AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1998

REGISTRATION NO. 333-09951
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

(Amendment No. 3)
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

EAGLE SUPPLY GROUP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 5033 13-3889248
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)

------------------------
122 EAST 42ND STREET
SUITE 1116
NEW YORK, NEW YORK 10168
(212) 986-6190
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
DOUGLAS P. FIELDS
CHIEF EXECUTIVE OFFICER
EAGLE SUPPLY GROUP, INC.
122 EAST 42ND STREET
SUITE 1116
NEW YORK, NEW YORK 10168
(212) 986-6190
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------

COPIES TO:

Robert Perez, Esq. David A. Carter, P.A.
Gusrae, Kaplan & Bruno 2300 Glades Road, Suite 210W
120 Wall Street Boca Raton, Florida 33431
New York, New York 10005 Tel No. (561) 750-6999
Tel No. (212) 269-1400 Fax No. (561) 367-0960
Fax No. (212) 809-5449

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CALCULATION OF REGISTRATION FEE

TITLE OF EACH AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE(1) FEE(12)

Common Stock, $.0001 par value 2,300,000(2) $ 5.00 $ 11,500,000 $ 3,822.27
Redeemable Common Stock Purchase Warrants 2,875,000(3) $ .125 $ 359,375 $ 116.76
Common Stock, $.0001 par value(4) 2,875,000 $ 5.00 $ 14,375,000 $ 4,670.39
Underwriter's Stock Warrants(5) 200,000 $ .0001 $ 20 $ .01
Common Stock, $.0001 par value(6) 200,000 $ 8.25 $ 1,650,000 $ 548.41
Underwriter's Warrants(7) 250,000 $ .0001 $ 25 $ .01
Common Stock Purchase Warrants(8) 250,000 $ .20625 $ 51,563 $ 16.75
Common Stock, $.0001 par value(9) 250,000 $ 8.25 $ 2,062,500 $ 670.01
Common Stock, $.0001 par value(10) 300,000 $ 5.00 $ 1,500,000 $ 517.24
Common Stock, $.0001 par value(11) 2,300,000 $ 5.00 $ 11,500,000 $ 3,392.50
TOTALS $13,754.35

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* Filing Fee of $7,401.26 paid with initial filing on August 12, 1996;
additional fee of $5,283.31 paid with the filing of Amendment No. 2 on May
1, 1998 and $1,069.78 paid immediately prior to the filing of this Amendment
No. 3.

SEE FOOTNOTES ON FOLLOWING PAGE.

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(CONTINUED FROM PREVIOUS PAGE)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

(1) Estimated solely for purposes of calculating the registration fee.

(2) Includes 300,000 shares of Common Stock subject to the Underwriter's
overallotment option and assumes the overallotment option is exercised in
full.

(3) Includes 375,000 Redeemable Common Stock Purchase Warrants subject to the
Underwriter's overallotment option and assumes the overallotment option is
exercised in full.

(4) Issuable upon exercise of the Redeemable Common Stock Purchase Warrants
referred to in the prior note.

(5) To be issued to the Underwriter, entitling the Underwriter to purchase up to
200,000 shares of Common Stock.

(6) Issuable upon the exercise of the Underwriter's Stock Warrants.

(7) To be issued to the Underwriter, entitling the Underwriter to purchase up to
250,000 Common Stock Purchase Warrants.

(8) Issuable upon the exercise of the Underwriter's Warrants.

(9) Issuable upon the exercise of the Common Stock Purchase Warrants identified
in the prior note.

(10) Issuable upon the exercise of the Redeemable Common Stock Purchase
Warrants, which shares are to be sold by the Selling Securityholders.

(11) Issuable in connection with acquisitions to occur contemporaneously with
the closing of the public securities offering discussed herein.

(12) Calculated by reference to the required filing fee at the time of the
initial registration of a security. The additional filing fees paid
contemporaneously with Amendment Nos. 2 and 3 represent the filing fees due
for the additional securities registered with Amendment No. 2 at the fee
rate then in effect.

Pursuant to Rule 416, there are also being registered such additional but
indeterminate number of shares as may become issuable pursuant to anti-dilution
provisions of the Redeemable Common Stock Purchase Warrants and the
Underwriter's Stock Warrants and Underwriter's Warrants.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one to be used
in connection with an offering by the Company of shares of Common Stock and
Redeemable Common Stock Purchase Warrants (the "Prospectus") and one to be used
in connection with the sale of (a) shares of the Company's Common Stock
underlying Warrants by certain selling securityholders and (b) shares of the
Company's Common Stock to be issued in connection with certain acquisitions by
the Company (the "Selling Securityholders' and Acquisitions' Prospectus"). The
Prospectus and the Selling Securityholders' and Acquisitions' Prospectus will be
identical in all respects except for the alternate pages for the Selling
Securityholders' and Acquisitions' Prospectus included herein which are labeled
"Alternate Page(s) for Selling Securityholders' and Acquisitions' Prospectus".

iii

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JULY 1, 1998

EAGLE SUPPLY GROUP, INC.

2,000,000 SHARES OF COMMON STOCK AND
2,500,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

Eagle Supply Group, Inc. (the "Company") is offering hereby 2,000,000 shares
of Common Stock (the "Common Stock") and 2,500,000 Redeemable Common Stock
Purchase Warrants (the "Warrants") of the Company (hereinafter the "Public
Offering"). The shares of Common Stock and Warrants are being offered to the
public at the initial offering prices of $5.00 per share and $0.125 per warrant,
respectively. The Common Stock and the Warrants (collectively, the "Securities")
are being separately offered, not as units, and are separately transferable at
any time from the date of this Prospectus (the "Effective Date"). Each Warrant
entitles the registered holder thereof to purchase, at any time during the
period commencing on the Effective Date, one share of Common Stock at a price of
$5.50 per share, subject to adjustment under certain circumstances, for a period
of five years from the Effective Date. The Warrants offered hereby are not
exercisable unless, at the time of exercise, the Company has a current
prospectus encompassing the shares of Common Stock issuable upon exercise of the
Warrants and such shares have been registered, qualified or deemed to be exempt
under the securities laws of the states of residence of the exercising holders
of the Warrants. Commencing after the Effective Date, the Warrants are subject
to redemption by the Company at $.25 per Warrant on 30 days' prior written
notice if the market price (as defined herein) for the Company's Common Stock,
as reported on in the NASDAQ SmallCap Market ("NASDAQ SmallCap") or a national
or regional securities exchange, as applicable, for 30 consecutive trading days
ending within 10 days of the notice of redemption of the Warrants averages at
least $10.00 per share. The Company is required to maintain an effective
registration statement with respect to the Common Stock underlying the Warrants
at the time of redemption of the Warrants. Prior to the first anniversary of the
Effective Date, the Warrants will not be redeemable by the Company without the
written consent of Barron Chase Securities, Inc. (the "Underwriter").

The offering price of the Common Stock and Warrants as well as the exercise
price and other terms of the Warrants have been determined by negotiation
between the Company and the Underwriter, and bear no relationship to the
Company's asset value, net worth or other established criteria of value. See
"RISK FACTORS" at page 10, and "Underwriting." After completion of the Public
Offering, the Company's current officers and directors and their affiliates will
have voting control of approximately 66% of the outstanding shares of Common
Stock. See "Principal Stockholders."

Simultaneously with the Public Offering, 300,000 shares of Common Stock
underlying Warrants held by certain individuals (hereinafter the "Selling
Securityholders" and "Selling Securityholders' Offering") are being offered for
resale from time to time. To permit such resale, the Company has included the
said Selling Securityholders' securities in the Company in the Registration
Statement of which this Prospectus forms a part and are to be offered by the
Selling Securityholders by a separate prospectus also included therein. The
Selling Securityholders may not sell or otherwise dispose of their shares of
Common Stock underlying their Warrants for a period of fifteen months from the
Effective Date without the Underwriter's prior written consent. The Company will
not receive any proceeds from sales of the shares of the Company's Common Stock
by the Selling Securityholders. See "Selling Securityholders."

The registration statement of which this Prospectus forms a part also is
being used by the Company to register the issuance of 2,000,000 shares of the
Company's Common Stock in connection with the acquisition by the Company of
Eagle Supply, Inc. and JEH/Eagle Supply, Inc. occurring simultaneous with the
Public Offering and 300,000 shares of the Company's Common Stock to be issued
pursuant to the agreement by which JEH/Eagle Supply, Inc. acquired substantially
all of the business and assets of another entity ("The Acquisitions Offering").
The acquirer of 2,000,000 of said shares has agreed not to sell or otherwise
dispose of all such shares and all other shares of the Company's Common Stock
owned by it on the date hereof for a period of two years from the date of this
Prospectus. The acquirer of the 300,000 shares has agreed not to sell or
otherwise dispose of all such shares of the Company's Common Stock for a period
of two years from the date of this Prospectus without the Underwriter's prior
written consent. See "The Acquisitions Offering."

Prior to the Public Offering, there has been no public market for the Common
Stock or the Warrants. The Company has applied for the listing of the Common
Stock and the Warrants under the symbols " " and " ", respectively, on
NASDAQ SmallCap. There can be no assurance that a trading market in the
Company's Common Stock or Warrants will develop or if it does develop that it
will be sustained. The closing of the Public Offering is subject to the
simultaneous acquisition by the Company of Eagle Supply, Inc. and JEH/Eagle
Supply, Inc.

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK, IMMEDIATE AND SUBSTANTIAL
DILUTION AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" AT PAGE 10 OF THIS PROSPECTUS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE 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 PUBLIC DISCOUNT(1) PROCEEDS TO COMPANY(2)

Per Share...................................... $5.00 $0.50 $4.50
Per Warrant.................................... $0.125 $0.0125 $0.1125
Total(3)....................................... $10,312,500.00 $1,031,250.00 $9,281,250.00

(footnotes on following page)

BARRON CHASE SECURITIES

The date of this Prospectus is , 1998

(1) Does not include additional compensation in the form of (i) a
non-accountable expense allowance of $309,375 ($355,781 if the Underwriter's
overallotment option is exercised in full); (ii) warrants to purchase up to
200,000 shares of Common Stock and 250,000 warrants at an exercise price
equal to 165% of the initial public offering prices of the Common Stock and
Warrants, during the five year period commencing on the Effective Date (the
"Underwriter's Warrants"); and (iii) a financial advisory agreement for the
Underwriter to act as an investment banker for the Company at a fee of
$108,000 payable at the closing of the Public Offering. In addition, the
Company has agreed to indemnify the Underwriter against certain civil
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."

(2) Before deducting expenses of this offering payable by the Company estimated
at $535,625 (approximately 5.2% of the gross proceeds of the Public
Offering), excluding the Underwriter's non-accountable expense allowance.

(3) The Company has granted to the Underwriter an option, exercisable within
forty-five (45) days of the Effective Date, to purchase up to 300,000
additional shares of Common Stock and 375,000 additional Warrants on the
same terms and conditions as set forth above to cover overallotments, if any
(the "Overallotment Option"). If all such additional Securities are
purchased, the Price to Public, Underwriting Discount and Proceeds to
Company will be increased to $11,859,375, $1,185,938 and $10,673,437,
respectively. See "Underwriting."

