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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

MAY 31, 1998 0-8880
(FOR THE FISCAL YEAR ENDED) (COMMISSION FILE NO.)

MARITIME TRANSPORT & TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEW YORK 11-2196303
(STATE OF JURISDICTION OF (I.R.S. IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

1535 MEMPHIS JUNCTION ROAD, BOWLING GREEN, KENTUCKY, 42101.
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(502) 781-8453
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Securities registered pursuant to Section 12(b) of the Act: None

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

COMMON STOCK, $.01 PAR VALUE PER SHARE

Indicate by check mark, whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes No X
-
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

$1,088,285 as of September 13, 1998
(Aggregate market value of the voting stock
held by non-affiliates of registrant)

The Company had 15,130,705 shares of common stock outstanding as of May 31,
1998.
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PART I

ITEM 1. BUSINESS

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS ANNUAL REPORT ON FORM 10-K ARE FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES, INCLUDING THE TIMELY DEVELOPMENT, INTRODUCTION
AND ACCEPTANCE OF NEW PRODUCTS, DEPENDENCE ON OTHERS, THE IMPACT OF COMPETITIVE
PRODUCTS, PATENT ISSUES, CHANGING MARKET CONDITIONS AND THE OTHER RISKS DETAILED
THROUGHOUT THIS FORM 10-K. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
PROJECTED. THESE FORWARD-LOOKING STATEMENTS REPRESENT THE COMPANY'S JUDGMENT AS
OF THE DATE OF THE FILING OF THIS FORM 10-K. THE COMPANY DISCLAIMS, HOWEVER, ANY
INTENT OR OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.

Maritime Transport & Technology, Inc. (the "Registrant") was incorporated
under the laws of the State of New York on June 26, 1968 under the name of
"Inter-County Premium Advancing Corp." On May 2, 1976, Registrant acquired 100%
(1,300,000 shares) of the issued and outstanding common stock, $.Ol par value
per share, of Delhi Chemicals, Inc., a New York corporation, in exchange for an
aggregate of 1,300,000 newly-issued shares of the common stock of Registrant.
The foregoing constituted a tax-free exchange within the meaning of Section 368
(A)(1)(B) of the Internal Revenue Code of 1954 as amended. On June 22, 1976,
pursuant to a Certificate of Merger filed with the Secretary of State-of New
York, Delhi Chemicals, Inc. was merged into the Registrant and Registrant
amended its certificate of incorporation so as to change its name to "Delhi
Chemicals, Inc." in January and April of 1981, respectively, pursuant to
shareholder approval granted at a meeting of Registrant's shareholders held on
November 25, 1980, Registrant's certificate of incorporation was amended so as
to change its authorized common stock from 4,000,000 to 6,000,000 shares, and
its name to "Delhi Consolidated Industries, Inc."

From May 1976 until the Fall of 1983, Registrant was engaged in the
furniture refinishing products business as the distributor and franchiser of
"Houck's Process" furniture and metal stripping and refinishing products. In the
Fall of 1983, after experiencing eight (8) successive fiscal quarters in which
operating losses were incurred, Registrant discontinued all active business
operations. Registrant has not engaged in any active business operations since
such discontinuance.

On June 22, 1983, Registrant's shareholders approved a one-for-two reverse
split of all of Registrant's issued and outstanding common stock, $.Ol par
value, per share, effective July 27, 1983, resulting in there being 4,886,347
shares of Registrant's common stock outstanding after such reverse-split.
Subsequently, Registrant rescinded the issuance of 680,000 Shares for
non-delivery of consideration. Accordingly, there were 9,311,019 shares of
common stock issued and outstanding. All references to the issued and
outstanding stock of Registrant, appearing hereinafter in this report, give
effect to the foregoing stock split.

In December, 1987, The Company agreed to purchase from Maritime Transport
and Technology, Inc. patents, metal forging engineering designs and technology.
The Company issued 4,990,000 shares of common stock to Maritime for the
acquisition, as a partial payment of a total consideration of 11,185,933 shares
of common stock and 7,100 shares of preferred stock. Subsequently, additional
shares were issued, primarily in exchange for cancellation of debt owed to James
Howell, President of the Company, bringing the total number of shares issued and
outstanding to 38,985,549.

In May, 1998, the Company completed the reverse acquisition of B.G. Banking
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Equipment, Inc., ("B.G. Banking") and Financial Building Equipment Exchange,
Inc., ("FBEE"), Kentucky corporations. This merger had an effective date of June
1, 1998. In that transaction, the Company purchased all of the outstanding
shares of B.G. Banking Equipment, Inc., in exchange for 11,282,250 shares of the
Company's common stock. Prior to this exchange, the Company had done a ten for
one reverse split which had left the Company with 3,848,455 common shares issued
and outstanding. After the completion of the merger, the amount of the Company's
common stock issued and outstanding was 15,130,705.

The Registrant sells and services new, used and reconditioned automated
teller machines (ATMs), electronic and physical security systems, various
products used to equip bank facilities, software and systems for global
financial and commercial markets. Sales of systems and equipment are made
directly to customers by the registrant's sales personnel and by manufacturer's
representatives and distributors. The sales/support organization works closely
with customers and their consultants to analyze and fulfill the customers'
needs. Products are sold under contract for future delivery at agreed upon
prices.

