TRANS GLOBAL SERVICES INC, S-1/A, 1997-02-13

TRANS GLOBAL SERVICES INC
S-1/A, 1997-02-13
HOUSEHOLD AUDIO & VIDEO EQUIPMENT

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As filed with the Securities and Exchange Commission on February 13, 1997
Registration No. 333-14289
================================================================================

Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 3
To
Form S-1
Registration Statement under the Securities Act of 1933

Trans Global Services, Inc.

Asher S. Levitsky P.C.
Esanu Katsky Korins & Siger
605 Third Avenue
New York, New York 10158
(212) 953-6000
Fax: (212) 953-6899
(Name, address and telephone number of agent for service)

Copies to:

Lewis S. Schiller, Chief Executive Officer Stuart Neuhauser, Esq.
Trans Global Services, Inc. Bernstein & Wasserman, LLP
1770 Motor Parkway 950 Third Avenue
Hauppauge, NY 11788 New York, NY 10022
(516) 582-9000 (212) 826-0730
Fax: (516) 582-9052 Fax: (212) 371-4730

Calculation of Registration Fee

================================================================================
<TABLE>
<CAPTION>
Maximum
Amount to be Maximum Offering Aggregate Registration
Title of each class of securities to be registered Registered Price Per Unit(1) Offering Price Fee
- -------------------------------------------------- ------------ ----------------- -------------- ------------
<S> <C> <C> <C> <C>
Units, each Unit consisting of one share of Series 1,150,000 Units $6.00 $6,900,000.00 $2,379.30
G Convertible 1,150,000 Units Redeemable Preferred
Stock, par value $.01 per share, and one Series E
Redeemable Common Stock Purchase Warrants(2)

Common Stock, par value $.01 per share(3),(4) -- -- -- --

Common Stock, par value $.01 per share(4),(5) 1,150,000 Shs. 3.00 3,450,000.00 1,189.66

Representative's Unit Purchase Options(6) 100,000 Optns. .001 100.00 .04

Units, each Unit consisting of one share of Series 100,000 Units 9.90 990,000.00 341.38
G Convertible Redeemable Preferred Stock, par value
$.01 per share, and one Series F Redeemable Common
Stock Purchase Warrants(4),(7)

Common Stock, par value $.01 per share(4),(8) -- -- -- --

Common Stock, par value $.01 per share(4),(9) 100,000 Shs. 4.95 495,000.00 170.69
---------
$4,081.07
=========
</TABLE>
================================================================================
(Footnotes on following page)
<PAGE>

(Footnotes from preceding page)

(1) Estimated solely for purposes of computation of the registration fee
pursuant to Rule 457.

(2) Includes 150,000 Units issuable upon exercise of the Underwriters'
over-allotment option.

(3) Represents an indeterminate number of shares of Common Stock issuable
upon conversion of the Series G Convertible Redeemable Preferred Stock
("Series G Preferred Stock").

(4) Pursuant to Rule 416, there are also being registered such additional
securities as may become issuable pursuant to the anti-dilution
provisions of the Warrants, the Series G Preferred Stock, the Series E
Common Stock Purchase Warrants ("Warrants"), the Underwriters' Unit
Purchase Options and the Series F Redeemable Common Stock Purchase
Warrants ("Series F Warrants") issuable upon exercise of the Unit
Purchase Options.

(5) Represents shares of Common Stock issuable upon exercise of the Warrants
included in the Units offered pursuant to this Registration Statement.

(6) Represents options (the "Unit Purchase Options") to purchase 100,000
units to be issued to the Representative, each such unit consisting of
one share of Series G Preferred Stock and one Series F Warrant.

(7) Represents units issuable upon exercise of the Unit Purchase Options.

(8) Represents an indeterminate number of shares of Common Stock issuable
upon conversion of the Series G Preferred Stock issuable pursuant to
the Unit Purchase Options.

(9) Represents shares of Common Stock issuable upon exercise of the Series F
Warrants issuable pursuant to the Unit Purchase Options.

<PAGE>

Trans Global Services, Inc.

Cross-Reference Sheet Pursuant to Rule 404

Item No. Caption in Prospectus
-------- ---------------------
1. Forepart of the Registration Registration Statement Facing Page,
Statement and Outside Front Cover Prospectus Cover Page
of Prospectus

2. Inside Front and Outside Back Inside Cover Page, Back Cover Page
Cover Pages of Prospectus

3. Summary Information, Risk Factors Prospectus Summary, Risk Factors
and Ratio of Earnings to Fixed
Charges

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Cover Page, Risk Factors, Underwriting

6. Dilution Dilution

7. Selling Security Holders Cover Page, Inside Cover Page,
Selling Security Holders

8. Plan of Distribution Cover Page, Inside Cover Page,
Selling Security Holders, Underwriting

9. Description of Securities to be Description of Securities
Registered

10. Interest of Named Experts and N.A.
Counsel

11. Information with Respect to the (a)-(c) Prospectus Summary, Business
Registrant (d) Cover Page
(e) Financial Statements; Pro Forma
Combined Condensed Statements of
Operations
(f) Prospectus Summary, Trans Global
Services, Inc. Selected
Financial Data
(g) N.A.
(h) Trans Global Services, Inc.
Management's Discussion and
Analysis of Financial Condition
and Results of Operations
(i) N.A.
(j)-(k) Management
(l) Principal Stockholders
(m) Certain Transactions

12. Disclosure of Commission Position N.A.
on Indemnification for Securities
Act Liabilities

<PAGE>

PROSPECTUS SUBJECT TO COMPLETION DATED FEBRUARY 13, 1997

1,000,000 Units

Trans Global Services, Inc.

(Each Unit consisting of one share of Series G Convertible Redeemable
Preferred Stock, par value $.01 per share, and one Series E Redeemable
Common Stock Purchase Warrant)

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

Trans Global Services, Inc. (the "Company") is offering 1,000,000
Units, each Unit consisting of one share of Series G Convertible Redeemable
Preferred Stock ("Series G Preferred Stock") and one Series E Redeemable Common
Stock Purchase Warrant (the "Warrants"). The Series G Preferred Stock and
Warrants comprising the Units will be separately transferable immediately upon
issuance. Each share of Series G Preferred Stock pays an annual dividend of $.12
per share, is convertible, commencing one year from the date of this Prospectus
or earlier with the consent of the Company and Patterson Travis, Inc., the
representative of the Underwriters (the "Representative"), into four shares of
Common Stock, subject to adjustment, and may be redeemed by the Company for
$6.00 per share commencing one year from the date of this Prospectus on not less
than 30 nor more than 60 day's notice. The consent of the Representative and the
Company may not be given prior to 61 days from the date of this Prospectus. Each
Warrant entitles the holder to purchase one share of Common Stock at $3.00 per
share, subject to adjustment, during the period commencing 61 days from the date
of this Prospectus and ending three years from the date of this Prospectus. The
Warrants are redeemable by the Company, commencing one year from the date of
this Prospectus or earlier (but not prior to 61 days from the date of this
Prospectus) with the consent of the Representative, for $.05 per Warrant, on not
more than 60 nor less than 30 days' written notice if the average closing price
per share of Common Stock is at least $4.00 (subject to adjustment) for at least
20 trading days ending not earlier than 15 days prior to the date the Warrants
are called for redemption. See "Description of Securities."

Prior to this Offering, there has been no public market for the Units,
Series G Preferred Stock or Warrants. The initial public offering price and
composition of the Units, the conversion rate and other terms of the Series G
Preferred Stock and the exercise price and other terms of the Warrants have been
determined through negotiations between the Company and the Representative, and
are not related to the Company's assets, book value, financial condition or
other recognized criteria of value. The Company's Common Stock and Callable
Common Stock Purchase Warrants ("1994 Warrants") are traded on The Nasdaq
SmallCap Market under the symbols TGSI and TGSIW, respectively. Although the
Company has applied for the inclusion of the Units, Series G Preferred Stock and
Warrants on The Nasdaq SmallCap Market under the symbols TGSIU, TGSIP and TGSIZ,
respectively, there can be no assurance that an active trading market in such
securities will develop or be sustained.

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

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK AND SUBSTANTIAL DILUTION AND SHOULD BE CONSIDERED ONLY BY
INVESTORS WHO CAN AFFORD TO SUSTAIN A LOSS OF THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS," WHICH BEGIN ON PAGE 7.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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

Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
- --------------------------------------------------------------------------------
Per Unit.......... $6.00 $ .60 $5.40

- --------------------------------------------------------------------------------
Total (3)......... $6,000,000 $600,000 $5,400,000
================================================================================
(footnotes on page 2)
The Units are being offered, subject to prior sale, when, as and if
delivered to and accepted by the Underwriters and subject to the approval of
certain legal matters by counsel and certain other conditions. The Underwriters
reserve the right to withdraw, cancel or modify the Offering and to reject any
order in whole or in part. It is expected that delivery of the certificates
representing the Series G Preferred Stock and Warrants comprising the Units will
be made against payment therefor at the offices of the Representative at One
Battery Park Plaza, New York, New York 10004 on , 1997.

Patterson Travis, Inc.

The date of this Prospectus is , 1997

<PAGE>

(footnotes from Cover Page)
(1) Excludes additional compensation to be received by the Representative
in the form of (a) a non-accountable expense allowance equal to 3% of
the gross proceeds of this Offering ($.24 per Unit) for a total of
$180,000 ($207,000 if the Underwriters' over-allotment option is
exercised in full), (b) a two-year consulting agreement pursuant to
which the Company will pay the Representative a fee of $100,000, and
(c) options (the "Unit Purchase Options") to purchase 100,000 units at
$9.90 per unit exercisable during the four-year period commencing one
year from the date of this Prospectus. In addition, the Company has
agreed to indemnify the Underwriters against certain liabilities,
including liability under the Securities Act of 1933, as amended (the
"Securities Act"). See "Underwriting."

(2) Before deducting estimated expenses of the Offering of approximately
$590,000 ($.59 per Unit), which are payable by the Company and which
include the Representative's non-accountable expense allowance and
consulting fee.

(3) The Company has granted to the Representative an option, exercisable on
its own behalf or on behalf of the Underwriters, within 45 days after
the date of this Prospectus, to purchase up to an additional 150,000
Units on the same terms solely to cover over-allotments. If the
over-allotment option is exercised in full, the Total Price to Public,
Underwriting Discounts and Commissions and Proceeds to Company will be
$6,900,000, $690,000 and $6,210,000, respectively. See "Underwriting."

The Company is subject to certain informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other information can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the regional
offices of the Commission at Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661 and Seven World Trade Center, New York, New York
10048. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The adress of such
site is http//www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and with such other periodic reports as
the Company may from time to time deem appropriate or as may be required by law.
The Company uses the calendar year as its fiscal year.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE UNITS,
SERIES G PREFERRED STOCK AND/OR WARRANTS AT LEVELS ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZATION, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

A SIGNIFICANT NUMBER OF UNITS MAY BE SOLD TO CUSTOMERS OF THE
UNDERWRITERS. SUCH CUSTOMERS MAY SUBSEQUENTLY ENGAGE IN THE SALE OR PURCHASE OF
THE SECURITIES THROUGH OR WITH THE UNDERWRITERS. ALTHOUGH THEY HAVE NO
OBLIGATION TO DO SO, THE UNDERWRITERS MAY BECOME MARKET MAKERS AND OTHERWISE
EFFECT TRANSACTIONS IN THE SECURITIES, AND, IF THE UNDERWRITERS PARTICIPATE IN
SUCH MARKET, THEY MAY BE DOMINATING INFLUENCES IN THE TRADING OF THE SECURITIES.
THE PRICES AND THE LIQUIDITY OF THE SECURITIES MAY BE SIGNIFICANTLY AFFECTED BY
THE DEGREE, IF ANY, OF THE PARTICIPATION OF THE UNDERWRITERS IN SUCH MARKET,
SHOULD A MARKET DEVELOP.

- 2 -
<PAGE>

PROSPECTUS SUMMARY

The following discussion summarizes certain information contained in
this Prospectus. It does not purport to be complete and is qualified in its
entirety by reference to more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus.

THE COMPANY

Trans Global Services, Inc. (the "Company"), is engaged in providing
technical temporary staffing services. In performing such services, the Company
addresses the current trend of major corporations in "downsizing" and
"outsourcing" by providing engineers, designers and technical personnel on a
temporary contract assignment basis pursuant to contracts with major
corporations. The engagement may relate to a specific project or may cover an
extended period based on the client's requirements. The Company seeks to offer
its clients a cost-effective means of work force flexibility and the elimination
of the inconvenience associated with the employment of temporary personnel, such
as advertising, initial interviewing, fringe benefits and record keeping.
Although the employees provided by the Company are on temporary contract
assignment, they work with the client's permanent employees; however, they may
receive different compensation and benefits than permanent employees.

In providing its services, the Company engages the employees, pays the
payroll and related costs, including FICA, worker's compensation and similar
Federal and state mandated insurance and related payments. The Company charges
its clients for services based upon the hourly payroll cost of the personnel.
Each temporary employee submits to the Company a weekly time sheet with work
hours approved by the client. The employee is paid on the basis of such hours,
and the client is billed for those hours at agreed upon billing rates.

The Company is a Delaware corporation which was incorporated in
September 1993 under the name Concept Technologies Group, Inc. ("Concept"). The
Company's executive offices are located at 1770 Motor Parkway, Hauppauge, New
York 11788, telephone (516) 582-9000.

In May 1995, Concept acquired all of the issued and outstanding stock
of Trans Global Services, Inc., a Delaware corporation now known as TGS Services
Corp. ("TGS"), in exchange for a controlling interest in the Company. Such
transaction is referred to as the "Trans Global Transaction." See "Certain
Transactions -- The Trans Global Transaction." In March 1996, the Company
changed its corporate name to Trans Global Services, Inc. Prior to May 1995, the
Company's primary business was the operation, through WWR Technology, Inc.
("WWR"), of the Klipsch(R) professional loudspeaker business. As a result of the
Trans Global Transaction, the Company's principal business became the provision
of technical temporary staffing services. See "Certain Transactions -- The Trans
Global Transaction." As of September 30, 1995, the Company sold the stock of WWR
to an affiliated party. See "Certain Transactions -- Sale of WWR."

TGS is a Delaware corporation which was incorporated in January 1995 to
hold the stock of its two subsidiaries, Avionics Research Holdings, Inc.
("Holdings") and Resource Management International, Inc. ("RMI"). Prior to
January 1995, the stock of Holdings and RMI was held by SIS Capital Corp.
("SISC"), which is a wholly-owned subsidiary of Consolidated Technology Group
Ltd. ("Consolidated"). Consolidated is a public company whose businesses
include, in addition to the Company, the management and operation of magnetic
resonance imaging centers, the manufacture and sale of electro-mechanical and
electro-optical products, a range of telecommunications services, computerized
health information systems and related services which are offered to health care
providers, and the marketing and selling of three dimensional imaging products.
Holdings was formed to acquire the stock of two related companies, Avionics
Research Corporation of New York and Avionics Research Corp. of Florida
(collectively, "Avionics") in December 1993. RMI was formed in 1994 to acquire
assets of Job Shop Technical Services, Inc. ("Job Shop") in November 1994. RMI
conducts business under the name The RMI Group. Avionics has been engaged in the
contract engineering business since its organization in 1954, and RMI commenced
such business in November 1994, with the acquisition of assets from Job Shop.

References to the Company refer to the Company and TGS and its
subsidiaries, unless the context indicates otherwise. References to Concept
relate to the Company prior to the consummation of the Trans Global Transaction
in May 1995.

At December 31, 1996, SISC was the owner of approximately 48.9% of the
Company's outstanding Common Stock and held warrants which, if converted and
exercised, would result in SISC's ownership of approximately 54.5% of the Common
Stock. Mr. Lewis S. Schiller, chairman of the board and chief executive officer
of the Company, is also chairman of the board and chief executive officer of
Consolidated, SISC, Netsmart Technologies, Inc. ("Netsmart"), a public
corporation of which SISC owns a majority of the Common Stock, and Lafayette
Industries, Inc. ("Lafayette"), a public corporation controlled by SISC. Mr.

- 3 -
<PAGE>

Schiller and SISC together owned approximately 53.9% of the Company's
outstanding Common Stock and held warrants and options which, if exercised,
would result in their ownership of approximately 59.7% of the Company's Common
Stock. The Trinity Group, Inc. ("Trinity"), a wholly-owned subsidiary of
Consolidated, has an agreement with the Company pursuant to which the Company
pays Trinity fees of $10,000 per month through March 2000, which monthly fee
will increase to $25,000 commencing with the month in which this Offering is
completed. Mr. Norman J. Hoskin, a director of the Company, is a director of
Consolidated, Netsmart, Lafayette and certain subsidiaries of Consolidated. Mr.
E. Gerald Kay, a director of the Company, is a director of Lafayette and certain
subsidiaries of Consolidated. See "Management -- Directors and Executive
Officers".

THE OFFERING

Securities Offered: 1,000,000 Units at $6.00 per Unit. Each Unit
consists of one share of Series G Convertible
Redeemable Preferred Stock ("Series G Preferred
Stock") and one Series E Redeemable Common Stock
Purchase Warrant (the "Warrants"). The shares of
Series G Preferred Stock and Warrants comprising
the Units will be separately transferable
immediately upon issuance.

Description of Series G Preferred Stock:

Redemption: The Series G Preferred Stock is redeemable by the
Company, at its option, for $6.00 per share, in
whole at any time and in part from time to time
commencing one year from the Effective Date on not
less than 30 nor more than 60 days notice.

Conversion: Commencing one year from the Effective Date, or
earlier with the consent of the Company and the
Representative, each share of Series G Preferred
Stock will be convertible into four shares of
Common Stock, subject to adjustment in the event of
any stock split, distribution, dividend,
combination of shares or other transaction having
the effect of a reverse split or other
recapitalizations or similar transactions. The
consent of the Representative and the Company may
not be given prior to 61 days from the date of this
Prospectus.

Liquidation: Upon the liquidation, dissolution or winding up of
the Company, the holders of the Series G Preferred
Stock will receive a preference of $6.00 per share.
Upon receipt of such preference, the holders of the
Series G Preferred Stock will not be entitled to
any further payment. In the event of the merger or
consolidation of the Company, the shares of Series
G Preferred Stock then outstanding will be deemed
converted into Common Stock immediately prior to
the effective time of the transaction.

Dividends: Annual dividends of $.12 per share of Series G
Preferred Stock, payable semiannually, in cash or
shares of Common Stock, as the Company shall
determine. After payment of the semi-annual
dividend, each share of Series G Preferred Stock
shall receive the same per share dividend as is
payable with respect to one share of Common Stock
payable during the semi-annual dividend period.

No Voting Rights: The holders of the Series G Preferred Stock have no
voting rights except as required by law.

Description of Warrants:

Exercise of Warrants: The Warrants are exercisable for the period
commencing 61 days from the date of this prospectus
and ending three years from the date of this
Prospectus. Subject to redemption by the Company,
the Warrants may be exercised at any time during
such exercise period at an exercise price of $3.00
per share, subject to adjustment.

Redemption: The Warrants are redeemable by the Company
commencing one year from the date of this
Prospectus, or earlier (but not prior to 61 days
from the date of this Prospectus) with the consent
of the Representative, at $.05 per Warrant provided
that the average closing price per share of the
Common Stock is at least $4.00 per share, subject
to adjustment, for

- 4 -
<PAGE>

a period of 20 trading days ending not earlier than
15 trading days prior to the date the board of
directors calls the Warrants for redemption.

Use of Proceeds: The net proceeds of this Offering will be used to
pay outstanding loans and obligations and for
working capital and other corporate purposes. See
"Use of Proceeds."

Risk Factors: Purchase of the Units involves a high degree of
risk and should be considered only by investors who
can afford to sustain a loss of their entire
investment. See "Risk Factors" and "Dilution."

Nasdaq Symbols:

Common Stock TGSI
1994 Warrants TGSIW
Units TGSIU (Proposed)
Series G Preferred Stock TGSIP (Proposed)
Series E Warrants TGSIZ (Proposed)

Common Stock and Warrants(1) Outstanding:
At the date of this Prospectus:

22,886,331 shares of Common Stock(2)
567,245 1994 Warrants(3)

As Adjusted(4):

22,886,331 shares of Common Stock(2)
1,000,000 shares of Series G Preferred Stock
1,000,000 Warrants
567,245 1994 Warrants(3)

(1) Does not nclude privately held warrants to purchase an aggregate of
6,257,352 shares of Common Stock at exercise prices ranging from $.50
to $8.45 (collectively, the "Other Warrants").

(2) Does not include a maximum of 2,792,332 shares of Common Stock which
may be issued pursuant to the Company's stock option plans, of which
stock options to purchase 1,523,950 shares are outstanding, 567,245
shares of Common Stock issuable upon exercise of the 1994 Warrants,
6,257,352 shares of Common Stock issuable upon exercise of the Other
Warrants, or any shares of Common Stock issuable upon conversion of the
Series G Preferred Stock or the exercise of the Warrants, the
Underwriters' over-allotment option or Unit Purchase Options or the
securities underlying the Unit Purchase Options.

(3) The 1994 Warrants were issued as part of the Company's initial public
offering in February 1994, have an exercise price of $7.00 per share,
and expire in February 1997.

(4) Reflects the issuance of the 1,000,000 shares of Series G Preferred
Stock and 1,000,000 Warrants comprising the Units offered hereby.

- 5 -
<PAGE>

SUMMARY FINANCIAL INFORMATION
(In thousands, except per share amounts)

Statement of Operations Data(1):
- -------------------------------
<TABLE>
<CAPTION>
Nine months ended September 30, Year Ended December 31,
------------------------------- -----------------------
1996 1995 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $45,380 $48,172 $63,152 $25,287
Net (loss) from continuing operations (770) (1,784) (4,413) (411)
Net (loss) (770) (1,872) (4,696) (411)
Net (loss) per share of Common Stock (.09) (.72) (1.48) (.68)
Weighted average number of shares
of Common Stock outstanding 8,525 2,592 3,173 600
Ratio of earnings to fixed charges (2) (2) (2) (2)
</TABLE>

Balance Sheet Data:
- ------------------
<TABLE>
<CAPTION>
September 30, 1996 December 31,
----------------------------------- --------------------
As Adjusted(3) Actual 1995 1994
----------------- ----------------- ---- ----
<S> <C> <C> <C> <C>
Working capital (deficiency) $ 4,099 $(751) $(2,401) $(1,805)
Total assets 17,254 14,604 12,763 10,345
Total liabilities 5,676 7,876 8,511 9,033
Accumulated deficit (5,876) (5,876) (5,106) (411)
Stockholders' equity(4) 11,578 6,728 4,252 1,312
- -----------------------
</TABLE>
(1) Statement of operations data includes the operations of RMI commencing
November 22, 1994.

(2) Earnings during this period were insufficient to cover combined fixed
charges and Preferred Stock dividends. The dollar amounts of the
coverage deficiencies were as follows: $860, $1,874, $4,503 and $501
for the nine months ended September 30, 1996 and 1995 and the years
ended December 31, 1995 and 1994.

(3) As adjusted to reflect (a) the receipt by the Company of the net
proceeds from the sale of the 1,000,000 Units offered hereby, (b) the
issuance by the Company of 10,000,000 shares of Common Stock upon the
conversion of shares of Series F $6 Convertible Preferred Stock
("Series F Preferred Stock") subsequent to September 30, 1996, and (c)
the use of a portion of the proceeds of this Offering to pay certain
debt. See "Use of Proceeds" and "Capitalization."

(4) Stockholders' equity includes $751 at September 30, 1996 and $4,850 as
adjusted, relating to Preferred Stock.

- 6 -
<PAGE>

RISK FACTORS

The purchase of the Units offered hereby involves a high degree of risk
and should be considered only by investors who can afford to sustain the loss of
their entire investment. In analyzing this Offering, prospective investors
should carefully consider the following factors, among others.

1. Continuing and substantial losses.

(a) Losses from continuing operations. During the nine months
ended September 30, 1996 and the years ended December 31, 1995 and 1994, the
Company sustained losses from continuing operations of $770,000, or $.09 per
share, $4.4 million, or $1.39 per share, and $411,000, or $.68 per share,
respectively, on revenue of $45.4 million, $63.2 million and $25.3 million,
respectively. The net loss for 1995, after the loss for the discontinued
operations and the loss on the sale of the discontinued segment, was $4.7
million, or $1.48 per share. The results of the Company's operations in 1995
reflect the results of operations of both Holdings and RMI for the entire year.
At September 30, 1996, the Company had an accumulated deficit of approximately
$5.9 million. The results of operations for 1994 reflect the operations of
Holdings for the entire year and RMI commencing November 22, 1994. If the
acquisition of Job Shop assets were consummated as of January 1, 1994, the pro
forma results of operations of the Company and Job Shop for 1994 would reflect
revenue of $64.8 million and a loss of $2.3 million. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

(b) Penalties for late payment of withholding tax. During the
nine months ended September 30, 1996 and the year ended December 31, 1995, the
Company incurred penalties of $550,000 and $1.0 million, respectively, for
penalties resulting from the late payment of withholding taxes. See "Risk
Factors 4. -- Recent delinquency in payment of payroll tax obligations."

(c) Significant interest expenses. The Company finances its
payroll obligations by borrowing from a non-affiliated asset-based lender at an
interest rate of 2% in excess of prime. The Company also pays a fee of .3% of
the face amount of the invoices financed, regardless of the amount borrowed
against the invoice. In January 1997, the asset-based lender agreed to a monthly
fee of $10,500, subject to adjustment under certain conditions, commencing April
1, 1997 or earlier at the request of the Company. The borrowings are secured by
a security interest in all of the Company's assets. At September 30, 1996 and
November 30, 1996, such borrowings were $3.6 million . The ability of the
Company to operate profitably is dependent in part upon its ability to obtain
adequate financing to enable the Company to become current in its payment of
payroll taxes, thus eliminating the penalties, and reduce financing costs,
however no assurance can be given that it can or will be able to reduce its
financing costs. See "Risk Factors 2. -- Substantial capital requirements;
acceleration of obligations to asset-based lender" in connection with a
reduction to $3.0 million in the available credit from the Company's asset-based
lender.

(d) Low gross margins. For the nine months ended September 30,
1996 and the years ended December 31, 1995 and 1994, the Company's gross margins
were approximately 8.4%, 6.3% and 6.2%, respectively. Revenue from contract
engineering services is based on the hourly cost of payroll plus a percentage.
Accordingly, no assurance can be given that the Company will be able to increase
its gross margin. The success of the Company's business is dependent upon its
ability to generate sufficient revenues to enable it to cover its fixed costs
and other operating expenses and to reduce its variable costs, principally its
interest. See "Risk Factors 2. -- Substantial capital requirements; acceleration
of obligations to asset-based lender." Under its agreements with its clients,
the Company is required to pay its employees and pay all applicable Federal and
state withholding and payroll taxes prior to receipt of payment from the
clients. Furthermore, the Company's payments from its clients are based upon the
hourly rate paid to the employee, without regard to when payroll taxes are
payable with respect to the employee. Accordingly, the Company's cost of
services are greater during the first part of the year, when Federal Social
Security taxes and state unemployment and related taxes, which are based on a
specific level of compensation, are due. Thus, until the Company satisfies such
payroll tax obligations, it will have a lower gross margin than after such
obligations are satisfied. Furthermore, to the extent that the Company
experiences turnover in employees, its gross margin will be adversely affected.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

2. Substantial capital requirements; acceleration of obligations
to asset-based lender.

(a) Working capital deficiency. As of September 30, 1996, the
Company had a working capital deficiency of $751,000. Its working capital
deficiency reflects (i) $3.6 million due to the Company's asset-based lender,
(ii) payroll taxes and related expenses of $3.1 million, and (iii) accounts
payable and accrued expenses of $1.1 million, the most significant component of
which was compensation due to the Company's contract employees, which was paid
during the first week of October 1996. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

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<PAGE>

(b) Substantial obligations to asset-based lender;
acceleration of obligations. At September 30, 1996 and December 31, 1996, the
Company owed approximately $3.6 million to its asset-based lender. The Company
had been advised that, as a result of a change in its general lending policies,
the Company's asset-based lender was to reduce the Company's maximum borrowing
availability to $1 million, effective in late October 1996, which date had been
orally extended until January 1997. In January 1997, the asset-based lender
agreed to an amendment to its agreement with the Company pursuant to which, at
April 1, 1997 or earlier at the request of the Company, the borrowing
availability will be reduced to $3.0 million. Although the Company is seeking
alternative financing sources, no assurance can be given that the Company can or
will be able to obtain an alternate financing source, the failure of which could
have a material adverse effect upon the Company. See "Management Discussion and
Analysis of Financial Conditions and Results of Operations."

(c) Continuing cash requirements. At September 30, 1996, the
Company's obligations for withholding taxes, including interest and penalties,
was approximately $1.35 million. In July 1996, the Company received $2 million
from the sale of Common Stock. The Company used approximately $1.3 million of
such proceeds to pay delinquent withholding tax obligations, including interest
and penalties. In connection with such payments, the Company entered into an
agreement with the Internal Revenue Service ("IRS") pursuant to which the
Company is to pay the balance of $1.5 million, plus interest, in eight monthly
installments of $150,000, commencing in September 1996 and a final installment
of $300,000 in May 1997. One of the conditions to the IRS' agreement is the
timely payment by the Company of its current withholding tax obligations on an
ongoing basis. See "Risk Factors 4. -- Recent delinquency in payment of payroll
tax obligations."

The Company is continuing to seek ways to lower its cost of
money. In view of the Company's relatively low gross margin, which was
approximately 8.4% for the nine months ended September 30, 1996, 6.3% for 1995
and 6.2% for 1994, and its interest costs, which were approximately 1.1% of
revenue for the nine months ended September 30, 1996 and 1.5% of revenue for
1995, the inability of the Company to reduce its interest expense would
adversely affect its ability to operate profitably. The Company intends to
address its capital requirements by seeking to increase its capital base through
the sale of the Units and negotiate more favorable borrowing rates. However, no
assurance can be given any increase in its capital base resulting from this
Offering will enable the Company to operate profitably.

(d) Possible need for additional financing. Although the
Company believes that the proceeds from this Offering will be sufficient to fund
the Company's anticipated cash requirements for one year following the date of
this Prospectus, conditions may arise as a result of which the Company may
require additional capital prior to one year from the date of this Prospectus,
and no assurance can be given that the Company will be able to obtain any or
adequate funds when required or that any funds available to it will be on
reasonable terms. The failure to obtain necessary funds could result in the
reduction of the Company's operations. See "Use of Proceeds."