The Securities are offered subject to prior sale, when, as and if delivered
to and accepted by the Underwriter and subject to the approval of certain legal
matters by counsel and certain other conditions. It is expected that delivery of
certificates representing the Securities sold in the Public Offering will be
made at the offices of Barron Chase Securities, Inc., 7700 W. Camino Real, Boca
Raton, Florida 33433-5541, on or about , 1998.

The Company is not presently required to file, and has not filed, periodic
reports with the Securities and Exchange Commission (the "Commission").
Following consummation of the Public Offering, the Company intends to furnish to
its stockholders annual reports containing financial statements audited and
reported on by independent auditors and quarterly reports containing unaudited
financial information for each of the first three quarters of each fiscal year.
Stockholders will be able to obtain the most recent such reports by making
written request therefor to the Company's stockholder relations officer at the
Company's principal executive offices located at 122 East 42nd Street, Suite
1116, New York, New York 10168.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICES OF THE SHARES AND THE
WARRANTS, INCLUDING PURCHASES OF SHARES, WARRANTS, OR BOTH TO STABILIZE THEIR
RESPECTIVE MARKET PRICES, PURCHASES OF THE SHARES AND THE WARRANTS TO COVER SOME
OR ALL OF A SHORT POSITION THEREIN MAINTAINED BY THE UNDERWRITER, AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION AND FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN
THIS PROSPECTUS. EACH PROSPECTIVE INVESTOR IS URGED TO READ THIS PROSPECTUS IN
ITS ENTIRETY. EXCEPT AS OTHERWISE INDICATED HEREIN, THE INFORMATION CONTAINED IN
THIS PROSPECTUS GIVES NO EFFECT TO THE EXERCISE OF (I) THE OVERALLOTMENT OPTION,
(II) THE UNDERWRITER'S WARRANTS, (III) ALL OTHER WARRANTS ISSUED AND OUTSTANDING
ON THE DATE OF THIS PROSPECTUS OR (IV) OPTIONS GRANTED OR TO BE GRANTED UNDER
THE COMPANY'S STOCK OPTION PLAN.

THE COMPANY WOULD LIKE TO CAUTION READERS REGARDING CERTAIN FORWARD-LOOKING
STATEMENTS IN THE PROSPECTUS AND THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS IS A PART. STATEMENTS THAT ARE BASED ON MANAGEMENT'S PROJECTIONS,
ESTIMATES AND ASSUMPTIONS ARE FORWARD-LOOKING STATEMENTS. THE WORDS "BELIEVE,"
"EXPECT," "ANTICIPATE," AND SIMILAR EXPRESSIONS GENERALLY IDENTIFY
FORWARD-LOOKING STATEMENTS. WHILE THE COMPANY BELIEVES IN THE VERACITY OF ALL
STATEMENTS MADE HEREIN, FORWARD-LOOKING STATEMENTS ARE NECESSARILY BASED UPON A
NUMBER OF ESTIMATES AND ASSUMPTIONS THAT, WHILE CONSIDERED REASONABLE BY THE
COMPANY ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES. MANY OF THESE UNCERTAINTIES AND CONTINGENCIES
CAN AFFECT THE COMPANY'S ACTUAL RESULTS AND COULD CAUSE ITS ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE
BY, OR ON BEHALF OF, THE COMPANY. SOME OF THE FACTORS THAT COULD CAUSE ACTUAL
RESULTS OR FUTURE EVENTS TO DIFFER MATERIALLY INCLUDE THE COMPANY'S INABILITY TO
FIND SUITABLE ACQUISITION CANDIDATES ON TERMS COMMERCIALLY REASONABLE TO THE
COMPANY, INTERRUPTION OR CANCELLATION OF EXISTING SOURCES OF SUPPLY, THE PRICING
OF AND DEMAND FOR DISTRIBUTED PRODUCTS AND THE PRESENCE OF COMPETITORS WITH
GREATER FINANCIAL RESOURCES. PLEASE SEE "RISK FACTORS" FOR A DESCRIPTION OF
SOME, BUT NOT ALL, OF THESE UNCERTAINTIES AND CONTINGENCIES.

THE COMPANY

Eagle was acquired by TDA in 1973, and JEH Eagle was established by TDA to
acquire the business and substantially all of the assets of JEH Company, Inc.
("JEH Co."). That acquisition was consummated by TDA and JEH Eagle in July 1997.
The product lines, types of customers, vendors, business philosophies, internal
and external expansion plans, and quality of management and personnel of Eagle
and JEH Eagle are generally, substantially similar. Together, Eagle and JEH
Eagle operate a network of twenty-six branches in seven states extending from
Florida to Colorado and back to Virginia, specializing in the wholesale
distribution of roofing supplies and related products.

Eagle, which was founded in Florida in 1905, distributes roofing supplies
and related products to contractors and subcontractors engaged in commercial and
residential roofing repair and the construction of new residential and
commercial properties. Eagle sells to more than 2,300 customers in Florida,
Alabama and the southern portions of Georgia and Mississippi using its own
direct sales force. Products distributed by Eagle include equipment, tools and
accessory products for the removal of old roofing, re-roofing and roof
construction, and related materials such as insulation, shingles, tiles, liquid
roofing materials, fasteners, ventilation materials and sheet metal of the type
used in the roofing industry. JEH Eagle sells to more than 2,700 customers in
Texas, Colorado, Indiana and Virginia through its own distribution facilities
and direct sales force. Products distributed by JEH Eagle also include dry wall,
plywood, vinyl siding and similar products used in the roofing repair and
construction industries. JEH Eagle has, on occasion, established temporary
distribution centers in response to storms which have created a temporary
market. Upon consummation of the Acquisitions, Eagle and JEH Eagle will become

wholly-owned subsidiaries of the Company and will constitute the business
operations of the Company until and unless the Company consummates additional
acquisitions. See "Risk Factors" and "Business."

During Eagle's fiscal years ended June 30, 1996 and 1997 and ten-month
periods ended April 30, 1997 and 1998, Eagle had revenues of approximately
$59,262,000, $57,576,000, $47,136,000 and $47,171,000, respectively, and net
income of approximately $1,315,000, $192,000, $199,000 and $135,000,
respectively. During JEH Co.'s fiscal year ended December 31, 1996, six month
period ended June 30, 1997 and ten month period ended April 30, 1997, JEH Co.
had revenues of approximately $74,893,000, $28,979,000, and $59,643,000,
respectively, and net income (loss) of approximately $171,000, ($1,179,000) and
($34,007), respectively. JEH Eagle, during its ten-month period ended April 30,
1998, had revenues and net income of approximately $55,677,000 and $532,000,
respectively. There can be no assurance Eagle or JEH Eagles's revenues and net
income will continue to be achieved in the future and that they will not sustain
losses. See "Risk Factors" and "Business."

Based upon its management's experience in the industry, the Company believes
that the roofing supplies and related products distribution industry is
fragmented and has the potential for consolidation in response to the
competitive disadvantages faced by smaller distributors. The Company believes
that the industry is characterized by a large number of relatively small local
distribution companies, a few very large, multi-center and multi-regional
distributors and a large national multi-center distributor. Roofing supplies
products distributors are overwhelmingly privately owned, relationship-based
companies that emphasize service, delivery and reliability as well as
competitive pricing and breadth of product line to their customers. The Company
believes that the competitive environment faced by small distributors, coupled
with the desire of many owners of such distributors for liquidity, has prompted
a trend toward industry consolidation that offers significant opportunities for
expansion oriented distributors. The Company believes that there are
opportunities for a company which has the capability to source and distribute
products effectively to serve the roofing supplies and related products markets
and to effect cost savings and increased profit opportunities through
efficiencies of scale which can be applied to companies that may be acquired in
the roofing supply distribution and related products industry. The Company
intends to provide expansion capital, if necessary, and administrative and
management services to acquired companies. See "Risk Factors" and "Business."

Although the Company does not currently have any agreements, arrangements or
commitments with respect to any proposed acquisition, other than the
Acquisitions, based upon its management's experience in the industry, the
Company believes that there are a number of suitable acquisition candidates that
may meet its criteria. The Company intends to seek out prospective acquisition
candidates in businesses that complement or are otherwise related to the
businesses of Eagle and JEH Eagle. Although the primary focus of the Company's
expansion and acquisition program will be on seeking suitable acquisition
candidates which are engaged in the wholesale distribution of roofing supplies
and related products, the Company will consider the purchase of manufacturers or
vendors of products which may be distributed through its wholesale distribution
business. The Company anticipates that it will finance future acquisitions, if
any, through a combination of cash (including approximately 30% of the net
proceeds of the Public Offering), issuances of shares of capital stock of the
Company, and additional equity or debt financing. There can be no assurance that
the Company will be able to consummate the acquisition of any companies, other
than the Acquisitions, or additional equity or debt financing on terms
acceptable to the Company or at all.

Management intends to pursue expansion of Eagle's and JEH Eagle's operations
by adding new distribution centers by internal growth. During Eagle's fiscal
year ended June 30, 1997, JEH Co.'s fiscal year ended December 31, 1996 and
Eagle's and JEH Eagle's (the "Combined Entities") ten-month period ended April
30, 1998, JEH Co. and the Combined Entities opened three new distribution
centers, although one of those centers has subsequently been closed, and are
currently exploring the possibility of opening several more distribution centers
in current market areas and in market areas adjacent to their existing
distribution centers.

TDA is a holding company which operates five business enterprises, including
Eagle and JEH Eagle, and real estate investment companies. At the current time,
Eagle and JEH Eagle are wholly-owned by TDA, and their revenues constitute a
majority of TDA's consolidated revenues. After the completion of the Public
Offering and consummation of the Acquisitions, TDA will own approximately 60% of
the Company's Common Stock. Certain of the Company's officers and directors are
also officers and directors of TDA (or affiliates of TDA), Eagle and/or JEH
Eagle. See "Management," "Principal Stockholders," "The Acquisitions" and
"Certain Transactions."

In connection with the Acquisitions, TDA will be issued 2,000,000 shares of
the Company's Common Stock. As part of the Acquisitions, Eagle and JEH Eagle
combined will have a book value of no less than $1,000,000 and Eagle will
cancel, in the form of a non-cash dividend, all indebtedness of TDA to Eagle,
except for an approximately $502,000 receivable from TDA relating to and
offsetting a mortgage in the same amount on property previously owned by Eagle
and for which Eagle remains the primary obligor, with TDA contributing
sufficient cash to Eagle or JEH Eagle, within forty-five days after the closing
of the Public Offering and consummation of the Acquisitions, to achieve that
book value in the event of a deficiency. At April 30, 1998, TDA's indebtedness
to Eagle, excluding the foregoing receivable offsetting such mortgage, was
approximately $2,849,000. At April 30, 1998 TDA's indebtedness to Eagle was
approximately $3,351,000. It is anticipated that no such contribution will be
required by TDA. The number of shares of the Company's Common Stock to be issued
to TDA in connection with the Acquisitions was determined by negotiations among
the Company, TDA and the Underwriter. Factors considered in such negotiations
included but were not limited to (a) the historical results of the Combined
Entities, (b) their future business prospects, (c) their industry position,
principally on a combined basis, (d) their product line breadth, (e) their
customer bases, (f) the experience of their management and personnel, (g) the
locations of their distribution facilities, and (h) their net worth. Pursuant to
the agreement by which JEH Eagle acquired substantially all of the business and
assets of JEH Co., 300,000 shares of the Company's Common Stock will be issued
to James E. Helzer, the former owner of JEH Co. and the President of the
Company, Eagle and JEH Eagle. The number of shares to be issued to Mr. Helzer
were determined by negotiations between JEH Eagle and JEH Co. at the time of the
acquisition of substantially all of the business and assets of JEH Co. by JEH
Eagle. The consideration to be paid by the Company to TDA for the Acquisitions
was determined by negotiations among the Company, TDA and the Underwriter
without independent appraisal. The Company, TDA, Eagle and JEH Eagle have made
no allocation of the consideration to be paid by the Company for each of Eagle
and JEH Eagle.