INDUSTRY

In the past several years, acquisitions and mergers in the banking industry
have resulted in many large bank holding companies. Manufacturers and service
companies have not kept pace with the new larger banks. Geographic spread of
branches has created servicing problems. Many banks are unable to find and
purchase equipment needed for their day to day banking needs. Part of the reason
for this is the fact that the large banks have hired away most of the
experienced buyers, and the smaller banks are now faced with less experienced
staff, lower amounts of funds available for purchases in comparison to the
larger banks, and limited geographical access to suppliers. Even though there
are smaller service companies in almost every area, they still cannot provide
service to many of these small banks because of the lack of available parts. The
result is a large number of "home town" or limited branch banks which are unable
to keep pace with the larger banks in terms of their access to and acquisition
of much of the equipment needed to manage the bank - bank equipment such as
vault doors, safes, drive-up equipment and ATM's.

THE SERVICE

Because the Company handles pre-owned equipment, it has been able to sell
many parts desired by banks. The Company is now in the process of cataloging all
parts and equipment. The Company thus has specialized equipment that does not
age, such as vault doors, safes, and deposit boxes. Most of this equipment costs
more to manufacture than the price for which the Company can sell it. The larger
banks are now outsourcing to facilities maintenance groups. The Company has
become an outsource resource, including new equipment, pre-owned equipment and
replacement parts, and maintenance personnel. The Company views its market as
the smaller banks, and intends to act as an outsource operation for these banks,
supplying them with the know how, sources, and technical expertise needed to
acquire and maintain the equipment necessary to run a bank in this day and age.
Because the Company uses pre-owned equipment, it is able to do this at a very
competitive price.

THE COMPETITION

The Company knows of several other entities presently competing for the
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same market. Many of these Companies have greater capital resources, larger
staffs and more sophisticated facilities and more experience in the industry
than the Company. Such companies may more effectively service clients than the
Company and may be more successful than the Company in their servicing and
marketing of the Company's products. There can be no assurance that other
companies will not enter the markets developed by the Company or its customers.
There can be no assurance that the Company will be able to compete successfully
in the future with existing or new competitors.

EMPLOYEES

Currently, the Company employs 19 full time employees, Paul Clark as
President, Roberta Clark as corporate secretary and vice president. Two persons
are employed in sales, four persons are employed in office/clerical capacities,
as well as one bookkeeper and one secretary. In addition there are six
installation personnel and three persons in service.

ITEM 2. PROPERTIES

The Company presently occupies 24,000 square feet of office and warehouse
space located at Building 1535 Memphis Junction Road, Bowling Green, Kentucky
42101 for a monthly rent of $5,000 pursuant to a lease dated August 1, 1998 for
three years. This space is rented to the Company by Paul Clark, President of the
Company.

ITEM 3. LEGAL PROCEEDINGS

As at May 31, 1998 and the filing date hereof, no material legal
proceedings were pending to which the Registrant or any of its property is
subject, nor to the knowledge of the Registrant are such legal proceedings
threatened.

The Company intends to file a suit in the near future. Two of the Company's
past directors, Andrew Seim and Alexander Brosda, acting and individually and
acting as principals of Taurus Investments International, Inc. ( a Nevada
corporation) (together "Taurus"), acting as Directors of B.G. Banking prior to
its acquisition by the Company and subsequent to the acquisition becoming
Directors of the Company, offered and sold on behalf of B.G. Banking what Taurus
has admitted to being an aggregate of 304,500 shares of common stock of B.G.
Banking for an aggregate consideration of $304,500. Taurus has remitted to B.G.
Banking and the Company a net proceeds of $109,673.05 and claims the difference
of $194,826 be retained by Taurus as payment for expenses and commissions.
Taurus has refused to disclose the names and numbers of shares of common stock
and refused to remit to the Company the proceeds of the shares sold.

The Company intends to enter into a lawsuit with Taurus demanding the
balance of $194,826 that was improperly withheld be remitted to the Company and
that Taurus disclose the names of the persons and the number of shares of common
stock sold to these individuals. As of May 31, 1999, Taurus has failed to turn
over the balance of money, provide the names of the stock subscribers and the
number of shares of common purchased.

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

Registrant submitted no matters to a vote of its security holders during
its fiscal year ended May 31, 1998.
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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Currently, the Company's Common Stock is traded over the counter
on the Bulletin Board. Following is a chart of the Company's high
and low bid information for each quarter within the last fiscal
year. The listed quotations reflect inter-dealer prices, without
retail mark-up, mark-down, or commission, and may not represent
actual transactions.

High Low

Fiscal Quarter (Year End) .01 .01
Ending May 31, 1998

Fiscal Quarter Ending .01 .01
Ending February 28, 1998

Fiscal Quarter Ending 1/4 55/100
Ending November 30, 1997

Fiscal Quarter Ending 1 3/4 1/4
Ending August 31, 1997

(b) As of May 31, 1998, there were approximately 901 holders of the
Company's Common Stock.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

THE MATTERS DISCUSSED IN THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS CONTAIN FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE DISCUSSED HERE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THE
SECTIONS ENTITLED "BUSINESS" AND "RISK FACTORS," AS WELL AS THOSE DISCUSSED
ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K. THE COMPANY DISCLAIMS, ANY INTENT
OR OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.