3. Potential claim by Department of Labor, other potential claim.
The United States Department of Labor and the independent court-appointed
trustee of the Job Shop 401(k) Plan (collectively, "DOL") has filed a complaint
against Job Shop and its principal stockholder for civil violations of ERISA
resulting from the failure of Job Shop to deposit employee contributions to Job
Shop's 401(k) retirement plan. A similar complaint was filed by former employees
of Job Shop against Job Shop, its principal stockholder and others. At November
22, 1994, the amount due to the Job Shop 401(k) plan was approximately $3.0
million, which amount may have increased since such date as a result of interest
and penalties. Neither the Company nor RMI, the subsidiary that acquired assets
and assumed certain obligations of Job Shop in November 1994, has been named as
a defendant in either of such actions. The DOL has raised with the Company the
possibility that RMI may be liable with respect to Job Shop's ERISA liability as
a successor corporation or purchaser of plan assets, even though RMI did not
assume such obligations and paid value for those assets which it did purchase.
Although the Company believes that RMI is not a successor corporation to Job
Shop and is not responsible for Job Shop's ERISA violations, the DOL may take a
contrary position. If the DOL takes such a position and prevails, it would have
a material adverse effect upon the operations of RMI and possibly the Company as
a whole. During the nine months ended September 30, 1996, the Company
established a $300,000 reserve with respect to the DOL claim. The Company has a
proposed agreement with the DOL pursuant to which it will pay $300,000 to the
DOL in satisfaction of any claims the DOL may have against it. A portion of the
proceeds of this Offering are allocated to such payment. See "Use of Proceeds"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

In May 1991, prior to the acquisition of Holdings by the
Company, the Government Printing Office wrote Avionics asking for reimbursement
of approximately $300,000 for allegedly unauthorized work on two programs. The
Company believes that these claims are without merit and intends to contest
these claims vigorously if reasserted. The Company believes that the ultimate
disposition of this matter will not have a material adverse affect on the
Company's consolidated financial position.

4. Recent delinquency in payment of payroll tax obligations; use
of proceeds to pay tax obligations. The nature of the technical temporary
staffing industry is that the service company, such as the Company, pays its
employees weekly, but

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<PAGE>

does not receive payment from its clients until the following week. As a result
of the size of the tax deposit and because of the lack of available cash under
its financing arrangement, the Company, as of June 30, 1996, was approximately
five weeks late in payment of Federal withholding tax of approximately $1.6
million. As a result of such failure, the IRS imposed interest and significant
penalties. During the nine months ended September 30, 1996 and the year ended
December 31, 1995, the Company's selling, general and administrative expenses
included approximately $550,000 and $1.0 million, respectively, in penalties for
late withholding payments. During July and August, the Company paid the IRS
approximately $1.3 million on account of such withholding tax obligations,
including interest and penalties, and entered into a payment agreement with the
IRS pursuant to which (a) the Company agreed to pay the remaining $1.5 million,
plus interest, in eight monthly installments of $150,000, commencing in
September 1996, and a final installment of $300,000 in May 1997, and (b) the IRS
agreed to subordinate its lien to the lien of the Company's asset-based lender.
The IRS' agreement is contingent upon the Company's making timely payments of
its withholding tax obligations. At September 30, 1996, the Company owed the IRS
approximately $1.35 million pursuant to its agreement with the IRS, and the
Company was current in its withholding tax obligations. At January 15, 1997, the
amount due to the IRS was approximately $800,000. The Company intends to use
approximately $800,000, or 16.7% of the net proceeds of this Offering, to pay
the IRS. See "Use of Proceeds."

5. Concentration of business in aerospace industry; dependence on
major customers. The Company's principal clients are in the aerospace industry.
The Company's three largest clients for the nine months ended September 30, 1996
were The Boeing Company ("Boeing"), Lockheed-Martin Corporation ("Lockheed") and
Northrop Grumman Corporation ("Northrop Grumman"), which accounted for revenues
of approximately $23.1 million, or 50.9% of revenue for the period. For 1995,
the Company's three largest clients were Northrop Grumman, Boeing and Lockheed
Ft. Worth Company which accounted for revenues of $34 million, or 54% of
revenue. The Company's largest client in 1994 was Northrop Grumman, which
accounted for $14.3 million, or 57% of revenue. The Company's contracts with its
clients may generally be terminated without significant notice and any loss of a
major client may have a material adverse effect upon the Company. Although the
Company's agreements with its clients in the aerospace industry are with the
clients and not government departments or agencies, the Company's business in
the aerospace industry may be affected by government policies relating to
defense spending. The Company's business may also be affected by the
consolidation of companies in the aerospace industry. The Company intends to
expand its marketing effort to other major companies in industries which it
believes are downsizing their present operations and relying on outside
consultants to perform services which had been performed by their employees. See
"Business -- Markets and Marketing."

6. Dependence upon industry trends. The technical temporary
staffing business is dependent upon the continuation of present trends in
industry toward downsizing and outsourcing. The Company hires its employees to
perform specific services for its clients. The interviewing process may be
conducted by the clients, and the clients define the scope of the work. In some
instances, the Company's employees were formerly employed by the clients, and
may have performed the same duties and reported to the same supervisor. Clients
engage technical personnel on a contract basis, rather than hiring such
individuals directly, because of the flexibility in retaining personnel and the
ability to obtain the services of the Company's employees without the need to
provide the compensation and other benefits which would be required to be paid
to employees. To the extent that these factors change, either as a result of
government policies, company policy or other factors, the Company's business
would be adversely affected. Furthermore, to the extent that legislation,
government regulations or court decisions require employees of technical
staffing companies to receive the same benefits as the clients' employees, the
Company's business may be adversely affected. See "Business -- Market and
Marketing."

7. Substantial obligations to and from related parties; related
party transactions. Effective June 30, 1996, SISC exchanged $1,000,000 of its
debt for shares of Series F Preferred Stock pursuant to a debt and equity
restructure with SISC (the "SISC Recapitalization"). Pursuant to the SISC
Recapitalization, the Company issued to SISC 9,900 shares of Series F Preferred
Stock and warrants to purchase 3,200,000 shares of Common Stock at $1.25 per
share in exchange for the cancellation of $750,000 principal amount of the
Company's debt to SISC and all of the shares of Series B, C and D Preferred
Stock owned by SISC, including accrued dividends due on the Series D Preferred
Stock. As part of the SISC Recapitalization, the Company issued 100 shares of
Series F Preferred Stock to DLB, Inc. ("DLB"), which owned 5% of the Series B
and C Preferred Stock. DLB is owned by Mr. Schiller's wife, but Mr. Schiller
disclaims beneficial interest in DLB or any securities owned by DLB. SISC
transferred 1,000 shares of Series F Preferred Stock to Mr. Lewis S. Schiller,
chairman of the board of the Company and Consolidated, pursuant to Mr.
Schiller's employment agreement with Consolidated. The 10,000 shares of Series F
Preferred Stock held by SISC, Mr. Schiller and DLB were convertible into
10,000,000 shares of Common Stock, and all of the shares of Series F Preferred
Stock were converted into Common Stock in October and December 1996. See
"Certain Transactions." No shares of Series F Preferred Stock are presently
outstanding.

The Company has made advances to three subsidiaries of SISC ("SISC
Subsidiaries") which are not owned or controlled by the Company. Such advances
were approximately $1.4 million at September 30, 1996. The Company cannot
predict whether or when these advances will be repaid because of the SISC
Subsidiaries' lack of working capital.

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<PAGE>

At September 30, 1995, the stock of WWR was sold to a subsidiary of
Consolidated. See "Certain Transactions -- Sale of WWR." At September 30, 1996,
WWR owed $400,000 to a nonaffiliated lender. The note matures in June 1997 and
is guaranteed by Walnut Capital Corp. ("Walnut") and the Kanter Family
Foundation (the "Kanter Foundation"). The Kanter Foundation and Walnut are
affiliated with Mr. Joel S. Kanter, who was a director of the Company until
February 1997. The Company, SISC and Consolidated have guaranteed the guarantee
obligations of the Kanter Foundation and Walnut.

Trinity, a subsidiary of Consolidated and an affiliate of SISC, has a
management services agreement with the Company pursuant to which the Company is
to pay Trinity $10,000 per month through March 2000, which monthly fee will
increase to $25,000 commencing with the month in which this Offering is
completed. Mr. Lewis S. Schiller, who is the chairman of the board and chief
executive officer of the Company, is the chief executive officer of SISC,
Consolidated and Trinity. However, Mr.
Schiller receives no cash compensation from the Company.

At September 30, 1996, Holdings owed former owners of its business
$138,000, which is due in installments through May 1997. This obligation was
incurred by Holdings in 1993 in connection with the purchase of the business. At
the time of the purchase, Holdings was owned by Mr. Joseph G. Sicinski,
president of the Company, and one other individual who is not affiliated with
the Company. See "Certain Transactions."

A portion of the proceeds of this Offering is being used to make
certain tax payments to the IRS. See "Use of Proceeds." To the extent that any
of such taxes are not paid by the Company, certain officers of the Company may
have personal liability with respect thereto.

8. Potential conflict of interest. Mr. Lewis S. Schiller,
chairman of the board and chief executive officer of the Company is chairman of
the board and chief executive officer of Consolidated. As a result of holding
such positions, Mr. Schiller is in a position to determine the terms and
conditions of any transactions between the Company and Consolidated, SISC and
the SISC Subsidiaries. In addition, Mr. Norman J. Hoskin, a director of the
Company, is also a director of Consolidated and certain subsidiaries of
Consolidated, and Mr. E. Gerald Kay, a director of the Company, is also a
director of certain subsidiaries of Consolidated. See "Risk Factors -- 7.
Substantial obligations to and from related parties; related party
transactions," "Risk Factors -- 14. Continued Control by SISC" and "Management
- -- Directors and Executive Officers."

9. Broad discretion as to use of proceeds; potential unspecified
acquisitions. Approximately $2.6 million, representing approximately 54.2% of
the net proceeds of this Offering, are allocated to working capital and other
corporate purposes. In addition, to the extent that any proceeds from this
Offering are not used to pay the Company's asset-based lender, such proceeds
will be used for working capital and other corporate purposes. Accordingly,
management will have broad discretion with respect to the expenditure of a
significant portion of the net proceeds of this Offering. Purchasers of the
Units offered hereby will be entrusting their funds to the Company's management,
upon whose judgment the investors must depend, with only limited information
concerning management's specific intentions. The Company may enter into joint
ventures, acquisitions or other arrangements, such as joint marketing
arrangements and licensing agreements, which the Company believes would further
the Company's growth and development. No assurance can be given that any such
agreements will result in additional revenue or net income for the Company.
Furthermore, investors may not have the opportunity to review the business or
financial statements of potential acquisition candidates or vote on any
acquisition. See "Use of Proceeds" and "Business -- Potential Business
Agreements."

10. Potential change in use of proceeds. Notwithstanding the
Company's plan to develop its business as described in this Prospectus, future
events, including the problems, expenses, difficulties, complications and delays
frequently encountered by businesses, as well as changes in the economic climate
or changes in government regulations, may make the reallocation of funds
necessary or desirable. Any such reallocation will be at the discretion of the
Board of Directors. Accordingly, in the event that the Company determines that
it is unable to develop a profitable business as described in this Prospectus,
the Company may engage in other, unrelated businesses and use a portion of the
proceeds of the Offering for such purpose. However, the Company has no such
intention at this time. No assurance can be given that any such businesses can
or will be profitably operated.

11. Dependence on management. The Company's business is dependent
upon its senior executive officers, principally Mr. Joseph G. Sicinski,
president, who is responsible for the Company's operations, including marketing
and business development. Mr. Sicinski has an employment agreement with the
Company pursuant to which he receives annual compensation at the rate of
$234,000, plus a bonus equal to 5% of the Company's consolidated income before
income taxes, but not more than 200% of his salary. The loss of service of Mr.
Sicinski or other key management employees would have a material adverse effect
upon the Company's business and prospects. The Company does has $500,000 of key
man life insurance on Mr. Sicinski's life.

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<PAGE>

12. Competition. The business of providing employees on either a
permanent or temporary basis is highly competitive and is typically local in
nature. The Company competes with numerous technical service organizations, a
number of which are better capitalized, better known, have more extensive
industry contracts and conduct extensive advertising campaigns aimed at both
employers and job applicants. No assurance can be given as to the ability of the
Company to expand its client base into other industries. See "Business --
Competition."

13. Need to attract qualified personnel. The ability of the
Company to generate revenues is dependent upon both its ability to obtain
contracts with clients and to provide its clients with qualified employees. The
market for qualified personnel is highly competitive, and the Company competes
with other companies in obtaining contracts with potential clients and in
attracting employees. See "Business -- Competition."

14. Continued control by SISC. As of December 31, 1996, SISC and
Mr. Lewis S. Schiller beneficially owned 48.9% and 5.0% of the Company's
outstanding Common Stock, respectively. SISC is a wholly-owned subsidiary of
Consolidated, and Mr. Schiller is chief executive officer of the Company, SISC
and Consolidated. Furthermore, SISC holds presently exercisable warrants to
purchase 2,550,000 shares of Common Stock at $1.25 per share and 267,500 shares
of Common Stock at $3.50 per share, and Mr. Schiller holds presently exercisable
warrants to purchase 250,000 shares of Common Stock at $1.25 per share and
47,500 shares of Common Stock at $3.50 per share and options to purchase 5,000
shares of Common Stock at $1.03 per share and 150,000 shares of Common Stock at
$1.125 per share. After including the shares of Common Stock issuable upon
exercise of such warrants and options, SISC and Mr. Schiller beneficially own in
the aggregate, 59.7% of the Common Stock. As a result, Mr. Schiller, as chief
executive officer of SISC and the Company, has the power to elect all of the
Company's directors and approve any matter requiring stockholder approval as
well as to determine the terms of any agreements between the Company, on the one
hand, and SISC, Consolidated and their subsidiaries and affiliates, on the other
hand. See "Principal Stockholders."

15. Possible delisting from The Nasdaq System and market
illiquidity. The Company's Common Stock and 1994 Warrants are, and the Units,
Series G Preferred Stock and Warrants are expected to be, included in The Nasdaq
SmallCap Market. For continued inclusion on The Nasdaq SmallCap Market, (i) the
Company will have to maintain at least $2,000,000 in total assets and $1,000,000
in capital and surplus, (ii) the minimum bid price of the Common Stock will have
to be $1.00 per share, (iii) there must be at least 100,000 shares in the public
float valued at $1,000,000 or more, (iv) the Common Stock must have at least two
active market makers, and (v) the Common Stock must be held by at least 300
holders. In addition, the Company may be required to maintain a stock price of
at least $1.00 per share. Nasdaq has recently announced proposed changes which
make the criteria for continued inclusion in the Nasdaq SmallCap Market
stricter. If the Company is unable to satisfy Nasdaq's requirements for
continued listing, such securities may be delisted from The Nasdaq SmallCap
Market. In such event, trading, if any, in such securities would thereafter be
conducted in the over-the-counter market in the so-called "pink sheets" or the
Nasdaq's "Electronic Bulletin Board." Consequently, the liquidity of the
Company's securities could be impaired, not only in the number of securities
which could be bought and sold, but also through delays in the timing of
transactions, reduction in security analysts' and the news media's coverage of
the Company, and lower prices for the Company's securities than might otherwise
be attained.

A significant number of the Units may be sold to customers of the
Underwriters. Such customers may subsequently engage in the sale or purchase of
the securities through or with the Underwriters. Although they have no
obligation to do so, the Underwriters may become market makers and otherwise
effect transactions in securities of the Company, and, if they participate in
such market, may be dominating influences in the trading of the securities. The
prices and the liquidity of the securities may be significantly affected by the
degree, if any, of the participation of the Underwriters in such market, should
a market arise.

16. Risks of low-priced stocks; penny stock regulations. If the
Company's securities were delisted from The Nasdaq SmallCap Market (See "Risk
Factors -- 15. Possible delisting of securities from The Nasdaq System and
market illiquidity") they may become subject to Rule 15g-9 under the 1934 Act,
which imposes additional sales practice requirements on broker-dealers which
sell such securities to persons other than established customers and
institutional accredited investors. For transactions covered by this rule, a
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. Consequently, the rule may affect the ability of broker-dealers to sell
the Company's Common Stock and Warrants and may affect the ability of purchasers
in this Offering to sell any of the Common Stock or Warrants acquired pursuant
to this Prospectus in the secondary market.

The Commission's regulations define a "penny stock" to be any equity
security that has a market price (as therein defined) less than $5.00 per share
or with an exercise price of less than $5.00 per share, subject to certain
exceptions. The penny stock restrictions will not apply to the Company's Common
Stock, Units, Preferred Stock and Warrants if the Common Stock is listed on The
Nasdaq SmallCap Market and has certain price and volume information provided on
a current and continuing basis or meet certain minimum net tangible assets or
average revenue criteria. There can be no assurance that the Company's
securities will

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<PAGE>

continue to qualify for exemption from these restrictions. If the Company's
securities were subject to the rules on penny stocks, the market liquidity for
the Common Stock or Warrants could be materially adversely affected.

17. Potential adverse effect of redemption of Warrants. Commencing
one year from the date of this Prospectus, or earlier with the consent of the
Representative, the Warrants may be redeemed by the Company at a redemption
price of $.05 per Warrant upon not more than 60 nor less than 30 days' notice if
the average closing price per share of the Common Stock is at least $4.00
subject to adjustment, during 20 trading days ending not earlier than 15 days
prior to the date of the Warrants are called for redemption. Redemption of the
Warrants could force the holders to exercise the Warrants and pay the exercise
price therefor at a time when it may be disadvantageous for the holder to do so,
to sell the Warrants at the then current market price when they might otherwise
wish to hold the Warrants, or to accept the redemption price, which, at the time
the Warrants are called for redemption, is likely to be substantially less than
the market value of the Warrants. The Company will not call the Warrants for
redemption except pursuant to a currently effective prospectus and registration
statement. See "Description of Securities --Series E Redeemable Common Stock
Purchase Warrants."

18. Current prospectus and state registration required to exercise
Warrants. Holders of the Warrants will only be able to exercise the Warrants if
(a) a current prospectus under the Securities Act relating to the shares of
Common Stock issuable upon exercise of the Warrants is then in effect and (b)
such securities are qualified for sale or exemption from qualification under the
applicable securities laws of the states in which the various holders of
Warrants reside. Although the Company has undertaken to use its best efforts to
maintain the effectiveness of a current prospectus covering the Common Stock
underlying the Warrants, and may not call the Warrants for redemption unless
there is a current and effective registration statement covering the issuance of
the Common Stock upon exercise of the Warrants, there can be no assurance that
the Company will be able to do so. Pursuant to Section 10(a)(3) of the
Securities Act, this Prospectus, unless amended or supplemented in accordance
with the rules and regulations of the Commission pursuant to the Securities Act,
may not be used by the Company in connection with the exercise of any Warrants
subsequent to nine months from the date of this Prospectus. Prior to the
expiration of nine months from the date of this Prospectus, it may be necessary
to amend or supplement this Prospectus under certain conditions, in which event
the Warrants could not be exercised prior to the date of the amended Prospectus
or supplement. Unless there is an effective and current registration statement
covering the issuance of the Common Stock upon exercise of the Warrants, the
Company will not accept payment for, or issue Common Stock with respect to, the
exercise of any Warrants, and any payments made by a Warrant holder will be
returned by the Company. The value of the Warrants may be greatly reduced if a
current prospectus covering the Common Stock issuable upon the exercise of the
Warrants is not kept effective or if such securities are not qualified or exempt
from qualification in the states in which the holders of Warrants reside. See
"Description of Securities -- Series E Redeemable Common Stock Purchase
Warrants."

The Company has registered or qualified the Warrants for sale in a
limited number of states. Although the Company is not aware of any states which
prohibit the registration or qualification of securities of the type offered by
the Company and anticipates that it will qualify for available after-market
exemptions in a majority of states within several months after the completion of
the Offering, there can be no assurance that an exception permitting the
exercise of the Warrants will be available in any jurisdiction other than in
those states which the Common Stock and Warrants were initially registered or
are exempt from registration at the time a holder seeks to exercise Warrants.

19. Arbitrary offering price and terms. The price and composition
of the Units, the conversion rate and other terms of the Series G Preferred
Stock and the exercise price and other terms of the Warrants have been
determined by negotiation between the Company and the Representative and do not
necessarily bear any relation to the results of the Company's operations or its
financial condition or any other indicia of value.

20. No Common Stock dividends anticipated. The Company presently
intends to retain future earnings, if any, in order to provide funds for use in
the operation and expansion of its business and, accordingly, does not
anticipate paying cash dividends on its Common Stock in the foreseeable future.
The annual dividend requirement of the Series G Preferred Stock is $90,000,
which are payable in cash or in shares of Common Stock, as the board of
directors may determine. If the Over-Allotment Option and the Representative's
Unit Purchase Option are exercised, the annual dividend on the Series G
Preferred Stock will be $150,000.

21. Shares eligible for future sale; shares issuable pursuant to
warrants, options and preferred stock; registration rights. Approximately
9,400,000 of the 22,886,331 shares of Common Stock outstanding at December 31,
1996, may be publicly sold as a result of either the registration of such shares
as part of the Company's initial public offering in February 1994, the
expiration of the two-year holding period pursuant to Rule 144 of the Commission
or the expiration of the restricted period pursuant to Regulation S of the
Commission. The remaining shares become eligible for sale pursuant to Rule 144
of the Commission two years after the date of issuance by the Company or the
date of transfer by an affiliate of the Company. Such

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<PAGE>

share will become eligible for sale pursuant to Rule 144 in May 1997, as to
3,091,782 shares, June 1997 as to 108,000 shares, September 1997 as to 954,000
shares and April 1998 as to 10,393,000 shares. SISC and the Company's directors
and executive officers have agreed to a 24-month lockup during which they may
not sell their shares without the prior approval of the Representative.

As of December 31, 1996, the Company had (a) outstanding 1994 Warrants
to purchase 567,245 shares of Common Stock at $7.00 per share through November
1996, which warrants are publicly traded, (b) warrants to purchase an aggregate
of 1,302,352 shares of Common Stock at exercise prices ranging from $2.00 to
$7.00 per share with various expiration dates, and (c) warrants to purchase
4,900,000 shares of Common Stock at $.50 per share through April 2001, which are
held by SISC and the Company's directors. In addition, the underwriter of the
Company's initial public offering holds unit purchase options to purchase 55,000
of the units issued in the Company's initial public offering in February 1994,
at $8.45 per unit through February 1999. Each such unit consisted of one share
of the Company Common Stock and a warrant to purchase one share of the Company
Common Stock at $7.00 per share through February 1997, after giving effect to
extensions from the original maturity date of February 1996.

The Company has adopted three stock option plans pursuant to which a
maximum of 2,792,332 shares of the Common Stock may be issued, of which options
to purchase 1,523,950 shares are outstanding.

The Company cannot predict the effect, if any, that the issuance of
shares of Common Stock upon exercise of options or warrants or the registration
of such shares will have on the market for and market price of the Common Stock.

22. Potential adverse impact of Preferred Stock on rights of
holders of Common Stock. The Company's certificate of incorporation authorizes
the issuance of so-called "blank check" preferred stock with the board of
directors having the right to determine the designations, rights, preferences
and privileges of the holders of one or more series of Preferred Stock.
Accordingly, the board of directors is empowered, without stockholder approval,
to issue Preferred Stock with voting, dividend, conversion, liquidation or other
rights which could adversely affect the voting power and equity interest of the
holders of Common Stock. The board of directors has in the past issued shares of
Preferred Stock with the right to vote more than one vote per share. The
Preferred Stock could be utilized as a method of discouraging, delaying or
preventing a change of control of the Company. The possible impact on takeover
attempts could adversely affect the price of the Company Stock. Although the
Company has no present intention to issue any additional shares of Preferred
Stock or to create any additional series of Preferred Stock, the Company may
issue such shares in the future.

23. No public market. Prior to this Offering, there has been no
public trading market for the Units, Series G Preferred Stock or Warrants.
Although the Common Stock and 1994 Warrants are listed on The Nasdaq SmallCap
Market and the Company has applied to have the Units, Series G Preferred Stock
and Warrants included in The Nasdaq SmallCap Market, there can be no assurance
that an active market in any of such securities will develop or, if such a
market develops, that it will be sustained.

24. Dilution. Assuming conversion of all of the Series G Preferred
Stock, without allocating any value to the Warrants, purchasers of the Units
will incur dilution in the net tangible book value per share of Common Stock of
$1.21, or 80.7%, from the initial public offering price of $1.50 per share,
based on the conversion rate of four shares of Common Stock for each share of
Series G Preferred Stock.

MARKET FOR COMMON STOCK; DIVIDENDS

The Company's securities have been traded on The Nasdaq SmallCap Market
since the Company's initial public offering on February 15, 1994, pursuant to
which the Company sold units (the "1994 Units"), each 1994 Unit consisting of
one share of Common Stock and one 1994 Warrant. The Common Stock and 1994
Warrants have been traded on The Nasdaq SmallCap Market since September 22,
1994. From July 28, 1994, when the Units were split into their individual
components and trading of the Common Stock and 1994 Warrants commenced on The
Nasdaq SmallCap Market, the symbols for the Common Stock and 1994 Warrants were
"CTGI" and "CTGIW," respectively. Effective on September 21, 1995, the trading
symbols were changed to "TGSI" and "TGSIW," respectively.

- 13 -
<PAGE>

The high and low closing bid prices for the Company's Common Stock and
1994 Warrants since September 1994, when the trading in 1994 Units terminated
and trading in the Common Stock and 1994 Warrants commenced are as follows:

Common Stock 1994 Warrants
High Low High Low
1994
Third Quarter
(from September 22) $5-7/8 $4-5/8 $1-1/4 $5/8
Fourth Quarter 5-3/4 3-1/8 1-3/8 1/2
1995
First Quarter 3-7/8 2 1 3/8
Second Quarter 4-3/4 3-1/2 7/8 5/8
Third Quarter 4-1/4 2-1/8 15/16 5/16
Fourth Quarter 3-1/2 1-3/8 1/2 11/32
1996
First Quarter 1-11/16 15/16 15/32 3/16
Second Quarter 1-3/4 1-7/32 1/2 5/16
Third Quarter 1-31/32 1-3/8 11/32 7/32
Fourth Quarter 2-1/4 1-7/16 7/32 5/32
1997
First Quarter
(through January 28) 2-1/16 1-1/4 7/32 1/8

The closing bid prices for the Common Stock and 1994 Warrants on
January 28, 1997 were $2-1/16 and $.125, respectively. These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.

As of December 31, 1996, the Company believes that there were
approximately 1,300 beneficial holders of the Common Stock.

The Company has paid no dividends on its Common Stock since inception,
and does not expect to pay any dividends for the foreseeable future. See
"Description of Securities -- Series G Preferred Stock" in connection with
dividends payable with respect to the Series G Preferred Stock.

USE OF PROCEEDS

The Company intends to utilize the net proceeds from the sale of the
Units issued pursuant to this Prospectus, estimated at approximately $4.8
million (assuming the Underwriters' over-allotment option is not exercised),
substantially as follows:

(a) Approximately $1.1 million (22.9% of the net proceeds) to
reduce the Company's obligations to its asset-based lender.(1)

(b) Approximately $1.1 million (22.9%) to prepay the Company's
obligations to the IRS and the DOL.(2)

(c) The balance of approximately $2.6 million (54.2%) for working
capital and other general corporate purposes.
- ------------
(1) At December 31, 1996, the Company owed its asset-based lender
approximately $3.6 million. Pursuant to a January 1997 amendment to the
Company's agreement with its asset-based lender, the Company's
borrowing availability will be reduced to $3.0 million on April 1, 1997
or earlier at the request of the Company. The Company is seeking
alternative financing sources. In the event that the Company obtains
such financing on reasonable terms, all or a portion of the proceeds
allocated to pay the asset-based lender may be used for working capital
and other corporate purposes.

(2) Pursuant to the Company's agreement with the IRS, the Company is to pay
the $1.5 million plus interest in eight monthly installments of
$150,000, commencing in September 1996, and a final installment of
$300,000 in May 1997. As of January 15, 1997, the amount due to the IRS
was approximately $800,000. The Company intends to prepay all or a
portion of its obligations to the IRS from the proceeds of this
Offering. However, the Company reserves the right to pay

- 14 -
<PAGE>

the IRS in accordance with its agreement, in which event the proceeds
allocated to the prepayment of the Company's obligations to the IRS, to
the extent not so used, will be used for working capital and other
corporate purposes. Pursuant to a proposed agreement with the DOL, the
Company is to pay the DOL $300,000 from the proceeds of this Offering.
The total amount due to the IRS and the DOL as of January 31, 1997 is
approximately $1.1 million.

The foregoing represents the Company's best estimate of its allocation
of the proceeds of this Offering based upon the present state of its business,
operations and plans, current business conditions and the Company's evaluation
of the market for the Company's services. Management will have broad discretion
to determine the use of a substantial portion of the proceeds of this Offering,
and conditions may develop which could cause management to reallocate proceeds
from the categories listed above, including difficulties encountered in
marketing its services. Furthermore, future events, including the problems,
expenses, difficulties, complications and delays frequently encountered by
businesses and those described under "Risk Factors," as well as changes in the
economic climate and changes or anticipated changes in government regulations,
may make the reallocation of funds necessary or desirable. Any such reallocation
will be at the discretion of the board of directors. Furthermore, in the event
that the Company determines that it is unable to develop a profitable business
as described in this Prospectus, the Company may use the proceeds from this
Offering to engage in other unrelated businesses, although it has no such
intention at this time.

The Company believes that the net proceeds from this Offering will be
sufficient to satisfy the Company's cash requirements for at least twelve months
following the date of this Prospectus. However, it is possible that conditions
may arise as a result of which the Company may require additional capital prior
to one year from the date of this Prospectus, and no assurance can be given that
the Company will be able to obtain any or adequate funds when required or that
any funds available to it will be on reasonable terms. The failure to obtain
necessary funds could result in the reduction or cessation of operations by the
Company.

The Company may use a portion of the proceeds of this Offering in
connection with acquisitions, joint ventures or other arrangements, which
management deems necessary or desirable in connection with the development of
the Company's business and related activities. The Company has not entered into
any letters of intent or agreements with respect to any such arrangements or
transactions. However, to the extent that the Company negotiates such a
transaction which requires payment of cash, the Company will use a portion of
the proceeds allocated to working capital and other corporate purposes to make
such acquisition. In this connection, the Company may reallocate all or a
portion of the proceeds allocated to payment of the Company's asset-based lender
and the prepayment of the Company's obligations to the IRS. "Business --
Potential Business Agreements."

Pending the application of the funds as described above, said funds
will be invested in short-term interest-bearing deposits and securities.