In the past, a subsidiary of TDA, 39 Acre Corp., has leased to Eagle several
of Eagle's distribution centers on a month to month basis pursuant to oral
agreements. Rent expense for these distribution centers was approximately
$782,000 for Eagle's fiscal year ended June 30, 1997. Upon completion of the
Public Offering and consummation of the Acquisitions, Eagle will enter into ten
year leases for said distribution centers. Although the written leases are to be
on substantially similar economic terms as the past oral agreements, Eagle will
then be committed to pay rent for these distribution centers for ten years. The
Company believes that the rent and other terms of the written lease agreements
to be entered into between 39 Acre Corp. and Eagle are on at least as favorable
terms as Eagle would expect to negotiate with unaffiliated third parties.
Neither Eagle nor 39 Acre Corp. will be permitted to terminate the leases before
the end of their term without a breach or default by the other party. JEH Eagle
leases several of its distribution centers from James E. Helzer pursuant to five
year leases expiring on June 30, 2002. Rent expense for these distribution
centers was approximately $402,000 for JEH Eagle's ten-month period ended April
30, 1998. James E. Helzer currently has a five-year employment agreement with
JEH Eagle and an agreement with Eagle which provides him with annual salaries of
$250,000 and $50,000, respectively. James E. Helzer and E.G. Helzer serve as
Eagle's President and Senior Vice President-Operations of Eagle at salaries of
$50,000 and $25,000 per year, respectively. Pursuant to their arrangements with
Eagle, James E. Helzer and E.G. Helzer are also entitled to receive 20% and 6%,
respectively, of Eagle's income before taxes in excess of $600,000 per year.
Messrs. Helzers agreements with Eagle are oral and can be terminated by either
party without notice or penalty. Upon completion of the Public Offering and

consummation of the Acquisitions, the Company will enter into (a) five-year
employment agreements with its Chairman of the Board and Chief Executive
Officer, Douglas P. Fields, and its Executive Vice President, Treasurer and
Secretary, Frederick M. Friedman, pursuant to which each of such persons, who
are also executive officers and directors of TDA, will receive a salary of
$200,000 per year plus substantial additional benefits, although neither of them
have committed any specified amount of time to the Company's affairs; and (b) a
month to month administrative services agreement with TDA requiring a $3,000
monthly payment to TDA. Similar agreements have already been entered into
between JEH Eagle and each of Messrs. Fields and Friedman providing annual base
salaries of $60,000 to each of Messrs. Fields and Friedman, and JEH Eagle and
TDA have already entered into an agreement pursuant to which TDA provides
certain services to JEH Eagle for a five-year term expiring in June 2002
requiring a $3,000 monthly payment to TDA. The payments by JEH Eagle to Messrs.
Fields and Friedman and TDA shall commence upon completion of the Public
Offering and consummation of the Acquisitions. Furthermore, as part of the
Acquisitions, TDA will indemnify Eagle for any payments that Eagle is required
to make which are in excess of Eagle's obligations under Eagle's leases for its
Birmingham, Alabama, distribution center and its former Fort Lauderdale,
Florida, distribution center and relate to the mortgage or the industrial
revenue bonds for the Birmingham, Alabama, and Fort Lauderdale, Florida,
properties, respectively. See "Risk Factors--Transactions With And for the
Benefit of Affiliates" and "Certain Transactions."

The Company was incorporated under the laws of the State of Delaware on May
1, 1996, and its operations to date have included, among other things: raising
capital, negotiation of "The Acquisitions" and establishing a management team
for the Company. Certain administrative services are provided to the Company by
TDA. The Company has funded itself since inception by initial minimal borrowing
from TDA, selling an aggregate of 300,000 shares of its Common Stock and 300,000
Warrants to twelve investors in June and July 1996 for aggregate gross proceeds
to the Company of $300,000 in a private offering of the Company's securities
(the "Private Placement") and recent borrowings from TDA, in the sum of
$150,000, and two other private investors, Hi-Tel Group, Inc. ($100,000) and
Paul Schmidt ($50,000) which are also stockholders of the Company. The Company's
executive office is located at 122 East 42nd Street, Suite 1116, New York, New
York 10168, and its telephone number is (212) 986-6190. See "Business" and
"Certain Transactions."

As used herein, the term EBITDA generally reflects net income (loss)
increased by the effects of interest expense, income tax provisions,
depreciation and amortization expense. EBITDA can be used by management, along
with other measures of performance, to assess the Company's financial
performance. EBITDA should not be considered in isolation or as an alternative
to measures of operating performance or cash flows pursuant to generally
accepted accounting principles. EBITDA may not be comparable to similar measures
reported by other companies. See "Summary Financial Data."

THE PUBLIC OFFERING

Securities Offered................ 2,000,000 shares of Common Stock and 2,500,000 Warrants.
Each Warrant entitles the holder to purchase one share
of Common Stock at a price of $5.50 during the five-year
period commencing on the Effective Date. The exercise
price and the number of shares issuable upon exercise of
the Warrants are subject to adjustment in certain
circumstances. See "Description of Securities."

Common Stock Outstanding
Before Offering................. 4,700,000 shares(1)

After Offering.................... 6,700,000 shares(1)(2)

Use of Proceeds................... To finance acquisitions of companies operating primarily
in the roofing supplies and related products industry,
expand Eagle's and JEH Eagle's operations, repayment of
indebtedness and for working capital purposes, including
general corporate purposes of the Company, Eagle and JEH
Eagle. See "Use of Proceeds," "Capitalization" and
"Certain Transactions."

Risk Factors...................... Investment in the Securities offered hereby involves a
high degree of risk and immediate substantial dilution.
See "Risk Factors" and "Dilution."

Proposed NASDAQ SmallCap Symbols:
(3)
Common Stock....................

Warrants........................ W

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

(1) Includes 2,000,000 and 300,000 shares of Common Stock to be issued to TDA
and James E. Helzer, respectively. See "The Acquisitions," "Certain
Transactions" and "The Acquisitions Offering."

(2) Includes the 2,000,000 shares of Common Stock to be issued in the Public
Offering but does not include (i) 300,000 shares of Common Stock, 375,000
Warrants and 375,000 shares of Common Stock underlying such Warrants subject
to the Underwriter's Overallotment Options; (ii) 2,500,000 shares of Common
Stock issuable upon the exercise of the Warrants; (iii) 300,000 shares of
Common Stock issuable upon the exercise of the Company's outstanding
Warrants; (iv) 450,000 shares of Common Stock issuable upon the exercise of
the Underwriter's Warrant and Stock Warrant; and (v) 1,000,000 shares of
Common Stock reserved for issuance pursuant to the Company's stock option
plan of which 700,000 shares of Common Stock are reserved for options to be
granted upon completion of the Public Offering. See "Management," "Certain
Transactions," "The Acquisitions," "Description of Securities,"
"Underwriting," "Selling Securityholders" and "The Acquisitions Offering."

(3) The proposed trading symbols do not imply that a liquid and active market
will be developed or sustained for the Company's Securities. See "Risk
Factors--Possible Suspension of the Company's Securities from NASDAQ
SmallCap Even if Listing is Obtained."

SUMMARY FINANCIAL DATA

COMBINED(1)
----------------------------------------------------------------------
TEN MONTHS
ENDED
YEAR ENDED JUNE 30, APRIL 30,
---------------------------------------------------------- ----------
1993 1994 1995 1996 1997 1997
---------- ---------- ---------- ---------- ---------- ----------

STATEMENT OF OPERATIONS DATA:
Revenue......................................... $66,552,083 $53,925,373 $50,483,469 $59,262,226 $57,575,712 $47,135,658
Gross Profit.................................... 14,932,791 10,658,013 9,739,568 12,576,870 11,471,124 9,751,980
Income From Operations.......................... 4,159,471 743,378 833,114 2,689,290 907,970 815,383
Net Income (Loss)............................... 2,621,939 464,270 352,589 1,315,035 (179,252) 198,777
Basic Net Income (Loss) Per Share...............
Weighted Average Number of Shares
Outstanding(2)................................
Diluted Net Income (Loss) Per Share.............
Weighted Average Number of Shares and Dilutive
Warrants(2)...................................
OTHER FINANCIAL DATA:
EBITDA(3)....................................... $4,717,701 $1,453,702 $1,388,531 $3,251,371 $1,153,554 $1,330,386
Net Cash Provided by (Used In) Operating
Activities.................................... $3,081,621 $1,278,228 $ 165,963 $2,538,838 $ (766,978) $(1,429,357)
Net Cash Used in Investing Activities........... $(1,163,645) $ (509,645) $ (240,755) $ (863,448) $ (215,640) $ (141,654)
Net Cash (Used In) Provided By Financing
Activities.................................... $(1,803,147) $ (742,450) $ 315,284 $(1,931,121) $1,575,357 $1,304,603

PRO FORMA(6)
------------------------
TEN MONTHS
YEAR ENDED ENDED
JUNE 30, APRIL 30,
1998 1997 1998
----------- ----------- -----------

STATEMENT OF OPERATIONS DATA:
Revenue......................................... $102,847,808 $128,092,057 $102,847,808
Gross Profit.................................... 22,455,895 27,761,270 22,455,895
Income From Operations.......................... 2,484,798 1,034,666 1,878,798
Net Income (Loss)............................... 661,126 (704,470) 374,126
Basic Net Income (Loss) Per Share............... $ (0.13) $ 0.07
----------- -----------
----------- -----------
Weighted Average Number of Shares
Outstanding(2)................................ 5,523,068 5,675,743
----------- -----------
----------- -----------
Diluted Net Income (Loss) Per Share............. $ (0.13) $ 0.06
----------- -----------
----------- -----------
Weighted Average Number of Shares and Dilutive
Warrants(2)................................... 5,523,068 5,915,743
----------- -----------
----------- -----------
OTHER FINANCIAL DATA:
EBITDA(3)....................................... $ 3,402,548 $ 2,219,936 $ 2,879,548
Net Cash Provided by (Used In) Operating
Activities.................................... $ (70,818)
Net Cash Used in Investing Activities........... $(3,192,786)
Net Cash (Used In) Provided By Financing
Activities.................................... $ 2,127,794

THE COMPANY
COMBINED(1) APRIL 30,
JUNE 30 1998
---------------------------------------------------------- -----------

1993 1994 1995 1996 1997 HISTORICAL
---------- ---------- ---------- ---------- ---------- -----------
BALANCE SHEET DATA:
Working Capital (Deficiency)....................... $4,387,235 $4,511,035 $5,450,306 $4,527,568 $6,232,891 $ (82,923)
Total Assets....................................... 17,170,011 12,947,453 14,709,463 15,778,742 15,853,837 354,112
Long Term Debt..................................... -- -- 6,290,453 5,678,243 7,195,163 --
Total Liabilities.................................. 13,449,799 9,659,216 14,552,647 15,586,657 15,832,712 437,035
Stockholders' Equity (Deficiency).................. 3,720,212 3,562,237 156,816 192,085 21,125 (82,923)

AS PRO
ADJUSTED(4) FORMA(5)
----------- ----------
BALANCE SHEET DATA:
Working Capital (Deficiency)....................... $8,353,077 $21,796,840
Total Assets....................................... 8,476,112 53,301,755
Long Term Debt..................................... -- 19,384,908
Total Liabilities.................................. 123,035 42,950,948
Stockholders' Equity (Deficiency).................. 8,353,077 10,350,807

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

(1) Prior to the contemplated Acquisitions, the Company has had limited
operations. The historical financial data included in the statement of
operations data has been prepared on a basis which combines the Company
(organized May 1, 1996), Eagle Supply, Inc. ("Eagle"), and JEH/Eagle Supply,
Inc. ("JEH Eagle") (acquired on July 1, 1997) as three entities controlled
by TDA Industries, Inc. ("TDA"), because the separate financial data of the
Company would not be meaningful. Information with respect to the Company is
included from May 1, 1996 (inception), information for Eagle is included for
all periods presented and information with respect to JEH Eagle is included
from July 1, 1997.