OVERVIEW

Maritime Transport & Technology (the "Company") was established in 1968.
The Company remained dormant for many years until the Company completed the
acquisition of B.G. Banking Equipment, Inc., ("B.G. Banking") and Financial
Building Equipment Exchange, Inc., ("FBEE"), Kentucky corporations. The Company
is now in the business of buying, selling, trading both new and refurbishing of
financial equipment for banks and other financial institutions. The Company
markets the products throughout the United States primarily through direct sales
to financial institutions and other distributors supported by the Company's
direct sales force and soliciting new contacts through its presence on the
Internet.
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The Company anticipates that its results of operations may fluctuate for the
foreseeable future due to several factors, including whether and when new
products at competitive prices are obtained and sources of good used banking and
banking related equipment and furniture available at favorable prices; market
acceptance of current or new products, delays, or inefficiencies, shipment
problems, seasonal customer demand, the timing of significant orders,
competitive pressures on average selling prices and changes in the mix of
products sold.

Operating results would also be adversely affected by a downturn in the
market for the Company's current and future products, order cancellations or
order rescheduling or remanufacturing or delays. The Company purchases and
resells new and used merchandise and remanufactures and ships its other products
shortly after receipt of orders and has not developed a significant backlog for
such products and does not anticipate it will develop a material backlog for
such products in the future.

Because the Company is continuing to increase its operating expenses,
primarily for personnel and activities supporting newly-introduced products, new
product development and entering new markets, the Company's operating results
would be adversely affected if its sales did not correspondingly increase or if
its product development efforts are unsuccessful or are subject to delays. The
Company has incurred losses due to the payment of consulting fees and the
issuance of shares of common stock in consideration for consulting expenses
charged to operations in lieu of the payment of cash.

The Company may not sustain revenue growth or return to profitability on a
quarterly or annual basis and its operating results may not be consistent with
predictions made by securities analysts.

RESULTS OF OPERATIONS

The following table sets forth operating data as a percentage of net sales:

August 31, 1997 May 31, 1998
--------------- ------------

Net sales 100.0% 100.0%
Cost of sales 50.0% 43.6%
----- -----
Gross profit 50.0% 56.3%
----- -----
Operating expenses:
Selling, general and administrative 43.3% 59.8%
Depreciation 2.4% 4.3%
Corporate state taxes 0.0% 0.0%
----- -----
Total operating expenses 45.7% 64.1%
----- -----
Income (loss) from operations 4.3% (7.7)%

Other expense, net 0.0% 0.4%
----- -----
Net income (loss) 4.3% (8.1)%
===== =====

Results of operations for the nine months ended May 31, 1998 as compared to the
year ended August 31, 1997.
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The fiscal year ended May 31, 1998 consisted of nine months resulting from
B.G. Banking Equipment, Inc., and Financial Building Equipment Exchange, Inc.,
changing its fiscal year end from August 31 to May 31 to conform to the fiscal
year end of the Company.

For the year ended May 31, 1998, the Company generated net sales of
$1,065,802 as compared to $1,401,301 for the year ended August 31, 1997
representing a decrease of $335,499. The Company's cost of goods sold for the
year ended May 31, 1998 was $465,015 as compared to $700,494 for the year ended
August 31, 1997. The Company's gross profit on sales was $600,787 for the year
ended May 31, 1998 as compared to $700,807 for the year ended August 31, 1997.
The decrease in sales is the direct result of the change in the fiscal year ends
creating shortfall of 3 months in sales for the fiscal year end May 31, 1998.
The ratio in Gross profit was reduced from 50.0% for the year end August 31,
1997 as compared to a gross profit percentage of 43.6%. The reduction is a
direct result of the product mix for the products sold being higher in
refurbished equipment than new equipment sales. The cost of purchasing and
refurbishing equipment for resale is significantly lower then the cost of
purchasing new equipment.

General and administrative costs for the year ended May 31, 1998 was
$637,315 as compared to $606,916 for the year ended August 31, 1997 representing
an increase of $30,399. These increased general and administrative costs were
undertaken to create the infrastructure necessary to meet the Company's
marketing and production goals. As an outgrowth of increasing equipment sales
the Company expects general and administrative costs to continue to increase but
at a slower rate. As a percent of sales, this cost to sales decreased 33.6%
during the current year as the fiscal year May 31, 1998 was only for nine
months.

BENEFIT (PROVISION) FOR INCOME TAXES

As a result of the pre-tax loss recorded for 1998, the Company not recorded
a benefit for Federal income taxes. Instead the Company recognized no income tax
benefit from the losses generated in the year ended May 31, 1998. SFAS No. 109
requires that a valuation allowance be provided if it is more likely than not
that some portion or all of a deferred tax asset will not be realized. The
Company's ability to realize benefit of its deferred tax asset will depend on
the generation of future taxable income. Because the Company has yet to
recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided. The Company will
continue to assess the likelihood of realization of such assets; however, if
future events occur which make the realization of such assets more likely than
not, the Company will record a tax benefit. The Company is liable for the
payment of a Corporate Kentucky State on tangible assets.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its operations through revenues from
operations, private and public placements of equity securities, debt and capital
lease financing and interest income earned on the net proceeds from the private
placements. Since its reorganization, the Company has received proceeds of
approximately $103,000 in long-term debt and $86,000 from investors.

During the year ended May 31, 1998, the Company had negative cash flow from
operations of $124,841 essentially because of an increase in accounts receivable
of $127,907, inventory of $9,404, and an increase in accounts payable and
accrued expenses of $46,340 customer deposits payable increased $12,853.
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Other significant business activities affecting cash included the purchase
of fixed assets of $39,684.

