through consignment
arrangements. At June 30, 1997 the Company included in its inventory 7,915
troy ounces of fine gold on consignment having a market value of $2,345,300
(see Note 4). The maximum amount of consigned gold available is limited to
the amount guaranteed by letters of credit provided by a third party consignee,
presently $2,600,000.

The Company has incurred consignment fees in the amount of $22,518 on the above
loans for the year ended June 30, 1998.

F-9
<PAGE>

NOTE 9 - INCOME TAXES

The Company's net deferred tax asset as of June 30, 1998 is estimated as
follows:

Deferred tax assets:
Net operating loss carryforward $196,000

Deferred tax liability:
Amortization of goodwill 3,000
--------------------

Net deferred tax asset 193,000
Valuation allowance 193,000
--------------------

Net deferred taxes $ 0
--------------------

A valuation allowance for 1998 has been applied to offset the deferred tax asset
in recognition of the uncertainty that such tax benefits will be realized.

At June 30, 1998, the Company has available net operating loss carryforwards
for federal and state income tax purposes of approximately $490,000, which are
available to offset future taxable income, if any. These carryforwards expire
beginning in 2012.

NOTE 10 -STOCKHOLDERS' EQUITY

The Company issued 1,850,000 shares of its common stock in exchange for all
of the outstanding shares of Westbury Alloys, Inc. This merger was accounted
for as a purchase. The value attributed to the shares was $100,000, which was
the value of all of the outstanding shares on the books of Westbury Alloys, Inc.

The Company entered into an agreement whereby it issued shares of its common
stock through a private placement memorandum. The proceeds of the offering,
net of expenses, was $2,334,039, from the issuance of 1,167,312 shares of
common stock. Included in the issued shares are 233,333 shares issued to
certain investors who had provided bridge financing of $700,000 to Westbury
and converted their loans to equity at the same offering price of $3.00 per
share. These noteholders also received warrants to purchase 700,000 shares of
common stock of the Company at $2.25 per share. The warrants expire on
March 31, 2000.

NOTE 11 - STOCK OPTION PLAN

Under the Company's stock option plan (Westbury Alloys' Inc.'s 1997 Omnibus
Stock Incentive plan (as amended) (the "Plan") which has been ratified by the
shareholders' of Westbury Metals Group Inc., options to purchase a maximum of
750,000 shares of common stock (subject to adjustment in the event of stock
splits, stock dividends, recapitalization and other capital adjustments) may be
granted to employees and outside directors of the Company. The options to be
granted under the plan are designated as incentive stock options or
non-incentive stock options by the board of directors which also has the
discretion as to the person to be granted the options, the number of shares
subject to the options and the terms of the option agreements. The plan is
administered by the board of directors. All present and future employees shall
be eligible to receive incentive awards under the plan, and all present and
future non-employee directors shall be eligible to receive non-statutory options
under the plan. The options are intended to receive incentive stock option tax
treatment under Section 422 of the Internal Revenue Code of 1986, as amended.

F-10

<PAGE>

WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997

NOTE 11 - STOCK OPTION PLAN (CONTINUED)

The exercise price of shares of common stock covered by an incentive stock
option shall not be less than 100% of the fair market value of such shares on
the date of grant, provided that if an incentive stock option is granted to an
employee who, at the time of the grant, is a 10% shareholder, then the exercise
price of the shares covered by the incentive stock option shall not be less than
110% of the fair market value of such shares on the date of grant. The exercise
price of shares covered by a non-statutory stock option shall not be less than
85% of the fair market value of such shares on the date of grant.

Options outstanding at June 30, 1998 are exercisable at prices ranging from $.50
to $3.00 per share, the fair market value on the date of grant, and expire at
various dates to June 17, 2008. Options to purchase 180,000 shares were granted
October 28, 1997, while the plan was part of Westbury Alloys, Inc. Options to
purchase 100,000 shares were granted June 18, 1998 and are exercisable through
June 17, 2008. The options granted October 28, 1997 are exercisable at a rate of
45,000 shares annually for four years beginning October 28, 1997. Of the options
granted June 18, 1998, 50,000 are exercisable immediately and 25,000 are
exercisable annually beginning June 18, 1999 and June 18, 2000. No other options
have been granted, exercised or terminated.

NOTE 12 - COMMITMENTS

EMPLOYMENT AGREEMENT
The Company's chief executive officer has an employment agreement expiring
December 31, 2000. Under the agreement he receives $175,000 annually plus 10%
of the annual pretax profits of the Company in excess of $500,000 to a maximum
bonus of $175,000 per year.

LEASE COMMITMENT
Effective July 22, 1996 the Company entered into a seven-year lease, expiring
July 31, 2003, for the premises known as 750 Shames Drive, Westbury, New York,
which approximates 10,200 square feet. The annual rental in the initial year
of the lease is $7.50 per square foot, plus escalations for real estate taxes.