(2) Basic income (loss) per Common Share is based on the weighted average number
of shares outstanding and includes 2,100,000 shares issued in connection
with the Company's initial capitalization, 300,000 shares issued as part of
the Company's Private Placement and 2,000,000 and 300,000 shares to be
issued to TDA and James E. Helzer, respectively, in connection with the
Acquisitions and 975,743 and 823,068 shares ("Additional Shares") in the ten
months ended April 30, 1998 and year ended June 30, 1997, respectively, for
the shares assumed to be issued in the Public Offering, the proceeds of
which would be used to retire $2,000,000 of debt and replace the capital in
excess of the respective period's earnings, which is represented by the non-
cash dividend. Dilutive net income (loss) per Common Share for the ten
months ended April 30, 1998 also includes the dilutive effect of the 300,000
Warrants issued in the Private Placement. The computation excludes shares to
be issued in connection with the Public Offering in excess of the Additional
Shares. The Underwriter's Warrant and options to be granted upon the closing
of the Public Offering pursuant to the Company's 1996 Stock Option Plan are
not dilutive and have not been included. See "Risk Factors," "The
Acquisitions," "Certain Transactions," and the Financial Statements and the
Notes thereto.

(3) As used herein, EBITDA reflects net income (loss) increased by the effects
of interest expense, income tax provisions, depreciation and amortization
expense. EBITDA is used by management, along with other measures of
performance, to assess the Company's financial performance. EBITDA should
not be considered in isolation or as an alternative to measures of operating
performance or cash flows pursuant to generally accepted accounting
principles. In addition, this measure of EBITDA may not be comparable to
similar measures reported by other companies.

(4) Reflects the Private Placement, the Public Offering of 2,000,000 shares of
Common Stock and 2,500,000 Warrants at initial public offering prices of
$5.00 per share of Common Stock and $.125 per Warrant and the application of
the net proceeds therefrom. See the Unaudited Pro Forma Condensed
Consolidated Balance Sheet, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Certain Transactions" and
the Financial Statements and the Notes thereto.

(5) Reflects the Private Placement, the Public Offering of 2,000,000 shares of
Common Stock and 2,500,000 Warrants at initial public offering prices of
$5.00 per share of Common Stock and $.125 per Warrant, the application of
the net proceeds therefrom and the consummation of the Acquisitions. See the
Unaudited Pro Forma Condensed Consolidated Balance Sheet, "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Certain Transactions" and the Financial Statements and the Notes thereto.

(6) See Unaudited Pro Forma Condensed Consolidated Statements of Operations.

RISK FACTORS

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE,
INVOLVES A HIGH DEGREE OF RISK AND SHOULD NOT BE MADE BY ANY INVESTOR WHO CANNOT
AFFORD THE LOSS OF HIS ENTIRE INVESTMENT. EACH PROSPECTIVE PURCHASER SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE FACTORS ASSOCIATED WITH
THIS OFFERING, AS WELL AS OTHER FACTORS DESCRIBED ELSEWHERE IN THIS PROSPECTUS,
BEFORE MAKING AN INVESTMENT.

NO ASSURANCE OF PROFITABLE OPERATIONS. Eagle has experienced substantial
revenue fluctuations in the past. For Eagle's fiscal years ended June 30, 1993,
1994, 1995, 1996, 1997 and ten-month periods ended April 30, 1997 and 1998 its
revenues were approximately $66,552,000, $53,925,000, $50,483,000, $59,262,000,
$57,576,000, $47,136,000 and $47,171,000, respectively, and its net income for
those fiscal years and ten month periods were approximately $2,622,000,
$464,000, $353,000, $1,315,000, $192,000, $199,000 and $135,000 respectively.
Eagle's results of operations for its fiscal year ended June 30, 1994 were
negatively impacted by a business slowdown following the prior year's increase
in business resulting from Hurricane Andrew. Hurricane Andrew also caused a
substantial increase in competition in the South Florida area resulting in the
reduced profitability of Eagle's operations in South Florida and their
discontinuance during Eagle's fiscal year ended June 30, 1994. Additionally,
during Eagle's fiscal year ended June 30, 1995, Eagle's Jacksonville, Florida,
distribution center was sold as a result of increased competition in that market
area. Also, Eagle closed its distribution center in Fort Pierce, Florida,
immediately after it was opened in 1996, as operating prospects for that center
were not anticipated to be satisfactory to management. Furthermore, during
Eagle's fiscal year ended June 30, 1996, the damage caused by hurricanes
increased business for Eagle's distribution centers located in the Florida
panhandle and in Alabama. Eagle's revenues and income decreased during Eagle's
fiscal year ended June 30, 1997 from Eagle's fiscal year ended June 30, 1996 as
a result of a decrease in storm related business; an increase in operating
expenses as a percentage of revenues because of the decline in revenues; and
expenses related to new branch locations, among other factors.

Similarly, during JEH Co.'s fiscal year ended December 31, 1995, JEH Co.
sustained a net loss of approximately $123,000, while during JEH Co.'s fiscal
year ended December 31, 1996, JEH Co. reported net income of approximately
$171,000 upon revenues that were fairly constant in both said fiscal years.
These results are after payment of compensation to JEH Co.'s owner of
approximately $3,988,000 and $2,330,000 during JEH Co.'s fiscal years ended
December 31, 1995 and 1996, respectively. During JEH Co.'s six month period
ended June 30, 1997, JEH Co. had revenues and a loss of approximately
$28,979,000 and $1,179,000, respectively.

Revenues and operating income of both Eagle and JEH Eagle are impacted by
weather phenomena, such as hailstorms and hurricanes, which have the result of
increasing business at the time of the event of the weather phenomena and
shortly thereafter but have the effect frequently of resulting in a slowdown of
business thereafter. Similarly, weather phenomena can also have a negative
impact on Eagle's and JEH Eagle's customers which can cause certain of such
customers to become delinquent in their payments of their accounts with Eagle or
JEH Eagle. In the past, this has occurred with certain of JEH Co.'s customers.
See the Financial Statements of JEH Company, Inc. as of and at June 30, 1997,
Note K-Allowance for Doubtful Accounts at pages F-44 and F-45. JEH Co.'s
revenues have fluctuated more than Eagle's as a result of a conceptual
difference in strategy regarding the establishment of distribution centers. JEH
Co. entered into new markets following storms which had the tendency to show
more immediate growth in revenues that would help to defray start-up costs.
Eagle has historically entered new or existing markets based upon management's
evaluation of expected long term growth and, when a roofing distributor was
already operating in an existing market, if the area could support a new
distributor.

There can be no assurance that, in the future, unforeseen developments,
increased competition, losses incurred by new businesses that may be acquired or
branches that may be opened, weather phenomena and other circumstances may not
have a material adverse affect on Eagle's and/or JEH Eagle's operations in their
current market areas of operations or areas into which Eagle's, JEH Eagle's or
the Company's

operations may be expanded by acquisition or otherwise. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business".

REPAYMENT OF INDEBTEDNESS; SUCH FUNDS WILL NOT BE AVAILABLE FOR USE IN
BUSINESS OPERATIONS. Approximately $2,000,000 and $310,000 of the net proceeds
of this Public Offering, representing approximately 27.4% of such net proceeds,
will be used to reduce Eagle's and/or JEH Eagle's borrowings under their
revolving credit facilities and to repay interim financial indebtedness and
interest thereon of the Company, respectively. As a result, said net proceeds
will not be available for use in the business operations of the Company, Eagle
or JEH Eagle. See "Use of Proceeds" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

BROAD DISCRETION IN USE OF PROCEEDS; UNKNOWN ACQUISITIONS. The Company has
broad discretion with respect to the specific allocation of a substantial
portion of the net proceeds. Such net proceeds are intended to be applied toward
consummating acquisitions in accordance with the Company's business strategy,
support Eagle's and JEH Eagle's expansion efforts by the establishment of
additional distribution centers and for working capital purposes. Although
management of the Company will endeavor to evaluate the risks inherent in any
particular acquisition or the establishment of new distribution centers for
Eagle and JEH Eagle, there can be no assurance that the Company will properly or
accurately ascertain all such risks. Management of the Company will have
virtually unrestricted flexibility in identifying and selecting prospective
acquisition candidates and establishing new distribution centers. Locations
selected for expansion efforts will be made at the discretion of management and
will not be subject to stockholder approval. Additionally, the Company does not
intend to seek stockholder approval for any acquisitions unless required by
applicable law and regulations, and stockholders will most likely not have an
opportunity to review financial information on an acquisition candidate prior to
consummation of an acquisition. Thus, purchasers of the Securities offered
hereby will be entrusting their funds to the Company's management, upon whose
judgment the investor must depend, with only limited information concerning
management's specific intentions. Except for the Acquisitions, the Company does
not currently have any agreements, commitments or arrangements with respect to
any proposed acquisitions, and there can be no assurance that any such
acquisitions will be consummated. See "Use of Proceeds."

THE WHOLESALE DISTRIBUTION OF ROOFING SUPPLIES BUSINESS SUBJECT TO ECONOMIC
AND OTHER CHANGES. The wholesale distribution of roofing supplies industry is
cyclical and is affected by weather and changes in general economic conditions.
An economic downturn in one or more of the markets currently served by Eagle
and/or JEH Eagle or to be served by the Company, Eagle and/or JEH Eagle as a
result of acquisitions or expansion efforts could have a material adverse effect
on the operations of the Company, Eagle and/or JEH Eagle.