The Company is evaluating various alternatives in addressing its future
facilities expansion needs. The alternatives being evaluated include
negotiations with various parties for the leasing of additional facility space
and the purchase of additional property to build a new or additional office and
warehousing facility. Relocation to a new facility or leasing of additional
facility space would be expected to result in an increase in rent upon
occupancy.

The Company believes that its available cash, cash from operations and
funds from existing credit arrangements will be sufficient to satisfy its
funding needs for at least the next 12 months. Thereafter, if cash generated
from operations is insufficient to satisfy the Company's working capital and
capital expenditure requirements, the Company may be required to sell additional
equity or debt securities or obtain additional credit facilities. There can be
no assurance that such additional capital, if needed, will be available on
satisfactory terms, if at all. Furthermore, any additional equity financing may
be dilutive to stockholders, and debt financing, if available, may include
restrictive covenants. The Company's future liquidity and capital funding
requirements will depend on numerous factors, including the extent to which the
Company's new products and products under consideration are successfully
developed, gain market acceptance and become and remain competitive, the timing
and results of regulatory actions in the banking industry, the costs and timing
of further expansion of sales, marketing and manufacturing activities,
facilities expansion needs. The failure by the Company to raise capital on
acceptable terms when needed could have a material adverse effect on the
Company's business, financial condition and results of operations.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTALLY DATE

MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEET

August 31, May 31,
1997 1998
-------- --------

ASSETS

Current assets
Cash and cash equivalents $ 70,628 $ 75,589
Accounts receivable 182,179 310,085
Inventory 161,391 170,795
Corporate income taxes receivable 4,205 8,925
Prepaid expenses 1,200
-------- --------

Current assets 418,403 566,594

Property plant and equipment -net 50,297 44,043

Other assets

Deferred offering costs 45,108
Loans receivable - non affiliated 36,276 40,699
Loans receivable-shareholder 75,914 91,352
Security deposit 805 805
-------- --------
Total other assets 112,995 177,964
-------- --------
Total assets $581,695 $788,601
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable and accrued expenses $153,651 $199,991
Customer deposits 48,553 61,406
Loans payable investors 131,500
Notes payable-bank 20,238 109,338
-------- --------
Total current liabilities 222,442 502,235

Long term liabilities
Note payable - bank 13,855
--------
Total liabilities 516,090
Capital stock
Common stock-authorized 80,000,000
common shares, par value $.01 each, at
August 31, 1997 and May 31, 1998 the
number of shares outstanding 15,130,705
and 15,130,705 respectively 151,307 151,307
Additional paid in capital -0- -0-
Retained earnings 207,946 121,204
-------- --------
Total stockholders' equity 359,253 272,511
-------- --------
Total liabilities and stockholders' equity $581,695 $788,601
======== ========

See accompanying notes to financial statement

F1
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MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS

For the For the For the
year ended year ended year ended
August 31, August 31, May 31,
1996 1997 1998
------------ ------------ ------------

Revenue $ 1,133,853 $ 1,401,301 $ 1,065,802

Costs of goods sold 536,274 700,494 465,015
------------ ------------ ------------

Gross profit 597,579 700,807 600,787

Operations:
General and administrative 556,306 606,916 637,315
Depreciation and amortization 28,864 33,208 45,938
------------ ------------ ------------
Total expense 585,170 640,124 683,253
------------ ------------ ------------

Profit (loss) from operations before
corporate income taxes 12,409 $60,683 (82,466)
------------ ------------ ------------

Corporate income taxes 2,559
------------

Other income and expenses
Interest income 2,107 2,646
Interest expenses (350) (3,710) (6,922)
------------ ------------ ------------
Total other Income (350) (1,603) (4,276)
------------ ------------ ------------

Net income (loss) $ 9,500 $ 59,080 $ (86,742)
============ ============ ============

Net income (loss) per share - basic $ 0.00 $ 0.00 $ (.01)
============ ============ ============
Number of shares outstanding - basic 15,130,705 15,130,705 15,130,705
============ ============ ============

See accompanying notes to financial statement
F2
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MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS

For the For the For the
year ended year ended year ended
August 31, May 31, May 31,
1996 1997 1998
--------- --------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $9,500 $59,080 $(86,742)
Non cash transactions
Depreciation 28,864 33,208 45,938
Accounts receivable (9,118) (62,542) (127,907)
Prepaid expenses (3,269) (1,200)
Inventory (39,068) (39,698) (9,404)
Federal corporate taxes receivable (4,605) 8,009 618
Accounts payable and accrued expenses 53,059 127,668 22,152
Customer deposits payable 17,464 (9,171) 12,853
--------- --------- ---------
TOTAL CASH FLOWS FROM OPERATIONS 52,827 116,554 (143,692)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan payable-bank (1,977) 122,368
Officer loan payable 3,000
Bank loans payable (45,425)
Investor loans payable 86,392
---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES (1,977) (42,425) 208,760
CASH FLOWS FROM INVESTING ACTIVITIES
Loan receivable shareholder 7,548 (11,080)
Note receivable
Purchase of fixed assets (27,995) (41,130) (39,682)
Due from affiliate 3,105 (16,055)
Note receivable non affiliated party (13,422) (4,423)
--------- --------- ---------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (17,342) (65,632) (60,160)