- 15 -
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1996 and as adjusted to reflect (a) the sale of the 1,000,000
Units offered hereby and the application of a portion of the proceeds from this
Offering to pay short-term debt and (b) the issuance subsequent to September 30,
1996 of 10,000,000 shares of Common Stock upon the conversion of Series F
Preferred Stock.
<TABLE>
<CAPTION>
September 30, 1996
Actual As Adjusted
(Dollars in thousands)
<S> <C> <C>
Short-term debt:
Loan payable -- asset-based lender(1) $ 3,565 $ 2,465
Other notes payable(2) 138 138
------- -------
$ 3,703 $ 2,603
======= =======
Stockholders' equity:
Preferred Stock, par value $.01 per share, 3,000,000 shares authorized(3) of
which:
10,000 shares are issued, outstanding and designated as Series F Preferred
Stock(4), none outstanding as adjusted -- --
1,250,000 shares are designated as Series G Convertible Redeemable
Preferred Stock, none issued or outstanding, 1,000,000 shares
outstanding, as adjusted(5) -- --
Common Stock, par value $.01 per share, 20,000,000 shares authorized3, 129 229
12,851,331 shares issued and outstanding and 22,851,331 shares
outstanding as adjusted(6)
Capital in excess of par 7 12,814 17,564
Accumulated deficit (5,876) (5,876)
Deferred compensation fee (339) (339)
------- --------
Stockholders' equity $ 6,728 $11,578
------- =======
- ------------
</TABLE>

(1) The Company's loan from its asset-based lender bears interest at prime
plus 2%. In addition, the Company pays a fee of .3% of the face amount
of all invoices financed, regardless of the amount borrowed against the
invoice. See Note 2 of Notes to Trans Global Services, Inc.
Consolidated Financial Statements.

(2) See Note 8 of Notes to Trans Global Services, Inc. Consolidated
Financial Statements.

(3) In November 1996, the Company's certificate of incorporation was
amended to increase the authorized capital stock to 20,000,000 shares
of Preferred Stock and 50,000,000 shares of Common Stock.

(4) The liquidation preference of the Series F Preferred Stock is $1 per
share, or an aggregate of $10,000. Subsequent to September 30, 1996,
all of the shares of Series F Preferred Stock were converted into an
aggregate of 10,000,000 shares of Common Stock.

(5) The liquidation preference of the Series G Preferred Stock is $6.00 per
share. The Series G Preferred Stock is redeemable at $6.00 per share.
See "Description of Capital Stock -- Series G Preferred Stock" for
information concerning the rights, preferences and privileges of the
holders of the Series G Preferred Stock.

(6) Does not include an aggregate of 10,184,174 shares of Common Stock
reserved as follows: (a) 2,792,332 shares issuable pursuant to the
Company's stock option plans, of which stock options to purchase
1,434,100 shares are outstanding, (b) 567,245 shares of Common Stock
issuable pursuant to the 1994 Warrants, and (c) 6,257,352 shares of
Common Stock issuable upon exercise of the Other Warrants. The number
of reserved shares of Common Stock does not include any shares of
Common Stock issuable upon conversion of the Series G Preferred Stock,
or the exercise of the Warrants, the Underwriters' over-allotment
option or Unit Purchase Options or the securities underlying the Unit
Purchase Options.
See "Certain Transactions," "Description of Securities" and "Underwriting."

- 16 -

<PAGE>

(7) Includes $751 at June 30, 1996 and $4,850, as adjusted, relating to the
Preferred Stock.

See "Business -- Property" and Note 10 of Notes to Trans Global
Services, Inc. Consolidated Financial Statements for information concerning the
Company's long-term lease obligations.

TRANS GLOBAL SERVICES, INC.
SELECTED FINANCIAL DATA
(In thousands, except per share amounts)

Set forth below is selected financial data with respect to the Company
for the nine months ended September 30, 1996 and 1995 and the years ended
December 31, 1995 and 1994. The selected financial data has been derived from
the financial statements which appear elsewhere in this Prospectus. The
unaudited financial data for the interim periods reflect, in the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the data for such periods. The results of operations
for the interim periods are not necessarily indicative of operating results for
the entire year. This data should be read in conjunction with the financial
statements of the Company and the related notes which are included elsewhere in
this Prospectus.

Statement of Operations Data(1):
<TABLE>
<CAPTION>
Nine months ended September 30, Year Ended December 31,
1996 1995 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $45,380 $48,172 $63,152 $25,287
Net (loss) from continuing operations (770) (1,784) (4,413) (411)
Net (loss) (770) (1,872) (4,696) (411)
Net (loss) per share of Common Stock (.09) (.72) (1.48) (.68)
Weighted average number of shares of
Common Stock outstanding 8,525 2,592 3,173 600
Ratio of earnings to fixed charges (2) (2) (2) (2)
</TABLE>

Balance Sheet Data:

December 31,
September 30, 1996 1995 1994
------------------ ---- ----
Working capital (deficiency) $(751) $(2,401) $(1,805)
Total assets 14,604 12,763 10,345
Total liabilities 7,876 8,511 9,033
Accumulated deficit (5,876) (5,106) (411)
Stockholders' equity(3) 6,728 4,252 1,312

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

(1) Statement of operations data includes the operations of RMI commencing
November 22, 1994.

(2) Earnings during this period were insufficient to cover combined fixed
charges and Preferred Stock dividends. The dollar amounts of the
coverage deficiencies were as follows: $860, 1,874, $4,503 and $501 for
the nine months ended September 30, 1996 and 1995 and the years ended
December 31, 1995 and 1994.

(3) Stockholders' equity includes $751 additional paid-in capital relating
to Preferred Stock.

- 17 -
<PAGE>

TRANS GLOBAL SERVICES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION

Results of Operations

The following information relates to the business of the Company and
TGS for the periods covered. The only business conducted by the Company is the
technical temporary staffing services business, which was conducted by TGS and
its affiliated companies prior to the completion of the Trans Global
Transaction. The business conducted by the Company prior to the Trans Global
Transaction is no longer conducted by the Company and is treated as discontinued
operations. References to the Company operations prior to January 1995, when the
Company was organized, relate to the operations of Avionics and RMI as
subsidiaries of SISC.

Nine months ended September 30, 1996 and 1995

Revenue from technical temporary staffing services is based on the
hourly cost of payroll plus a percentage. The success of the Company's business
will be dependent upon its ability to generate sufficient revenues to enable it
to cover its fixed costs and other operating expenses, and to reduce its
variable costs, principally its interest. Under its agreements with its clients,
the Company is required to pay its employees and pay all applicable Federal and
state withholding and payroll taxes prior to receipt of payment from the
clients. Furthermore, the Company's payments from its clients are based upon the
hourly rate paid to the employee, without regard to when payroll taxes are
payable with respect to the employee. Accordingly, the Company's cost of
services are greater during the first part of the year, when Federal Social
Security taxes and state unemployment and related taxes, which are based on a
specific level of compensation, are due. Thus, until the Company satisfies its
payroll tax obligations, it will have a lower gross margin than after such
obligations are satisfied. Furthermore, to the extent that the Company
experiences turnover in employees, its gross margin will be adversely affected.
For example, in 1996, Social Security taxes are payable on the first $62,700 of
compensation. Once that level of compensation is paid with respect to any
employee, there is no further requirement for the Company to pay Social Security
tax for such employee. Since most of the Company's employees receive
compensation in excess of that amount, the Company's costs with respect to any
employee are significantly higher during the period when it is required to pay
Social Security taxes than it is after such taxes have been paid.

For the nine months ended September 30, 1996 (the "September 1996
period"), the Company had revenues of $45.4 million reflecting a 5.8% decrease
from the revenue of $48.2 million during the nine months ended September 30,
1995 (the "September 1995 period"). This decrease is attributed to the loss of a
contract on January 1, 1996, from one of the Company's larger customers in the
aerospace industry. By September 30, 1996, the Company had increased its revenue
base so that, at such date, the annual rate of revenue was substantially the
same as it was prior to the loss of the customer. During the September 1996
period, 50.9% of the Company's revenue was derived from three clients and 63.3%
of such revenue was derived from five clients. See "Business -- Markets and
Marketing." The Company's gross margin for the September 1996 period was 8.4%,
as compared to 6.0% for the September 1995 period. The increase reflects a
higher gross margin on the new contracts entered into by the Company as compared
with the lower gross margin on the contract that was lost.

Selling, general and administrative expenses were approximately $3.5
million, or 7.7% of revenue, for the September 1996 period and $2.9 million, or
6.0% of revenue, for the September 1995 period. This percentage increase is
primarily attributed to penalties of $550,000 for late withholding tax payments.
In addition, the increase in selling, general and administrative expenses, as a
percent of revenue, reflects the 5.8% decline in revenue.

The Company finances its payroll obligations by borrowing from a
non-affiliated asset-based lender at an interest rate of 2% in excess of prime.
The Company also pays a fee of .30% of the face amount of the invoices financed,
regardless of the amount borrowed against the invoice. This reflects a reduction
in the financing charges resulting from a June 1995 amendment to its borrowing
agreement. Prior to the amendment, the Company paid interest at a rate of 4% in
excess of prime and a fee of 1% of its borrowings relating to RMI's operations.
Pursuant to a January 1997 amendment to the Company's agreement with its
asset-based lender, on April 1, 1997 or earlier at the request of the Company,
the borrowing availability will be reduced to $3.0 million and the Company will
pay a fixed monthly fee of $10,500 to the asset-based lender. The fee will be
subject to increases to the extent that receivables in any month exceed $10.0
million. The interest rate of 2% in excess of prime will not be affected by the
amendment. The borrowings are secured by a security interest in all of the
Company's assets. At September 30, 1996 and December 31, 1996, such borrowings
were $3.6 million. The ability of the Company to operate profitably is dependent
in part upon its ability to reduce its financing costs. The interest rates
(exclusive of the fee) payable by the Company at September 30, 1996 and 1995 was
10.25%. During the September 1996 period, the interest expense was approximately
$500,000, as compared

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<PAGE>

to $740,000 for the September 1995 period, reflecting a decrease of 31%, which
reflects the reduced borrowing rates which were effective in June 1995.

During the September 1996 period, the Company established a $300,000
reserve in connection with the claim by the DOL arising from the acquisition of
Job Shop assets, which is reflected on the Consolidated Statements of Operations
as a contingency reserve. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

The Company has not provided for income taxes for the September 1996
period due to a current period loss. Federal and state tax benefits have not
been recognized for the September 1996 period since, under SFAS No. 109,
"Accounting for Income Taxes," the Company has determined that more likely than
not the deferred tax asset will not be realized.

Years Ended December 31, 1995 and 1994

For the year ended December 31, 1995, the Company had revenues of $63.2
million, reflecting a 150% increase in revenue from the revenue of $25.3 million
during 1994. During 1994, the Company's operations consisted of Avionics for the
entire year and RMI from November 22, 1994, the date of the acquisition of Job
Shop assets. The increase in revenue in 1995 reflected the inclusion of the
operations of RMI for the entire year, as well as an increase in revenue from
Avionics' clients resulting from its increased marketing effort. The increase in
costs of sales from $23.7 million for 1994 to $59.2 million for 1995 also
reflects the inclusion of the operations of RMI. The gross margin was 6.3% for
both 1995 and 1994.

Selling, general and administrative expenses increased by 540% from
$1.0 million for 1994 to $6.4 million for 1995. This increase reflects a number
of factors, including (i) $2.3 million from the issuance of securities for
consulting services, (ii) $2.0 million managing expenses relating to the
operations of RMI; and (iii) $1.0 million of penalties resulting from late
withholding tax payments. Although the Company has been taking steps to reduce
overhead, it is possible that selling, general and administrative expenses may
continue at modestly reduced levels for the short-term future. In 1994, selling,
general and administrative expenses reflected a $159,000 credit resulting from
the refund of a withholding tax penalty previously paid by the Company.

During 1995, the Company also incurred approximately $528,000 of
acquisition expenses reflecting the value of securities issued in connection
with the Trans Global Transaction. The acquisition expenses reflect the value of
Common Stock issued to a finder in connection with the Trans Global Transaction
and in consideration of agreements by certain of the Company's stockholders to
enter into lock-up agreements. The delivery of such shares of Common Stock was
deferred until after the Company's certificate of incorporation was amended to
increase its authorized Common Stock. See Note 14 of Notes to Trans Global
Services, Inc. Consolidated Financial Statements.

Amortization of customer lists and other intangible assets increased by
47% during 1995 from $309,000 to $455,000, reflecting the increased amortization
resulting from the November 1994 acquisition of Job Shop assets. During 1994,
the amortization related primarily to the December 1993 acquisition of Avionics.

The Company incurred an operating loss for 1995 of $3.4 million,
compared with operating income of $277,000 for 1994. The increase in the loss
reflects (i) the substantial increase in selling, general and administrative
expenses, (ii) the acquisition expenses relating to the Trans Global Transaction
and (iii) the increased amortization of intangibles.

The Company's interest expense reflects principally its obligations due
to its asset-based lender. In June 1995, the Company effected a reduction in the
financing costs under its agreement with its asset-based lender for borrows by
RMI. The interest rate (exclusive of the fee) payable by the Company at December
31, 1995 was 10.25%. In 1995, the average outstanding borrows increased 147%
from $1.5 million to $3.7 million. The increase in outstanding borrows reflected
the inclusion of the operations of RMI for the entire year in 1995. As a result,
although the Company was able to reduce its finance rates from 1994 to 1995,
finance costs increased 38.4% from $696,000 for 1994 to $963,000 for 1995.

As a result of the foregoing, the Company sustained a loss from
continuing operations of $4.4 million, or $1.39 per share, for 1995 as compared
with a loss of $411,000, or $.68 per share, for 1994.

At September 30, 1995, the Company disposed of WWR, which operated its
loudspeaker business. Such business is reflected as a discontinued operation.
This operation generated a loss of approximately $25,000 for 1995. After giving
effect to the loss from discontinued operations, the Company's net loss for 1995
was $4.7 million, or $1.44 per share.

- 19 -
<PAGE>

Years Ended December 31, 1994 and 1993

The results of operations for the Company for 1994 reflect the
operations of Avionics for the entire year and the operations of RMI from
November 22, 1994, when RMI acquired assets of Job Shop. Avionics was acquired
in December 1993. RMI acquired assets of Job Shop, including its customer list,
in exchange for 750,000 shares of common stock of Consolidated, the sole
stockholder of SISC, and the payment of certain of Job Shop's obligations to the
IRS pursuant to a settlement agreement with the IRS.

The Company has sustained losses since its organization. Although the
Company had an operating profit of $277,000 on revenue of $25.3 million for the
year ended December 31, 1994, it shows a loss of $411,000 for the year
principally as a result of interest expense of $696,000. Selling, general and
administrative expenses in 1994 were affected by a credit of $159,000
representing a refund of a tax penalty previously paid. Net income was also
affected by the amortization of intangibles of $309,000, a significant portion
resulted from the November 1994 acquisition of Job Shop assets.

The operations of Job Shop from January 1, 1994 to November 22, 1994
showed an operating profit of $206,000 and a net loss of $1.9 million on revenue
of $39.5 million. Job Shop's interest expense for the period was $871,000.

During 1994, the Company financed its payroll obligations by borrowing
from an asset-based lender at interest rates of 2% and 4% in excess of prime.
The Company also paid a fee of .33% and 1.0% of the face amount of the invoices
financed, regardless of the amount borrowed against the invoice. At December 31,
1994, such borrows were $4.0 million, which was the maximum available under its
borrowing formula. The interest rates payable by the Company at December 31,
1994 were 9.65% as to $1.5 million and 11.65% as to $2.5 million. The combined
interest expense for the Company and Job Shop during 1994 was approximately $1.6
million.

Liquidity and Capital Resources

As of September 30, 1996, the Company had a working capital deficiency
of $751,000. Its working capital deficiency reflects (a) $3.6 million due to the
Company's asset-based lender, (b) payroll taxes and related expenses of $3.1
million, and (c) accounts payable and accrued expenses of $1.1 million.

At September 30, 1996, the Company required additional capital to
enable it to expand its operations. The principal source of funds, other than
its asset-based lender, is from the sale of securities. In July 1996, the
Company raised $2 million from the sale of Common Stock and used such funds
principally to pay tax obligations.

At September 30, 1996 and December 31, 1996, the Company owed
approximately $3.6 million to its asset-based lender. The Company had been
advised that, as a result of a change in its general lending policies, the
asset-based lender was to reduce the Company's maximum borrowing availability to
$1 million, effective in late October 1996, which date had been orally extended
until January 1997. In January 1997, the asset-based lender agreed to an
amendment to its agreement with the Company pursuant to which, at April 30,
1997, or earlier at the request of the Company, the borrowing availability will
be reduced to $3.0 million. The amendment also provides for a reduction in the
monthly fee payable to the asset-based lender. Although the Company is seeking
alternative financing sources, no assurance can be given that the Company can or
will be able to obtain an alternate financing source, the failure of which could
have a material adverse effect upon the Company.

The Company and its subsidiaries have certain outstanding notes. One of
these notes, issued by WWR in the amount of $400,000, is guaranteed by SISC and
certain entities which are affiliated with a director of the Company. The
Company has guaranteed the guarantee obligations of certain of such entities.
The Company's obligation on its guarantee continues notwithstanding the sale of
WWR to an affiliate of SISC in September 1995. See "Certain Transactions."

In November 1994, RMI purchased assets of Job Shop. The DOL has raised
with the Company the possibility that RMI may be liable with respect to Job
Shop's ERISA liability as a successor corporation or purchaser of plan assets,
even though RMI did not assume such obligations and paid value of those assets
which it did purchase. At November 22, 1994, the date of the purchase of the Job
Shop assets, the amount due to the Job Shop 401(k) plan was approximately $3.0
million, which amount may have increases since such date as a result of interest
and penalties. Although the Company believes that RMI is not a successor
corporation to Job Shop and is not responsible for Job Shop's ERISA violations,
the DOL may take a contrary position. The Company and the DOL are currently
engaged in discussions. If an agreement cannot be reached by the parties
involved and the DOL prevails in court, it could have a material adverse effect
upon the operations of RMI and possibly the Company as a whole. At September 30,
1996, the Company had reserved $300,000 with respect to the claim by the DOL,
which management believed to be the maximum range of recovery by the DOL;
however, no assurance can be given that such reserve will be adequate. The

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<PAGE>

Company has a proposed agreement with the DOL providing for the payment to the
DOL of $300,000 from the proceeds of this Offering.

In May 1991, prior to the acquisition of Avionics by the Company, the
Government Printing Office wrote Avionics asking for reimbursement of
approximately $300,000 for allegedly unauthorized work on two programs. Although
the Company believes that these claims are without merit and intends to contest
these claims vigorously if reasserted, it believes that the ultimate disposition
of this matter will not have a material adverse affect on the Company's
consolidated financial position.

In August 1996, the Company entered into an agreement with the IRS to
pay its delinquent payroll taxes, interest and penalties. The Company paid $1.3
million and has agreed to pay the balance in eight equal monthly installments of
$150,000, commencing in September 1996, with the remaining balance of $300,000
to be paid in May 1997. The IRS has agreed to subordinate its lien to the lien
of the Company's asset-based lender provided that the Company is in compliance
with current IRS regulations concerning the timely deposit of Federal employment
and withholding taxes. At September 30, 1996, the Company owed the IRS $1.35
million pursuant to its agreement with the IRS, and the Company was current in
its withholding tax obligations.

BUSINESS

Since May 1995, the Company's principal business has been technical
temporary staffing service. In performing such services, the Company, through
its two wholly-owned subsidiaries, Holdings and RMI, addresses the current trend
of major corporations in "downsizing" and "outsourcing" by providing engineers,
designers and technical personnel on a temporary contract assignment basis
pursuant to contracts with major corporations. The engagement may relate to a
specific project or may cover an extended period based on the client's
requirements. The Company believes that the market for outsourcing services such
as those offered by the Company results from the trend in employment practices
by major corporations in the aerospace, electronics, energy, engineering and
telecommunications industries to reduce their permanent employee staff and to
supplement their staff with temporary personnel on an as-needed basis. The
Company seeks to offer its clients a cost-effective means of work force
flexibility and the elimination of the inconvenience associated with the
employment of temporary personnel, such as advertising, initial interviewing,
fringe benefits and record keeping. Although the employees provided by the
Company are on temporary contract assignment, they work with the client's
permanent employees; however, they receive different compensation and benefits
than permanent employees.

The Company also offers its clients a range of integrated logistical
support services which are performed at the Company's facilities. These
services, which are ancillary to a project, include the management of technical
documents involving technical writing, preparation of engineering reports, parts
provisioning documents and test equipment support documents, establishing
maintenance concepts and procedures, and providing manpower and personnel
support. In performing these services, the Company hires the necessary employees
for its own account and may work with the client in developing and preparing the
documentation. Payments would be made pursuant to a purchase order from the
client on a project basis and not as a percentage of the cost of the employees.
To date, the integrated logistics support business has not generated more than
nominal revenue, and no assurance can be given that the Company will generate
any significant revenue or profit from such services.

The Company's strategy has been directed at increasing its customer
base and providing additional services, such as integrated logistics support, to
its existing customer base. The Company believes that the key to profitability
is to provide a range of services to an increased customer base. In this
connection, the Company is increasing its marketing effort both through its own
personnel and in marketing efforts with other companies that offer complementary
services.

Markets and Marketing

The market for the Company's services is comprised of major
corporations in such industries as aerospace, electronics, energy, engineering,
computer services and telecommunications, where "downsizing" and "outsourcing"
have become an increasingly important method of cost reduction. Typically, a
client enters into an agreement with one or a small number of

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<PAGE>

companies to serve as employer of record for its temporary staff, and its
agreements are terminable by the client without significant notice.

The Company maintains a computerized data base of technical personnel
based upon their qualifications and experience. The data base, which contains
more than 100,000 names, is generated through employees previously employed by
the Company, referrals and responses to advertisements placed by the Company in
a variety of local media, including newspapers, yellow pages, magazines and
trade publications. Part of its responsibilities for any engagement is the
recruitment and initial interviewing of potential employees, with the client
conducting any final interviews it deems necessary. The majority of work
performed by the Company' employees is performed at the client's premises and
under the client's direction, although the Company is the employer of record.

The Company markets its services to potential clients through its
officers, management and recruitment personnel who seek to provide potential
clients with a program designed to meet the client's specific requirements. The
marketing effort utilizes referrals from other clients, sales calls, mailings
and telemarketing. The Company also conducts an ongoing program to survey and
evaluate the clients' needs and satisfaction with the Company's services, which
it uses as part of its marketing effort.

Although the Company has eight offices, including its main office in
Long Island, New York, throughout the United States, there is no limited
geographic markets for the Company's services. The Company has in the past
established offices in new locations when it receives a contract in the area and
it cannot effectively service such contract from its existing offices. The
Company intends to continue to establish new offices as necessary to meet the
needs of its customers.

A client will utilize contract engineering services such as those
provided by the Company when it requires a person with specific technical
knowledge or capabilities which are not available from the client's permanent
staff or to supplement its permanent staff for a specific project or to meet
peak load requirements. When the client requires personnel, it provides the
Company with a detailed job description. The Company then conducts an electronic
search in its computerized resume data base for candidates matching the job
description. In addition, each branch office maintains a file of active local
resumes for candidates available for assignment in the vicinity of the branch
office. The candidates are then contacted by telephone by the Company's
recruiters, who interview interested candidates. If a candidate is acceptable to
the Company and interested in the position, the Company refers the candidate to
the client. An employment agreement is executed with the Company prior to the
commencement of employment.

The Company serves primarily the aerospace and electronics industries
as well as the telecommunications, banking and computer science industries and
public utilities along with numerous manufacturing companies. The Company is
expanding its effort to address the general trend of "downsizing" and
"outsourcing" by major corporations on a national basis. To meet this goal, the
Company has commenced a national sales campaign addressing a broad spectrum of
Fortune 500 companies, offering a managed staffing service to those companies in
the process of downsizing and outsourcing specific functions. Since a company
engaged in downsizing seeks to focus on its core business needs with its
in-house staff, the Company seeks to identify and address the needs of a
specific task or department not part of the core business for which outsourcing
would be an appropriate method of addressing those needs. In addressing these
needs, the Company has conducted marketing efforts with Manpower International,
Inc., TAD Resources International Inc. and Olsten Corporation.

The Company's contracts are generally terminable by the client on short
notice.

The Company's largest customers for the nine months ended September 30,
1996 were Boeing, Lockheed, Northrop Grumman, Gulfstream Aerospace Corp. and
Bell Helicopter Textron, which accounted for approximately $9.9 million, $7.3
million, $5.9 million, $3.1 million and $2.5 million, or 21.9%, 16.1%, 13.0%,
6.9% and 5.4% of revenue, respectively. For the year ended December 31, 1995,
Northrop Grumman, Lockheed and Boeing accounted for $19.4 million, $10.2 million
and $9.6 million, or 30.7%, 16.1% and 15.2% of revenue, respectively. No other
client accounted for 5% or more of the Company's revenues in either the nine
months ended September 30, 1996 or the year ended December 30, 1995.

Avionics' largest clients for both 1994 and 1993 were Northrop Grumman
and Martin Marietta Corp., which accounted for approximately $14.5 million and
$2.0 million, respectively, which represented approximately 57% and 8% of the
Company's revenue for the year ended December 31, 1994, and approximately $9
million and $3 million, respectively, which represented approximately 65% and
22% of Avionics' revenue for the year ended December 31, 1993.

RMI was formed in 1994 to acquire assets of Job Shop in November 1994.
RMI conducts business under the name The RMI Group. During 1994, six clients of
RMI and Job Shop accounted for aggregate revenues of $32 million, or
approximately 90% of their combined revenue for the year. Boeing and Lockheed
Ft. Worth Company, which accounted for revenues of $10

- 22 -
<PAGE>

million and $7.5 million, or 22% and 17% of such combined revenue for 1994, were
the only clients which accounted for more than 10% of the combined revenue of
RMI and Job Shop. Four other clients, three of which are in the aerospace
industry, accounted for aggregate revenue of $14.7 million, or 51% of the
combined revenue of RMI and Job Shop for 1994.

Competition

The business of providing employees on either a permanent or temporary
basis is highly competitive and is typically local in nature. The Company
competes with numerous technical service organizations, a number of which are
better capitalized, better known, have more extensive industry contracts and
conduct extensive advertising campaigns aimed at both employers and job
applicants. The Company believes that the ability to demonstrate a pattern of
providing reliable qualified employees is an important aspect of developing new
business and retaining existing business. Furthermore, the ability of the
Company to generate revenues is dependent not only upon its ability to obtain
contracts with clients, but also to provide its clients with qualified
employees. The market for qualified personnel is highly competitive, and the
Company competes with other companies in attracting employees.

Government Regulations

The technical temporary staffing industry, in which the Company is
engaged, does not require licensing as a personnel or similar agency. However,
as a provider of personnel for other corporations, it is subject to Federal and
state regulations concerning the employment relationship, including those
relating to wages and hours and unemployment compensation. It also maintains
401(k) plans for its employees and is subject to regulations concerning such
plans.

The Company does not have contracts with the government agencies.
However, the Company does have contracts with clients, including major defense
contractors, that have contracts with government agencies. The Company's
contracts with its clients are based on hourly billing rates for each technical
discipline. Many of the clients' contracts with government agencies are subject
to renegotiation or cancellation for the convenience of the government. Since
the manpower needs of each of the Company's clients are based on the client's
own requirements and the client's needs are affected by any modification in
requirements, any reduction in staffing by a client resulting from cancellation
or modification of government contracts could adversely impact the business of
the Company.

Potential Business Agreements

Following completion of this Offering, the Company may enter into joint
ventures, acquisitions or other arrangements, such as joint marketing
arrangements and licensing agreements, which the Company believes would further
the Company's growth and development. In negotiating such agreements or
arrangements, the Company anticipates that such agreements would be based upon
the manner in which the Company's business can be expanded, the extent to which
the Company's services can be enhanced or the market for such services expanded
into fields not then being addressed by the Company. In this connection, the
Company may acquire businesses that are related directly or indirectly to its
technical temporary staffing services business. No assurance can be given that
any agreement which the Company enters into will generate any net income to the
Company. To the extent that the Company enters into an agreement with an
affiliated party, the terms and conditions of such agreement will be on terms at
least as favorable to the Company as those the Company believes it could achieve
in negotiations at arm's length with an independent third party.

Employees

At December 31, 1996, the Company had 963 employees, of which 921 were
contract service employees who performed services on the clients' premises and
42 were executive and administrative employees. Each of the Company's offices is
staffed by recruiters and sales managers. Each contract service employee enters
into a contract with the Company which sets forth the client for whom and the
facility at which the employee's services are to be performed and the rate of
pay. If an employee ceases to be required by the Company's clients for any
reason, the Company has no further obligation to the employee. Although
assignments can be for as short as 90 days, in some cases, it has been for
several years. The average assignment is in the range of six to nine months. The
Company's employees are not represented by a labor union, and the Company
considers its employee relationship to be good.

- 23 -
<PAGE>

Litigation and Claims

There is no material litigation pending or threatened against the
Company.

The DOL has filed a complaint against Job Shop and its principal
stockholder for civil violations of ERISA resulting from the failure of Job Shop
to deposit employee contributions to Job Shop's 401(k) retirement plan. A
similar complaint was filed by former employees of Job Shop against Job Shop,
its principal stockholder and others. At November 22, 1994, the amount due to
the Job Shop 401(k) plan was approximately $3.0 million, which amount may have
increased since such date as a result of interest and penalties. Neither the
Company nor RMI, the subsidiary which acquired assets and assumed certain
obligations of Job Shop in November 1994, has been named as a defendant in
either of such actions. The DOL has raised with the Company the possibility that
RMI may by liable with respect to Job Shop's ERISA liability as a successor
corporation or purchaser of plan assets, even though RMI did not assume such
obligations and paid value for the Job Shop assets which it did purchase.
Although the Company believes that RMI is not a successor corporation to Job
Shop and is not responsible for Job Shop's ERISA violations, the DOL may take a
contrary position. If the DOL takes such a position and prevails, it would have
a material adverse effect upon the operations of RMI and possibly the Company as
a whole. Although the Company is engaged in discussions with the DOL, no
assurance can be given that such discussions will result in any settlement
acceptable to the Company. However, in connection with the negotiations with the
DOL and with the consent of the IRS, the Company has paid into escrow $400,000
of the money due the IRS in connection with the agreement with the IRS relating
to the acquisition of Job Shop assets. See Note 11 of Notes to Trans Global
Services, Inc. Consolidated Financial Statements. During the nine months ended
September 30, 1996, the Company established a $300,000 reserve with respect to
the DOL's claim, however, no assurance can be given that such reserve will be
adequate.