DEPENDENCE UPON CERTAIN VENDORS; LACK OF WRITTEN AGREEMENTS WITH
VENDORS. Eagle and JEH Eagle distribute products manufactured by a number of
major vendors. GAF Corporation ("GAF"), a supplier of residential and commercial
roofing materials, is Eagle's largest supplier, accounting for approximately
21%, 23% and 22% of Eagle's product lines during Eagle's fiscal years ended June
30, 1996 and 1997 and ten-month period ended April 30, 1998, respectively.
During Eagle's fiscal years ended June 30, 1996 and 1997 and ten-month period
ended April 30, 1998, three other vendors' products accounted for an aggregate
of approximately 23%, 32% and 20%, respectively, of Eagle's product lines.
Similarly, Atlas Roofing Corp., a supplier of roofing materials, is JEH Eagle's
largest supplier, accounting for approximately 22%, 15% and 15% of JEH Co.'s
product lines during JEH Co.'s fiscal years ended December 31, 1995 and 1996 and
JEH Eagle's ten-month period ended April 30, 1998, respectively. During JEH
Co.'s fiscal years ended December 31, 1995 and 1996 and JEH Eagle's ten-month
period ended April 30, 1998, three other vendors' products accounted for an
aggregate of approximately 31%, 34% and 30%, respectively, of JEH Co.'s and JEH
Eagle's product lines. Included within the foregoing three vendors were GAF and
Elk Roofing Products ("Elk") which accounted for approximately 15%, and 10%, 16%
and 10% of JEH Co.'s product lines during its fiscal years ended December 31,
1995 and 1996 and 16% and 11% of

JEH Eagle's product lines during its ten month period ended April 30, 1998,
respectively. Eagle and JEH Eagle have no written agreements with any of their
vendors. Management believes that in the event of any interruption of product
deliveries from any of its vendors, Eagle and JEH Eagle will be able to secure
suitable replacement supplies on acceptable terms. However, there can be no
assurance of the continued availability of supplies of residential and
commercial roofing materials at acceptable prices or at all. See "Business."

COMPETITION IN THE WHOLESALE DISTRIBUTION OF ROOFING SUPPLIES AND RELATED
PRODUCTS INDUSTRY. Eagle and JEH Eagle currently face substantial competition
in the wholesale distribution of roofing supplies from relatively smaller
distributors but also face competition from retail distribution centers and from
a number of multi-regional and a national wholesale distributor of building
products including suppliers which are larger than the Combined Entities and
have greater financial resources than the Combined Entities. The Combined
Entities currently compete in the wholesale distribution of roofing supplies on
the basis of competitive pricing, service, breadth of product line, prompt
delivery, providing discounts for prompt payment and on the abilities of its
personnel. There can be no assurance that Eagle or JEH Eagle will be able to
continue to compete effectively with such competitors. During Eagle's last three
fiscal years Eagle has closed and/or sold certain distribution centers as a
result of such competition. To a substantially lesser degree, Eagle and JEH
Eagle also compete with larger, higher volume, discount general building supply
stores selling standardized products, sometimes at lower prices. See "--No
Assurance of Profitable Operations" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

COMPETITION FOR POTENTIAL ACQUISITIONS. The Company anticipates that it may
experience competition from entities and individuals (including venture capital
partnerships and corporations, equity funds, blind pool companies, competing
wholesale roofing supply distribution companies, large industrial and financial
institutions, small business investment companies and wealthy individuals) which
are well-established and have greater financial resources and more extensive
experience than the Company and the Combined Entities in connection with
identifying and effecting acquisitions of the type sought by the Company. Many
of such competitors possess greater financial, technical, personnel and other
resources than the Company and the Combined Entities, and there can be no
assurance that the Company will be able to compete successfully in connection
with identifying and effecting acquisitions of the type sought by the Company.
The Company's, Eagle's and JEH Eagle's combined financial resources will be
limited in comparison to those of many of such competitors. Such competition
could result in the loss of an acquisition candidate or an increase in the price
the Company would be required to pay for such acquisitions. See "Business."

NEED FOR ADDITIONAL FUTURE FINANCING; POSSIBLE ADDITIONAL DILUTION AND/OR
FINANCIAL RESTRICTIONS. The Company may require additional equity or debt
financing in order to consummate an acquisition or for additional working
capital if either of the Combined Entities suffer losses or if the Company
completes the acquisition of a business that subsequently suffers losses. Any
additional equity financing that may be obtained may dilute the voting power and
equity interests of the Company's stockholders. Any additional debt financing
that may be obtained may impair or restrict the Company's ability to declare
dividends or may impose financial restrictions on the Company's ability to make
acquisitions or implement the expansion efforts of the Combined Entities. There
can be no assurance that the Company will be able to obtain additional financing
on terms acceptable to the Company or at all. In the event additional financing
is unavailable to the Company, the Company may be materially adversely affected.
See "Use of Proceeds."

UNPROVEN BUSINESS STRATEGY OF THE COMPANY; ACQUISITIONS UNKNOWN. A
significant element of the Company's business strategy is to acquire additional
companies engaged in the wholesale distribution of roofing supplies and related
products industry and companies which manufacture products for or supply
products to such industry. The Company's strategy is unproven and based on
unpredictable and changing events. Although the Company believes that suitable
candidates for potential acquisition exist, other than the Acquisitions, there
can be no assurance that any acquisitions, if successfully consummated, will be

successfully integrated into the Company or operations of the Combined Entities,
will perform as expected, will not result in significant unexpected liabilities
or will ever contribute significant revenues or profits to the Company and/or
either of the Combined Entities. In addition, if the Company is unable to manage
growth effectively, the Company's operating results could be materially
adversely effected. See "Business."

CONTROL BY MANAGEMENT AND TDA. Upon closing of the Public Offering and
consummation of the Acquisitions, TDA will own approximately 60% of the issued
and outstanding Common Stock of the Company. Douglas P. Fields, the Company's
Chief Executive Officer and Chairman of the Company's Board of Directors, is
also Chairman of the Board of Directors, President and the Chief Executive
Officer of TDA as well as a principal stockholder of TDA. Frederick M. Friedman,
the Executive Vice President, Treasurer, Secretary and a Director of the Company
is also the Executive Vice President, Chief Financial Officer, Treasurer and a
Director of TDA as well as a principal stockholder of TDA. John E. Smircina is a
Director Nominee of the Company and a director of TDA. Accordingly, Messrs.
Fields, Friedman and Smircina will control approximately 60% of the issued and
outstanding shares of Common Stock of the Company after the closing of the
Public Offering and consummation of the Acquisitions. As a result, the foregoing
officers and directors, if they were to act in concert, would be in a position
to control the composition of the Board of Directors of the Company, and,
therefore the business, policies and affairs of the Company and the outcome of
issues which may be subject to a vote of the Company's stockholders. See
"Principal Stockholders," "Management" and "Certain Transactions."

POTENTIAL CONFLICTS OF INTEREST. Certain executive officers and directors
of the Company are also officers, directors and/or principal stockholders of TDA
and its affiliates and, consequently, may be able, through TDA and its
affiliates, to direct the election of the Company's directors, effect
significant corporate events and generally direct the affairs of the Company.
Eagle has been dependent on TDA for certain administrative services, and TDA
also furnishes certain services to JEH Eagle. Following completion of the Public
Offering and the consummation of the Acquisitions, TDA will provide the Company
with certain administrative services. Furthermore, a subsidiary of TDA, 39 Acre
Corp., and James E. Helzer, the President of the Company, Eagle and JEH Eagle,
lease approximately one-half of Eagle's and JEH Eagle's facilities to them,
respectively. Conflicts of interest may arise in the future with respect to such
leases and possible renewal terms and conditions. The Company does not intend to
enter into any material transaction with TDA or its affiliates in the future
unless such transaction is fair and reasonable to the Company and is approved by
a majority of the independent members of the Board of Directors of the Company.
Notwithstanding the foregoing, there can be no assurance that future
transactions, if any, will not result in conflicts of interest which will be
resolved in a manner favorable to the Company. See "-- Control by Management and
TDA," "Management," "Principal Stockholders" and "Certain Transactions."

DEPENDENCE UPON KEY PERSONNEL. The success of the Company and either of the
Combined Entities may depend upon the continued contributions of their officers.
The business of the Company could be adversely affected by the loss of the
services of Douglas P. Fields, the Chief Executive Officer and Chairman of the
Boards of Directors of the Company and each of the Combined Entities, Frederick
M. Friedman, the Executive Vice President, Secretary and Treasurer of the
Company and each of the Combined Entities or James E. Helzer, the President of
the Company and each of the Combined Entities. Although JEH Eagle has "key
person" life insurance on the life of James E. Helzer in the amount of
$2,000,000 naming JEH Eagle as beneficiary, and the Company has "key person"
life insurance in the amount of $1,000,000 on each of the lives of Messrs.
Fields and Friedman, there can be no assurance that the foregoing amounts will
be adequate to compensate JEH Eagle and/or the Company, in the event of the loss
of any of their lives. See "Management."

KEY PERSONNEL; CONFLICTS OF INTEREST IN ALLOCATION OF MANAGEMENT'S
TIME. Additionally, the employment agreements already entered into and to be
entered into with Messrs. Fields and Friedman do not and will

not require either of them to devote a specified amount of time to the Company's
or the Combined Entities' affairs. Each of Messrs. Fields, Friedman and Helzer
have significant business interests outside of the Company, including but not
limited to TDA and its subsidiaries, as to Messrs. Fields and Friedman.
Accordingly, Messrs. Fields, Friedman and Helzer may have conflicts of interest
in allocating time among various business activities. There can be no assurance
that any such conflicts will be resolved in a manner favorable to the Company.
See "Management."

NO ASSURANCE OF CONTINUATION OF CREDIT FACILITIES. Both Eagle and JEH Eagle
have substantial credit facilities that are needed to finance their operations.
Both credit facilities are guaranteed by TDA, and the institutions providing the
credit facilities will be required to consent to the completion of the Public
Offering and consummation of the Acquisitions. Assuming the required consents
from the lending institutions are obtained and the Public Offering and the
Acquisitions are completed and consummated, TDA has advised the Company that in
the event Eagle or JEH Eagle seek increased lines of credit, new lines of credit
or other changes in their respective credit facilities which would give TDA the
right to terminate or decline to grant a new guarantee, TDA may seek
compensation from the Company. Although no such compensation has been agreed
upon, such compensation, if paid, could be materially adverse to the Company,
Eagle and/or JEH Eagle and could be a material benefit to TDA and certain
officers and directors of the Company, who are also officers, directors and
stockholders of TDA. In the event TDA were to exercise any such right to
terminate a guarantee or decline to grant a new guarantee, credit facilities may
no longer be available to Eagle and/or JEH Eagle or credit facilities may be
available only upon materially different terms and conditions including, but not
limited to, a reduced availability of funds, additional and/or higher interest
rates and charges and other more restrictive financial terms and conditions. Any
of the foregoing events could have a material adverse effect upon the Company,
Eagle and/or JEH Eagle. See "--Control by Management and TDA," "--Potential
Conflicts of Interest," "-- Transactions With and For the Benefit of
Affiliates," "Substantial Potential Future Financial Benefits to Prior Owner of
Acquisition Candidate Now Affiliated with the Company," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "The
Acquisitions," "Management," "Principal Stockholders" and "Certain
Transactions."

TRANSACTIONS WITH AND FOR THE BENEFIT OF AFFILIATES. Messrs. Fields and
Friedman, the Company's Chief Executive Officer and Chairman of its Board of
Directors; and Executive Vice President, Treasurer, Chief Financial Officer and
a Director of the Company, respectively, are also executive officers, directors
and principal stockholders of TDA and have and will or may be deemed to benefit,
directly or indirectly, from the Company's and each of the Combined Entities'
transactions with TDA. James E. Helzer, the Company's President and the nominee
Vice Chairman of the Company's Board of Directors, previously owned JEH Co. and
has and will or may be deemed to benefit, directly from his and JEH Eagle's
transactions with the Company. See "Management," "Principal Stockholders" and
"Certain Transactions."