NET INCREASE (DECREASE) IN CASH 33,508 8,497 4,908
CASH BALANCE BEGINNING OF PERIOD 28,676 62,184 70,681
--------- --------- ---------
CASH BALANCE END OF PERIOD $62,184 $70,681 $75,589
========= ========= =========

See accompanying notes to financial statement
F3
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MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

Additional Retained
paid in earnings
Date Common Stock Common Stock capital deficit Total
---- ------------ ------------ ------- ------- -----

Balances September 1, 1996 15,130,705 $ 151,307 -0- $ 148,866 $ 300,173
Net profit 59,080 59,080
----------- -----------
Balances August 31, 1997 15,130,705 $ 151,307 -0- $ 207,946 $ 359,253
Net loss (86,742) (86,742)
----------- -----------
Balances May 31, 1998 15,130,705 $ 151,307 $ -0- $ 121,204 $ 272,511
=========== =========== ===== =========== ===========

See accompanying notes to financial statement
F4
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MARITIME TRANSPORT & TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1997 AND MAY 31, 1998

NOTE 1 - FORMATION OF COMPANY AND ISSUANCE OF COMMON STOCK

a. Formation and Description of the Company

Maritime Transport & Technology, Inc. (the "Company") was formed under
the laws of the State of New York on June 26, 1968 and authorized up to issue to
80,000,000 shares of common stock, $.01 par value. On May 31, 1998, the Company
completed the acquisition of B.G. Banking Equipment, Inc. ("B.G. Banking") and
Financial Building Equipment Exchange, Inc. ("FBEE"), Kentucky corporations, in
exchange for 11,282,250 shares of its common stock. The aforementioned
transaction has been accounted for as a reverse merger involving a shell
company, effectively a recapitalization of B.G. Banking Equipment, Inc. and
Financial Building Equipment Exchange, Inc. (the operating companies/accounting
acquirers). Accordingly, the historical financial statements of the operating
companies are presented as the historical financial statements of the
registrant. The results of operations of Maritime Transport & Technology, Inc.
(legal acquirer) are included in the consolidated financial statements since May
31, 1998, the date of the merger. The Company is in the business of buying,
selling, trading and refurbishing of financial equipment for banks and other
financial institutions.

b. Issuance of Common Stock

The number of common shares outstanding at May 31, 1997 is 38,484,549.
No other shares have been issued.

On May 3, 1998, the Company reverse split the number of shares of
common stock outstanding in a ratio of 1 for 10 restating the number of shares
outstanding to 3,848,455.

On May 3, 1998, the Company authorized for issuance 11,282,250 shares
of common stock pursuant to an Agreement of Business Combination, the
("Agreement"), with B.G. Banking and FBEE. On May 31, 1998, the shares of common
stock were released from escrow.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Financial Statement Presentation

The consolidated financial statements of the Company presented consist
of the balance for the Company of as of August 31, 1997 and May 31, 1998, and
the balance sheet for B.G. Banking and FBEE as of August 31, 1997 and May 31,
1998 and the related consolidated statements of operations, retained earnings
and cash flows for the year ended August 31, 1996 and 1997 and May 31, 1998 for
the Company, and the related statements of operations, retained earnings and
cash flows for the years ended August 31, 1996 and 1997 and May 31, 1999 for
B.G. Banking and FBEE. The consolidated statement of operations, cash flows and
stockholders equity for the year ended May 31, 1998 consists of the short nine
month year ended May 31, 1998 for BG Banking and FBEE reflecting BG Banking and
FBEE changing its fiscal year end to May 31 from an August 31 year end. The
consolidated statement of operations, cash flows and stockholders equity for the
year ended August 31, 1996 and 1997 consists of the statement of operations,
cash flows and stockholders equity for year ended August 31, 1996 and 1997 for
the
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Company and the statement of operations, cash flows and stockholders equity for
the fiscal year ending August 31, 1996 and 1997.

b. Cash and Cash Equivalents

The Company treats cash equivalents which includes temporary
investments with a maturity of less than three months as cash when purchased
with cash.

c. Inventory

Inventory has been recorded at the lower of cost or market under the
first-in-first-out method. Inventory components for B.G. Banking and FBEE as of
August 31, 1997 and May 31, 1998 were goods available for sale aggregating
$161,391 and $170,795 respectively.

d. Earnings per share

In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share
("Statement No. 128"). Statement No. 128 applies to entities with publicly held
common stock or potential common stock and is effective for financial statements
issued for periods ending after December 15, 1997. Statement No. 128 replaces
APB Opinion 15, Earnings per Share ("EPS"). Statement No. 128 requires dual
presentation of basic and diluted earnings per share by entities with complex
capital structures. Basic EPS includes no dilution and is computed by dividing
net income by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution of securities that could
share in the earnings of the Company such as common stock which may be issuable
upon exercise of outstanding common stock options or the conversion of debt into
shares of common stock. As of May 31, 1999, there no are matters that would
effect the number of shares of common stock outstanding.

e. Revenue recognition

Revenue is recognized when products are shipped or services are
rendered.

f. Customer Deposits

Customer deposits represent monies advanced by customers at the time
orders were placed. The amount of the deposit is used to reduce the customer's
accounts receivable balance at the time of shipment of the order. At August 31,
1997 and May 31, 1998, there were $48,553 and $61,406 respectively in advance
deposits received from customers for orders to be filled.

g. Federal Corporate Incomes Tax Receivable

The balance of taxes receivable consists of monies that were overpaid
to the United States Government with the Federal Income Tax return filed for
August 31, 1997. This amount was paid subsequent to the date of the financial
statements.

h. Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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.
15
i. Asset Impairment

The Company adopted the provisions of SFAS No. 121, Accounting for the
impairment of long lived assets and for long-lived assets to be disposed of
effective January 1, 1996. SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of.
Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that full
recoverability is questionable. There was no effect of such adoption on the
Company's financial position or results of operations.

j. Significant Concentration of Credit Risk

At August 31, 1997 and May 31, 1998, the Company has concentrated its
credit risk by maintaining deposits in several banks. The maximum loss that
could have resulted from this risk totaled $-0- which represents the excess of
the deposit liabilities reported by the banks over the amounts that would have
been covered by the federal insurance.

k. Recent Accounting Standards

Accounting for Derivative Instruments and Hedging Activities

Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133) was issued in June
1998. It is effective for all fiscal years beginning after June 15, 1999. The
new standard requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivatives and whether they qualify for hedge accounting. The
key criterion for hedge accounting is that the hedging relationship must be
highly effective in achieving offsetting changes in fair value or cash flows.
The Company does not currently engage in derivative trading or hedging activity.
The Company will adopt SFAS 133 in the fiscal year ending December 31, 2000,
although no impact on operating results or financial position is expected.

Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use

In March of 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use". SOP 98-1 requires
computer software costs associated with internal use software to be charged to
operations as incurred until certain capitalization criteria are met. SOP 98-1
is effective beginning January 1, 1999. The Company is currently assessing the
impact that adoption of this statement will have on consolidated financial
position and results of operations.

NOTE 3 - ACQUISITION OF SUBSIDIARIES

On May 3, 1998, The Company entered into an Agreement with B.G. Banking
and FBEE, pursuant to which the Company and an affiliated entity controlled my
Paul and Roberta Clark exchanged all the issued and outstanding shares of common
stock of these entities for 11,282,250 shares of Maritime's common stock. The
shares of common stock were released from escrow on May 31, 1998.
16
The transaction has been accounted for as the issuance of shares of
common stock by a private company for the net assets of the Company, accompanied
by a recapitalization. Accordingly, the financial statements of Company became
the consolidated financial statements of B.G. Banking and FBEE.

In a separate private transaction, the principals of the Company
acquired on in December, 1997 27,943,370 shares of Maritime's common stock,
which subsequently reverse split in a ratio of 10 to 1 on April 14, 1998.

NOTE 4 - NOTES RECEIVABLE

a. Loans receivable - shareholder

As of August 31, 1997 and May 31, 1998, the Company is due an aggregate
of $75,914 and $91,352 respectively from Paul Clark. These amounts were advanced
without interest and are due on demand.

b. Notes receivable non affiliated

As of August 31, 1997 and May 31, 1998, the Company has outstanding
notes receivable aggregating $36,276 and $40,699 as follows:

As of August 31, 1997 and May 31, 1998, a balance of $23,076 and
$27,499 respectively due from Morgan Glass and Mirror, Inc. consisting of monies
advanced to the Company on January 1, 1997 with interest of 10.5% and is payable
on demand. This amount is collateralized by the underlying accounts receivable
of Morgan.

On August 31, 1997 and May 31, 1998, a balance of $13, 200 and $13,900
respectively due from AAA Alarm Systems, Inc. with interest of 9.5% and is
payable on demand. This amount is collateralized by the underlying accounts
receivable.

c. Loan receivable - shareholder

As of May 31, 1998, Paul Clark was obligated to repay monies advanced
to him by the Company. This amount is due without interest and on demand. Such
amount was repaid to the Company in 1999.

d. Loan receivable - non-affiliate

As of May 31, 1998, the Company had outstanding notes receivable
aggregating $40,699 as follows:

As of May 31, 1998, the Company has a balance of $27,499 due from
Morgan Glass and Mirror, Inc. with interest at 10%. This loan represents an open
line of credit and is collateralized by his accounts receivable.

On May 31, 1998, the Company advanced $13,200 to AAA Alarm Systems,
Inc. The note is due on demand with interest at 9.5%

NOTE 5 - RELATED PARTY TRANSACTIONS

a. Leased Office Space

The Company has entered into a three year lease with Paul Clark,
President of the Company beginning August 1, 1997, for the lease of an aggregate
of 23,976 square feet of office and warehouse space located at Building 1535
Memphis
17
Junction Road, Bowling Green, Kentucky, 42101 for a monthly rent of $ 5,000 per
month.

Rent paid pursuant to this lease agreement for the year ending May 31,
1998 is $45,000. The minimum lease payments for the years ending May 31, 1999
and 2000 of the lease is $60,000 and $60,000 respectively

b. Officer Salaries

Mr. Paul Clark, President of the Company received an aggregate salary
of $129,600 consisting of cash payments of $33,600.

Roberta Clark, Secretary to the Company received a salary of $21,600
plus vacation and health benefits.

No other officer has received a salary in excess of $100,000.

c. Managerial Relationship

Mr. Paul Clark is the President of both the Company, B.G. Banking and
FBEE. Paul and Roberta Clark are husband and wife.

d. Change in Managerial Control

On May 3, 1998, The Company entered into an Agreement with B.G. Banking
and FBEE, pursuant these affiliated entities controlled by Paul and Roberta
Clark exchanged all the issued and outstanding shares of common stock of these
entities for 11,282,250 shares of Maritime's common stock.