Provided the Company is not in default under the lease, the Company has the
option to purchase the premises, along with premises known as 700 Shames Drive
(7,800 square feet). If the Company exercises the option to buy within the
first three years of the lease, the combined purchase price of both premises
shall be $1,200,000. After the first three years of the lease, the purchase
terms of the property shall be determined as specified in the lease, which
calls for among other provisions, the purchase price to be fair market value.

Future minimum lease payments are as follows:
For the year ending June 30,
1999 $82,416
2000 84,762
2001 85,884
2002 89,556
2003 92,004
---------
$434,622
==========

Rent expense for the year ended June 30, 1998 was $22,838.

CONSULTING SERVICES

Effective July 22, 1996, the Company entered into a five year consulting
agreement with Lawrence Raskin. Under the agreement, the Company will pay
Lawrence Raskin $10,000 annually for a total fee of $50,000 plus certain
expenses.

F-11

<PAGE>

WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997

NOTE 12 - COMMITMENTS (CONTINUED)

LETTERS OF CREDIT
An affiliate of the Company has entered into letter of credit arrangements
with an unrelated third party to provide letters of credit in the amount of
$2,600,000 to guarantee the debt to Republic National Bank. During the
current fiscal year the Company paid fees of $21,807 for these letters of
credits.

NOTE 13 - STOCK BASED COMPENSATION

The per share average fair value of stock options granted during the year
ended June 30, 1998 were $2.59 and $.66 on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions:

Expected dividend yield 0%
Risk free interest rate 5%
Expected stock volatility 0%
Expected option life 4 YEARS AND 5 YEARS

The Company applies APB opinion No 25 in accounting for its plans and,
accordingly, no compensation cost has been recognized in the financial
statements for its stock options which have an exercise price equal to the fair
value of the stock on the date of the grant. Had the Company determined
compensation cost based on the fair value at the grant date of this stock
options under SFAS No. 123, the Company's net loss would have been increased to
the pro forma amounts indicated below for the year ended June 30, 1998:

Net loss:
As reported $(75,232)
Pro forma $(153,485)

Net loss per share:
As reported $(.08)
Pro forma $(.17)

Pro forma net loss reflects only options granted during the year ended June 30,
1998. The full impact of calculating compensation cost for stock options under
SFAS No. 123 is not reflected in the pro forma net loss amounts presented above
because compensation cost is reflected over the options' vesting period of 4
years.

NOTE 14 - SUBSEQUENT EVENTS

On July 1, 1998 Westbury International, Inc., was formed to provide trading and
risk management services. Activities include metals leasing, financing
arrangements, cash and forward purchases and sales for internal metals
management requirements and as a profit center dealing with third parties.

The Company has entered into an agreement to purchase an adjacent building at
900 Shames Drive, Westbury, New York for a total of $510,000. There is a
mortgage commitment from Roosevelt Savings Bank in the amount of $325,000. The
title to this property will be in Westbury Realty Management Inc., a newly
formed corporation with no activity in the current year. The closing is
anticipated to take place on September 29, 1998.

NOTE 15 - RELATED PARTY TRANSACTIONS

An Officer of the Company is affiliated with a legal firm which provided
services to the Company in 1998. Fees earned by such affiliate were $67,641.

F-12
<PAGE>

WESTBURY METALS GROUP, INC., AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997

NOTE 16 - PRO FORMA RESULTS OF OPERATIONS - UNAUDITED

The pro forma results include the operations of the Company, Westbury Alloys,
Inc. and Alloy Trading S.A. for the twelve month periods ended June 30, 1998 and
1997, respectively, and the operations of West Tech, Inc. for the period from
March 30, 1998 (inception) through June 30, 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

1998 1997
----

Revenues:

Sales $1,425,315 $
Refining fees 1,874,829 1,540,479
Other income 67,688
----------------------- --------------------

Total revenues 3,367,832 1,540,479

Cost and expenses:

Cost of sales 1,335,607
Cost of refining 807,221 703,853
Selling, general and administrative 1,240,274 742,953
Depreciation and amortization 246,739 138,144
Interest 132,090 56,654
----------------------- --------------------

Total costs and expenses 3,761,931 1,641,604
----------------------- --------------------

Loss before provision for income taxes (394,099) (101,125)
Provision for income taxes 9,018
----------------------- --------------------

Net loss $(394,099) $(110,143)
======================= ====================

Net loss per share - basic $(.16) $(.06)
Net loss per share - diluted $(.16) $(.06)

Average shares outstanding - basic 2,408,947 1,916,062
Average shares outstanding - diluted 2,408,947 1,916,062

F-13
</TABLE>

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act,
Westbury Metals Group, Inc. has caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.

Dated: October 8, 1998

WESTBURY METALS GROUP, INC.

By: _______________________
Mandel Sherman,President

Pursuant to the requirements of the Exchange Act, this report has been
signed by the following persons on behalf of the Registrant and in the
capacities and on the date indicated:

Name Titles Date

_______________ President, Chief Executive October 8, 1998
Mandel Sherman Officer and Director

___________________ Director October 8, 1998
Michael A. O'Hanlon

___________________ Director October 8, 1998
Michael Riess

___________________ Chief Financial Officer October 8, 1998
David Nadler