Eagle and JEH Eagle have revolving credit facilities, in the amounts of
$7,500,000 and $20,000,000, respectively, guaranteed by TDA. To the extent these
credit facilities are reduced or repaid, TDA will derive an indirect benefit.
During Eagle's June 30, 1995 fiscal year, Eagle used its borrowings under this
revolving credit facility to repay approximately $2,326,000 of its indebtedness
to TDA and to advance approximately $3,309,000 to TDA. As part of the
Acquisitions, Eagle and JEH Eagle combined will have a book value of no less
than $1,000,000 after Eagle cancels, in the form of a non-cash dividend, all
indebtedness of TDA to Eagle, except for an approximate $502,000 receivable from
TDA relating to and offsetting a mortgage in the same amount on property
previously owned by Eagle and for which Eagle remains the primary obligor, with
TDA contributing sufficient cash to Eagle or JEH Eagle, within forty-five days
after the closing of the Public Offering and consummation of the Acquisitions,
to achieve that book value in the event of a deficiency. At April 30, 1998,
TDA's indebtedness to Eagle, excluding the foregoing receivable offsetting such
mortgage, was approximately $2,849,000. To the extent TDA's indebtedness to
Eagle is so cancelled, TDA will directly, and Messrs. Fields and Friedman will
indirectly, derive a benefit. During Eagle's fiscal years ended June 30, 1996
and 1997 and the ten-month period ended

April 30, 1998, Eagle made dividend payments to TDA of $1,097,000, $1,250,000
and $900,000, respectively. After April 30, 1998, Eagle intends to continue to
make dividend payments to TDA until the completion of the Public Offering and
consummation of the Acquisitions. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "The Acquisitions" and "Certain
Transactions."

TDA, through a wholly-owned subsidiary, has rented to Eagle the premises for
several of Eagle's distribution facilities and Eagle's executive offices. Upon
completion of the Public Offering and the consummation of the Acquisitions,
Eagle and TDA intend to enter into lease agreements which will provide rental
arrangements for such facilities which the Company believes to be fair and
reasonable to Eagle. See "The Acquisitions," "Business" and "Certain
Transactions".

Eagle is responsible, as mortgagor, to make payments due on the mortgage
underlying its Birmingham, Alabama, distribution center. That property is owned
by 39 Acre Corp., a wholly-owned subsidiary of TDA and is leased to Eagle. Such
mortgage requires a "balloon" payment in April 1999. 39 Acre Corp. intends to
obtain replacement financing when the "balloon" payment is due. There can be no
assurance that such financing will be available on acceptable terms. Eagle also
remains responsible, as leasee, for lease payments to another TDA subsidiary,
Eagle Holding, Inc., under a lease for Eagle's former distribution center in
Fort Lauderdale, Florida, including a "balloon" payment due on May 1, 1999, the
lease expiration date, relating to industrial revenue bonds used to acquire and
develop the Fort Lauderdale, Florida, realty. Eagle has no obligation to make
payments on the industrial revenue bond and presently subleases this property to
an unrelated third party. In the event the unrelated third party sublessee fails
to perform its obligations under the sublease, Eagle is required to make rental
payments to Eagle Holding, Inc., and, in any event, will be required to make the
"balloon" payment. However, through April 30, 1998, Eagle had been making
pro-rata payments upon the "balloon" payment to Eagle Holding, Inc., and these
payments, together with anticipated sublessee rental payments, are currently
projected to fully fund the "balloon" payment. Upon completion of the Public
Offering and as part of the Acquisitions, TDA will indemnify Eagle for any
payments that Eagle is required to make which are in excess of its obligations
under its leases for the foregoing properties and relate to the mortgage or the
industrial revenue bonds for the Birmingham, Alabama and Fort Lauderdale,
Florida properties, respectively. In the event of the failure of Eagle, TDA
and/or TDA's subsidiary to perform Eagle's obligations under said mortgage and
lease, Eagle could be subject to substantial judgments that would have a
material adverse effect on Eagle and its financial condition.

The mortgage underlying Eagle's Birmingham, Alabama, distribution center
requires monthly payments of approximately $4,700 through April 1999 and a
"balloon" payment of approximately $440,000 on that date. The lease for Eagle's
former Fort Lauderdale, Florida, distribution center requires variable monthly
payments and a "balloon" payment of approximately $580,000 on May 1, 1999. See
"Certain Transactions."

The Company believes that TDA's transactions with Eagle with regard to the
Birmingham, Alabama, and Fort Lauderdale, Florida, properties are on terms no
less favorable than Eagle could obtain from independent third parties.

Upon completion of the Public Offering and consummation of the Acquisitions,
TDA will provide office space and administrative services to the Company at
TDA's offices in New York City pursuant to an administrative services agreement
to be entered into by the Company and TDA, and Messrs. Fields' and Friedman's
employment agreements with the Company and Eagle will become effective. Messrs.
Fields and Friedman have already entered into employment agreements with JEH
Eagle which will remain effective. TDA also provides certain services to JEH
Eagle pursuant to a five-year agreement requiring monthly payments to TDA of
$3,000. The payments required to be made to Messrs. Fields and Friedman and to
TDA pursuant to their respective agreements with JEH Eagle will commence upon
completion of

the Public Offering and consummation of the Acquisitions. See "Transactions With
And For the Benefit of Affiliates," "Business," "Management" and "Certain
Transactions".

SUBSTANTIAL POTENTIAL FUTURE FINANCIAL BENEFITS TO PRIOR OWNER OF
ACQUISITION CANDIDATE NOW AFFILIATED WITH THE COMPANY. In July 1997, JEH Eagle
acquired substantially all of the assets and the business of JEH Co., a Texas
corporation, wholly owned by James E. Helzer, now the President of the Company,
Eagle and JEH Eagle. The purchase price, as adjusted, was approximately
$14,473,000, consisting of $13,600,000 in cash and a five-year, $873,000
principal amount note bearing interest at the rate of 6% per year. The purchase
price and the note are subject to further adjustments under certain conditions.
The first $250,000 of the adjustments was to be paid in cash by JEH Co. to JEH
Eagle but, as other adjustments to the purchase price are anticipated, JEH Eagle
elected to postpone the $250,000 payment from JEH Co. until other adjustments to
the purchase price are resolved, and the $250,000 payment has been established
as a receivable due on demand from JEH Co. Certain, potentially substantial,
contingent payments, as additional future consideration to JEH Co., or its
designee, are to be paid by JEH Eagle. JEH Co. is to receive a percentage of the
EBITDA or the modified EBITDA (as defined) of the business acquired (the "JEH
EBITDA") on a per year non-cumulative basis for each of JEH Eagle's fiscal years
ending on June 30 of 1998 through 2002 (the "Applicable Period"). If the JEH
EBITDA reaches $3,000,000, $4,000,000 and $5,000,000 in the foregoing fiscal
years, JEH Co. or its designee is to receive 35%, 40% and 50%, respectively, of
that fiscal year's JEH EBITDA. In addition to the foregoing percentages of JEH
EBITDA, if the JEH EBITDA (plus $50,000 of Mr. Helzer's compensation under his
employment agreement) (x) for any fiscal year in the Applicable Period is not
less than $4,400,000, JEH Eagle is to pay JEH Co. or its designee $1,000,000,
provided that the aggregate amounts of such payments is not to exceed
$2,000,000; and (y) in the aggregate during the Applicable Period is not less
than $20,000,000, JEH Eagle is to pay JEH Co. or its designee the sum of
$1,350,000 plus the amount of the difference, if any, between $2,000,000 and the
amount to be paid under (x). Additionally, with respect to certain Total
Accounts Receivable Reserves, as defined (the "JEH Reserves") which were
established at the date of acquisition, if JEH Eagle reduces the amount of the
JEH Reserves in any fiscal year during the Applicable Period, JEH Co. or its
designee is to be paid 100% of the reduction until the JEH Reserves are not less
than $2,500,000 and 50% of the reduction in the JEH Reserves below $2,300,000
down to $600,000. Both of the immediately foregoing percentage payments to JEH
Co. or its designee are subject to adjustment in certain events. Additionally,
if this Public Offering is completed prior to June 30, 2002 and in the event
certain JEH EBITDA levels are reached for JEH Eagle during the period from July
1, 1997 through the date of consummation of this Public Offering, JEH Co. or its
designee will be entitled to receive (i) $1,000,000 or (ii) $1,350,000 (either
in cash or in shares of the Company's Common Stock valued at its public offering
price) if the JEH EBITDA level is (i) less than $3,800,000 per year but not less
than $3,600,000 per year, or (ii) not less than $3,800,000 per year,
respectively. The Company will issue 300,000 shares of its Common Stock and not
pay the foregoing amounts to James E. Helzer in fulfillment of the obligation
set forth above, even if the JEH EBITDA does not reach the required levels. The
foregoing may result in substantial financial benefits to James E. Helzer, and
may materially and adversely effect the financial condition and income of JEH
Eagle and the Company. See "The Acquisitions" and "Certain Transactions."

DILUTION. As a result of the sale of the Securities offered in the Public
Offering and the consummation of the Acquisitions, there will be immediate and
substantial dilution to public investors in that the pro forma net tangible book
value per share of the Company's Common Stock after the Public Offering and
consummation of the Acquisitions will be approximately $1.54 per share, or
approximately $3.46 (69%) less than the $5.00 Public Offering price per share.
All of the Company's present stockholders purchased their shares at a price
substantially less than the Public Offering price per share. See "Dilution."

PRIOR ABSENCE OF WRITTEN LEASES WITH AFFILIATES; WRITTEN LEASES TO BE
ENTERED INTO. Several of Eagle's distribution centers are leased from a
subsidiary of TDA on a month to month basis without formal written lease
agreements. Upon completion of the Public Offering and consummation of the
Acquisitions, the

subsidiary of TDA and Eagle intend to enter into written leases for such
distribution centers. Although the written leases are expected to be on
substantially equivalent economic terms as Eagle's prior oral agreements, the
written leases will be for ten-year terms. As a result, Eagle will then be
committed to pay rent for such distribution centers for ten (10) years. James E.
Helzer has rented to JEH Eagle the premises for several of JEH Eagle's
distribution facilities pursuant to five year leases at an approximate annual
cost of $486,000 to JEH Eagle which the Company believes to be fair and
reasonable to JEH Eagle. See "Business."

POSSIBLE SUSPENSION OF COMPANY'S SECURITIES FROM NASDAQ SMALLCAP EVEN IF
LISTING OBTAINED. The Company has applied for the listing of the Securities
offered hereby on the NASDAQ SmallCap. However, there can be no assurance that
the Company's application will be granted or that, if granted, the Company will
meet the criteria for continued quotation of its securities on the NASDAQ
SmallCap. Such criteria include, among other things, (a) $2,000,000 in net
tangible assets, $35,000,000 in market capitalization or $500,000 in net income
in an issuer's last fiscal year or two of its last three fiscal years; (b) a
public float of 500,000 shares; (c) a $1,000,000 public float market value; (d)
a $1.00 minimum bid price; (e) two market makers; and (f) at least 300 round lot
shareholders. If the Company is unable to meet the continued quotation criteria
of the NASDAQ SmallCap and is suspended therefrom, trading, if any, in the
Company's securities could thereafter be conducted in the over-the-counter
market in the so-called "pink sheets" or, if then available, the OTC Bulletin
Board. In such an event, an investor would likely find it more difficult to
dispose of, or obtain accurate quotation of, the Company's Securities.