In May 1991, prior to the acquisition of Avionics by the Company, the
Government Printing Office wrote the Company asking for reimbursement of
approximately $300,000 for allegedly unauthorized work on two programs. The
Company believes that these claims are without merit and intends to contest
these claims vigorously if reasserted. The Company believes that the ultimate
disposition of this matter will not have a material adverse affect on the
Company's consolidated financial position. See Note 9 of Notes to Trans Global
Services, Inc. Consolidated Financial Statements.

Properties

The Company leases an aggregate of approximately 12,800 square feet of
office facilities at two locations in Long Island, New York, where it maintains
its executive offices. It also rents modest office space in Houston, Texas,
Phoenix, Arizona, Arlington, Texas, Los Angeles, California, Seattle,
Washington, Orlando, Florida and Wichita, Kansas. The aggregate annual rent
payable by the Company is approximately $160,000, which is subject to annual
increases. The Company believes that its present office space is adequate for
its present needs and that additional office space is readily available on
commercially reasonable terms.

Former Business of the Company

Prior to May 1995, Concept's principal business was the operation,
through WWR, of the Klipsch(R) professional loudspeaker business. It also is the
developer and owner of several proprietary technologies with applications in
environmental noise cancellation, medical monitoring, defense and
communications. No significant revenue was generated from these activities,
which have been discontinued by the Company. For the years ended December 31,
1994 and 1993, Concept had losses of $1.6 million, or $1.30 per share, and $1.4
million, or $1.95 per share, respectively, on revenue of $2.4 million and $3.0
million, respectively.

WWR was incorporated in 1992 to acquire the professional products
business segment of the Klipsch loudspeaker line from Klipsch. Klipsch's primary
market has traditionally been the home high fidelity loudspeaker business. It
had also developed a reputation as a manufacturer of rugged, well-designed
loudspeakers for the professional, commercial and theater sound markets. The
Company believed that the acquisition of the assets of the Klipsch professional
speaker line would give WWR a major name in the industry.

Concept's business focus from the time of the acquisition of the
Klipsch professional speaker business until its disposition of WWR was to become
a significant factor in the professional loudspeaker market, which is defined as
any application for loudspeakers other than those used for home and automotive
entertainment purposes. Although the Company sought to market the Klipsch
speaker line and develop its other businesses, it was not able to operate
profitably and, as a result, sought a business opportunity which it felt could
develop into a profitable business. Following this strategy, Concept entered
into the Trans Global

- 24 -
<PAGE>

Transaction. See "Certain Transactions -- The Trans Global Transaction." At
September 1995, the stock of WWR was sold to a subsidiary of Consolidated. See
"Certain Transactions -- Sale of WWR."

MANAGEMENT

Directors and Executive Officers

The following table sets forth certain information concerning the
directors, a nominee for director and the executive officers of the Company:

Name Age Position with the Company
---- --- -------------------------
Lewis S. Schiller 66 Chairman of the board, chief executive officer
and director
Joseph G. Sicinski 65 President and director
Glen R. Charles 42 Chief financial officer and treasurer
Grazyna B. Wnuk 32 Secretary
E. Gerald Kay(1) 57 Director
Norman J. Hoskin(1) 61 Director
- ----------

(1) Member of the stock option committee.

Mr. Lewis S. Schiller has been chairman of the board, chief executive
officer and a director of the Company since the consummation of the Trans Global
Transaction in May 1995. He served in the same capacities for TGS since its
organization in January 1995 until the completion of the Trans Global
Transaction in May 1995. Mr. Schiller is chairman of the board and chief
executive officer of Consolidated, a corporation which, through subsidiaries, is
engaged in various businesses. Mr. Schiller is also chairman of the board, chief
executive officer and a director of Netsmart, a majority owned subsidiary of
Consolidated that markets health information systems and other network based
software systems, and Lafayette, a publicly-traded corporation controlled by
SISC which is engaged in various manufacturing businesses. Consolidated's
businesses include, in addition to the Company, the management and operation of
magnetic resonance imaging centers, the manufacture and sale of
electro-mechanical and electro-optical products, a range of telecommunications
services, computerized health information systems and related services which are
offered to health care providers, and the marketing and selling of three
dimensional imaging products. Mr. Schiller has held his positions with
Consolidated for more than the past five years. Mr. Schiller devotes a
significant portion of his time to the business of Consolidated and its other
subsidiaries, and he devotes only a portion of his time to the business of the
Company.

Mr. Joseph G. Sicinski has been president and a director of the Company
since the consummation of the Trans Global Transaction in May 1995. He served in
the same capacities for TGS since its organization in January 1995, and served
as president of a predecessor of TGS since September 1992. For more than eight
years prior thereto, he was executive vice president of corporate marketing for
Interglobal Technical Services, Inc., which was engaged in providing technical
temporary staffing services.

Mr. Glen R. Charles has been chief financial officer and treasurer of
the Company since May 1995 and of TGS since its organization in January 1995. He
served as chief financial officer of RMI since its acquisition in November 1994.
From 1992 to November 1994, he was engaged in the private practice of
accounting. For more than five years prior thereto, he was chief financial
officer of Telephone Support Systems, Inc., a manufacturer of telecommunications
peripheral equipment.

Ms. Grazyna B. Wnuk has been the secretary of the Company since May
1995. She is also secretary of Consolidated, a position she has held since
1991. She is also a director of Consolidated.

Mr. E. Gerald Kay has been a director of the Company since the
consummation of the Trans Global Transaction in May 1995. He has been chairman
of the board and chief executive officer of Chem International, Inc., a
pharmaceutical manufacturer, Manhattan Drug Co., Inc., a wholesaler of
pharmaceutical products, The Vitamin Factory, Inc., a chain of retail vitamin
stores, and Connaught Press, Inc., a publisher for more than the past five
years. From 1988 to 1990, he was also president and a director of The Rexall
Group, Inc., a distributor of Rexall brand products. Mr. Kay is a director of
Lafayette and was a director of Netsmart from 1994 until December 1996.

- 25 -
<PAGE>

Mr. Norman J. Hoskin has been a director of the Company since 1995. He
is chairman of Atlantic Capital Group, a financial advisory services company, a
position he has held for more than the past five years. He is also chairman of
the board and a director of Tapistron International, Inc., a high tech
manufacturer of carpeting, and is a director of Consolidated, Netsmart,
Lafayette, Aqua Care Systems, Inc., a water media filtration and remediation
company, and Spintek Gaming, Inc., a manufacturer of gaming equipment.

The Board of Directors presently has one committee, the stock option
committee, which was formed in 1995 and which administers the Company's 1993
Stock Option Plan, the 1995 Stock Incentive Plan and the 1995 Long Term
Incentive Plan.

The Company's Certificate of Incorporation provides that to the fullest
extent provided by Delaware law, a director shall not be liable to the Company
or its stockholders for monetary damages for breach of fiduciary duty as a
director. The Certificate of Incorporation also contains broad indemnification
provisions. These provisions do not affect the liability of any director under
Federal or applicable state securities laws.

Remuneration

Set forth below is information with respect to compensation paid or
accrued by the Company for 1996, 1995 and 1994 to its chief executive officer
and to each other officer whose compensation exceeded $100,000 for 1996.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation (Awards)
Restricted Stock Options, SARs
Name and Principal Position Year Salary Bonus Awards (Dollars) (Number)
- --------------------------- ---- ------ ----- ---------------- --------
<S> <C> <C> <C> <C> <C>
Lewis S. Schiller, CEO(1) 1996 -- -- -- 555,000(2)
1995 -- -- -- --
1994 -- -- -- --

Joseph G. Sicinski, President 1996 195,500 -- -- 1,200,000(3)
1995 178,000 -- -- 250,000(3)
1994 110,000 15,000 -- --
- ---------------
</TABLE>

(1) Mr. Schiller received no compensation from the Company. Effective
December 31, 1994, Consolidated changed its fiscal year to a calendar
year from the twelve months ended July 31. During the years ended
December 31, 1996 and 1995, the period from August 1, 1994 to December
31, 1994 and the fiscal year ended July 31, 1994, the total
compensation paid or accrued by Consolidated to Mr. Schiller was
$340,000, $250,000, $94,000 and $181,451, respectively.

(2) Represents warrants to purchase 400,000 shares of Common Stock at $1.25
per share, an incentive stock option to purchase 150,000 shares of
Common Stock at $1.125 per share and a nonqualified stock option to
purchase 5,000 shares at $1.03 per share. Such options and warrants
were granted at the fair market value on the date of grant. Mr.
Schiller transferred warrants to purchase 150,000 shares to members of
his family. See "Management -- Stock Option Plans" and "Certain
Transactions."

(3) Represents warrants to purchase 400,000 shares of Common Stock at $1.25
per share and an incentive stock option to purchase 800,000 shares of
Common Stock at $1.125 per share. Such options and warrants were
granted at the fair market value on the date of grant. In connection
with the grant of the incentive stock option to purchase 800,000 shares
of Common Stock, Mr. Sicinski agreed to the cancellation of an
incentive stock option to purchase 250,000 shares of Common Stock at
$2.125, which was granted in 1995. See "Management -- Stock Option
Plans" and "Certain Transactions."

Pursuant to his employment agreement with Consolidated, Mr. Schiller
received, prior to September 1, 1996, an annual salary of $250,000, subject to a
cost of living increase, a bonus equal to 10% of Consolidated's net income
before income taxes or cash flow, whichever is greater, in excess of $350,000.
Effective September 1, 1996, Mr. Schiller's base salary was increased to
$500,000. Pursuant to his employment agreement with Consolidated, Mr. Schiller
has the right to acquire 10% of SISC's interest in its subsidiaries and
investments, including its investment in the Company, at 110% of SISC's cost.
See "Certain Transactions."

In January 1995, Mr. Joseph G. Sicinski entered into a five-year
employment agreement with the Company pursuant to which he received annual
compensation of $180,000, subject to an annual cost of living increase.
Effective September 1, 1996,
- 26 -
<PAGE>

Mr. Sicinski entered into a new employment agreement for a five-year term
commencing September 1, 1996 pursuant to which he receives annual compensation
of $234,000, subject to an annual cost of living increase. In addition, Mr.
Sicinski is entitled to a bonus equal to 5% of the Company's income before
income taxes, but not more than 200% of his salary. The Company also provides
Mr. Sicinski with an automobile which he may use for personal use.

In August 1995, SISC granted Mr. Sicinski a five-year option to
purchase 200,000 shares of Common Stock owned by SISC at $1.625 per share. In
April 1996, SISC granted Mr. Sicinski a five-year option to purchase 800,000
shares of Common Stock owned by SISC at $.25 per share, and the prior option was
canceled. The Company granted Mr. Sicinski certain demand and piggy-back
registration rights with respect to the shares of Common Stock issuable upon
exercise of such option.

The Company pays its non-management directors a fee of $500 per month.

The following table sets forth information concerning the exercise of
options during the year ended December 31, 1996 and the year-end value of
options held by the Company's officers named in the remuneration table. No SARs
have been granted.
<TABLE>
<CAPTION>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value

Number of
Securities Value of
Underlying Unexercised In-
Unexercised the-Money
Options at Fiscal Options at Fiscal
Year End(1) Year End(2)

Shares Acquired Exercisable/ Exercisable/
Name Upon Exercise Value Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Lewis S. Schiller -- -- 555,000 $272,969/
-- --
Joseph G. Sicinski -- -- 47,000/ 382,000/
203,000 486,000
- -----------
</TABLE>

(1) Includes options which became exercisable on January 1, 1997.

(2) Based on the closing price per share of Common Stock on December 31,
1996, which was $1.875.

During 1996, the board of directors approved the repricing of incentive
stock options granted to Mr. Joseph Sicinski in 1995, by the cancellation of
incentive stock options to purchase 250,000 shares at $2.125 per share and the
grant of an incentive stock option to purchase 800,000 shares of Common Stock at
$1.125 per share. The grant of the new option and cancellation of the old option
were based on the Company's improving results notwithstanding the decline in the
stock price. Set forth below is information concerning the repricing of such
options. Information is not included with respect to repricing of options
granted to Mr. Milton E. McNally, who was chief executive officer of the Company
prior to the consummation of the Trans Global Transaction in May 1995. In
February 1995, the Company reduced to $2.25 per share the exercise price of
outstanding options to purchase an aggregate of 92,500 shares of Common Stock
from $3.00, as to 50,000 shares, $5.00 as to 30,000 shares and $6.40 as to
12,500 shares.

- 27 -
<PAGE>
<TABLE>
<CAPTION>
Option Repricings

Number of
Securities Market Price
Underlying of Stock at Exercise Price
Options Time of at Time of New Length of Original Term
Repriced or Repricing or Repricing or Exercise Remaining at Date of
Name Date Amended Amendment Amendment Price Repricing or Amendment
<S> <C> <C> <C> <C> <C> <C>
Joseph B. Sicinski 3/18/96 250,000 shares1 $1.125 $2.125 $1.125 five years, five months

</TABLE>
(1) In addition, in April 1996, SISC granted Mr. Sicinski an option to
purchase 800,000 shares of Common Stock at $.25 per share. In August
1995, SISC had granted Mr. Sicinski an option to purchase 200,000
shares of Common Stock at $1.625 per share. This option was canceled in
connection with the April 1996 grant.

Stock Option Plans

The Company has three stock option plans. In 1993, the Company adopted
the 1993 Stock Incentive Plan (the "1993 Plan"), covering an aggregate of
150,000 shares of Common Stock. Options to purchase 124,100 shares of Common
Stock were granted at exercise prices of $3.00 as to 54,500 shares, $5.00 as to
14,600 shares and $5.00 as to 55,000 shares. The exercise price of all of such
options was reduced to $2.25 per share in February 1995. As of August 31, 1996,
options to purchase 10,150 shares had expired unexercised. No options under the
1993 Plan had been exercised. In January 1995, the board of directors adopted
the 1995 Stock Incentive Plan (the "1995 Plan"), pursuant to which stock options
and stock appreciation rights can be granted with respect to 305,000 shares of
Common Stock. At August 31, 1996, options to purchase 290,000 shares of Common
Stock were granted pursuant to the 1995 Plan, of which options to purchase
155,000 shares were exercised and options to purchase 85,000 shares at an
exercise price of $1.00 per share were outstanding. In May 1995, the board of
directors adopted, and, in March 1996, the stockholders approved the 1995 Long
Term Incentive Plan (the "1995 Incentive Plan"), initially covering 500,000
shares of Common Stock. In April 1996, the board of directors approved, subject
to stockholder approval, an amendment to the 1995 Plan which increased the
number of shares of Common Stock currently subject to the 1995 Plan to 2,492,332
shares. The stockholders approved such amendment to the 1995 Incentive Plan in
November 1996. The number of shares of Common Stock subject to the 1995 Plan
automatically increases by 5% of any shares of Common Stock issued by the
Company other than shares issued pursuant to the 1995 Plan. The information
contained in this Prospectus relating to the 1993 Plan, the 1995 Plan and the
1995 Incentive Plan (collectively, the "Plans") is qualified in its entirety by
the text of such plans, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part.

Awards under the Plans may be made to key employees, including
officers, and directors of the Company and its subsidiaries. Members and
alternate members of the stock option committee are not eligible for options
under the 1995 Incentive Plan, except that the 1995 Incentive Plan provides for
the automatic grant to outside directors of non-qualified options to purchase
5,000 shares on February 1st of each year, commencing February 1, 1996. Messrs.
E. Gerald Kay and Norman J. Hoskin are the directors who qualify as
non-management directors under the 1995 Plan. Pursuant to the 1995 Incentive
Plan, Messrs. Schiller, Kay and Joel S. Kanter, who was a director of the
Company until February 1997, were non-management directors on February 1, 1996,
each received an option to purchase 5,000 shares of Common Stock at $1.031 per
share, and Messrs. Hoskin, Kay and Kanter, who were non-management directors on
February 1, 1997, each received an option to purchase 5,000 shares of Common
Stock at $1.875 per share. The Plans impose no limit on the number of officers
and other key employees to whom awards may be made.

The Plans are administered by a committee of at least two disinterested
directors appointed by the board (the "Committee"). Any member or alternate
member of the Committee shall not be eligible to receive options or stock under
the 1995 Incentive Plan (except as to the automatic grant of options to
directors) or under any plan of the Company or any of its affiliates. The
Committee has broad discretion in determining the persons to whom stock options
or other awards are to be granted and the terms and conditions of the award,
including the type of award, the exercise price and term and restrictions and
forfeiture conditions. If no committee is appointed, the functions of the
committee shall be performed by the board of directors. The Committee is
presently comprised of Messrs. Norman J. Hoskin and E. Gerald Kay.

The Committee has the authority to grant the following types of awards
under the 1995 Plan: incentive or non-qualified stock options; stock
appreciation rights; restricted stock; deferred stock; stock purchase rights
and/or other stock-based awards.

- 28 -
<PAGE>

The 1995 Incentive Plan is designed to provide the Committee with broad
discretion to grant incentive stock-based rights. Allofficers, including Messrs.
Lewis S. Schiller and Joseph G. Sicinski, who are also directors, are eligible
for awards under the 1995 Incentive Plan.

Tax consequences of awards provided under the 1995 Plan are dependent
upon the type of award granted. The grant of incentive or nonqualified stock
options does not result in any taxable income to the recipient or deduction to
the Company. Upon exercise of a nonqualified stock option, the recipient
recognizes income in the amount by which the fair market value on the date of
exercise exceeds the exercise price of the option, and the Company receives a
corresponding tax deduction. In the case of incentive stock options, no income
is recognized to the employee, and no deduction is available to the Company, if
the stock issued upon exercise of the option is not transferred within two years
from the date of grant or one year from the date of exercise, whichever occurs
later. However, the exercise of an incentive stock option may result in
additional taxes through the application of the alternative minimum tax. In the
event of a sale or other disqualifying transfer of stock issued upon exercise of
an incentive stock option, the employee realizes income, and the Company
receives a tax deduction, equal to the amount by which the lesser of the fair
market value at the date of exercise or the proceeds from the sale exceeds the
exercise price. The issuance of stock pursuant to a stock grant results in
taxable income to the recipient at the date the rights to the stock become
nonforfeitable, and the Company receives a deduction in such amount. However, if
the recipient of the award makes an election in accordance with the Internal
Revenue Code of 1986, as amended, the amount of his or her income is based on
the fair market value on the date of grant rather than the fair market value on
the date the rights become nonforfeitable. When compensation is to be recognized
by the employee, appropriate arrangements are to be made with respect to the
payment of withholding tax.

In August 1995, the Company granted to Mr. Joseph G. Sicinski,
president of the Company, a six-year incentive stock option to purchase an
aggregate of 250,000 shares of Common Stock pursuant to the 1995 Plan at an
exercise price of $2.125 per share, being the fair market value on the date of
grant. The option was immediately exercisable as to 47,000 shares of Common
Stock and becomes exercisable as to an additional 47,000 shares of Common Stock
on each of January 1, 1996, 1997, 1998 and 1999 and becomes exercisable as to
the remaining 15,000 shares of Common Stock on January 1, 2000.

In March 1996, the committee granted incentive stock options to
purchase an aggregate of 1,310,000 shares of Common Stock at $1.125 per share,
being the fair market value on the date of grant. Such options were granted to
Mr. Joseph G. Sicinski, president of the Company, who received an option to
purchase 800,000 shares of Common Stock, Mr. Lewis S. Schiller, chairman of the
board of the Company, who received an option to purchase 150,000 shares of
Common Stock, Mr. Glen R. Charles, chief financial officer of the Company, who
received an option to purchase 100,000 shares of Common Stock, and eleven other
employees who received options to purchase an aggregate of 260,000 shares of
Common Stock. In connection with the grant to Mr. Sicinski, he agreed to the
cancellation of the previously granted incentive stock options. The option
granted to Messrs. Schiller and Sicinski have a ten-year term, and the other
options have five year terms. Except for the options granted to Messrs.
Schiller, Sicinski and Charles, all options are immediately exercisable. The
options granted to Messrs. Schiller and Charles are immediately exercisable as
to 88,000 shares and become exercisable as to the remaining shares on January 1,
1997. The option granted to Mr. Sicinski is immediately exercisable as to 88,000
shares and becomes exercisable cumulatively as to an additional 88,000 shares on
January 1 of each year from 1997 to 2004 and becomes exercisable as to the
remaining 8,000 shares on January 1, 2005.

The following table sets forth information concerning options granted
during the year ended December 31, 1996 pursuant to the Company's 1995 Incentive
Plan. See "Management -- Remuneration" and "Certain Transactions" for
information relating to the issuance of warrants to officers and directors. No
SARs were granted.

- 29 -
<PAGE>

Option Grants in Year Ended December 31, 1996
<TABLE>
<CAPTION>
Percent of Total
Number of Shares Options Granted
Underlying to Employees in Exercise Price
Name Options Granted Fiscal Year Per Share Expiration Date
---- --------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
Lewis S. Schiller 150,000 11.3% $1.125 3/17/06
5,000(1) 0.3% 1.031 1/31/06
Joseph G. Sicinski(2) 800,000 60.4% 1.125 3/17/06
All current executive officers(3) 950,000 71.7% 1.125 3/17/06
100,000 7.5% 1.125 3/17/01
All non-officer directors 10,000(1) 0.8% 1.031 1/31/06
All other employees 260,000 19.6% 1.125 3/17/01
- ----------
</TABLE>

(1) These options are automatically granted pursuant to the 1995 Incentive
Plan.

(2) In addition, in April 1996, SISC granted Mr. Sicinski an option to
purchase 800,000 shares of Common Stock at $.25 per share. In August
1995, SISC had granted Mr. Sicinski an option to purchase 200,000
shares of Common Stock at $1.625 per share. This option was canceled in
connection with the April 1996 grant.

(3) Including Messrs. Schiller and Sicinski. April 1996, the Company
canceled this option and granted Mr. Sicinski a ten-year incentive
stock option to purchase 800,000 shares of Common Stock at $1.125 per
share.

CERTAIN TRANSACTIONS

The Trans Global Transaction

On May 8, 1995, the Company acquired all of the issued and outstanding
capital stock of TGS and issued (a) 1,000,000 shares of Common Stock, (b) 25,000
shares of Series A Convertible Participating Preferred Stock ("Series A
Preferred Stock"), (c) 25,000 shares of Series B Preferred Stock which are
convertible into an aggregate of 1,000,000 shares of Common Stock if net income
before income taxes, as defined, is either $500,000 for 1995 or $1.5 million for
either 1996 or 1997, (d) 25,000 shares of Series C Preferred Stock which are
convertible into an aggregate of 1,500,000 shares of Common Stock if net income
before income taxes, as defined, is $1.5 million for either 1996 or 1997, and
(e) 20,000 shares of Series D 6.25% Redeemable Cumulative Preferred Stock
("Series D Preferred Stock"), which are not convertible, but which have an
aggregate redemption price of approximately $1.7 million. In addition, in
connection with the Trans Global Transaction, the Company issued two-year
warrants to purchase an aggregate of 500,000 shares of Common Stock at $3.50 per
share. As a result of the March 1996 filing of a certificate of amendment to the
Company's certificate of incorporation increasing the authorized Common Stock to
20,000,000 shares, the 25,000 shares of Series A Convertible Preferred Stock
automatically, without any action on the part of the holder, became converted
into 2,000,000 shares of Common Stock.

As a result of, and at the time of, the Trans Global Transaction, SISC
owned approximately 32.2% of the outstanding Common Stock, and 59.3% of the
voting rights on all matters, including the election of directors, except where
the holders of Common Stock are required by law to vote as a single class. As a
result, SISC had the power to elect all of the directors of the Company. Mr.
Lewis S. Schiller, chairman of the board, chief executive officer and a director
of the Company, is the chairman of the board, chief executive officer and a
director of Consolidated and SISC. Accordingly, both Consolidated and Mr.
Schiller may be deemed control persons with respect to the Company.

Sale of WWR

At June 30, 1995, the Company owed SISC approximately $1.1 million.
Subsequent to June 30, 1995, the Company repaid $225,000 to SISC, and SISC
advanced $275,000 to the Company and WWR to enable the Company to pay a $275,000
debenture due to Klipsch, Inc. ("Klipsch"), the company from which WWR purchased
its loudspeaker business. The debenture became due on June 30, 1995. The advance
was required because the Company and WWR did not have the cash to make the
payment. As of September 30, 1995, the Company transferred the stock of WWR to
an affiliate of SISC in consideration for

- 30 -
<PAGE>

which SISC released the Company from its obligations with respect to the
$275,000 advance. In connection with the transaction, the Company issued
1,060,000 shares of Common Stock to SISC; however, the actual issuance of the
shares has been deferred until the number of authorized shares of the Company's
Common Stock was increased. WWR had, at the time of the transaction, a
deficiency in stockholders' equity of approximately $1.4 million. Among WWR's
liabilities was approximately $2.1 million payable to the Company, which, based
upon WWR's historical and current cash flow, was not likely to be paid in the
near future. This payable was satisfied through the issuance by Consolidated of
shares of a newly created series of preferred stock which converts on September
30, 2000 into such number of shares of Consolidated's common stock, not to
exceed 2.8 million shares, as has a value equal to $2.1 million. The directors
believed that the transaction was in the best interest of the Company because it
removed a $1.4 million net deficit from the Company's balance sheet, the
business of WWR was not related to the business of the Company, and the Company
has no experience in manufacturing operations. During the period from the
completion of the Trans Global Transaction until the sale of WWR, the operations
of WWR had been supervised by personnel of SISC and its affiliates and not by
the Company. Furthermore, WWR was a defendant in litigation commenced by
Klipsch, Inc. claiming that the license agreement pursuant to which WWR has the
right to use the Klipsch name and certain patents has terminated. The Company is
the guarantor with respect to a $530,000 note issued by WWR to a nonaffiliated
lender, which note, as a result of a $130,000 payment in June 1996, was reduced
to $400,000.

Loan and Equity Transactions With SISC

TGS was organized by SISC in January 1995 to hold all of the stock of
Holdings, which was acquired by SISC in December 1993, and RMI, which was
acquired by SISC in November 1994. At the time of the organization of TGS, TGS
issued to SISC, in consideration for the shares of Consolidated common stock
issued in connection with the acquisitions of Holdings and RMI assets, 500
shares of Series A 5% Redeemable Cumulative Preferred Stock. The Company also
issued to SISC warrants to purchase shares of its common stock. The TGS stock
and warrants were issued to SISC in consideration for the transfer of the stock
of Holdings and RMI and the advances made by SISC. In connection with the
organization of TGS, TGS also issued a 3.4% interest to Mr. Joseph G. Sicinski,
president of TGS, in exchange for certain rights Mr. Sicinski has with respect
to the stock of Holdings.

In connection with the organization of TGS in January 1995, SISC
transferred a 5% interest in its common stock and warrants in TGS to DLB, in
exchange for DLB's 10% interest in Avionics. DLB is owned by the wife of Mr.
Lewis S. Schiller, chairman of the board and chief executive officer of the
Company; however, Mr. Schiller disclaims beneficial ownership in DLB or any
securities owned by DLB.

The Trans Global Agreement provides SISC and DLB with certain
registration rights with respect to their warrants and the underlying Common
Stock and provides Mr. Sicinski with certain registration rights with respect to
the 100,000 shares of Common Stock issued to him pursuant to the Trans Global
Agreement.

Trinity, a wholly-owned subsidiary of Consolidated, is a party to a
management services agreement dated as of January 1, 1995, pursuant to which
Trinity will receive a monthly fee of $10,000 through March 2000, which monthly
fee will increase to $25,000 commencing with the month in which this Offering is
completed. The fees through October 1996 have been paid. Neither SISC,
Consolidated nor any of their employees, including Mr. Lewis S. Schiller,
chairman of the board and chief executive officer of the Company, have received
any compensation from the Company or TGS. None of such persons provided
significant services to Holdings or RMI prior to 1995.

At June 30, 1996, prior to the SISC Recapitalization, the Company owed
SISC approximately $1.1 million. At June 30, 1996, pursuant to the SISC
Recapitalization, the Company issued to SISC 9,900 shares of Series F Preferred
Stock and warrants to purchase 3,200,000 shares of Common Stock at $1.25 per
share in exchange for the cancellation of $750,000 principal amount of the
Company's debt to SISC and all of the shares of Series B, C and D Preferred
Stock owned by SISC, including accrued dividends due on the Series D Preferred
Stock. The 9,900 shares of Series F Preferred Stock were convertible into
9,900,000 shares of Common Stock. As a result of the SISC Recapitalization, the
Company's obligations to SISC was reduced to $300,000, which was paid subsequent
to June 30, 1996.

Pursuant to Mr. Schiller's employment agreement with Consolidated, Mr.
Schiller has the right to acquire 10% of SISC's interest in its subsidiaries and
investments, including the Company's Common Stock, Preferred Stock and warrants
held by SISC, at 110% of SISC's cost. At the closing of the Trans Global
Transaction, Mr. Schiller exchanged such right for a right to purchase 10% of
SISC's common stock, convertible preferred stock and warrants in the Company.
Mr. Schiller has exercised his right to purchase 393,000 shares of Common Stock,
warrants to purchase 47,500 shares of Common Stock and 2,500 shares of Series B
and C Preferred Stock. In connection with the SISC Recapitalization, SISC
transferred to Mr. Schiller 1,000 shares of Series F

- 31 -
<PAGE>

Preferred Stock, and Mr. Schiller's shares of Series B and C Preferred Stock
were canceled. Also in connection with the SISC Recapitalization, DLB exchanged
its shares of Series B and C Preferred Stock for 100 shares of Series F
Preferred Stock which were converted into 100,000 shares of Common Stock in
December 1996.

In October 1996, SISC converted 5,000 shares of Series F Preferred
Stock into 5,000,000 shares of Common Stock, and in December 1996, SISC
converted the remaining 3,900 shares of Series F Preferred Stock into 3,900,000
shares of Common Stock, and Mr. Schiller and DLB converted their 1,000 and 100
shares of Series F Preferred Stock into 1,000,000 and 100,000 shares of Common
Stock, respectively.

During the nine months ended September 30, 1996 and the years ended
December 30, 1995 and 1994, the largest amount due to SISC was $1.0 million,
$1.1 million and $885,000, respectively. These advances were incurred for
working capital and in connection with the acquisition of Job Shop assets. At
September 30, 1996, the Company's debt to SISC had been paid. The Company's
advances from SISC bore interest at 10% per annum.