NOTE 6 - PROPERTY PLANT AND EQUIPMENT

Property Plant and Equipment consists of the following at May 31, 1998

Equipment and tools $ 90,492
Vehicles and trucks 165,569
Furniture and fixtures 33,563
Leasehold improvements 13,745
--------
Total 303,369
Less accumulated depreciation 259,326
--------
Property Plant and Equipment - net $ 44,043
========

NOTE 7 - BANK LOANS PAYABLE

a. Loans Due South Central Bank of Bowling Green, Inc.

Total amount due banks for vehicle loans at May 31, 1998 of $123,192
Less current portion due 109,338
--------
Long term amount due $ 13,854
========

Bank loans aggregating $15,542 at May 31, 1999 are as follows:
18
FBEE is obligated to repay a loan payable to the South Central Bank of
Bowling Green, Inc. in the principal amount of $8,052 in 36 equal monthly
installments of $263.54 beginning January 16, 1998 with interest at 11%. The
balance due at May 31, 1998 is $7,077. The loan is secured by a 1992 Ford truck.

FBEE is obligated to repay a loan payable to the South Central Bank of
Bowling Green, Inc. in the principal amount of $14,052 in 40 equal monthly
installments of $342.66 beginning June 20, 1998 with interest at 7.75%. The
balance due at May 31, 1998 is $14,052. The loan is secured by a 1995 Buick Park
Avenue.

FBEE is obligated to repay a loan payable to the South Central Bank of
Bowling Green, Inc. in the principal loan balance amount of $1,564 at May 31,
1998 with monthly installments of $342.66. The loan is secured by a Ford F250
truck.

b. First American National Bank

FBEE has a $150,000 line of credit with the First American National
Bank with interest at prime plus 2%. As of May 31, 1998, FBEE is obligated to
repay a balance of $100,500 and $-0- respectively. Interest is billed monthly.
The line of credit is secured personally by the residence of Paul and Roberta
Clark.

NOTE 8 - INCOME TAXES

The Company provides for the tax effects of transactions reported in
the financial statements. The provision if any, consists of taxes currently due
plus deferred taxes related primarily to differences between the basis of assets
and liabilities for financial and income tax reporting. The deferred tax assets
and liabilities, if any, represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of May 31, 1998, the Company had no
material current tax liability, deferred tax assets, or liabilities to impact on
the Company's financial position because the deferred tax asset related to the
Company's net operating loss carry forward and was fully offset by a valuation
allowance.

At May 31, 1998, the Company has net operating loss carry forwards for
income tax purposes of $131,850. These carry forward losses are available to
offset future taxable income, if any, and expire in the year 2010. The Company's
utilization of this carry forward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.

The components of the net deferred tax asset as of May 31, 1998 are as
follows:

Deferred tax asset:
Net operating loss carry forward $ 44,829
Valuation allowance $(44,829)
--------
Net deferred tax asset $ -0-

The Company recognized no income tax benefit for the loss generated for
the year ended May 31, 1998.

The Company recognized no income tax benefit from the loss generated in the
year ended May 31, 1997. SFAS No. 109 requires that a valuation allowance be
provided if it is more likely than not that some portion or all of a deferred
tax asset will not be realized. The Company's ability to realize benefit of its
19
deferred tax asset will depend on the generation of future taxable income.
Because the Company has yet to recognize significant revenue from the sale of
its products, the Company believes that a full valuation allowance should be
provided.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

a. Private Placement and Investor Loans Payable

As of May 31, 1998, Investor loans payable were $131,500. These amounts
represent shares of common stock sold at $1.00 per share sold as of these dates,
but remain undelivered by the Company.

The Company offered 2,000,000 shares of common stock at $1.00 per share
on a "best efforts basis".

As of May 31, 1998, the Company had sold 131, 500 shares of common
stock for an aggregate consideration of $131,500 for which delivery of the
shares representing 93,100 shares or an aggregate of $93,100 was effectuated in
the next fiscal year.

The Company has reserved 1,868,500 shares of common stock pending the
completion of the private placement.

NOTE 10 - BUSINESS AND CREDIT CONCENTRATIONS

The amount reported in the financial statements for cash and trade
accounts receivable approximates fair market value. Because the difference
between cost and the lower of cost or market is immaterial, no adjustment has
been recognized and investments are recorded at cost.

Financial instruments that potentially subject the company to credit
risk consist principally of trade receivables. Collateral is generally not
required.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

The Company did not change accountants for the fiscal year ending May 31, 1998.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF
REGISTRANT

Name Age Position

Paul Clark 55 President, Director, and Chief Executive Officer
Roberta Clark 54 Vice President, Secretary, and Director
Albert Blakenship 65 Chief Financial Officer

PAUL CLARK

Mr. Clark is the founder of B.G. Banking Equipment, Inc. (Formerly AAA
Alarms and Services, Inc., March 1977) He is also the President and CEO of
Financial Building Equipment Exchange, Inc. He has worked in a variety of
20
management and sales positions in the electronic security and banking equipment
industries as well as the U.S. Navy. His education and training were from
several technical schools including an Industrial Electronics degree received in
1970. Mr. Clark also received medical electronics specialist training as an
interior communication electrician with the United States Naval Submarine
Service. Mr. Clark also attends specialized educational courses annually to stay
current in the field of security.