RISKS OF LOW-PRICED SECURITIES. If the Company's Securities were to be
suspended or delisted from the NASDAQ SmallCap, the Securities would be subject
to rules under the Securities Exchange Act of 1934 (the "Exchange Act") which
impose additional sales practice requirements on broker-dealers who sell such
securities to persons other than established clients and "accredited investors"
(for example, individuals with a net worth in excess of $1,000,000 or an annual
income exceeding $200,000 or $300,000 together with their spouses). For
transactions covered by such rules, a broker-dealer must make a special
suitability determination of the purchaser and have received the purchaser's
written consent to the transaction prior to the sale. Consequently, such rules
may affect the ability of broker-dealers to sell the Company's Securities and
the ability to sell any of the Company's Securities in any secondary market that
may develop for such Securities.

The Commission has enacted rules that define a "penny stock" to be any
equity security that has a price (as therein defined) of less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions, including securities listed on the NASDAQ SmallCap or on designated
exchanges. For any transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to any transaction in a penny stock, of a disclosure
statement prepared by the Commission relating to the penny stock market.
Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading, and about commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements must be sent
disclosing recent price information for the penny stocks held in the account and
information on the limited market in penny stocks. In the event the Company's
Securities are no longer listed on the NASDAQ SmallCap or are not otherwise
exempt from the provisions of the Commission's "penny stock" rules, such rules
may also affect the ability of broker-dealers to sell the Company's Securities
and the ability to sell any of the Securities acquired hereby in any secondary
market that may develop.

NO ASSURANCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE. Prior to
the offering, there has been no market for any of the Company's securities. The
initial public offering price of the Securities and the exercise price and other
terms of the Warrants have been arbitrarily determined by negotiations between
the Company and the Underwriter and such prices and terms are not necessarily
related to the Company's asset value, net worth or other established criteria of
value. In addition, there can be no assurance that a

trading market will develop after the Public Offering for any of the Company's
Securities or that, if developed, it will be sustained. See "Underwriting."

SHARES ELIGIBLE FOR FUTURE SALE. In general, under Rule 144, a person who
has satisfied a one-year holding period may, under certain circumstances, sell
within any three-month period a number of shares of common stock that does not
exceed the greater of 1% of the then outstanding shares of common stock or the
average weekly trading volume in such shares during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain circumstances, the sale
of shares without any quantity or other limitation by a person which is not an
affiliate of an issuer and which has satisfied a two-year holding period. The
holders of approximately 400,000 and 300,000 shares of the Company's Common
Stock, after giving effect to the Public Offering and the Acquisitions, have
agreed not to sell, transfer, hypothecate or otherwise dispose of the shares of
the Company's Common Stock for a period of two years and fifteen months,
respectively, from the date of this Prospectus without the prior written consent
of the Underwriter. The holder of 4,000,000 shares of the Company's Common
Stock, after giving effect to the Public Offering and the Acquisitions, has
agreed not to sell, transfer, hypothecate or otherwise dispose of said shares of
the Company's Common Stock for a period of two years from the date of this
Prospectus.

After giving effect to the Acquisitions, the Company will have 4,700,000
shares of Common Stock outstanding that are "restricted securities," as that
term is defined under Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). The Company also has outstanding Warrants to
purchase 300,000 shares of Common Stock which shares of Common Stock underlying
the Warrants are being registered under the Registration Statement of which this
Prospectus forms a part for sale by the Selling Securityholders. Investors
should be aware that sales of the Company's securities may have a depressive
effect on the price of the Company's securities in any market which may develop
for such securities. See "--Effect of Options, Warrants and Registration
Rights," "Shares Eligible for Future Sale" and "Selling Securityholders."

EFFECT OF OPTIONS, WARRANTS AND REGISTRATION RIGHTS. For the respective
terms of the Underwriter's Warrant and Stock Warrants and Warrants sold as part
of the Public Offering and issued by the Company in the Private Placement and
any options granted and that may be granted by the Company under the Company's
stock option plan, the holders thereof are given an opportunity to profit from a
rise in the market price of the Common Stock, with a resulting dilution in the
interests of the other stockholders. Further, the terms on which the Company may
obtain additional financing during the exercise periods of said warrants and
options may be adversely effected by the existence of such warrants, options and
plan. The holders of options or warrants to purchase Common Stock may exercise
such options or warrants at a time when the Company might be able to obtain
additional capital through offerings of securities on terms more favorable than
those provided by such options or warrants. In addition, the holders of the
Underwriter's Warrant and Stock Warrants have demand and "piggyback"
registration rights with respect to their securities. Exercise of such
registration rights may involve substantial expense to the Company. See "The
Acquisitions," "Management," "Certain Transactions," "Description of
Securities," "Underwriting" and "Selling Securityholders."

NO CASH DIVIDENDS. The Company has not paid any dividends to date. The
Company's Board of Directors does not presently intend to declare any dividends
in the foreseeable future but instead intends to retain all earnings, if any,
for use in the business operations of the Company and the Combined Entities. See
"Description of Securities."

ISSUANCE OF PREFERRED STOCK; ANTI-TAKEOVER PROVISIONS. The Company's
Certificate of Incorporation permits its directors to designate the terms of and
issue shares of preferred stock. The issuance of shares of preferred stock by
the Board of Directors could adversely effect the rights of holders of Common
Stock by, among other matters, establishing preferential dividends, liquidation
rights and voting power. Although the Company has no present intention to issue
shares of preferred stock, the issuance thereof might render it more difficult,
and therefore discourage, an unsolicited takeover proposal such as a tender
offer, proxy

contest or the removal of incumbent management, even if such actions would be in
the best interest of the Company's stockholders. The Company has agreed not to
issue any shares of Preferred Stock until the third anniversary date of this
Prospectus without the Underwriter's written consent. See "Description of
Securities."

DIRECTORS' LIABILITY LIMITED. The Company's Certificate of Incorporation
provides that its directors will not be held liable to the Company or its
stockholders for monetary damages upon breach of a director's fiduciary duty
with certain exceptions. The exceptions include a breach of the director's duty
of loyalty, acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, improper declarations of dividends, and
transactions from which the directors derived an improper personal benefit. See
"Management."

POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS. The Warrants are not
redeemable prior to the first anniversary date of this Prospectus without the
written consent of the Underwriter. The Warrants may be redeemed by the Company
at a redemption price of $.25 per Warrant upon 30 days prior written notice if
the market price (as herein defined) of the Common Stock averages at least
$10.00 per share for 30 consecutive trading days ending within 10 days of the
notice. Redemption of the Warrants could force the holders to exercise the
Warrants and pay the exercise price at a time when it may be disadvantageous for
the holders to do so, to sell the Warrants at the current market price for the
Warrants when they might otherwise wish to hold the Warrants, or to accept the
redemption price, which may be substantially less than the market value of the
Warrants at the time of redemption. See "Description of Securities."

CURRENT PROSPECTUS AND BLUE SKY REGISTRATION REQUIRED TO EXERCISE
WARRANTS. Holders of the Warrants will have the right to exercise the Warrants
for the purchase of shares of Common Stock only if a current prospectus relating
to such shares is then in effect and only if the shares are qualified for sale
under the securities laws of the states in which the warrantholders reside.
Although the Company intends to maintain such a current prospectus and to seek
to qualify the shares of Common Stock underlying the Warrants for sale in those
states where the Common Stock and Warrants are to be offered, there is no
assurance that it will be able to do so. The Warrants may be deprived of any
value if the current prospectus encompassing the shares underlying the Warrants
is not kept effective or if such underlying shares are not or cannot be
registered in the states in which warrantholders reside. See "Description of
Securities."

DILUTION

The initial offering price per share of Common Stock is substantially higher
than the average price per share paid by the Company's existing stockholders.
Based on an initial public offering price of $5.00 per share, purchasers of the
Common Stock in the Public Offering will experience an immediate and substantial
dilution in net tangible book value of approximately 69% or $3.46 per share. For
the purposes of this discussion, it is assumed that no Warrants will be
exercised, and, accordingly, no value is attributed to the Warrants.

The following table presents certain information concerning the net tangible
book value per share of the Company's Common Stock as of April 30, 1998, as
adjusted to give effect to the sale of 2,000,000 shares of Common Stock by the
Company in the Public Offering (at an initial public offering price of $5.00 per
share and after deducting the estimated underwriting discounts and estimated
offering expenses payable by the Company) and the consummation of the
Acquisitions:

Initial Public Offering price.......................................... $ 5.00 $ 5.00
---------
Net tangible book value per share before the Public Offering and the
Acquisitions(1)...................................................... $ (.03)
Increase per share attributable to new investors....................... 2.03
---------
Pro forma net tangible book value per share after the Public Offering
and before the Acquisitions.......................................... 2.00 2.00
---------
Dilution per share to new investors before the Acquisitions............ $ 3.00
---------
---------
Decrease per share attributable to the Acquisitions.................... (.46)
---------
Pro forma net tangible book value per share after the Public Offering
and the Acquisitions................................................. 1.54
---------
Total dilution per share to new investors(2)........................... $ 3.46
---------
---------

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

(1) Net tangible book value per share is determined by dividing the Company's
net tangible book value (total assets less intangible assets and total
liabilities) at April 30, 1998 by the number of shares of Common Stock then
outstanding.

(2) Dilution per share is determined by subtracting pro forma net tangible book
value per share after the Public Offering and the Acquisitions from the
initial public offering price per share. The foregoing table also assumes no
exercise of the Underwriter's Warrant, the Warrants issued in the Private
Placement or options to purchase 700,000 shares of Common Stock to be
granted upon the closing of the Public Offering pursuant to the Company's
1996 Stock Option Plan.

In the event the Underwriter exercises its Overallotment Option in full, the
pro forma net tangible book value per share after the Public Offering and the
Acquisitions would be $1.67 which would result in dilution to new investors of
$3.33 per share.

The following table sets forth, on a pro forma basis as of the date of this
Prospectus, the respective positions of the Company's existing stockholders and
new investors with respect to the number of shares of Common Stock purchased
from the Company, the total cash consideration paid and the average price per

share paid by the existing stockholders and by the new investors with respect to
the 2,000,000 shares of Common Stock to be issued by the Company at an initial
public offering price of $5.00 per share.

SHARES PURCHASED TOTAL CONSIDERATION
----------------------- --------------------------

APPROXIMATE APPROXIMATE AVERAGE
----------------------- -------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ----------- ------------- ----------- -----------
Existing stockholders(1)............................... 4,700,000 70% $ 1,300,210 12% $ .28
New investors.......................................... 2,000,000 30% 10,000,000 88% $ 5.00
---------- --- ------------- --- -----
Totals................................................. 6,700,000 100% $ 11,300,210 100% $ 1.69
---------- --- ------------- --- -----
---------- --- ------------- --- -----

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

(1) Includes 2,000,000 shares of Common Stock to be issued to TDA in connection
with the Acquisitions and 300,000 shares of Common Stock to be issued to
James E. Helzer pursuant to the agreement by which JEH Eagle acquired
substantially all of the assets and the business of JEH Co.