The Company has from time to time made advances to three SISC
Subsidiaries which are not owned or controlled by the Company. Such advances
were approximately $1.4 million, $1.2 million and $274,000 at September 30,
1996, December 31, 1995 and December 31, 1994, respectively. The amounts
outstanding on such dates represent the largest amounts outstanding during the
respective periods ending on such dates. The Company cannot estimate whether or
when the SISC Subsidiaries will pay the amounts due the Company because of their
lack of available working capital. Advances to the SISC Subsidiaries may
continue. In addition, the Company pays the compensation and benefits of certain
non-executive employees who perform services for both the Company and one of the
SISC Subsidiaries and share common space and other office expenses. The amount
allocated to such SISC Subsidiary, which is approximately $150,000 per annum, is
added to the obligations of the SISC Subsidiary to the Company.

As of June 30, 1995, SISC converted $200,000 of the Company's
obligations to SISC into 5,000 shares of Series E Preferred Stock. In March
1996, as a result of the filing of the certificate of amendment to the Company's
certificate of incorporation increasing its authorized common stock, the 5,000
shares of Series E Preferred Stock automatically, without any action on the part
of the holder, became converted into 120,000 shares of Common Stock.

At June 30, 1996, WWR owed $400,000 to a nonaffiliated lender, after
giving effect to a $130,000 payment in June 1996. The note matures in June 1997
and is guaranteed by Walnut and the Kanter Foundation. The Kanter Foundation and
Walnut are affiliated with Mr. Joel S. Kanter, who was a director of the Company
until February 1997. The Company, SISC and Consolidated have guaranteed the
guarantee obligations of the Kanter Foundation and Walnut.

Other Related Party Transactions

The Company was organized in September 1993 as Concept Technologies
Group, Inc. to acquire the stock of three companies, each of which was
controlled by Walnut. Walnut may be deemed a promoter of the Company. Following
the acquisition of such subsidiaries and until the Trans Global Transaction,
Walnut may be deemed a controlling stockholder of the Company. As a result of
family relationships, the Kanter Foundation, The Holding Company and Windy City,
as well as certain members of the Kanter family may be deemed affiliates of the
Company. Mr. Joel Kanter, who was a director of the Company until February 1997,
is president and a director of Windy City and Kanter Foundation. Since February
1995, he has been president of Walnut, to which he was a consultant prior to
that date. Mr. Joshua Kanter, who was secretary of the Company prior to May
1995, is vice president of Windy City and the Kanter Foundation. Mr. Burton
Kanter, the father of Joel and Joshua Kanter, is chief executive officer of
Walnut and president and a director of The Holding Company. While there is
little or no common beneficial ownership of Walnut, Windy City, the Kanter
Foundation and The Holding Company, members of the Kanter family have varying
degrees of control over these entities.

In connection with the Trans Global Transaction, the Company requested
certain holders of restricted securities to agree to a one year lockup from the
effective date of the first registration statement filed by the Company
following the closing of the Trans Global Transaction. Walnut, Windy City, the
Kanter Foundation and The Holding Company received an aggregate of 181,080
shares of Common Stock and warrants to purchase 90,540 shares of Common Stock at
$3.50 per share in consideration for agreeing to such lockups, which related to
an aggregate of 362,160 shares of Common Stock.

In October 1995, the Company authorized the issuance to each of Messrs.
E. Gerald Kay and Joel S. Kanter a warrant to purchase 75,000 shares of Common
Stock at $3.50 per share. In April 1996, the Company issued to each of Messrs.
Lewis S. Schiller and Joseph G. Sicinski a warrant to purchase 400,000 shares of
Common Stock at $1.25 per share and to each of Messrs.

- 32 -
<PAGE>

E. Gerald Kay, Joel S. Kanter and Norman J. Hoskin, a warrant to purchase
300,000 shares of Common Stock at $1.25 per share. In connection with such
grants, Messrs. Kay and Kanter agreed to the waive the right to receive the
previously authorized warrants, which had not been issued.

During 1994 and 1995 the Company engaged Plaza Street Holdings, Inc.
("Plaza Street") to perform consulting services in connection with possible
acquisition or merger candidates for the Company. Plaza Street is wholly-owned
by Mr. Michael Alan Faber, who is a vice president of Walnut. Plaza Street
received $50,000 for services rendered during 1994 (of which $15,000 was paid in
1995) and 1995.

Prior to completion of the Company's initial offering in February 1994,
the Company borrowed funds on an unsecured, short term basis from Walnut for
working capital. The borrowing did not exceed $90,000, bore interest at 10% per
annum and was repaid from the proceeds of the Issuer's initial public offering.

Legal fees of $317,000 for the year ended December 31, 1994 were
incurred by the Company with a law firm in which Mr. Joshua S. Kanter, who was
secretary of the Company, is of counsel.

The Company incurred $31,000 in stockholder/director expenses for the
years ended December 31, 1994. Such expenses consist primarily of travel and
related costs.

The Company believes that the transaction with related parties were
made on terms that were no less favorable to the Company that would have been
available from non-affiliated third parties under similar circumstances.

- 33 -
<PAGE>

PRINCIPAL STOCKHOLDERS

Set forth below is information as of February 11, 1997 as to each
person owning of record or known by the Company, based on information provided
to the Company by the persons named below, to own beneficially at least 5% of
the Company's Common Stock, of each nominee for director and for all officers
and directors as a group.

Percent of Outstanding
Name and Address(1) Shares Common Stock
- ------------------- ------
Lewis S. Schiller(2) 15,610,000(3) 59.7%
160 Broadway
New York, NY 10038

SIS Capital Corp. 14,004,500(4) 54.5%
Consolidated Technology Group Ltd.
160 Broadway
New York, NY 10038

Joseph G. Sicinski 1,476,000(5) 6.3%
1770 Motor Parkway
Hauppauge, NY 11788

E. Gerald Kay 305,000(6),(7) 1.3%
225 Long Avenue
Hillside, NJ 07205

Norman J. Hoskin 300,000(7),(8) 1.3%
2200 Corporate Blvd.
Boca Raton, FL 33431

All directors and officers as a 17,241,000(3),(5),(6),(7),(8) 62.3%
group (seven individuals owning
stock or warrants)
- -------------

(1) Unless otherwise indicated, each person has the sole voting and sole
investment power and direct beneficial ownership of the shares.

(2) Mr. Schiller is the chairman of the board and chief executive officer
of Consolidated and chief executive officer of SISC. Accordingly, he
has the right to vote the shares owned by SISC.

(3) Includes (a) 297,500 shares of Common Stock issuable upon the exercise
of warrants held by Mr. Schiller, (b) 5,000 shares issuable upon
exercise of an option held by Mr. Schiller, (c) 150,000 shares pursuant
to an incentive stock option held by Mr. Schiller; (d) 11,187,000
shares of Common Stock owned by SISC, and (e) 2,817,500 shares of
Common Stock issuable upon exercise of warrants held by SISC.

(4) Includes 2,817,500 shares of Common Stock issuable upon exercise of
warrants held by SISC. SISC has granted Mr. Joseph G. Sicinski an
option to purchase 800,000 of its shares of Common Stock which may be
shares owned by SISC or issuable upon exercise of warrants owned by
SISC.

(5) Includes (a) 176,000 shares of Common Stock issuable pursuant to an
incentive stock option, (b) 100,000 shares issuable upon exercise of a
warrant held by Mr. Sicinski and (c) 800,000 shares of Common Stock
issuable pursuant to an option granted by SISC to Mr. Sicinski.

(6) Represents 300,000 shares of Common Stock issuable upon exercise of a
warrant and 5,000 shares issuable upon exercise of an option held by
Mr. Kay.

(7) Represents 300,000 shares of Common Stock issuable upon exercise of a
warrant held by Mr. Hoskin.

(8) Includes 100,000 shares of Common Stock issuable upon exercise of an
incentive stock option held by one other officer and 250,000 shares of
Common Stock issuable upon exercise of a warrant held by another
officer.

- 34 -
<PAGE>

DESCRIPTION OF SECURITIES

Capital Stock

The Company is authorized to issue 20,000,000 shares of Preferred
Stock, par value $.01 per share, and 50,000,000 shares of Common Stock, par
value $.01 per share. Holders of Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of stockholders. Holders
of Common Stock are entitled to share in such dividends as the Board of
Directors, in its discretion, may declare from funds legally available. In the
event of liquidation, each outstanding share entitles its holder to participate
ratably in the assets remaining after payment of liabilities. At December 31,
1996, there were 22,886,331 shares of Common Stock outstanding.

Stockholders have no preemptive or other rights to subscribe for or
purchase additional shares of any class of stock or of any other securities of
the Company, and there are no redemption or sinking fund provisions with regard
to the Common Stock. All outstanding shares of Common Stock are, and those
issuable pursuant to this Prospectus or upon exercise of the Warrants will be
when issued as provided in this Prospectus, validly issued, fully paid, and
nonassessable. Stockholders do not have cumulative voting rights.

The Company's Board of Directors is authorized to issue, from time to
time and without further stockholder action, up to 3,000,000 shares of preferred
stock in one or more distinct series. The Board of Directors is authorized to
fix the following rights and preferences, among others, for each series: (i) the
rate of dividends and whether such dividends shall be cumulative; (ii) the price
at and the terms and conditions on which shares may be redeemed; (iii) the
amount payable upon shares in the event of voluntary or involuntary liquidation;
(iv) whether or not a sinking fund shall be provided for the redemption or
purchase of shares; (v) the terms and conditions on which shares may be
converted; and (vi) whether, and in what proportion to any other series or
class, a series shall have voting rights other than required by law, and, if
voting rights are granted, the number of voting rights per share. Except as set
forth in this Prospectus, the Company has no plans, agreements or understandings
with respect to the designation of any series or the issuance of any shares of
preferred stock.

There is presently one series of Preferred Stock which is authorized --
the Series G Preferred Stock. Set forth below is information concerning such
series of Preferred Stock. The Board of Directors may create other series of
Preferred Stock which are either junior or senior to or on a parity with the G
Preferred Stock as to dividends and/or on any voluntary or mandatory liquidation
without the approval of the holders of such series of Preferred Stock. The
Company has previously authorized six other series of Preferred Stock, all of
which have either been converted into shares of Common Stock or have been
canceled. Such other series of Preferred Stock have been terminated.

Series G Preferred Stock

The Company has authorized the issuance of 1,250,000 shares of Series G
Preferred Stock, none of which are issued or outstanding. Holders of shares of
Series G Preferred Stock are entitled to receive, when and as declared by the
Board of Directors of the Company, out of funds of the Company legally available
for payment, dividends at an annual rate of $.12 per share. Dividends are
payable semi-annually on the first day of March and September of each year,
commencing September 1, 1997, to holders of record on the preceding February 15
and August 15, respectively. Dividends shall accrue from the closing date of
this Offering, and are payable in cash or in shares of Common Stock, valued at
fair market value, as the Company's board of directors shall determine. After
payment of the semi-annual dividend, each share of Series G Preferred Stock
shall receive the same per share dividend as is payable with respect to one
share of Common Stock payable during the semi-annual dividend period, which
shall be the semi-annual period ending on the day before such dividend payment
date. For the purpose of determining whether a dividend with respect to the
Common Stock is payable during a semi-annual dividend period, if the record date
for determining holders of Common Stock entitled to receive a dividend is during
such dividend period, the dividend shall be treated as a dividend payable during
such semi-annual dividend period.

Except as required by law, the holders of the Series G Preferred Stock
have no voting rights.

The holders of the Series G Preferred Stock will be entitled at any
time, commencing one year from the date of this Prospectus, or earlier with the
consent of the Company and the Representative, subject to prior redemption, to
convert each share of Series G Preferred Stock into four shares of Common Stock
of the Company. The consent of the Representative and the Company may not be
given prior to 61 days from the date of this Prospectus. If the Series G
Preferred Stock is called for redemption, conversion rights will expire at the
close of business on the business date prior to the redemption date. The
conversion rate is subject to adjustment upon the occurrence of certain events.

- 35 -
<PAGE>

The Company shall have the right to redeem the shares of Series G
Preferred Stock at a redemption price of $6.00 per share, plus accumulated and
unpaid dividends, at any time commencing one year from the date of this
Prospectus. The Series G Preferred Stock may be redeemed in whole at any time
and in part from time to time. Once the Series G Preferred Stock becomes
redeemable, the Company may redeem the Series G Preferred Stock upon at least
30, but not more than 60, days' prior written notice to the registered holders.
If the Series G Preferred Stock is called for redemption, conversion rights will
expire at the close of business on the business day prior to the redemption
date.

In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company, after payment has been made on any securities of
the Company which rank senior to the Series G Preferred Stock, holders of shares
of Series G Preferred Stock will be entitled to receive from the assets of the
Company $6.00 per share plus accrued and unpaid dividends to the payment date,
before any payment or distribution is made to holders of shares of Common Stock
or any other series or class of stock hereafter issued which ranks junior as to
liquidation rights to the Series G Preferred Stock. Thereafter, the holders of
the Series G Preferred Stock will not be entitled to any additional payment on
liquidation.

Series E Redeemable Common Stock Purchase Warrants

The holder of each Warrant is entitled, upon payment of the exercise
price of $3.00 per share, to purchase one share of Common Stock. Unless
previously redeemed, the Warrants are exercisable during the period commencing
61 days from the date of this Prospectus and ending three years from the date of
this Prospectus. A holder of the Warrants (an "Exercising Holder") will only be
able to exercise the Warrants if (a) a current prospectus under the Securities
Act relating to the shares of Common Stock issuable upon exercise of the
Warrants is then in effect, and (b) such securities are qualified for sale or
exemption from qualification under the applicable securities laws of the state
in which the Exercising Holder resides.

The Warrants are subject to redemption by the Company, on not more than
60 nor less than 30 days' written notice, at a price of $.05 per Warrant,
commencing one year from the date of this Prospectus, or earlier (but not prior
to 61 days from the date of this Prospectus with the consent of the
Representative, if the average closing price per share of the Common Stock is at
least $4.00, subject to adjustment, for at least 20 trading days ending not
earlier than 15 days prior to the date on which the Warrants are called for
redemption. Holders of Warrants will automatically forfeit their rights to
purchase the shares of Common Stock issuable upon exercise of such Warrants
unless the Warrants are exercised before the close of business on the business
day immediately prior to the date set for redemption. All of the outstanding
Warrants must be redeemed if any are redeemed. A notice of redemption shall be
mailed to each of the registered holders of the Warrants by first class mail,
postage prepaid, within ten business days (or such longer period to which the
Representative may consent) after the Warrants are called for redemption, but no
earlier than the sixtieth nor later than the thirtieth day before the date fixed
for redemption. The notice of redemption shall specify the redemption price, the
date fixed for redemption, the place where the Warrant certificates shall be
delivered and the redemption price to be paid, and that the right to exercise
the Warrants shall terminate at 5:00 p.m. (New York City time) on the business
day immediately preceding the date fixed for redemption. The Warrants can only
be redeemed if, on the date the Warrants are called for redemption, there is an
effective registration statement covering the issuance of the shares of Common
Stock issuable upon exercise of the Warrants.

The Warrants may be exercised upon surrender of the certificate(s)
therefor on or prior to 5:00 p.m. New York City time on the expiration date of
the Warrants or, if the Warrants are called for redemption, the day prior to the
redemption date (as explained above) at the offices of the Company's warrant
agent (the "Warrant Agent") with the form of "Election to Purchase" on the
reverse side of the certificate(s) filled out and executed as indicated,
accompanied by payment of the full exercise price for the number of Warrants
being exercised.

The Warrants contain provisions that protect the holders thereof
against dilution by adjustment of the exercise price in certain specified
events, such as stock dividends, stock splits, mergers, sale of substantially
all of the Company's assets, and for other similar events.

The Company is not required to issue fractional shares of Common Stock,
and in lieu thereof will make a cash payment based upon the current market value
of such fractional shares. The holder of the Warrants will not possess any
rights as a stockholder of the Company unless and until the holder exercises the
Warrants.

Although the Warrants have a fixed exercise price and a formula for
adjustments in certain events and have a fixed expiration date, it is possible
that in the future the Company may wish to reduce the exercise price or extend
the exercise period of the Warrants. The Company has no plans to reduce such
price or extend the exercise period of the Warrants. Any such change would be
effected pursuant to a post-effective amendment to the registration statement of
which this Prospectus is a part or a new

- 36 -
<PAGE>

registration statement, and no Warrants with amended terms may be exercised
unless and until such post-effective amendment or new registration statement has
been declared effective by the Commission.

The Warrants are issued pursuant to a warrant agreement among the
Company and American Stock Transfer & Trust Company, as warrant agent.

1994 Warrants

In February 1994, the Company, in its initial public offering, sold an
aggregate of 567,245 units, each unit consisting of one share of Common Stock
and one 1994 Warrant. Each 1994 Warrant entitles the holders to purchase one
share of Common Stock at $7.00 per share. The 1994 Warrant were exercisable
until August 14, 1996, and the exercise period was extended to November 14,
1996. The 1994 Warrants may be redeemed by the Company for $.10 per 1994 Warrant
if the price of the Common Stock is at least $6.00 per share for 30 consecutive
trading days.

The 1994 Warrants may be exercised upon surrender of the certificate(s)
therefor on or prior to 5:00 p.m. New York City time on the expiration date of
the 1994 Warrants or, if the 1994 Warrants are called for redemption, the day
prior to the redemption date at the offices of the warrant agent for the 1994
Warrants, accompanied by payment of the full exercise price for the number of
Warrants being exercised.

The 1994 Warrants contain provisions that protect the holders thereof
against dilution by adjustment of the exercise price in certain events, such as
stock dividends, stock splits, mergers, sale of substantially all of the
Company's assets, and for other extraordinary events.

The 1994 Warrants may not be exercised unless there is a current and
effective registration statement covering the issuance of the shares of Common
Stock on exercise of the 1994 Warrants. As of the date of this Prospectus, the
Company has not filed such a registration statement and, accordingly, the 1994
Warrants may not be exercised.

Other Warrants

There are also outstanding other warrants to purchase an aggregate of
1,242,890 shares of Common Stock at exercise prices ranging from $2.00 to $6.50
per share with varying exercise periods. The Other Warrants contain provisions
that protect the holders thereof against dilution by adjustment of the exercise
price in certain events, such as stock dividends, stock splits, mergers, sale of
substantially all of the Company's assets, and for other extraordinary events.
The holders of certain of these warrants have registration rights with respect
to the warrants or the underlying shares of Common Stock. See "Underwriting"
with respect to warrants issuable to the Underwriters upon exercise of the Unit
Purchase Options.

Dividend Policy

Except for the obligation of the Company to pay dividends with respect
to the Series F and G Preferred Stock, the Company presently intends to retain
future earnings, if any, in order to provide funds for use in the operation and
expansion of its business and accordingly does not anticipate paying cash
dividends on its Common Stock in the foreseeable future. See "Description of
Securities" for information concerning dividends payable with respect to the
Series F and G Preferred Stock.

- 37 -
<PAGE>

Shares Eligible for Future Sale

Approximately 9,400,000 of the 22,886,331 shares of Common Stock
outstanding at December 31, 1996, may be publicly sold as a result of either the
registration of such shares as part of the Company's initial public offering in
February 1994, the expiration of two-year holding period pursuant to Rule 144 of
the Commission or the expiration of the restricted period pursuant to Regulation
S of the Commission. The remaining shares become eligible for sale pursuant to
Rule 144 of the Commission two years after the date of issuance by the Company
or the date of transfer by an affiliate of the Company. Such share will become
eligible for sale pursuant to Rule 144 in May 1997, as to 3,091,782 shares, June
1997 as to 108,000 shares, September 1997 as to 954,000 shares and April 1998 as
to 5,393,000 shares. SISC and the Company's directors and executive officers
have agreed to a 24 -month lockup during which they may not sell their shares
without the prior approval of the Representative.

As of December 31, 1996, the Company had (a) outstanding 1994 Warrants
to purchase 567,245 shares of Common Stock at $7.00 per share through November
1996, which warrants are publicly traded, (b) warrants to purchase an aggregate
of 1,302,352 shares of Common Stock at exercise prices ranging from $2.00 to
$7.00 per share with various expiration dates, and (c) warrants to purchase
4,900,000 shares of Common Stock at $.50 per share through April 2001, which are
held by SISC and the Company's directors. In addition, the underwriter of the
Company's initial public offering holds unit purchase options to purchase 55,000
of the units issued in the Company's initial public offering in February 1994,
at $8.45 per unit through February 1999. Each such unit consists of one share of
the Company Common Stock and a warrant to purchase one share of the Company
Common Stock at $7.00 per share through August 1996.

The Company has adopted three stock option plans pursuant to which a
maximum of 2,792,332 shares of the Common Stock may be issued, of which options
to purchase 1,523,950 shares are outstanding.

Section 203 of the Delaware General Corporation Law

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. That section provides, with certain exceptions, that a
Delaware corporation may not engage in any of a broad range of business
combinations with a person or affiliate or associate of such person who is an
"interested stockholder" for a period of three years from the date that such
person became an interested stockholder unless: (i) the transaction resulting in
a person's becoming an interested stockholder, or the business combination, is
approved by the board of directors of the corporation before the person becomes
an interested stockholder, (ii) the interested stockholder acquires 85% or more
of the outstanding voting stock of the corporation in the same transaction that
makes it an interested stockholder (excluding certain employee stock ownership
plans); or (iii) on or after the date the person becomes an interested
stockholder, the business combination is approved by the corporation's board of
directors and by the holders of at least 66 2/3% of the corporation's
outstanding voting stock at an annual or special meeting, excluding shares owned
by the interested stockholder. An "interested stockholder" is defined as any
person that is (i) the owner of 15% or more of the outstanding voting stock of
the corporation or (ii) an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within the three year period immediately prior to the date on which it is
sought to be determined whether such person is an interested stockholder.

These provisions could have the effect of delaying, deferring or
preventing a change of control of the Company. The Company's stockholders, by
adopting an amendment to the certificate of incorporation or by-laws of the
Company, may elect not to be governed by Section 203, effective twelve months
after adoption. Neither the certificate of incorporation nor the by-laws of the
Company currently excludes the Company from the restrictions imposed by Section
203.

Transfer Agent and Warrant Agent

The transfer agent for the Common Stock and the Series G Preferred
Stock and the Warrant Agent for the Warrants is American Stock Transfer & Trust
Company, 40 Wall Street, New York, New York 10005.

- 38 -
<PAGE>

UNDERWRITING

The several underwriters, of which Patterson Travis, Inc. (the
"Representative") is the representative, have severally agreed, on the terms and
subject to the conditions of the Underwriting Agreement, to purchase from the
Company, and the Company has agreed to sell to the Underwriters, the following
Units:

Number of Units
Patterson Travis, Inc. ---------------

---------------
Total 1,000,000
===============

The Underwriters are committed to purchase and pay for all of the Units
offered hereby on a "firm commitment" basis if any are purchased.

The Representative has advised the Company that the Underwriters
propose to offer the Units to the public at the respective public offering
prices set forth on the cover page of this Prospectus. The Underwriters may
allow to certain dealers, who are members of the National Association of
Securities Dealers, Inc. ("NASD"), concessions not exceeding $. per Unit, of
which not more than $. per Unit may be reallowed to other dealers who are
members of the NASD. After the initial public offering, the offering price, the
concession and the reallowance may be changed.

The Company has granted an option to the Underwriters, which may be
exercised by the Representative for its own account or for the account of the
several Underwriters, exercisable during the 45 day period from the date of this
Prospectus, to purchase up to a maximum of 150,000 additional Units at the
offering price, less the underwriting discounts, for the sole purpose of
covering over-allotments of the Units. The Underwriting Agreement also provides
that the Company will pay the Representative a fee in the event the Company
enters into an acquisition, merger or similar transaction with a party
introduced to it by the Representative. As of the date of this Prospectus, the
Representative has not introduced the Company to any such party.

The Company has agreed to pay to the Representative a non-accountable
expense allowance of 3% of the aggregate public offering price of all Units sold
(including any Units sold pursuant to the Underwriters' over-allotment option).

The Company has agreed to enter into a two-year consulting agreement
with the Representative pursuant to which the Company will pay the
Representative, on its own behalf and not as representative of the Underwriters,
a fee of $100,000, which is to be paid in full at the closing of this Offering.
During the period of the consulting agreement, the Representative will be
reimbursed for its Company-authorized out-of-pocket expenses.

The Company's officers, directors, 5% stockholders and their affiliates
have agreed not to sell publicly any of their securities without the written
consent of the Representative for a period of 24 months from the date of this
Prospectus.

The Underwriting Agreement provides for reciprocal indemnification
between the Company and the Underwriters against certain liabilities in
connection with the Registration Statement, including liabilities under the
Securities Act.

In connection with this Offering, the Company has agreed to sell to the
Underwriters, for a purchase price of $100.00, Unit Purchase Options to purchase
from the Company up to 100,000 units at an exercise price equal to 165% of the
initial public offering price per unit. The units issuable upon exercise of the
Unit Purchase Options are similar to the Units offered hereby, except that, (i)
the warrants included in such units are Series F Redeemable Common Stock
Purchase Warrants ("Series F Warrants") and have an exercise price of $4.95 per
share and (ii) in the event that the Unit Purchase Options are exercised after
the redemption (but before the expiration) of the Warrants, the Series F
Warrants underlying the Unit Purchase Options are immediately redeemable by the
Company. The Unit Purchase Options are exercisable for a four-year period
commencing one year from the date of this Prospectus, except that, if the
Warrants expire prior to the exercise of the Unit Purchase Options, upon such
exercise the Company will issue one share of Series G Preferred Stock and no
warrants. During the one-year period commencing on the date of this Prospectus,
the Unit Purchase Options may not be sold, transferred, assigned or
hypothecated, except to the officers of the Underwriters or to selling group
members or officers or partners or members thereof, all of which shall be bound
by such restrictions. The Unit Purchase Options will contain anti-dilution
provisions providing for adjustment under

- 39 -
<PAGE>

certain circumstances similar to those applicable to the Warrants included in
the Units. The holders of the Unit Purchase Options have no voting, dividend or
other rights as stockholders of the Company with respect to securities
underlying the Unit Purchase Options. The holders of the Unit Purchase Options
have been given the opportunity to profit from a rise in the market for the
Company's securities at a nominal cost, with a resulting dilution in the
interests of stockholders. The holders of the Unit Purchase Options can be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain equity capital, if then needed, by a new equity offering on
terms more favorable than those provided by the Unit Purchase Options. Such
facts may adversely affect the terms on which the Company could obtain
additional financing. Any profit received by the Underwriters on the sale of the
Unit Purchase Options or the securities issuable upon exercise of the Unit
Purchase Options may be deemed additional underwriting compensation.

The Company has agreed during the term of the Unit Purchase Options and
for two years thereafter to give advance notice to the holders of the Unit
Purchase Options or underlying securities of its intention to file a
registration statement, and, in such case, the holders of the Unit Purchase
Options and underlying securities shall have the right to require the Company to
include the underlying securities in such registration statement at the
Company's expense. At the demand of the holders of a majority of holders of the
Unit Purchase Options and underlying Common Stock, including Common Stock issued
or issuable upon exercise of the Series F Warrants issuable upon exercise of the
Unit Purchase Options, during the term of the Unit Purchase Options, the Company
will also be required to file one such registration statement at the Company's
expense. In addition, the Company has agreed to cooperate with the holders of
the Unit Purchase Options in filing a registration at the expense of the holders
of the Unit Purchase Options or underlying securities.

The Company has also agreed to pay the Representative, in its
individual capacity and not as representative of the Underwriters, a Warrant
solicitation fee equal to 5% of the exercise price of the Warrants, a portion of
which may be reallowed to a member of the NASD who solicited or assisted in the
solicitation of the exercise of the Warrants. The Warrant exercise fee shall not
be payable with respect to any Warrant exercises prior to the first anniversary
of the date of this Prospectus and may be paid only if (i) the market price of
the Common Stock on the date the Warrant is exercised is greater than the
exercise price of the Warrant, (ii) the exercise of the Warrant was solicited by
a member of the NASD and the customer states in writing that the transaction was
solicited and designates in writing the broker-dealer to receive compensation
for the exercise, (iii) the Warrant is not held in a discretionary account, (iv)
disclosure of the compensation arrangements are made, in addition to the
disclosure provided in this Prospectus, in documents provided to holders of
warrants at the time of exercise, and (v) the solicitation of the Warrant was
not made in violation of Rule 10b-6 of the Commission under the Securities
Exchange Act of 1934.

Rule 10b-6 of the Commission pursuant to the Exchange Act may prohibit
the Representative from engaging in any market making activities with regard to
the Company's securities for the period from nine business days (or such other
applicable period as Rule 10b-6 may provide) prior to any solicitation by the
Representative of the exercise of Warrants until the later of the termination of
such solicitation activity or the termination (by waiver or otherwise) of any
right that the Representative may have to receive a fee for the exercise of
Warrants following such solicitation. As a result, the Representative may be
unable to provide a market for the Company's securities during certain periods
while the Warrants are exercisable.

Prior to this Offering there has been no public market for the Units,
Series G Preferred Stock or Warrants. The public offering price and composition
of the Units, the conversion rate and other terms of the Series G Preferred
Stock and the exercise price and other terms of the Warrants have been
arbitrarily determined by negotiation between the Company and the
Representative.

The Representative has informed the Company that sales to any account
over which the Underwriters exercise discretionary authority will not exceed 1%
of this Offering.

LEGAL MATTERS

Esanu Katsky Korins & Siger, 605 Third Avenue, New York, New York
10158, counsel for the Company, have given their opinion as to the authorization
and valid issuance of the shares of Common Stock and Warrants comprising the
Units offered by this Prospectus. Bernstein & Wasserman, LLP, 950 Third Avenue,
New York, New York 10022, is acting as counsel for the Underwriters in
connection with this Offering.

- 40 -
<PAGE>

EXPERTS

The financial statements of the Company and the statements of
operations and retained earnings (deficit) and cash flows of Avionics included
in this Prospectus have been audited by Moore Stephens, P.C., independent
certified public accountants, as stated in their reports appearing herein and
are included in reliance on their reports given on the authority of that firm as
experts in accounting and auditing.

The statements of operation, changes in divisional equity and cash
flows of the International Technical Division of Job Shop Technical Services,
Inc. (the "Job Shop Division") for the period January 1 to November 21, 1994
included in this Prospectus have been audited by Moore Stephens, P.C.,
independent certified public accountants, as stated in their report appearing
herein, which report includes explanatory paragraphs as to the ability of the
Job Shop Division to continue as a going concern and as to the outcome of
certain litigation and an investigation, and are included in reliance on their
report given on the authority of that firm as experts in accounting and
auditing.