ROBERTA CLARK

Ms. Clark has been a director, the secretary and Vice President of the
Company since May, 1998. From 1977 to 1998, Ms. Clark served in similar
positions at AAA Alarms. She attended Colorado State University in Fort Collins,
Colorado. In 1962 she received a B.A. in Art and in 1966 a Masters Degree in
Art.

ALBERT E. BLANKENSHIP

Mr. Blankenship is and has been since at least 1990 a practicing
accountant. He has extensive financial experience in a variety of industries,
with both publicly and privately held corporations. He also managed financial
and tax affairs for a variety of corporate clients. Mr. Blankenship received his
B.S. in Business Administration from Bowling Green (KY) College of Commerce, and
is a retired U.S. Army officer. He holds certificate #871 for state board of
accountancy effective 2-14-62.

ITEM 11. EXECUTIVE COMPENSATION

Mr. Paul Clark, President of the Company received an aggregate salary
of $129,600 consisting of cash payments of $33,600.

Roberta Clark, Secretary to the Company received a salary of $21,600
plus vacation and health benefits.

No other officer has received a salary in excess of $100,000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the share
ownership, as of May 31, 1998, of those persons known to Registrant to be the
beneficial owners of more than 5% of Registrant's common stock, $.Ol par value,
and by Registrant's officers and directors:

Number of Percentage
Name Shares of Shares Owned
Owned

Paul Clark 6,631,815 44.5%
1985 Claypool Alvaton Rd
Bowling Green, Kentucky 42101

Roberta Clark 6,631,815 44.5%
1985 Claypool Alvaton Rd
Bowling Green, Kentucky 42101

Albert Blankenship 131,320 0.8%
628 Sherwood Drive
Bowling Green, Kentucky 42101

21
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Following are the related party transactions during the fiscal year
ended May 31, 1998.

a. Loans receivable - shareholder

As of August 31, 1997 and May 31, 1998, the Company is due an aggregate
of $75,914 and $91,352 respectively from Paul Clark. These amounts were advanced
without interest and are due on demand.

b. Loan receivable - shareholder

As of May 31, 1998, Paul Clark was obligated to repay monies advanced
to him by the Company. This amount is due without interest and on demand.

c. Leased Office Space

The Company has entered into a three year lease with Paul Clark,
President of the Company beginning August 1, 1997, for the lease of an aggregate
of 23,976 square feet of office and warehouse space located at Building 1535
Memphis Junction Road, Bowling Green, Kentucky, 42101 for a monthly rent of $
5,000 per month.

d. Officer Salaries

Mr. Paul Clark, President of the Company received an aggregate salary
of $129,600 consisting of cash payments of $33,600.

Roberta Clark, Secretary to the Company received a salary of $21,600
plus vacation and health benefits.

No other officer has received a salary in excess of $100,000.

e. Managerial Relationship

Mr. Paul Clark is the President of both the Company, B.G. Banking and
FBEE. Paul and Roberta Clark are husband and wife.

f. Change in Managerial Control

On May 3, 1998, The Company entered into an Agreement with B.G. Banking
and FBEE, pursuant these affiliated entities controlled my Paul and Roberta
Clark exchanged all the issued and outstanding shares of common stock of these
entities for 11,282,250 shares of Maritime's common stock.

Part IV
22
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

(A)(1) FINANCIAL STATEMENTS

The following financial statements are included under a separate
caption "Financial Statements and Supplementary Data" in Part II, Item 8 hereof
and are incorporated herein by reference.

Consolidated Balance Sheet for Years Ended May 31, 1998 and August 31, 1997

Consolidated Statements of Operations for Years Ended May 31, 1998, August 31,
1997 and August 31, 1996

Consolidated Statements of Cash Flows for Years Ended May 31, 1998, August 31,
1997 and August 31, 1996

Consolidated Statements of Shareholders' Equity for Years Ended May 31, 1998,
August 31, 1997 and September 1, 1996

Notes to Consolidated Financial Statements

(A)(2)

Financial Statement Schedules All financial statement schedules have
been omitted as the required information is inapplicable or has been included in
the Consolidated Financial Statements.

(A)(3)

Exhibit Number Description of Document
- -------------- -----------------------

3.1 Certificate of Incorporation of Maritime Transport &
Technology, as amended

3.2 Articles of Incorporation of Financial Building Equipment
Exchange, Inc.

3.3 Articles of Incorporation BG Banking Equipment, Inc., as
amended

3.4 Bylaws of Maritime Transport & Technology

4 Specimen

10 Asset Acquisition Agreements, dated may 3, 1998, by and
between BG Banking Equipment, Inc. and Maritime Transport and
Technology, Inc. (Exhibit 1 in Form 8-K, May 3, 1998)

16 Letter from Thomas P. Monahan, CPA, starting his concurrence
with the Registrant's change in Certifying Accountant (Exhibit
16.1 in Form 8-K, July 20 2000.)

21 Subsidiaries of the Registrant

23 Letter from Thomas P. Monahan, CPA, regarding their
concurrence with the foregoing disclosures.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Maritime Transport & Technology, Inc.

By: /s/ Paul Clark
---------------------------------
Paul Clark
President, CEO & Director

3-15-01
--------------------------------
(Date)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By: /s/ Roberta Clark
---------------------------------
Roberta Clark
Vice President, Secretary & Director

3/15/01
-------------------------------------
(Date)

By: /s/ Albert Blankenship
---------------------------------
Albert Blankenship
Chief Financial Officer

3-15-01
-----------------------------------
(Date)