The statements of operation, accumulated deficit and cash flows of Job
Shop for the year ended December 31, 1993 included in this Prospectus have been
audited by Edward Isaacs & Company LLP, independent certified public
accountants, as stated in their report appearing herein, which report includes
an explanatory paragraph as to the ability of Job Shop to continue as a going
concern, and are included in reliance on their report given on the authority of
that firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

A Registration Statement on Form S-1 relating to the securities offered
hereby has been filed by the Company with the Securities and Exchange
Commission. This Prospectus does not contain all of the information set forth in
such Registration Statement. For further information with respect to the Company
and to the securities offered hereby, reference is made to such Registration
Statement, including the exhibits thereto. Statements contained in this
Prospectus as to the content of any contract or other document referred to are
not necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.

- 41 -
<PAGE>

[This page intentionally left blank]

- 42 -
<PAGE>

INDEX TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

Page
Trans Global Services, Inc. and Subsidiaries

Report of Independent Certified Public Accountants................... F-3

Balance Sheets as of September 30, 1996 [ Unaudited] and December
31, 1995 and 1994.................................................... F-4

Statements of Operations for the nine months ended September 30,
1996 and 1995 [Unaudited] and for the years ended December 31,
1995 and 1994........................................................ F-6

Statements of Changes in Stockholders' Equity for the nine months
ended September 30, 1996 [Unaudited] and for the years ended December
31, 1995 and 1994.................................................... F-7

Statements of Cash Flows for the nine months ended September 30, 1996
and 1995 [Unaudited] and for the years ended December 31, 1995
and 1994............................................................. F-9

Notes to Financial Statements........................................ F-12

Avionics Research Corporation

Report of Independent Certified Public Accountants................... F-24

Combined Statement of Operations and Retained Earnings [Deficit]
for the year ended December 31, 1993................................. F-25

Combined Statement of Cash Flows for the year ended December 31, 1993.. F-26

Notes to Combined Financial Statements................................ F-27

International Technical Services Division of Job Shop Technical
Services, Inc.

Report of Independent Certified Public Accountants................... F-29

Statement of Operations for the period January 1 to November 21, 1994.. F-30

Statement of Changes in Divisional Equity for the period January 1 to
November 21, 1994...................................................... F-31

Statement of Cash Flows for the period ended January 1 to November 21,
1994................................................................. F-32

Notes to Financial Statements........................................ F-33

Job Shop Technical Services, Inc.

Independent Auditors' Report......................................... F-36

Statement of Operations for the year ended December 31, 1993......... F-37

Statement of Accumulated Deficit for the year ended December 31, 1993. F-38

Statement of Cash Flows for the year ended December 31, 1993......... F-39

Notes to Financial Statements........................................ F-40

. . . . . . . . . . .

F-1
<PAGE>

[This page intentionally left blank]

F-2
<PAGE>
INDEPENDENT AUDITOR'S REPORT

To the Stockholders of Trans Global Services, Inc.
Hauppauge, New York

We have audited the accompanying balance sheets of Trans
Global Services, Inc. and its subsidiaries as of December 31, 1995 and 1994, and
the related statements of operations, stockholders' equity, and cash flows for
each of the two years in the period ended December 31, 1995. 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 consolidated 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 Trans Global
Services, Inc. and its subsidiaries as of December 31, 1995, and the results of
their operations and their cash flows for each of the two years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

MORTENSON AND ASSOCIATES, P. C.
Certified Public Accountants.

Cranford, New Jersey
March 27, 1996

F-3
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

BALANCE SHEETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
------------- ------------
1 9 9 6 1 9 9 5 1 9 9 4
------- ------- -------
[Consolidated] [Consolidated] [Combined]
[Unaudited]
<S> <C> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 515,479 $ 210,597 $ --
Accounts Receivable - Net 6,405,729 4,869,116 5,427,078
Loans Receivable - Officer 22,500 22,500 --
Prepaid Expenses and Other Current Assets 181,239 80,966 90,483
----------------- --------------- ---------------
Total Current Assets 7,124,947 5,183,179 5,517,561
----------------- --------------- ---------------
Property and Equipment - Net 67,521 41,205 11,428
----------------- --------------- ---------------
Other Assets:
Due from Affiliates 1,449,785 1,234,428 --
Customer Lists 2,894,777 3,063,503 3,453,468
Goodwill - Net 836,270 872,705 921,285
Covenant Not-to-Compete 105,744 241,833 423,285
Other Assets 24,215 25,074 17,546
Investment in Preferred Stock of Affiliate 2,100,730 2,100,730 --
----------------- --------------- ---------------
Total Other Assets 7,411,521 7,538,273 4,815,584
----------------- --------------- ---------------
Total Assets $ 14,603,989 $ 12,762,657 $ 10,344,573
================= =============== ===============
</TABLE>
See Notes to Financial Statements.

F-4
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

BALANCE SHEETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
------------- ------------
1 9 9 6 1 9 9 5 1 9 9 4
------- ------- -------
[Consolidated] [Consolidated] [Combined]
[Unaudited]
<S> <C> <C> <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
Cash Overdraft $ -- $ -- $ 360,306
Accounts Payable and Accrued Expenses 649,376 551,094 1,281,159
Accrued Payroll and Related Taxes and Expenses 3,148,766 1,755,685 707,161
Accrued Payroll Tax Penalties 75,000 700,000 --
Accrued Contingency Settlement 300,000 -- --
Loans Payable - Asset-Based Lender 3,564,862 3,678,702 4,019,161
Notes Payable - Bank -- 60,513 --
Note Payable - Other 138,230 138,230 155,308
Subordinated Debt Current Portion - IRS Debt -- 700,000 800,000
----------------- --------------- ---------------
Total Current Liabilities 7,876,234 7,584,224 7,323,095
----------------- --------------- ---------------
Other Liabilities:
Due to Affiliates -- 926,832 --
Notes Payable - Long-Term -- -- 124,870
Subordinated Debt Long-Term Portion - IRS Debt -- -- 700,000
Notes Payable - Related Party -- -- 884,980
----------------- --------------- ---------------
Total Other Liabilities -- 926,832 1,709,850
----------------- --------------- ---------------
Commitments and Contingencies -- -- --
----------------- --------------- ---------------

Stockholders' Equity:
Preferred Stock, $.01 Par Value, 3,000,000 Shares Authorized
[25,000 Shares each of Series A, B and C, 20,000 Shares of
Series D [Liquidation Preference of $1,700,000] December 31,
1994 and 1995; and 5,000 Shares of Series E, December 31,
1995, and 10,000 Shares of Series F - September 30, 1996] 100 1,000 950

Common Stock, $.01 Par Value, 20,000,000 Shares Authorized,
Shares Issued and Outstanding [12,851,331 - September 30,
1996, 3,424,609 - December 31, 1995, 600,000 -
December 31, 1994] 128,514 34,246 6,000

Capital in Excess of Par Value 12,813,934 9,831,234 1,715,300

Deferred Consulting Fees (338,691) (508,512) --

Accumulated Deficit (5,876,102) (5,106,367) (410,622)
----------------- --------------- ---------------
Total Stockholders' Equity 6,727,755 4,251,601 1,311,628
----------------- --------------- ---------------
Total Liabilities and Stockholders' Equity $ 14,603,989 $ 12,762,657 $ 10,344,573
================= =============== ===============
</TABLE>
See Notes to Financial Statements.

F-5
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine months ended Years ended
September 30, December 31,
1 9 9 6 1 9 9 5 1 9 9 5 1 9 9 4
------- ------- ------- -------
[Consolidated] [Consolidated] [Consolidated] [Combined]
[Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
Revenues $ 45,379,718 $ 48,172,197 $ 63,151,995 $ 25,287,089
Cost of Services Provided 41,562,317 45,288,653 59,157,016 23,704,230
---------------- --------------- ---------------- ---------------
Gross Profit 3,817,401 2,883,544 3,994,979 1,582,859
---------------- --------------- ---------------- ---------------
Operating Expenses:
Selling, General and Administrative
Expenses 3,495,625 2,888,637 6,448,030 997,122
Amortization - Intangibles 341,400 484,243 455,197 308,974
Acquisition Expenses -- 528,578 528,578 --
---------------- --------------- ---------------- ---------------
Total Operating Expenses 3,837,025 3,901,458 7,431,805 1,306,096
---------------- --------------- ---------------- ---------------
Operating [Loss] Profit (19,624) (1,017,914) (3,436,826) 276,763
---------------- --------------- ---------------- ---------------
Other Income [Expenses]:
Interest Expense (508,688) (739,691) (963,211) (696,129)
Other Income [Expense] 58,577 (26,000) (12,890) 8,744
Contingency Settlement (300,000) -- -- --
---------------- --------------- ---------------- ---------------
Total Other [Expenses] - Net (750,111) (765,691) (976,101) (687,385)
---------------- --------------- ---------------- ---------------
Net Loss From Continuing Operations (769,735) (1,783,605) (4,412,927) (410,622)
---------------- --------------- ---------------- ---------------

Discontinued Operations:
Loss from Discontinued Operations -- (88,866) (247,076) --
Loss on Sale of Discontinued Segment -- -- (35,742) --
---------------- --------------- ---------------- ---------------
Total Discontinued Operations -- (88,866) (282,818) --
---------------- --------------- ---------------- ---------------
Net Loss $ (769,735) $ (1,872,471) $ (4,695,745) $ (410,622)
================ =============== ================ ===============

Net Loss Per Share of Common Stock:
Continuing Operations $ (.09) $ (.69) $ (1.39) $ (.68)
Discontinued Operations -- (.03) (.09) --
---------------- --------------- ---------------- ---------------
Totals $ (.09) $ (.72) $ (1.48) $ (.68)
================ =============== ================ ===============
Weighted Average Number of Shares of
Common Stock 8,525,227 2,591,982 3,172,696 600,000
================ =============== ================ ===============
</TABLE>
See Notes to Financial Statements.

F-6
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

STATEMENTS OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Preferred Preferred Stock
Preferred Stock Preferred Stock $.01 Stock $0.01 Par $0.01 Par Value
$0.01 Par Value Preferred Par Value Series "D" Value Series "E" Convertible
"A" Convertible Stock $.01 Par Convertible 6.25% Convertible Participating
Participating Value Series "B" & "C" Redeemable Participating Series "F"
------------- ---------------------- ---------- ------------- ----------
Authorized Convertible Authorized Authorized Authorized Authorized
25,000 Shares 25,000 Shares Each 20,000 Shares 5,000 Shares 9,950 Shares
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Stock at
Inception 25,000 $ 250 50,000 $ 500 20,000 $ 200 -- $ -- -- $ --

Net [Loss] for the Period
Ended December 31, 1994 -- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- -------- ------ ------ ------ ------ ------

Balance - December 31,
1994 25,000 250 50,000 500 20,000 200 -- -- -- --

Acquisition of Concept -- -- -- -- -- -- -- -- -- --

Exercise of Stock Options -- -- -- -- -- -- -- -- -- --

Issuance of Common Stock
- Private Placement -- -- -- -- -- -- -- -- -- --

Issuance of Common Stock
- Legend Stock -- -- -- -- -- -- -- -- -- --

Issuance of Preferred
Stock to Repay Debt -- -- -- -- -- -- 5,000 50 -- --

Issuance of Common Stock
- Regulation S -- -- -- -- -- -- -- -- -- --

Issuance of Below Market
Options -- -- -- -- -- -- -- -- -- --

Issuance of Common Stock
- Sale of WWR -- -- -- -- -- -- -- -- -- --

Amortization of Deferred
Consulting Costs -- -- -- -- -- -- -- -- -- --

Acquisition Expenses -- -- -- -- -- -- -- -- -- --
Issuance of Common Stock
- Sirrom Capital -- -- -- -- -- -- -- -- -- --

Exercise of Stock Options -- -- -- -- -- -- -- -- -- --

Reverse Merger Costs -- -- -- -- -- -- -- -- -- --

Forgiveness of Accrued
Interest Prior Years -- -- -- -- -- -- -- -- -- --

Net Loss -- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- -------- ------ ------ ------ ------- ------
Balance - December 31,
1995 - Forward 25,000 $ 250 50,000 $ 500 20,000 $ 200 5,000 $ 50 -- $ --
(continued)
</TABLE>
See Notes to Financial Statements.
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

STATEMENTS OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock $.01
-----------------
Par Value Authorized Capital in Total
4,000,000 Shares Excess of Accumulated Deferred Stockholders'
Shares Amount Par Value Deficit Charges Equity
------- ------- ----------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Issuance of Stock at
Inception 600,000 $ 6,000 $ 1,715,300 $ -- $ -- $ 1,722,250

Net [Loss] for the Period
Ended December 31, 1994 -- -- -- (410,622) -- (410,622)
------- ------- ----------- -------- ---------- ----------

Balance - December 31,
1994 600,000 6,000 1,715,300 (410,622) -- 1,311,628

Acquisition of Concept 1,485,589 14,856 967,966 -- -- 982,822

Exercise of Stock Options 767,000 7,670 3,226,366 -- (2,543,536) 690,500

Issuance of Common Stock
- Private Placement 151,300 1,513 452,387 -- -- 453,900

Issuance of Common Stock
- Legend Stock 2,600 26 (26) -- -- --

Issuance of Preferred
Stock to Repay Debt -- -- 199,950 -- -- 200,000

Issuance of Common Stock
- Regulation S 390,000 3,900 996,100 -- -- 1,000,000

Issuance of Below Market
Options -- -- 178,750 -- (178,750) --

Issuance of Common Stock
- Sale of WWR -- -- 1,537,000 -- -- 1,537,000

Amortization of Deferred
Consulting Costs -- -- -- -- 2,213,774 2,213,774

Acquisition Expenses -- -- 528,578 -- -- 528,578
Issuance of Common Stock
- Sirrom Capital 3,120 31 10,499 -- -- 10,530

Exercise of Stock Options 25,000 250 24,750 -- -- 25,000

Reverse Merger Costs -- -- (117,854) -- -- (117,854)

Forgiveness of Accrued
Interest Prior Years -- -- 111,468 -- -- 111,468

Net Loss -- -- -- (4,695,745) -- (4,695,745)
--------- ------- ----------- ----------- ---------- ----------
Balance - December 31,
1995 - Forward 3,424,609 $34,246 $ 9,831,234 $(5,106,367) $ (508,512) $ 4,251,601
(concluded)
</TABLE>
See Notes to Financial Statements.

F-7
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- -------------------------------------------------------------------------------

STATEMENTS OF STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Preferred Preferred Stock
Preferred Stock Preferred Stock $.01 Stock $0.01 Par $0.01 Par Value
$0.01 Par Value Preferred Par Value Series "D" Value Series "E" Convertible
"A" Convertible Stock $.01 Par Convertible 6.25% Convertible Participating
Participating Value Series "B" & "C" Redeemable Participating Series "F"
------------- ---------------------- ---------- ------------- ----------
Authorized Convertible Authorized Authorized Authorized Authorized
25,000 Shares 25,000 Shares Each 20,000 Shares 5,000 Shares 9,950 Shares
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance - December 31,
1995 - Forwarded 25,000 $ 250 50,000 $ 500 20,000 $ 200 5,000 $ 50 -- $ --

Conversion of Series
"A" and "E" Preferred
Stock to Common (25,000) (250) -- -- -- -- (5,000) (50) -- --

Issuance of Common Stock
- Regulation S -- -- -- -- -- -- -- -- -- --

Issuance of Common Stock
- Sirrom Capital -- -- -- -- -- -- -- -- -- --

Deferred Issuance of
Common Stock Related
to Acquisition Stock
of Concept -- -- -- -- -- -- -- -- -- --

Deferred Issuance of
Common Stock Related
to Sale of WWR -- -- -- -- -- -- -- -- -- --

SISC Recapitalization -- -- (50,000) (500) (20,000) (200) -- -- 10,000 100

Amortization of Deferred
Consulting Costs -- -- -- -- -- -- -- -- -- --

Expiration of Below
Market Options -- -- -- -- -- -- -- -- -- --

Issuance of Below
Market Options -- -- -- -- -- -- -- -- -- --

Recapture of Amortization
on Expired Below
Market Options -- -- -- -- -- -- -- -- -- --

Net Loss -- -- -- -- -- -- -- -- -- --
------ ------- ------ ------ ------ ------ ------ ------ ------ -----
Balance - September 30,
1996 [Unaudited] -- $ -- -- $ -- -- $ -- -- $ -- 10,000 $ 100
====== ======= ====== ====== ====== ====== ====== ====== ====== ======
(continued)
</TABLE>
See Notes to Financial Statements.
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- -------------------------------------------------------------------------------

STATEMENTS OF STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock $.01
-----------------
Par Value Authorized Capital in Total
4,000,000 Shares Excess of Accumulated Deferred Stockholders'
Shares Amount Par Value Deficit Charges Equity
--------- ------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31,
1995 - Forwarded 3,424,609 $34,246 $ 9,831,234 $(5,106,367) $ (508,512) $4,251,601

Conversion of Series
"A" and "E" Preferred
Stock to Common 2,120,000 21,200 (20,900) -- -- --

Issuance of Common Stock
- Regulation S 5,500,000 55,000 2,320,000 -- -- 2,375,000

Issuance of Common Stock
- Sirrom Capital 6,240 63 9,443 -- -- 9,506

Deferred Issuance of
Common Stock Related
to Acquisition Stock
of Concept 740,482 7,405 (7,405) -- -- --

Deferred Issuance of
Common Stock Related
to Sale of WWR 1,060,000 10,600 (10,600) -- -- --

SISC Recapitalization -- -- 750,600 -- -- 750,000

Amortization of Deferred
Consulting Costs -- -- -- -- 194,890 194,890

Expiration of Below
Market Options -- -- (138,125) -- 138,125 --

Issuance of Below
Market Options -- -- 79,687 -- (79,687) --

Recapture of Amortization
on Expired Below Market
Options -- -- -- -- (83,507) (83,507)

Net Loss -- -- -- (769,735) -- (769,735)
---------- -------- ----------- ----------- ---------- ---------
Balance - September 30,
1996 [Unaudited] 12,851,331 $128,514 $12,813,934 $(5,876,102) $ (338,691) $6,727,755
========== ======== =========== =========== ========== ==========
(concluded)
</TABLE>
See Notes to Financial Statements.

F-8
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

Changes in Assets and Liabilities:
[Increase] Decrease in:
Receivables (1,536,613) (500,897) 473,305 (271,498)
Work in Process -- -- -- 22,600
Inventories -- -- 55,226 --
Loan Receivable - Officer -- (22,500) (22,500) --
Prepaid Expenses and Other Current
Assets (100,273) (34,750) (84,852) 25,897

Increase [Decrease] in:
Accounts Payable and Accrued Expenses 98,282 (58,854) (544,981) (535,841)
Accrued Payroll Taxes and Related
Expenses 1,393,081 1,009,389 1,076,504 (242,033)
Accrued Payroll Tax Penalties (625,000) -- 700,000 --
Accrued Contingency Settlement 300,000 -- -- --
Accrued Interest -- 53,302 -- --
---------------- --------------- ---------------- ---------------
Total Adjustments 10,817 1,704,619 4,939,764 (683,080)
---------------- --------------- ---------------- ---------------
Net Cash - Continuing Operations (758,918) (78,986) 526,837 (1,093,702)
---------------- --------------- ---------------- ---------------

Net Loss from Discontinued Operations -- (88,866) (282,818) --
Adjustments to Reconcile Net Loss to
Net Cash Used for Discontinued Operations:
Gain on Sale of Discontinued Segment -- 8,923 -- --
Depreciation and Amortization -- 68,558 149,906 --
Loss on Sale of Discontinued Segments -- -- 35,742 --
Other -- (17,846) -- --
---------------- --------------- ---------------- ---------------
Net Cash - Continuing Operations -- (29,231) (97,170) --
---------------- --------------- ---------------- ---------------
Net Cash - Operating Activities -
Forward $ (758,918) $ (108,217) $ 429,667 $ (1,093,702)
</TABLE>
See Notes to Financial Statements.

F-9
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine months ended Years ended
September 30, December 31,
1 9 9 6 1 9 9 5 1 9 9 5 1 9 9 4
------- ------- ------- -------
[Consolidated] [Consolidated] [Consolidated] [Combined]
[Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
Net Cash - Operating Activities -
Forwarded $ (758,918) $ (108,217) $ 429,667 $ (1,093,702)
---------------- --------------- ---------------- ---------------
Investing Activities:
Decrease in Deferred Offering Costs and
Other Assets -- -- -- --
Capital Expenditures (45,517) (112,072) (110,384) (2,095)
Cash of Merged Company -- 504,210 504,210 --
Net [Advances to] and Repayments to
Affiliates (215,357) (799,571) (791,105) 459,241
Net Cash of Subsidiary Sold -- (46,600) (46,600) --
Proceeds on Sale of Property and Equipment -- -- -- 1,300
Other 859 -- -- --
---------------- --------------- ---------------- ---------------
Net Cash - Investing Activities (260,015) (454,033) (443,879) 458,446
---------------- --------------- ---------------- ---------------
Financing Activities:
Net Advances from and [Payments] to
Asset-Based Lender (113,840) (172,504) (340,459) 550,443
Repayment of Long-Term Debt -- -- (125,201) (144,837)
Repayment of Subordinated Debt (700,000) (500,000) (800,000) --
Net Advances from Affiliates -- 236,789 -- --
Net [Payments] to Affiliates (176,832) -- (201,471) --
Issuance of Common Stock 2,375,000 1,453,900 1,453,900 --
Expenses Related to Merged Company -- -- (117,154) --
Exercise of Stock Options -- 690,500 715,500 --
Cash Overdraft -- -- (360,306) 229,650
Repayment of Note Payable (60,513) -- -- --
Loan Repayment -- (373,812) -- --
---------------- --------------- ---------------- ---------------
Net Cash - Financing Activities 1,323,815 1,334,873 224,809 635,256
---------------- --------------- ---------------- ---------------
Net Increase in Cash and Cash
Equivalents 304,882 772,623 210,597 --

Cash and Cash Equivalents - Beginning
of Periods 210,597 (360,306) -- --
---------------- --------------- ---------------- ---------------
Cash and Cash Equivalents - End of
Periods $ 515,479 $ 412,317 $ 210,597 $ --
================ =============== ================ ===============

Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest $ 508,688 $ 685,680 $ 909,200 $ 696,129
Income Taxes $ -- $ -- $ -- $ --
</TABLE>
See Notes to Financial Statements.

F-10
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------

STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
During the nine months ended September 30, 1996, the Company had the following:
o Issued preferred stock with a value of $750,000 to an affiliate and
reduced amounts owed to such affiliate by $750,000 plus accrued interest.
o A stock option granted in 1995 expired without having exercised 85,000
shares. This resulted in a recapture of $83,507 of amortization expense.
Additional stock options were granted and incurred non-cash deferred
charges of $79,687 which will be amortized over the 2 year life of the
grant.

During the year ended December 31, 1995, the Company had the following:
o Acquired the net assets of Concept Technologies Group, Inc. through a
reverse merger. Total net assets of such entities acquired was $982,822
including cash of $504,210 at the date of acquisition.
o Issued preferred stock with a value of $200,000 to an affiliate and
reduced amounts owed to such affiliate by $200,000 plus accrued interest.
o Issued stock options and received exercise proceeds of $715,500 and
incurred non-cash deferred changes of $2,213,774.
o An affiliate forgave $111,468 of accrued interest payable which has been
recorded as a contribution to capital.

See Notes to Financial Statements.

F-11
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[1] Basis of Presentation

On May 8, 1995, the Company acquired all of the issued and outstanding capital
stock of Trans Global Services, Inc. ["Trans Global"] and issued [a] 1,000,000
shares of Common Stock, [b] shares of a series of preferred stock that, upon the
filing of a certificate of amendment to the Company's certificate of
incorporation increasing the authorized Common Stock, are convertible into
2,000,000 shares of Common Stock and vote with the Common Stock [based on the
number of shares of Common Stock issuable upon conversion], [c] shares of two
series of preferred stock which are convertible into an aggregate of 2,500,000
shares of Common Stock if certain levels of net income before income taxes for
1995 and 1996 are attained, and [d] shares of a series of preferred stock which
are not convertible, but which have an aggregate redemption price of
approximately $1.7 million, and is payable from 50% of the net proceeds received
by the Company from the sale of equity securities.

As a result of the acquisition of Trans Global [the "Trans Global Transaction"],
[i] the principal business of the Company became the business of providing
engineers, designers and other technical personnel to its clients, which include
major companies in the aerospace, electronics, computer and other industries,
which is Trans Global's business, and [ii] the principal stockholder of the
Company became SIS Capital Corp. ["SISC"], a wholly-owned subsidiary of
Consolidated Technology Group Ltd., ["Consolidated"], a publicly held company.
Trans Global operates through two subsidiaries, Avionics Research Holdings, Inc.
["Holdings"], formerly ARC Acquisition Group ["ARC"] and Resource Management
International, Inc. ["RMI"].

The Trans Global Transaction was accounted for as a reverse merger, with Trans
Global being the surviving company. Trans Global was formed by SISC in January
1995, to hold the stock of two predecessor corporations, ARC, which was acquired
by SISC in December 1993, and RMI, which was acquired by SISC in November 1994.
In accounting for the reverse merger, the equity of Trans Global, as the
surviving corporation, and Concept Technologies Group, Ltd., which, when
referred to as the acquired corporation is referred to as "Concept", as the
acquired corporation, was recapitalized as of March 31,1995. The
recapitalization included the reclassification of Concept's accumulated deficit
of $11,060,479 as a reduction of capital in excess of par value-common stock and
the reclassification of Trans Global's March 31,1995 preferred stock and common
stock to capital in excess of par value-common stock.

The Company's principal business [the "Concept business"] prior to the Trans
Global Transaction was the ownership and operation of WWR Technology, Inc,
["WWR"] the Klipsch Professional Loudspeaker business, which has been
discontinued. It also is the developer and owner of several proprietary
technologies with applications in environmental noise cancellation, medical
monitoring, defense and communications, however, such technologies have not
generated any significant revenues for the Company, and those operations have
also been discontinued.

As of September 30, 1995 the Company sold all of the issued and outstanding
shares of capital stock of a subsidiary, WWR to SES Holdings, in consideration
for which SISC released the Company from its obligations with respect to a
$275,000 advance made to the Company and WWR in order to enable WWR to pay an
outstanding debenture. As part of the transaction, the Company issued to SISC
1,060,000 shares of Common Stock, the delivery of which was deferred until the
approval of an amendment of the Company's Certificate of Incorporation
increasing its authorized common stock. WWR had, at the time of the transaction,
a deficiency in stockholders' equity of approximately $1.5 million. Among WWR's
liabilities was approximately $2.1 million, payable to the Company, which, based
upon WWR's historical and current cash flow, would not likely be paid in the
near future. This payable was satisfied through the issuance by Consolidated,
the parent of SISC, of shares of a newly-created series of Consolidated
preferred stock which converts on December 31, 2000 into such number of shares
of Consolidated's common stock, not to exceed 2.8 million shares, as have a
value equal to $2.1 million. This is on the balance sheet as investment in
Preferred Stock of Affiliate.

F-12
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #2
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[1] Basis of Presentation [Continued]

The balance sheet information at December 31, 1995 reflects the consolidated
financial position of the Company with Trans Global as the surviving entity and
the sale of WWR stock. The results of operations for the twelve months ended
December 31, 1995 and the cash flows for the twelve months ended December 31,
1995 reflect the operations of Trans Global from the beginning of the period.

[2] Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated financial statements include the
accounts of Concept Technologies Group, Inc. and Trans Global and its
affiliates, ARC and RMI. All intercompany transactions have been eliminated in
consolidation.

Principles of Combination - The 1994 combined financial statements include the
accounts of Trans Global and its affiliates [the "Company"], ARC and RMI. All
intercompany transactions have been eliminated in combination.

The combined financial statements reflect the combined financial position of
Trans Global, ARC and RMI as of December 31, 1994 and the results of operations
of ARC from January 1, 1994 to December 31, 1994 and of RMI from November 22,
1994 [period of acquisition] to December 31, 1994.

Receivables - The Company finances a majority of its receivables from an
asset-based lender under agreements entered into in August 1994. The agreements
have a maximum availability of funds of $5,500,000. Funds can be advanced in an
amount equal to 85% of the total face amount of outstanding and unpaid
receivables, with the asset-based lender having the right to reserve 15% of the
outstanding and unpaid receivables financed. The interest rate is equal to the
base lending rate of an agreed upon bank, which was 8.25% at December 31, 1995
plus 2% and a commission of .3% of the receivables financed. The asset-based
lender has a security interest in all accounts receivables, contract rights,
personal property, fixtures and inventory of the Company. At December 31,1995
and 1994, the total amount advanced by the asset-based lender was $3,678,702 and
$4,019,161, respectively. The weighted average interest rate on this short-term
borrowing outstanding as of December 31, 1995 is approximately 11%.

Prepaid Expenses and Other Current Assets - Prepaid expenses consist of
approximately $78,000 of prepaid insurance.

Property and Equipment - Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are
computed using straight-line and accelerated methods over the estimated useful
lives of the respective assets. Estimated useful lives range from 3 to 10 years
as follows:

Furniture and Fixtures 5 - 7 years
Leasehold Improvements 5 - 10 years
Transportation Equipment 3 - 4 years
Equipment 5 - 10 years

Expenditures for maintenance and repairs, which do not improve or extend the
life of the respective assets are expensed currently while major repairs are
capitalized.

Revenue Recognition - The Company records revenue as services are provided by
engineering personnel.

F-13
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #3
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[2] Summary of Significant Accounting Policies [Continued]

Loss Per Share - reflects the weighted average number of shares issued during
the period [ including shares for which the issuance has been deferred but with
respect to which the consideration has been received by the Company]. With
respect to the year ended December 31, 1995, additional shares were to be issued
by the Company, but the persons to whom such shares were to be issued agreed to
defer receipt of the shares until the Company increases its authorized common
stock. Such shares were issued upon the filing of an amendment to the Company's
certificate of incorporation increasing the authorized capital stock. Such an
amendment was approved by the Company's board of directors, in May 1995 and by
stockholders in March 1996. The consideration for such shares is included in
additional paid in capital. Upon the issuance of the shares, the par value of
the shares will be transferred from additional paid in capital to common stock.
At December 31, 1995, the total number of shares to be so issued was 1,800,482
of which 1,460,000 were issuable to SISC. Common Stock equivalents are not
included in the computation since their effect would be anti-dilutive.

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

Concentration of Credit Risk - The Company extends credit to customers which
results in accounts receivable arising from its normal business activities and
does not require its customers to collateralize their payables to the Company.
It routinely assesses the financial strength of its customers and believes that
its accounts receivable credit risk exposure is limited. Such estimate of the
financial strength of such customers may be subject to change in the near term.

[3] Going Concern Considerations

The accompanying consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the satisfaction
of liabilities and commitments in the normal course of business. As shown in the
consolidated financial statements, the Company incurred a net loss of $4,695,745
for the year ended December 31, 1995, and has accumulated a deficit to that date
of $5,106,367. The continuation of the Company as a going concern is dependent
upon its ability to obtain additional and more favorable financing and proceeds
from a proposed public offering. All of these factors had raised substantial
doubt about the ability of the Company to continue as a going concern.

Such substantial doubt has been alleviated due to the Company's availability of
substantial additional funding under its existing financing arrangements and the
approximately $2 million in financing to be made available in connection with a
proposed public offering. Additionally, the $4.7 million loss for 1995 was due
primarily to non-cash expenses as evidenced by the Company's ability to generate
positive cash flow of $210,597 for the year. Another factor is the Company's
ability to replace certain former contracts with contracts that will generate
higher gross profit margins.

F-14
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #4
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[4] Property and Equipment

Property and equipment at December 31, 1995 and 1994 is as follows:

1 9 9 5 1 9 9 4
------- -------

Equipment $ 253,279 $ 223,109
Furniture and Fixtures 180,452 169,027
Leasehold Improvements 1,039 1,039
---------- ----------

Total - At Cost 434,770 393,175
Less: Accumulated Depreciation 393,565 381,747
---------- ----------
Total $ 41,205 $ 11,428
----- ========== ==========

Depreciation expense charged to operations was $11,820 in 1995 and $5,973 in
1994.

[5] Intangibles

The Company acquired its subsidiaries [See Note 1] during 1994. As part of the
purchase agreement, the Company acquired customer lists, a restrictive covenant
and goodwill. The intangible assets acquired and the related amortization on the
straight-line method are summarized as follows:
<TABLE>
<CAPTION>
Accumulated Net of
Amortization Amortization
Life December 31, December 31,
Years Cost 1 9 9 5 1995
<S> <C> <C> <C> <C>
Customer Lists 15 $ 3,374,477 $ 310,974 $ 3,063,503
Goodwill 20 $ 971,623 $ 98,918 $ 872,705
Covenants Not-to-Compete 5 $ 907,257 $ 665,424 $ 241,833
</TABLE>
Management has determined that expected future cash flows exceed the carrying
value of the intangibles at December 31, 1995. It is at least reasonably
possible that management's estimate of expected future cash flows will change,
in the near term.

[6] Subordinated Debt

The Company, as part of its acquisition of RMI, agreed to assume a certain debt
for delinquent taxes owed to the Internal Revenue Service. The total outstanding
amount of the debt was $2,000,000, of which $500,000 was paid at the closing of
the acquisition of RMI. The remaining $1,500,000 is payable in 15 monthly
installments of $100,000 commencing May 31, 1995. The remaining balance as of
December 31, 1995 is $700,000. No interest is being charged on this obligation.
Such agreement requires the Company to be in compliance with current IRS
Regulations concerning the timely deposit of Federal employment and withholding
taxes [See Note 11].

[7] Related Party Transactions

During the period ended December 31, 1995, the Company borrowed from SISC
$48,529 . Interest is accumulated at 10% per annum. The Company also advanced
$1,041,105 to companies affiliated to SISC. The Company exchanged $200,000 of
debt to SISC for 5,000 shares of Series E Convertible Participating Preferred
Stock [See Note 15].

F-15
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #5
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[7] Related Party Transactions [Continued]

During the period ended December 31, 1994, the Company received $1,276,577 in
loans from parties which are related by common control. Interest is accumulated
at 10% per annum. The Company also advanced $391,597 to companies affiliated to
such related party. The net balance, exclusive of interest, as of December 31,
1994 is $884,980

Also see Notes 14 and 15.

[8] Notes Payable

Bank - Note payable to bank in the amount of $60,513 is payable on demand. The
note bears interest at 9.45%. The Company is not current remitting monthly
payments of principal and interest and is therefore in default.

Other - Note payable to former stockholders of an acquired subsidiary due
September 1996 with interest at 7%.

[9] Income Taxes

For financial reporting purposes at December 31, 1995, the Company has net
operating loss carryforwards of approximately $4,800,000 expiring by 2010. The
Tax Reform Act of 1986 includes provisions which may limit the net operating
loss carryforwards available for use in any given year if certain events occur
including significant changes in stock ownership.

The expiration dates of net operating loss carryforwards are as follows:

December 31, Amount

2007 $ --
2008 --
2009 400,000
2010 4,400,000
--------------

Total $ 4,800,000
----- ==============

A deferred tax asset arising primarily from the benefits of net operating loss
carryforwards of approximately $1,900,000 is offset by an allowance of
$1,900,000.

[10] Commitments

The Company leases office space and several office machines under operating
leases which expire in 1998. The following is an analysis of commitments as of
December 31, 1995:

1996 $ 142,959
1997 96,894
1998 56,142
Thereafter --
--------------

Total $ 295,995
----- ==============

Rent expense amounted to $141,684 and $67,776 for the years ended December 31,
1995 and 1994.

F-16
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #6
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[11] Contingencies

On May 14, 1991, the Government Printing Office wrote the Company asking to be
reimbursed a total of $296,292 for "unauthorized timework" on two programs. The
Company has been in contact with the Department of Justice which has stated that
they were declining prosecution of the Company regarding this matter. Management
believes these claims are without merit and intends to contest these claims
vigorously if reasserted by the Government Printing Office and believes that the
ultimate disposition of this matter will not have a material adverse effect on
the financial position of the Company.

Although all payroll taxes due as of December 31, 1995 have been paid, the
Company was delinquent in payment of certain payroll tax obligations at such
date. Although, the Company has paid approximately $314,000 in penalties to the
Internal Revenue Service, which is reflected in the Statements of Operations, as
selling, general and administrative expenses, it continues to contest these
penalties. The estimated range of potential expense would be from $0-$700,000.
The Company has accrued $700,000 in penalties which is also reflected in
selling, general and administrative expense [See Note 21].

The United States Department of Labor ["DOL"] has filed a complaint against Job
Shop Technical Services, Inc. ["Job Shop"] and its principal stockholder for
civil violations of ERISA resulting from the failure of Job Shop to deposit
employee contributions to Job Shop's 401[k] retirement plan. A similar complaint
was filed by former employees of Job Shop against Job Shop, its principal
stockholder and others. At November 22, 1994, the amount due to the Job Shop
401[k] plan was approximately $3.0 million, which amount may have increased
since such date as a result of interest and penalties. Neither the Company nor
RMI, which is the subsidiary which acquired assets and assumed certain
obligations of Job Shop in November 1994, has been named as a defendant in
either of such actions. The DOL has raised with the Company the possibility that
RMI may be liable with respect to Job Shop's ERISA liability as a successor
corporation or purchaser of plan assets, even though RMI did not assume such
obligations and paid value for those assets which it did purchase. Although the
Company believes that RMI is not a successor corporation to Job Shop and is not
responsible for Job Shop's ERISA violations, the DOL may take a contrary
position. If the DOL takes such a position and prevails, it would have a
material adverse effect upon the operations of RMI and possibly the Company as a
whole. Although the Company is engaged in discussions with the DOL, no assurance
can be given that such discussions will result in any settlement acceptable to
the Company. However, in connection with the negotiations and with the consent
of the IRS, the Company paid into escrow $400,000 of the money due the IRS in
connection with the agreement with the IRS relating to the acquisition of Job
Shop assets.

WWR is a defendant in litigation commenced by Klipsch, Inc. claiming that the
license agreement pursuant to which WWR has the right to use the Klipsch name
and certain patents has terminated. The Company is the guarantor of a $530,000
note issued by WWR to a non-affiliated lender. As of December 31, 1995, the
Company owed SISC approximately $925,000, which reflects the repayment by the
Company of $225,000 and additional borrowings from SISC of approximately
$500,000. The Company was released from its obligations for a $275,000 loan in
connection with the sale of WWR.

Due to the uncertainties in the legal process it is reasonably possible that
management's view of the outcomes of the above matters will change in the near
term.

F-17
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #7
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[12] Fair Value of Financial Instruments

Effective December 31, 1995, the Company adopted SFAS No. 107, which requires
disclosing fair value to the extent practicable for financial instruments which
are recognized or unrecognized in the balance sheet. The fair value of the
financial instruments disclosed therein is not necessarily representative of the
amount that could be realized or settled, nor does the fair value amount
consider the tax consequences or realization or settlement. The following table
summarizes financial instruments by individual balance sheet accounts as of
December 31, 1995:

Carrying Amount Fair Value

Debt Maturing Within One Year 4,577,445 4,577,445
Long-Term Debt 926,832 926,832

For certain financial instruments, including cash and cash equivalents, trade
receivables and payables, and short-term debt, it was assumed that the carrying
amount approximated fair value because of the near term maturities of such
obligations. The fair value of long-term debt is based on current rates at which
the Company could borrow funds with similar remaining maturities. The carrying
amount of long-term debt approximates fair value. The Company is contingently
liable for a debt arrangement totaling $530,000 at December 31, 1995. The
Company knows of no event of default which would require it to satisfy this
guarantee and, therefore, the fair value of this contingent liability is
considered immaterial.

[13] Economic Dependency

Three customers of the Company, accounted for 31%, 14% and 10% respectively, of
the sales for 1995. Accounts receivable of approximately $1,350,000 were due
from these customers collectively.

[14] Employment and Management Contracts

In January 1995, the President of Trans Global, entered into a five-year
employment agreement pursuant to which he receives annual compensation of
$180,000, subject to an annual cost of living increase. In addition, he is
entitled to a bonus equal to 5% of Trans Global's income before income taxes,
but not more than 200% of his salary.

In January 1995, the Company entered into a consulting agreement with the
Trinity Group, Inc. [Trinity], a wholly owned subsidiary of Consolidated,
through March 31, 2000. Trinity is engaged in the business of providing
management services to businesses and has been providing such services to the
Company on an ongoing basis. Trinity is receiving monthly compensation at the
rate of $10,000 per month.

[15] Stockholders Equity

At December 31, 1995 the authorized capital stock of the Company consisted of
100,000 shares of preferred stock, and 4,000,000 shares of common stock, par
value $.01 per share. The Board of Directors has the right to create and to
define the rights, preferences and privileges of the holders of one or more
series of preferred stock. The Company authorized five series of preferred stock
which are described below.

Preferred Stock:

Series A Convertible Participating Preferred Stock - 25,000 shares were issued
and outstanding. The Series A Preferred Stock was automatically converted into
an aggregate of 2,000,000 shares of common stock, on March 11, 1996, upon the
filing of a Certificate of Amendment to the Certificate of Incorporation of the
Corporation increasing the authorized shares of common stock.

F-18
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #8
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[15] Stockholders Equity [Continued]

Series B Convertible Preferred Stock - 25,000 shares were issued. Each share of
Series B Preferred Stock will be automatically converted into 40 shares of
common stock if either [A] the Company has income before income taxes equal by
at least $500,000 for the year ended December 31, 1995; or [B] the Company has
income before income taxes of at least $1,500,000 for the year ended December
31, 1996 or 1997.

Series C Convertible Preferred Stock - 25,000 shares were issued. Each share of
Series C Preferred stock will be automatically converted into 60 shares of
common stock if the Company has income before income taxes of at least
$1,500,000 for the year ended December 31, 1996 or 1997.

Series D 6.25% Redeemable Cumulative Preferred Stock - 20,000 shares were
issued. The series D preferred stock is not convertible and has an aggregate
redemption value of approximately $1,700,000.

Series E Convertible Participating Preferred Stock - 5,000 shares were issued.
Each share of the series E preferred stock was converted into 24 shares of
common stock and was automatically converted upon the filing of a Certificate of
Amendment to the Certificate of Incorporation of the Corporation increasing the
authorized shares of common stock.

Common Stock - On July 12, 1995 the Company sold 390,000 shares of common stock
pursuant to Regulation S of the Securities Act of 1933 and received net proceeds
of $1,000,000.

Pursuant to the Trans Global Transaction, the Company was required to issue to
the former owners of TGS an aggregate amount of 1,000,000 shares of common
stock. At the closing, the Company issued 600,000 of those shares. The issuance
of the remaining shares was deferred until March 1996, when an amendment was
approved to the Company's Certificate of Incorporation increasing its authorized
common stock. In a separate transaction which was contemporaneous with the Trans
Global Transaction, the Company issued to certain accredited investors 151,300
shares of common stock and series A warrants to purchase 453,900 shares of
common stock. The net proceeds from such sale was $453,900.

Stock Options and Warrants - Pursuant to the reverse merger, the Company issued
the following common stock purchase warrants:

Series A Common Stock Purchase Warrants - Issued to certain accredited investors
series A warrants to purchase an aggregate of 453,900 shares of common stock.
The exercise price of the Series A warrants is $3.50 per share of common stock
and are exercisable upon the effectiveness of a registration statement which
includes the series A warrants and expire 45 days after the effective date of
such registration statement.

Series B Common Stock Purchase Warrants - Issued to SISC and DLB, Inc. series B
common stock purchase warrants to purchase an aggregate of 500,000 shares of
common stock. The exercise price of the series B warrants is $3.50 per share of
common stock and are exercisable upon the exercise or expiration of the series A
warrants. The series B warrants expire on May 5, 1997.

Series C Redeemable Common Stock Purchase Warrants - Issued to holders of
restricted shares of the Company's common stock, in consideration for the
agreement of such holders to a one-year lock-up of the restricted common stock,
series C redeemable common stock purchase warrants to purchase 107,740 shares of
common stock. The exercise price of the warrants is $3.50 per share and are
exercisable until May 5, 1997.

F-19
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #9
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[15] Stockholders Equity [Continued]

Non-Employee Directors, Consultants and Advisors Stock Plan - During the year
ended December 31,1995, the Company authorized a stock option plan for
Non-Employee Directors, Consultants and Advisors to provide compensation for
services rendered to the Company in lieu of cash payments. At various times, the
Company has registered and granted shares pursuant to the plan. During the year
ended December 31, 1995, 767,000 shares were granted and exercised , at an
average price of $.90 per share, resulting in $2,543,536 of deferred charge
costs computed as follows:

Shares 767,000
Value of Stock at Date of Grant [Weighted Average] $ 4.216475
---------------
3,234,036
Exercise Price (690,500)

Total Charges Deferred at the Time of Exercise $ 2,543,536
---------------------------------------------- ===============

In accordance with the agreements relating to the various parties involved,
amortization of the deferred portion in the amount of $2,213,774 was charged to
income from operations for the year ended December 31, 1995. The unamortized
deferred consulting expense is recorded in the equity section of the balance
sheet. Such deferred charges are being amortized over four years, the term of
the related contracts.

On August 14, 1995 an option was granted to a consultant to purchase 110,000
shares of common stock, at a price of $1.00 per share. The value of the stock at
the date of grant was $2.625 per share. The deferred charges amount to:

Shares 110,000
Value of Stock at Date of Grant [Weighted Average] $ 2,625
---------------
288,750
Exercise Price 110,000

Total Charges Deferred at the Time of Exercise $ 178,750
---------------------------------------------- ===============

The option was exercised as to 25,000 shares on October 9, 1995. Such exercise
was made by a reduction in the Company's indebtedness to SISC.

[16] Stock Option Plans

The Company has three stock option plans. In 1993, the Company adopted the 1993
Stock Incentive Plan [the "1993 Plan"], covering an aggregate of 150,000 shares
of Common Stock. Options to purchase 124,100 shares of Common Stock were granted
at exercise prices of $3.00 as to 54,500 shares, $5.00 as to 14,600 shares and
$5.00 as to 55,000 shares. The exercise price of all of such options was reduced
to $2.25 per share in February 1995. As of August 31, 1996, options to purchase
10,150 shares had expired unexercised. No options under the 1993 Plan had been
exercised. In January 1995, the board of directors adopted the 1995 Stock
Incentive Plan [the "1995 Plan"], pursuant to which stock options and stock
appreciation rights can be granted with respect to 305,000 shares of Common
Stock. At August 31, 1996, options to purchase 290,000 shares of Common Stock
were granted pursuant to the 1995 Plan, of which options to purchase 155,000
shares were exercised and options to purchase 85,000 shares at an exercise price
of $1.00 per share were outstanding. In May 1995, the board of directors
adopted, and, in March 1996, the stockholders approved the 1995 Long Term
Incentive Plan [the "1995 Incentive Plan"], initially covering 500,000 shares of
Common Stock.

F-20
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #10
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[16] Stock Option Plans [Continued]

In August 1995, the Company granted to an officer six-year incentive stock
options to purchase an aggregate of 250,000 shares of Common Stock pursuant to
the 1995 Plan at an exercise price of $2.125 per share, being the fair market
value on the date of grant. The option is immediately exercisable as to 47,000
shares of Common Stock and becomes exercisable as to an additional 47,000 shares
of Common Stock on each of January 1, 1996, 1997, 1998 and 1999 and becomes
exercisable as to the remaining 15, 000 share of Common Stock on January 1, 2000
[See Note 22].

[17] Discontinued Segment

During the year ended December 31, 1995, the Company disposed of a segment of
the business that was unrelated to its present line. The revenues generated by
that segment amounted to $1.5 million. The loss relating to the discontinued
operations was $247,000.

[18] Fourth Quarter Data

The Company incurred a loss in the fourth quarter of $2.8 million. This loss was
primarily due to the expensing of the deferred consulting costs of $2 million
and accrued payroll tax penalties of $700,000.

[19] Subsequent Events

On January 6, 1996 the Company sold 500,000 shares of common stock pursuant to
Regulation S of the Securities Act of 1933 and received net proceeds of
$375,000.

On March 11, 1996, the Company held its annual meeting of stockholders, at which
the stockholders approved an amendment to the Company's certificate of
incorporation to a] change the name of the Company to Trans Global Services,
Inc., and to b] change the authorized capital stock of the Company by increasing
the number of authorized shares of preferred stock, par value $.01 per share,
from 100,000 shares to 3,000,000 shares and increasing the number of authorized
shares of common stock, par value $.01 per share, from 4,000,000 shares to
20,000,000 shares was approved.

Pursuant to a preliminary letter of intent, the Company will engage an
investment banking firm as its agent in connection with a proposed offering of
approximately $5 million, net of related expenses, of equity securities. In
connection with the Offering, the Company will receive a bridge loan of
approximately $2,000,000 for working capital and other financing and operational
purposes.

[20] New Authoritative Accounting Pronouncements

The Financial Accounting Standards Board ["FASB"] issued 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", in March of
1995. SFAS No. 121 established accounting standards for the impairment of
long-lived assets and certain identifiable intangibles, and goodwill related to
those assets to be held and used, and for long-lived assets and certain
identifiable intangibles to be disposed of. SFAS No. 121 is effective for
financial statements issued for fiscal years beginning after December 15, 1995.
Adoption of SFAS No. 121 may have a material impact on the Company's financial
statements.

The FASB has also issued SFAS No. 123, "Accounting for Stock-Based
Compensation", in October 1995. SFAS No. 123 uses a fair value based method of
accounting for stock options and similar equity instruments as contrasted to the
intrinsic valued based method of accounting prescribed by Accounting Principles
Board ["APB"] Opinion No. 25, "Accounting for Stock Issued to Employees". The
Company has not decided if it will adopt SFAS No. 123 or continue to apply APB
Opinion No. 25 for financial reporting purposes. SFAS No. 123 will have to be
adopted for financial note disclosure purposes in any event. The accounting
requirements of SFAS No. 123 are effective for transactions entered into in
fiscal years that begin after December 15, 1995; the disclosure requirements of
SFAS No. 123 are effective for financial statements for fiscal years beginning
after December 15, 1995.

F-21
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #11
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[21] Unaudited Interim Statements

The financial statements for the nine months ended September 30, 1996 and 1995
are unaudited; however, in the opinion of management all adjustments [consisting
solely of normal recurring adjustments] necessary to a fair presentation of the
financial statements for these interim periods have been made. The results for
interim periods are not necessarily indicative of the results to be obtained for
a full fiscal year.

[22] Subsequent Events [Unaudited]

In March 1996, the Company amended its certificate of incorporation increasing
the authorized Preferred Stock to 3,000,000 shares and the authorized Common
Stock to 20,000,000 shares. At the time of the amendment, the 25,000 shares of
Series A Convertible Preferred Stock and the 5,000 shares of Series E Preferred
Stock automatically, without any action on the part of the holder, became
converted into 2,000,000 and 120,000 shares of Common Stock, respectively.

In April 1996, the Company issued to each of Messrs. Lewis S. Schiller and
Joseph G. Sicinski a warrant to purchase 400,000 shares of Common Stock at $1.25
per share and to each of Messrs. E. Gerald Kay, Joel S. Kanter and Norman J.
Hoskin, a warrant to purchase 300,000 shares of Common Stock at $1.25 per share.
In connection with such grants, Messrs. Kay and Kanter agreed to waive the right
to receive previously authorized warrants, which had not been issued.

In April 1996, the committee granted incentive stock options to purchase an
aggregate of 1,310,000 shares of common stock at $1.125 per share, being the
fair market value on the date of grant. Such options were granted to Mr. Joseph
G. Sicinski, president of the company, who received an option to purchase
800,000 shares of common stock, Mr. Lewis S. Schiller, chairman of the board of
the Company, who received an option to purchase 150,000 shares of common stock,
one other officer, who received an option to purchase 100,000 shares of common
stock, and eleven other employees who received options to purchase an aggregate
of 260,000 shares of common stock. In connection with the grant to Mr. Sicinski,
he agreed to the cancellation of the previously granted incentive stock options.
The option granted to Messrs. Schiller and Sicinski have a ten year term, and
the other options have five year terms [See Note 15].

In April 1996, the board of directors approved, subject to stockholder approval,
an amendment to the 1995 Plan which increased the number of shares of Common
Stock currently subject to the 1995 Plan to 2,492,332 shares. The number of
shares of Common Stock subject to the 1995 Plan automatically increases by 5% of
any shares of Common Stock issued by the Company other than shares issued
pursuant to the 1995 Plan.

At June 30, 1996, the May 8, 1995 merger [See Note 1] was recapitalized pursuant
to which the Company issued to SISC 9,900 shares of Series F Preferred Stock and
warrants to purchase 3,200,000 shares of Common Stock at $1.25 per share in
exchange for the cancellation of $750,000 principal amount of the Company's debt
to SISC and all of the shares of Series B, C and D Preferred Stock owned by
SISC, including accrued dividends due on the Series D Preferred Stock. The 9,900
shares of Series F Preferred Stock are convertible into 9,900,000 shares of
common stock. As a result of the SISC Recapitalization, the Company's
obligations to SISC was reduced to $300,000, which was paid subsequent to June
30, 1996. In October and December 1996, the 9,900 shares of Series F Preferred
Stock were converted into 9,900,000 shares of common stock. Also, in connection
with the aforementioned recapitalization, another stockholder exchanged its
shares of Series B and C Preferred Stock for 100 shares of Series F Preferred
Stock which were converted into 100,000 shares of Common Stock in December 1996.

In July 1996, the Company raised $2 million from the sale of common stock
through a regulation S offering.

F-22
<PAGE>
TRANS GLOBAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS, Sheet #12
[Information as of and for the Nine months ended
September 30, 1996 and 1995 are Unaudited]
- --------------------------------------------------------------------------------
[22] Subsequent Events [Unaudited] [Continued]

In August 1996, the Company entered into an agreement with the IRS to pay its
delinquent payroll taxes, interest and penalties. The Company paid $1.3 million
and has agreed to pay the balance in eight equal monthly installments of
$150,000, commencing in September 1996, with the remaining balance of $300,000
to be paid in May 1997. The IRS has agreed to subordinate its lien to the lien
of the Company's asset-based lender provided that the Company is in compliance
with current IRS regulations concerning the timely deposit of Federal employment
and withholding taxes [See Note 11].

In October 1996, the Company filed a registration statement with respect to an
offering of its securities. In January 1997, the agreement with Trinity was
amended increasing the monthly fee to $25,000 commencing with the month in which
the Company completes such public offering [See Note 14].

In November 1996, the Company amended its certificate of incorporation
increasing the authorized preferred stock to 20,000,000 shares and the
authorized common stock to 50,000,000 shares.

. . . . . . . . . . . . . .

F-23
<PAGE>
INDEPENDENT AUDITOR'S REPORT

To the Stockholders of Avionics Research Corporation
Hauppauge, New York

We have audited the accompanying combined statements of
operations and retained earnings [deficit], and cash flows of Avionics Research
Corporation of New York and Avionics Research Corporation of Florida, divisions
of ARC Acquisition Group, Inc. for the year ended December 31, 1993. These
combined statements of operations and retained earnings [deficit], and cash
flows are the responsibility of the Company's management. Our responsibility is
to express an opinion on these combined statements of operations and retained
earnings [deficit], and cash flows based on our audit.

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

In our opinion, the combined statements of operations and
retained earnings [deficit], and cash flows referred to above present fairly, in
all material respects, the combined results of operations and cash flows of
Avionics Research Corporation of New York and Avionics Research Corporation of
Florida, divisions of ARC Acquisition Group, Inc. for the year ended December
31, 1993.

MORTENSON AND ASSOCIATES, P. C.
Certified Public Accountants.

Cranford, New Jersey
May 5, 1994

F-24
<PAGE>
AVIONICS RESEARCH CORPORATION
- --------------------------------------------------------------------------------

COMBINED STATEMENT OF OPERATIONS AND RETAINED EARNINGS [DEFICIT]
FOR THE YEAR ENDED DECEMBER 31, 1993.
- --------------------------------------------------------------------------------

Sales $ 14,032,787
Cost of Sales,
As shown on Schedule #1 13,142,021

Gross Profit 890,766

Operating Expenses:
Selling Expenses 112,832
General and Administrative 646,058

Total Operating Expenses 758,890

Operating Profit 131,876

Other [Expenses],
As shown on Schedule #4 (660,103)

[Loss] Before Taxes (528,227)

Provision for Income Taxes --

Net [Loss] (528,227)

Retained Earnings - Beginning of Year 203,715
---------------
Retained Earnings [Deficit] - End of Year $ (324,512)
===============

See Notes to Combined Financial Statements.

F-25
<PAGE>
AVIONICS RESEARCH CORPORATION
- --------------------------------------------------------------------------------

COMBINED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1993.
- --------------------------------------------------------------------------------

Operating Activities:
Net [Loss] $ (528,227)
---------------
Adjustments to Reconcile Net [Loss] to
Net Cash Provided by Operating Activities:
Depreciation 6,806

Change in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable (392,343)
Work in Process (7,400)
Prepaid Expenses and Other Receivables 4,506
Net Proceeds from [Payments to] Affiliates 245,763

Increase [Decrease] in:
Accounts Payable and Accrued Expenses 923,584
Taxes Payable 304,894

Total Adjustments 1,085,810

Net Cash - Operating Activities 557,583
---------------

Investing Activities:
Acquisition of Property and Equipment (2,456)
Security Deposit (4,125)

Net Cash - Investing Activities (6,581)
---------------

Financing Activities:
Loan Payable - Factor (473,590)
---------------
Net Increase in Cash 77,412

Cash - Beginning of Year 27,644
---------------
Cash - End of Year $ 105,056
===============

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest $ 169,511
Income Taxes $ --

See Notes to Combined Financial Statements.

F-26
<PAGE>
AVIONICS RESEARCH CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
[1] Principals of Combination

The combined financial statements as of December 31, 1993 include the accounts
of Avionics Research Corporation of New York and Avionics Research Corporation
of Florida [collectively, the "Company"].
All intercompany balances have been eliminated.

The Company provides engineering personnel primarily in the aerospace, marine,
electronics and energy industries on a temporary basis to its customers located
throughout the United States.

[2] Summary of Significant Accounting Policies

Receivables - The Company finances a majority of its receivables with a factor
under an agreement entered into in August 1993. The agreement expires in one
year and has a maximum availability of funds of $1,500,000. Funds can be
advanced in an amount equal to 85% of the total face amount of outstanding and
unpaid receivables, with the factor having the right to reserve 15% of the
outstanding and unpaid receivables financed. The discount rate charged is based
upon the gross amount of the receivables financed. These rates range from 2.65%
to 7.95% based upon aging categories. At December 31, 1993, the total amount
advanced by the factor was $871,900.

Work in Process - Work in Process is generally stated using the percentage of
completion method for work in process.

Furniture and Fixtures 5 - 7 years
Leasehold Improvements 5 - 10 years
Transportation Equipment 3 - 4 years
Equipment 5 - 10 years

Expenditures for maintenance and repairs, which do not improve or extend the
life of the respective assets, are expensed currently while major renewals are
capitalized.

Revenue Recognition - The Company records revenue as services are provided by
engineering personnel.

Income Taxes - Federal income tax returns are filed on a consolidated basis with
those of the parent company. On a consolidated basis, there is no tax expense.

For state income tax purposes, the parent company has a net operating loss
carryforward at December 31, 1993. The effect of state income taxes refundable
due to carryback of net operating loss is not material.

On a separate return basis, no provision for income taxes is necessary due to
available net operating loss carryforwards of the parent company at December 31,
1993, which are in excess of net taxable income of these entities.

Concentration of Credit Risk - The Company extends credit to customers, which
results in accounts receivable arising from its normal business activities. The
Company routinely assesses the financial strength of its customers and, based
upon factors surrounding the credit risk of its customers, believes that its
accounts receivable credit risk exposure is limited.

F-27
<PAGE>
AVIONICS RESEARCH CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS, Sheet #2
- --------------------------------------------------------------------------------
[3] Due to Affiliates

This balance represents the net difference between funds collected and disbursed
by the Company on behalf of its parent company, ARC Acquisition Group, Inc. and
ARC Networks, Inc. ["Networks"] and the effect of allocation of expenses to
Networks.

[4] Commitments

On October 15, 1993, the Company has entered into an employment contract with
its President. The contract is for a five-year term. The aggregate base salary,
to be adjusted for annual cost of living increases, is $120,000. In addition,
the President shall be entitled to an annual bonus ranging from 3% to 5% of net
income before taxes along with various other benefits.

The Company leases office space and several office machines under operating
leases that expire in 1998. The following is an analysis of commitments as of
December 31, 1993:

Operating Leases Employment Contracts

1994 $ 67,965 $ 240,000
1995 73,081 240,000
1996 38,868 240,000
1997 28,121 240,000
1998 31,553 200,000
---------------- --------------
Total $ 239,588 $ 1,160,000
----- ================ ==============

[5] Contingencies

On May 14, 1991, the Government Printing Office wrote the Company asking that
they be reimbursed a total of $296,292 for "unauthorized timework" on two
programs. The Company has been in contact with the Department of Justice which
has stated that they were declining prosecution of the Company regarding this
matter. Management believes these claims are without merit and intends to
contest these claims vigorously if reasserted by the Government Printing Office.

[6] Major Customer

Revenues from one customer amounted to$11,038,495 and comprised approximately
79% of the total revenues for the year ended December 31, 1993.

[7] Subsequent Events

On January 3, 1994, the Company entered into an employment contract with one of
ITS senior vice presidents. The contract is for a five year term. The aggregate
base salary, to be adjusted for annual cost of living increases, is $75,000. In
addition, the senior vice president shall be entitled to an annual bonus ranging
up to 3% of net income be for taxes along with various other benefits.

. . . . . . . . . . . . . .

F-28
<PAGE>
INDEPENDENT AUDITOR'S REPORT

To the Stockholders of Trans Global Services, Inc.
New York, New York

We have audited the accompanying statements of operations,
changes in divisional equity, and cash flows of the International Technical
Services Division of Job Shop Technical Services, Inc. for the period January 1
to November 21, 1994. These financial statements are the responsibility of the
management of Job Shop Technical Services, Inc. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the results of operations, changes in
divisional equity and cash flows of the International Technical Services
Division of Job Shop Technical Services, Inc. for the period January 1 to
November 21, 1994, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared using
generally accepted accounting principles which has as one of its basic
assumptions the recoverability of recorded asset amounts in the ordinary course
of business. As more fully described in Note 7 to the financial statements,
recorded asset amounts have been realized with the sale of substantially all of
the Division's assets.

Also, as more fully described in Notes 5 and 7 to the
financial statements, as part of the sale of the Division, the acquiror has
assumed the payment of all of the Division's liabilities with the exception of
amounts related to the 401[k] profit-sharing plan, which amount is reflected at
$3,360,938, and includes an estimate for excise taxes of $361,393. There is
ongoing litigation, and an investigation by a Federal governmental agency,
regarding the alleged mismanagement of the 401[k] profit-sharing plan by the
management of Job Shop Technical Services, Inc. The ultimate liability resulting
from those matters cannot presently be determined. Accordingly, no provision for
any liability that may result on adjudication has been made in the accompanying
financial statements.

MORTENSON AND ASSOCIATES, P. C.
Certified Public Accountants.

Cranford, New Jersey
July 7, 1995

F-29
<PAGE>
INTERNATIONAL TECHNICAL SERVICES DIVISION OF JOB SHOP TECHNICAL SERVICES, INC.
- --------------------------------------------------------------------------------

STATEMENT OF OPERATIONS FOR THE PERIOD JANUARY 1 TO NOVEMBER 21, 1994.
- --------------------------------------------------------------------------------

Revenues $ 39,519,655

Cost of Services Provided 37,009,818

Gross Margin 2,509,837

Operating Expenses:
Selling Expenses 949,863
General and Administrative Expenses 1,353,764

Total Operating Expenses 2,303,627

Operating Profit 206,210

Other Expenses:
Provision for Doubtful Accounts - Due from Affiliate 1,070,955
Excise Taxes 176,393
Interest Expense 871,114
---------------
Total Other Expenses 2,118,462

Net [Loss] $ (1,912,252)
===============

See Notes to Financial Statements.

F-30
<PAGE>
INTERNATIONAL TECHNICAL SERVICES DIVISION OF JOB SHOP TECHNICAL SERVICES, INC.
- --------------------------------------------------------------------------------

STATEMENT OF CHANGES IN DIVISIONAL EQUITY FOR THE PERIOD
JANUARY 1 TO NOVEMBER 21, 1994.
- --------------------------------------------------------------------------------

Accumulated
[Deficit]

Balance - January 1, 1994 $ (3,731,796)

Net [Loss] (1,912,252)

Totals $ (5,644,048)
==============

See Notes to Financial Statements.

F-31
<PAGE>
INTERNATIONAL TECHNICAL SERVICES DIVISION OF JOB SHOP TECHNICAL SERVICES, INC.
- --------------------------------------------------------------------------------

STATEMENT OF CASH FLOWS FOR THE PERIOD JANUARY 1 TO NOVEMBER 21, 1994.
- --------------------------------------------------------------------------------

Operating Activities:
Net [Loss] $ (1,912,252)
---------------
Adjustments to Reconcile Net [Loss] to
Net Cash [Used for] Operating Activities:
Depreciation and Amortization 9,647
Provision for Doubtful Accounts - Accounts Receivable 198,317
Provision for Doubtful Accounts - Due from Affiliate 1,070,955

Changes in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable (1,070,282)
Deposits (828)

Increase [Decrease] in:
Accounts Payable and Accrued Expenses (322,002)
Payroll Taxes Payable (185,366)
Due to 401[k] Profit-Sharing Plan 2,121,493
---------------
Total Adjustments 1,821,934

Net Cash - Operating Activities (90,318)
---------------

Investing Activities:
Net Advances to Affiliates (709,426)
Repayment - Due from Officer 49,477

Net Cash - Investing Activities (659,949)
---------------

Financing Activities:
Loans Payable - Factor 2,096,820
Payments of Loans Payable - Bank (1,347,820)
---------------
Net Cash - Financing Activities 749,000
---------------
Net [Decrease] in Cash (1,267)

Cash - Beginning of Period 33,934
---------------

Cash - End of Period $ 32,667
===============

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 571,114

See Notes to Financial Statements.

F-32
<PAGE>
INTERNATIONAL TECHNICAL SERVICES DIVISION OF JOB SHOP TECHNICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
[1] Organization, Line of Business and Significant Accounting Policies

[A] Organization - International Technical Services ["ITS"] is one of the
divisions of Job Shop Technical Services, Inc. ["Job Shop"] and has no separate
legal status or existence. The income and expenses in the divisional statement
of operations relate to the operations of ITS.

The other division of Job Shop is the Computer Design Services Division ["CDS"].
The CDS division sells computer aided design systems.

[B] Line of Business - The ITS division provides engineering personnel primarily
in the aerospace, marine, electronics and energy industries on a temporary basis
to its customers located throughout the United States.

[C] Significant Accounting Policies

Receivables - Job Shop finances a majority of the receivables of the ITS
division under an agreement entered into in August 1994. The agreement expires
in August of 1995 and has maximum availability of funds of $2,500,000. Funds can
be advanced in an amount equal to 85% of the total face amount of outstanding
and unpaid receivables, with the factor having the right to reserve 15% of the
outstanding and unpaid receivables financed. The interest rate is equal to the
base lending rate of an agreed upon bank, which was 7.25% at November 21, 1994,
plus 4.0% and a commission of 1.0% of the receivables financed. The factor has a
security interest in all accounts receivables, contracts, personal property and
fixtures of the Company.

Concentration of Credit Risk - The Company extends credit to customers which
results in accounts receivable arising from its normal business activities. It
routinely assesses the financial strength of its customers and based upon
factors surrounding the credit risk of the customers believes that its accounts
receivable credit risk exposure is limited.

Property and Equipment and Depreciation - Property and equipment are stated at
cost less accumulated depreciation. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.

Revenue Recognition - The ITS division records revenue as services are provided
by engineering personnel.

Income Taxes - Job Shop is an S corporation under the provisions of the Internal
Revenue Code and applicable state statutes and, accordingly, is not subject to
federal and income based on income.

[2] Relationship with Corporate Entity and Affiliated Divisions

As indicated in Note 1, each of the two divisions of Job Shop operate in
separate lines of business. The management of Job Shop believes that expenses
recorded by each division are indicative of what such expenses would have been
if each of the divisions operated as a stand-alone entity, and that no expense
allocations, to either division, is required.

The charges by ITS to the CDS division arise primarily from payroll, payroll tax
and employee benefit charges paid by the ITS division for employees of the CDS
division. The ITS division acts as a common paymaster for both divisions. The
accompanying statement of operations and [deficit] does not include any interest
income charged by the ITS division to the CDS division on any balances due by
the CDS division.

F-33
<PAGE>
INTERNATIONAL TECHNICAL SERVICES DIVISION OF JOB SHOP TECHNICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #2
- --------------------------------------------------------------------------------
[3] Provision for Doubtful Accounts - Due from Affiliate

As of July 7, 1995, the balance due to the ITS division from the CDS division
has not been repaid. The management of the ITS division believes that such
balance will not be repaid. Therefore, a provision for doubtful accounts of the
total amount due of $1,070,955 has been provided in the statement of operations.

[4] Due to 401[k] Profit-Sharing Plan

The liability to the 401[k] profit-sharing plan consists of employees'
compensation deferrals from June 1993 to November 21, 1994 which have not been
remitted by Job Shop to the plan's trustee. The liability of $2,999,545 includes
accrued interest of $350,877 on the employees' balances.

The above represents violations of the Employee Retirement Income Security Act
of 1974, the Internal Revenue Code and other statutes, and could jeopardize the
plan's qualified and tax exempt status.

A provision $176,393 for excise taxes relating to the above prohibited
transactions is included in statement of operations. The total amount provided
through November 21, 1994 for excise taxes is $361,393. See Note 5 for an action
commenced by the employees of the division related to unremitted employees'
compensation deferrals.

[5] Commitments and Contingencies

[A] Unremitted Federal Withholding and FICA Tax Liabilities - As of November 21,
1994, the Company had not remitted $2,000,000 of 1992 employees' federal and
FICA withholding taxes, FICA taxes, interest and penalties, to the Internal
Revenue Service. Pursuant to an agreement of sale of the assets of the business
[See Note 7], this liability was assumed by the buyer and a repayment plan has
been worked out between such buyer and the Internal Revenue Service. However,
the Job Shop is liable for any payments not made by the buyer to the Internal
Revenue Service.

[B] Leases - The division occupies space in various locations leased by Job Shop
There is no formal lease agreement between Job Shop and the ITS division.
However, the ITS division does pay rent due under such leases directly to
various landlords under an informal agreement with Job Shop. Minimum lease
payments required on leases with an initial or remaining term in excess of one
year are as follows:

For the years ended
December 31,
1994 $ 2,368
1995 8,016
1996 8,353
1997 2,109
-----------------

Total $ 20,846
----- =================

Rent expense for the period January 1, 1994 to November 21, 1994 totaled
$67,586. The lease for the New York office of Job Shop expired in December 1994
and was not renewed by the buyer of the assets of the business [See Note 7].
Subsequently, such buyer relocated its New York office to new premises.

F-34
<PAGE>
INTERNATIONAL TECHNICAL SERVICES DIVISION OF JOB SHOP TECHNICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #3
- --------------------------------------------------------------------------------
[5] Commitments and Contingencies [Continued]

[C] Litigation - During January 1995 and as amended in March 1995, the employees
of ITS filed a complaint against ITS and Job Shop, its president and others
seeking $3,000,000 or more, plus interest, punitive damages and other equitable
or remedial relief, removal of the plan administrator and trustee and the
appointing of an independent administrator and a court-designated trustee. ITS,
Job Shop and its president have denied any wrongdoing or liability, asserted
cross-claims against codefendants for indemnity and other relief and are
vigorously defending the action. The codefendants have denied any liability in
regard to this. At this time, no determination of the likelihood of a favorable
or unfavorable outcome can be made nor can any estimate of the amount or range
of potential loss.

The Company is also a defendant in a action which alleges breach of contract,
breach of fiduciary duty and fraud. ITS, Job Shop and its president are
vigorously contesting this matter. At this time, no determination of the
likelihood of a favorable or unfavorable outcome can be made.

[6] Economic Dependency

Revenues from three customers amounted to $20,780,918 and comprised
approximately 52.6% of total revenues for the period January 1, 1994 to November
21, 1994.

[7] Subsequent Event

On November 21, 1994, pursuant to an asset purchase agreement dated as of August
19, 1994, among Job Shop, its sole stockholder and ITS Management Corp. [ITS
Man. Corp.] a Delaware Corporation and wholly-owned subsidiary of the
Consolidated Technology Group, Ltd. [Consolidated], ITS Man. Corp. acquired
substantially all of the assets of Job Shop in exchange for 750,000 shares of
Consolidated common stock valued at $281,250, and the assumption of certain
scheduled liabilities. The principal liability assumed was a $2,000,000
obligation due to the Internal Revenue Service pursuant to a settlement
arrangement which Job Shop had negotiated [See Note 5A]. The initial $500,000
payment was made in November 1994, the balance is due in 15 monthly installments
of $100,000, commencing May 1995. The liability not assumed by the buyer is the
amount due to the 401[k] profit-sharing plan [See Note 4]. This liability is
subject to litigation as more fully described in Note 5C.

. . . . . . . . .

F-35
<PAGE>
INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Shareholder of Job Shop Technical Services, Inc.
Farmingdale, New York

We have audited the accompanying statements of operations,
accumulated deficit, and cash flows of Job Shop Technical Services, Inc. for the
year ended December 31, 1993. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Job Shop
Technical Services, Inc. as of December 31, 1993, and the results of operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As shown in the
financial statements, the Company has incurred a net loss of $2,272,614 for 1993
and has incurred substantial net losses for each of the past three years.
Additionally, at December 31, 1993, the Company has a significant deficiency in
shareholder's equity and negative working capital, these factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

The Company is liable for unremitted payments to its 401(k)
profit-sharing plan, as discussed in Note 5, and unremitted payroll taxes, as
discussed in Note 6.

EDWARD ISAACS & COMPANY LLP
Certified Public Accountants.

New York, New York
May 16, 1994

F-36
<PAGE>
JOB SHOP TECHNICAL SERVICES, INC.
- --------------------------------------------------------------------------------

STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993.
- --------------------------------------------------------------------------------

Net Sales $ 44,154,009
---------------

Cost and Expenses:
Cost of Sales 40,342,491
Selling Expenses 2,328,071
General and Administrative 1,653,901
Interest - [Net of Interest Income of $17,663] 260,590
---------------
Total Cost and Expenses 44,585,053

Loss From Operations (431,044)

Other Expenses 1,841,570

Net Loss $ (2,272,614)
===============

See Independent Auditor's Report and Notes to Financial Statements.

F-37
<PAGE>
JOB SHOP TECHNICAL SERVICES, INC.
- --------------------------------------------------------------------------------

STATEMENT OF ACCUMULATED DEFICIT FOR THE YEAR ENDED DECEMBER 31, 1993.
- --------------------------------------------------------------------------------

Balance - January 1, 1993, As Previously Reported $ (2,015,847)

Retained Earnings of Acquired Company* 556,665

Balance - January 1, 1993, As Restated (1,459,182)

Net Loss (2,272,614)

Balance - December 31, 1993 $ (3,731,796)
==============

*Reflects elimination of the intercompany payable to the Company of $1,954,779;
the Company had provided an allowance for the full amount of the receivable.

See Independent Auditor's Report and Notes to Financial Statements.

F-38
<PAGE>
JOB SHOP TECHNICAL SERVICES, INC.
- --------------------------------------------------------------------------------

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1993.
- --------------------------------------------------------------------------------

Operating Activities:
Net Loss $ (2,272,614)
Adjustments to Reconcile Net Loss to Net Cash Used for
Operating Activities:
Depreciation and Amortization 128,165
Loss on Settlement of Note Receivable 83,432
Reversal of Allowance for Doubtful Accounts (20,000)

Changes in Assets and Liabilities:
[Increase] Decrease in:
Accounts Receivable (403,436)
Inventory - Work-in-Progress (115,334)
Other Current Assets 1,103

Increase [Decrease] in:
Accounts Payable and Accrued Expenses 1,756,957
Taxes Other Than on Income 57,460
Duet to 401(k) Profit-Sharing Plan 727,327
---------------
Net Cash Used in Operating Activities (56,940)
---------------

Investing Activities:
Capital Expenditures (130,038)
Payments Received on Note Receivable 117,334
Due from Shareholder (49,477)
Deposits (5,621)
---------------
Net Cash Used in Investing Activities (67,802)
---------------

Financing Activities:
Increase in Bank Debt 106,204
Payments of Long-Term Debt (123,056)

Net Cash Used in Financing Activities (16,852)
---------------
Net Decrease in Cash (141,594)

Cash - Beginning of Year 180,352
---------------

Cash - End of Year $ 38,758
===============

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest $ 278,253
Income Taxes $ 2,787

See Independent Auditor's Report and Notes to Financial Statements.

F-39
<PAGE>
JOB SHOP TECHNICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
[1] Going Concern Status

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates the Company
continuing as a going concern. However, the Company has sustained substantial
net losses in recent years and at December 31, 1993 has a significant deficiency
in shareholder's equity and negative working capital.

Management believes that action presently being taken to bring about the
Company's profitability and/or an infusion of new capital will enable the
Company to continue as a going concern.

[2] Merger

On August 16, 1993, the Company acquired Computer Design Services, Inc. (CDS), a
company owned by the shareholder of the Company, in a business transaction
accounted for as though it were a pooling of interests. On the date of
acquisition CDS was merged into the Company through the exchange of one share of
the Company's common stock for all of the outstanding stock of CDS, which was
immediately canceled. The accompanying financial statements for 1993 are based
on the assumption that the companies were combined for the full year.

Summarized unaudited results of operations of the separate companies for the
period from January 1, 1993 through August 16, 1993, the date of acquisition,
were as follows:

Job Shop Technical Computer Design
Services, Inc. Services, Inc.

Sales $ 28,062,000 $ 1,696,000
Income (Loss) from Operations 293,000 (437,000)
Net Loss (382,000) (437,000)

The summarized unaudited assets and liabilities of the separate companies on
August 16, 1993, the date of acquisition, (excluding a payable to the Company of
$1,954,779; the Company had provided an allowance for the full amount of the
receivable) were as follows:

Job Shop Technical Computer Design
Services, Inc. Services, Inc.

Cash $ 21,000 $ 67,000
Other Current Assets 3,336,000 234,000
Property, Plant and Equipment, Net 13,000 304,000
Other Noncurrent Assets 378,000 39,000
----------------- ---------------
Subtotals 3,748,000 644,000
Liabilities (6,145,000) (524,000)
----------------- ---------------
Shareholder's (Deficiency) Equity $ (2,397,000) $ 120,000
- --------------------------------- ================= ===============

F-40
<PAGE>
JOB SHOP TECHNICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #2
- --------------------------------------------------------------------------------
[3] Summary of Significant Accounting Policies

Company's Business - The Company has two divisions, International Technical
Services and Computer Design Services.

International Technical Services provides engineering personnel primarily in the
aerospace, marine, electronics and energy industries on a temporary basis to its
customers located throughout the United States.

Computer Design Services principally sells computer aided design systems and
provides necessary support and training to its customers who are located
primarily on the east coast of the United States. The division recognizes income
on contracts, which are all short-term, when the programs are completed. Costs
to the point of completion are deferred and are included in work-in-progress
inventory in the accompany balance sheet.

Depreciation - Depreciation is computed by the straight-line method over the
estimated useful lives of the assets ranging from five to ten years.

Income Taxes - The Company is an S corporation under the provisions of the
Internal Revenue Code and applicable state statutes and, accordingly, is not
subject to federal and state income taxes.

[4] Note Receivable

In 1988, the Company received a promissory note relating to the sale of its
Computer Systems Division. In 1990, the Company modified the terms of the note
(including unpaid interest) from 60 payments of $4,249 to 120 payments of
$3,180, commencing June 1, 1990, including interest at 10%. The balance of the
note as of December 31, 1993 was $183,432. In December 1993, the Company
accepted $100,000 in full settlement of the note and recorded a loss of $83,432
which is included in other deductions in the accompany statement of operations.

[5] Due to 401(k) Profit-Sharing Plan

The liability to the 401(k) profit-sharing plan consists of employees'
compensation deferrals from June 1993 to December 1993 which have not been
remitted by the Company to the plan's trustee. The liability of $878,052
includes interest accrued on the employees' balances.

During 1994, the Company has not made any payments to the Plan for the above
liability and, in addition, approximately $1,400,000 of 1994 compensation
deferrals have not been remitted. As of September 30, 1994, the liability to the
401(k) profit-sharing plan aggregated approximately $2,300,000.

The above represent violations of the Employee Retirement Income Security Act of
1974, the Internal Revenue Code and other statutes, and could jeopardize the
Plan's qualified and tax exempt status.

A provision of $185,000 for excise taxes relating to the above prohibited
transactions is included in other expenses in the accompanying 1993 statement of
operations.

[6] Taxes Other than on Income

The liability for taxes other than on income includes approximately $2,587,000
of 1992 employees' federal withholding taxes and FICA tax liabilities, which
have not been remitted to the Internal Revenue Service. A $1,008,000 provision
for penalties and interest relating to this liability is included in other
expenses in the accompanying 1993 statement of operations. The Company has paid
$700,000 towards this liability, which has been applied to penalties and
interest by the Internal Revenue Service, the remaining $308,000 of unpaid
penalties and interest are included in accrued expenses.

F-41
<PAGE>
JOB SHOP TECHNICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #3
- --------------------------------------------------------------------------------
[7] Other Expenses

Other expenses consists of the following:

Penalties and Interest on Payroll Taxes $ 1,398,368
Excise Taxes (Note 5) 185,000
Loss on Settlement of Note Receivable 83,452
Department of Labor Settlement* 174,750
-----------------

Total $ 1,841,570
----- =================

* In 1993, the Company settled a dispute with the Department of Labor for
$174,750 relating to an error in computing employees' overtime compensation.

[8] Commitments and Contingencies

[A] Leases - The Company leases its offices and certain equipment under leases
expiring through July 1997. Total rent expense under operating leases was
$247,688.

Future minimum annual rentals under operating leases with initial or remaining
noncancellable lease terms in excess of one month in effect at December 31,
1993, are as follows:

1994 $ 188,320
1995 112,315
1996 76,315
1997 44,520
-----------------

Total $ 421,470
----- =================

[B] 401(k) Profit-Sharing Plan - The Company maintains a noncontributory
profit-sharing plan covering all employees who meet eligibility requirements.
Annual contributions are at the discretion of the Board of Directors. No
provision was made in 1993 (see Note 5).

[C] Major Customers - Three customers accounted for 52% of sales of the year
ended December 31, 1993.

[9] Subsequent Events

Factoring Agreement - In April 1994, the Company entered into an agreement with
a factor. The agreement provides for advances of up to 85% of eligible accounts
receivable. A portion of the proceeds from these advances were used to liquidate
the Company's loan payable to bank.

Sale of Assets - The Company is currently negotiating terms for the sale of its
assets.

. . . . . . . . . .

F-42
<PAGE>

No dealer, salesperson or any other person has
been authorized to give any information or to make
any representations other than those contained in
this Prospectus in connection with the offer made
by this Prospectus, and, if given or made, such 1,000,000 Units
information or representations must not be relied
on as having been authorized by the Company or by
the Underwriters. This Prospectus does not
constitute an offer to sell or a solicitation of Trans Global Services, Inc.
an offer to buy any securities offered hereby to
any person in any jurisdiction in which such offer (Each Unit Consists of
or solicitation was not authorized or in which the one share of Series G
person making such offer or solicitation is not Convertible Preferred
qualified to do so or to anyone to whom it is Stock and one Series
unlawful to make such offer or solicitation. E Redeemable Common
Neither the delivery of this Prospectus nor any Stock Purchase Warrant)
sale made hereunder shall, under any
circumstances, create any implication that there
has been no change in the circumstances of the
Company of the facts herein set forth since the
date of this Prospectus.

TABLE OF CONTENTS

Page
----
Prospectus Summary...............................3
Risk Factors.....................................7
Market for Common Stock; Dividends..............13
Use of Proceeds.................................14
Capitalization..................................16
Selected Financial Data ........................17
Management's Discussion and Analysis of
Financial Condition and Results of Operations...18
Business........................................21
Management......................................25
Certain Transactions............................30 PROSPECTUS
Principal Stockholders..........................34
Description of Securities.......................35
Underwriting....................................39
Legal Matters...................................40
Experts.........................................41
Additional Information .........................41
Index to Financial Statements..................F-1

Until , 1997 (25 days after the date
of this Prospectus) all dealers effecting
transactions in the registered securities, whether
or not participating in the distribution, may be
required to deliver a Prospectus. This is in Patterson Travis, Inc.
addition to the obligation of , 1997 dealers to
deliver a Prospectus when acting as underwriters
and with respect to their unsold allotments or
subscriptions.

,1997

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

SEC registration fee $7,612.11
NASD registration fee 2,707.51
Nasdaq listing fee 10,000.00
Printing and engraving 25,000.00*
Accountants' fees and expenses 75,000.00*
Legal fees 125,000.00*
Transfer agent's and warrant agent's fees and expenses 5,000.00*
Blue Sky fees and expenses 35,000.00*
Representative's non-accountable expense allowance 180,000.00
Representative's consulting fee 100,000.00
Miscellaneous 24,680.38*
------------
Total $590,000.00*
============
- ---------
* Estimated

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

1.1(1) Form of Underwriting Agreement.
1.2(1) Form of Unit Purchase Option.
1.3(1) Form of Selected Dealers Agreement.
1.4(1) Form of Financial Consulting Agreement.
2.1(2) Agreement (the "Agreement") dated as of March 31, 1995, by and
among SIS Capital Corp., DLB, Inc., Joseph G. Sicinski and
Concept Technologies Group, Inc., including exhibits thereto.
2.2(2) The Concept Disclosure Letter delivered pursuant to the Agreement.
2.3(2) The Trans Global Disclosure Letter delivered pursuant to the
Agreement.
2.4(3) Asset purchase agreement dated August 19, 1994, among ITS
Management Corp., Job Shop Technical Services, Inc. ("Job Shop")
and Ralph Corace.
2.5(3) Disclosure letter of Job Shop dated August 19, 1994, as
supplemented on September 10, 1994.
3.1(1) Restated Certificate of Incorporation
3.2(1) Certificate of Designation for the Series F Preferred Stock.
3.3(1) Form of Certificate of Designation for the Series G Convertible
Preferred Stock.
3.4(3) By-Laws.
4.1(1) Form of Warrant Agreement among the Registrant and American Stock
Transfer & Trust Company, as Warrant Agent, to which the form of
Series E Redeemable Common Stock Purchase Warrant is included as
an exhibit.
5.1 Opinion of Esanu Katsky Korins & Siger.
10.1(1) Employment agreement dated September 1, 1996, between the
Registrant and Joseph G. Sicinski.
10.2(3) Management services agreement dated January 1, 1995 between Trans
Global Services, Inc. and The Trinity Group, Inc.
10.3(5) 1995 Long-Term Incentive Plan.
10.4(6) 1993 Stock Option Plan.
10.5(6) 1995 Incentive Stock Plan.
10.6(3) Agreement dated as of September 30, 1995 between SIS Capital Corp.
and the Registrant.
10.7(3) Agreement dated as of September 30, 1995 between Consolidated
Technology Group Ltd., WWR Technology, Inc. and the Registrant.
10.8(3) Form of Series A Common Stock Purchase Warrants.
10.9(3) Form of Series B Common Stock Purchase Warrants.
10.10(3) Form of Series C Common Stock Purchase Warrants.
10.11(6) Form of Callable Common Stock Purchase Warrants issued in the
Registrant's initial public offering.
10.12(6) Form of Registrant's Warrant.
10.13(6) Form of August Financing Warrants.
10.14(6) Form of October Bridge Financing Warrants.

II-1

<PAGE>

10.15(6) Form of Consulting Warrant.
10.16(1) Form of Subscription Agreement.
10.17(1) Form of Offshore Securities Subscription Agreement.
10.18(1) Form of Series D Common Stock Purchase Warrant.
10.19(1) Payment agreement between the Internal Revenue Service and
Resource Management International, Inc.
10.20(1) Amendment dated as of January 1, 1997 between the Registrant and
The Trinity Group, Inc.
10.21(1) Agreement dated February 3, 1995 between the Registrant and Metro
Factors, Inc.
10.22(1) Letter agreement dated January 29, 1997 and February 5, 1997
between the Registrant and Metro.
11.1(1) Computation of loss per share.
24.1(1) Consent of Moore Stephens, P.C.
24.2(1) Consent of Edward Isaacs & Company LLP.
24.3 Consent of Esanu Katsky Korins & Siger (included in Exhibit 5.1).
25.1(1) Powers of attorney.
27.1(1) Financial data schedule.

(1) Previously filed.
(2) Filed as an exhibit to the Current Report on Form 8-K of Consolidated
Technology Group Ltd., Commission File No. 0-4186, for the report date of
April 19, 1995 and incorporated herein by reference.
(3) Filed as an exhibit to the Registrant's Annual Report on Form 10-KSB for
the year ended December 31, 1995 and incorporated herein by reference.
(4) To be filed by amendment.
(5) Filed as a exhibit to the Registrant's definitive proxy material for its
special meeting of stockholders for November 1996 and incorporated herein
by reference.
(6) Filed as an exhibit to the Registrant's Registration Statement on Form
SB-2, File No. 33-73178 and incorporated herein by reference.

(b) Financial Statement Schedules

None

II-2
<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York on this 13th day of February, 1997.

TRANS GLOBAL SERVICES, INC.

By: LEWIS S. SCHILLER
------------------
Lewis S. Schiller
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated..

Signature Title
--------- -----

LEWIS S. SCHILLER* Chairman of the Board, Chief
- ------------------- Executive Officer and Director
Lewis S. Schiller (Principal Executive Officer)

GLEN R. CHARLES* Treasurer and Chief Financial
- ----------------- Officer (Principal Financial
Glen R. Charles and Accounting Officer)

JOSEPH G. SICINSKI* Director
- --------------------
Joseph G. Sicinski *By: LEWIS S. SCHILLER
------------------
NORMAN J. HOSKIN* Director Lewis S. Schiller
- ------------------ Attorney-in-fact
Norman J. Hoskin February 13, 1997

E. GERALD KAY* Director
- ---------------
E. Gerald Kay

II-3
<PAGE>

Exhibit 5.1

February 7, 1997

Securities and Exchange Commission 20529-04
450 Fifth Street N.W.
Washington, D.C. 20549

Re: Trans Global Services, Inc.
File No. 333-14289
---------------------------

Gentlemen:

We refer to the above-captioned registration statement on Form S-1 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), filed by Trans Global Services, Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission.

We have examined the originals, photocopies, certified copies or other
evidence of such records of the Company, certificates of officers of the Company
and public officials, and other documents as we have deemed relevant and
necessary as a basis for the opinion hereinafter expressed. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as certified copies or photocopies and the
authenticity of the originals of such latter documents. We have also assumed the
filing of the Certificate of Designation for the Series G Convertible Redeemable
Preferred Stock ("Series G Preferred Stock") in substantially the form filed as
an exhibit to the Registration Statement.

Based on our examination mentioned above, we are of the opinion that
the securities being registered to be sold pursuant to the Registration
Statement are duly authorized and will be, when sold in the manner described in
the Registration Statement, legally and validly issued, and, in the case of the
Series G Preferred Stock and the Common Stock, fully paid and nonassessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under "Legal Matters" in
the related Prospectus. In giving the foregoing consent, we do not hereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Securities and Exchange
Commission.

Very truly yours,

ESANU KATSKY KORINS & SIGER