The foregoing table assumes no exercise of any Warrants or options to
purchase 700,000 shares of Common Stock to be granted upon the closing of the
Public Offering pursuant to the Company's 1996 Stock Option Plan.

USE OF PROCEEDS

The net proceeds to the Company from the sale of 2,000,000 shares of Common
Stock and 2,500,000 Warrants offered hereby are estimated to be approximately
$8,436,250 ($9,782,031 if the Underwriter's Overallotment Option is exercised in
full) after deducting underwriting commissions and discounts and other expenses
of the Public Offering. The Company expects to use the net proceeds over the
next twelve to twenty-four months approximately as follows:

APPROXIMATE
DOLLAR AMOUNT APPROXIMATE
OF NET PERCENTAGE OF
APPLICATION OF NET PROCEEDS PROCEEDS NET PROCEEDS
- ----------------------------------------------------------------------------------- -------------- ---------------

Finance the cash portion of potential acquisitions(1).............................. $ 2,500,000 29.6%
Additional Eagle and JEH Eagle distribution centers(2)............................. $ 2,176,000 25.8%
Reduce Eagle's and JEH Eagle's credit facility balances(3)......................... $ 2,000,000 23.7%
Capital Expenditures(4)............................................................ $ 700,000 8.3%
Repayment of Private Financing(5).................................................. $ 310,000 3.7%
Working Capital.................................................................... $ 750,250 8.9%
-------------- -----
Totals......................................................................... $ 8,436,250 100.0%

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

(1) Represents the approximate amount that may be used to fund the potential
acquisition of businesses in accordance with the Company's current strategy
which is subject to change from time to time.

(2) Represents the approximate amount that may be used to expand Eagle's and JEH
Eagle's operations which is subject to change from time to time. The Company
estimates that the foregoing allocation will be sufficient to enable Eagle
and JEH Eagle to establish approximately six new distribution centers and
will be used principally to carry accounts receivable and purchase
inventory. The foregoing allocation excludes the purchase of trucks,
forklifts and similar equipment identified in note (4).

(3) To be used to reduce Eagle's and JEH Eagle's outstanding balance of
borrowings under their credit facilities. At April 30, 1998, Eagle had
borrowed approximately $6,616,000 under its credit facility. During Eagle's
June 30, 1995 fiscal year, Eagle used its borrowing under its credit
facility to repay approximately $2,326,000 of its indebtedness to TDA and to
advance approximately $3,309,000 to TDA. The remainder of the outstanding
balance of the credit facility was used to fund continuing operations. At
April 30, 1998, JEH Eagle had borrowed $14,326,000 under its credit facility
of which approximately $12,500,000 was used to pay a part of the purchase
price of JEH Co.'s business and the balance was used for JEH Eagle's working
capital. The Eagle credit facility bears interest, at Eagle's option, at
either the lender's prime rate plus one-half percent or the London interbank
offered rate ("Libor") plus two and one-half percent. The JEH Eagle credit
facility bears interest, at JEH Eagle's option, at Libor plus two and
one-half percent or the lender's prime rate plus one-half percent.
Currently, Eagle and JEH Eagle pay interest based upon both rates. The
current annual rates of interest for both facilities is 9% based on the
prime rate and approximately 8.2% based on Libor, and both credit facilities
mature in July 2002. It is anticipated that the borrowings at the higher
interest rate will be reduced.

(4) To be used for leasehold improvements for existing distribution centers and
to purchase, if necessary, trucks, forklifts and similar equipment to
support additional distribution centers for Eagle and JEH Eagle.

(5) To be used to repay $310,000 in principal and interest on borrowings made by
the Company in February 1998 pursuant to promissory notes issued to TDA
($150,000) and two other stockholders of the Company. Said notes bear
interest at the rate of 15% per year through June 30, 1998 which decreases
to 6% per year after that date. The notes mature on the earlier of thirty
months after issuance or the closing of this Public Offering. The proceeds
from the issuance of the foregoing notes

have and are being used to pay certain expenses relating to the Public
Offering, legal fees and expenses in connection with seeking the listing of
the Company's securities on NASDAQ and the Acquisitions.

The Company currently estimates that the net proceeds of the Public Offering
will be sufficient to fund its planned operations, including the cash portion of
potential acquisitions, if any, and expansion efforts for approximately twelve
to twenty-four months from the date of this Prospectus. The net proceeds may be
sufficient for a greater or lesser period of time depending on the extent of the
Company's expansion efforts and on the number of acquisitions, if any, that the
Company consummates during the next twelve to twenty-four months and the portion
of the purchase price of such acquisitions paid in cash. In addition, the
Company may require additional financing prior to or following such period if
Eagle or JEH Eagle suffer losses or if the Company effects the acquisition of a
business that subsequently suffers losses. The Company has no commitments or
arrangements for any such additional financing and there can be no assurance
that the Company will be able to obtain additional financing on terms acceptable
to the Company or at all. If required, the Company may seek to finance the
purchase price of acquisitions by purchase money indebtedness, asset-based
financing and/or issuances of its own securities; and to open additional Eagle
and JEH Eagle distribution centers by obtaining short-term vendor inventory
financing (inventory purchased on extended payment terms), asset-based financing
and/or equipment leasing/ financing. As each potential acquisition will be
individually negotiated, the Company is unable to estimate the cash or other
portions of a potential acquisition's purchase price. In the event additional
financing is unavailable to the Company, the Company may be materially adversely
affected.

The foregoing represents the Company's best estimate of its allocation of
the net proceeds of the Public Offering. Future events, as well as changes in
economic, regulatory or competitive conditions or the Company's business or
Eagle's or JEH Eagle's business and the results of the Company's, Eagle's or JEH
Eagle's activities may make shifts in the allocation of funds within the
described categories or to other purposes necessary or desirable. In the event
the Company is unable to fund the cash portion of potential acquisitions with
the net proceeds allocated above, Eagle or JEH Eagle suffer losses or the
Company completes an acquisition that subsequently suffers losses, the Company
may draw upon the net proceeds of the Public Offering allocated to expand the
number of Eagle's and JEH Eagle's distribution centers, purchase equipment to
support that expansion and/or working capital. The Company estimates that the
net proceeds of the Public Offering allocated to expand the number of Eagle's
and JEH Eagle's distribution centers and to support that expansion will be
sufficient to establish approximately six new distribution centers at an average
cost of approximately $415,000 for each new distribution center. In the event
the per distribution center costs are greater than estimated, Eagle and JEH
Eagle may establish less than six new distribution centers, the Company may seek
vendor financing of inventory, asset-based financing and/or equipment
leasing/financing, or draw upon the net proceeds of the Public Offering
allocated to working capital. In the event the per distribution center costs are
less than estimated, a portion of the net proceeds of the Public Offering
allocated for such purposes will be reallocated to finance acquisitions or for
working capital. In order to conduct its proposed expansion, the Company intends
to use a significant portion of the net proceeds of the Public Offering for the
acquisition of businesses or assets that are consistent with the Company's
current strategy, which is subject to change from time to time. With the
exception of the Acquisitions, the Company does not currently have any
agreements, commitments or arrangements with respect to any proposed
acquisitions nor has it identified or negotiated with any potential acquisition
candidates, and there can be no assurance that any acquisitions will be
consummated. Except for the Acquisitions, the Company has no present intention
to use the net proceeds of the Public Offering to acquire assets from any of its
affiliates.

Prior to expenditure, proceeds will be invested principally in high grade,
short-term, interest-bearing investments. Any proceeds received upon exercise of
the Overallotment Option or any of the Warrants will be used to finance
potential acquisitions or for working capital. There can be no assurance that
the Overallotment Option or any of the Warrants will be exercised.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of April 30,
1998 (i) on an actual basis, (ii) as adjusted to give effect to the Public
Offering of 2,000,000 shares of Common Stock and 2,500,000 Warrants at initial
public offering prices of $5.00 per share and $.125 per Warrant and the
application of the net proceeds therefrom and (iii) on a pro forma basis,
assuming the consummation of the Acquisitions as of such date. The Acquisitions
will be treated as a combination of entities under common control similar to the
pooling-of-interests method of accounting. This table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and the Unaudited Pro Forma Condensed Consolidated
Balance Sheet, "Certain Transactions" and the Financial Statements and the notes
thereto included elsewhere in this Prospectus.

APRIL 30, 1998
------------------------------------------

PRO FORMA
ACTUAL AS ADJUSTED AS ADJUSTED
------------- ------------ -------------
Long-Term Debt............................................................ $ -- $ -- $ 20,408,546
Stockholders' Equity:
Preferred Stock, $.0001 par value; 2,500,000 shares authorized; no
shares issued and outstanding......................................... -- -- --
Common Stock, $.0001 par value; 25,000,000 shares authorized; 2,400,000
shares issued and outstanding (actual); 4,400,000 shares issued and
outstanding (as adjusted)(1); 6,700,000 shares issued and outstanding
(pro forma)(2)(3)....................................................... 240 440 670
Additional Paid-in Capital................................................ 293,865 8,729,665 12,638,735
Retained Earnings (Deficit)............................................... (377,028) (377,028) (1,786,328)
------------- ------------ -------------
(82,923) 8,353,077 10,853,077
Due from TDA Industries, Inc. and Affiliated Companies.................... -- -- (502,270)
------------- ------------ -------------
Total Stockholders' Equity (Deficit)...................................... (82,923) 8,353,077 10,350,807
------------- ------------ -------------
Total Capitalization...................................................... $ (82,923) $ 8,353,077 $ 30,759,353
------------- ------------ -------------
------------- ------------ -------------

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

(1) Includes 2,000,000 shares of Common Stock to be issued in the Public
Offering.

(2) Includes, in the pro forma column, 2,000,000 and 300,000 shares of Common
Stock to be issued to TDA and James E. Helzer, respectively, simultaneously
with the closing of the Public Offering in connection with the Acquisitions.
See "Certain Transactions."

(3) Does not include (i) 300,000 shares of Common Stock and 375,000 Warrants and
375,000 shares of Common Stock underlying such Warrants subject to the
Underwriter's Overallotment Option; (ii) 2,500,000 shares of Common Stock
issuable upon the exercise of the Warrants; (iii) 300,000 shares of Common
Stock issuable upon the exercise of the Company's outstanding Warrants; (iv)
450,000 shares of Common Stock issuable upon the exercise of the
Underwriter's Warrants and Stock Warrants; and (v) 1,000,000 shares of
Common Stock reserved for issuance pursuant to the Company's stock option
plan of which 700,000 shares of Common Stock are reserved for options to be
granted upon completion of the Public Offering. See "Management,"
"Description of Securities" "Underwriting," and "Selling Securityholders."

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited pro forma condensed consolidated financial
statements are presented to illustrate the effects of certain adjustments to the
historical financial statements of the Company, Eagle and JEH Eagle that would
result from the completion of the Public Offering and the Acquisitions and are
presented as if these transactions had occurred on the first day of the earliest
period presented in the Unaudited Pro Forma Condensed Consolidated Statements of
Operations and the last day of the tenth month of the current fiscal year for
the Unaudited Pro Forma Condensed Consolidated Balance Sheet.

The unaudited pro forma consolidated financial statements should be read in
conjunction with the notes thereto and also in conjunction with the respective
audited and unaudited historical financial statements and notes thereto of the
Company, Eagle and JEH Eagle appearing elsewhere herein.

The unaudited pro forma condensed consolidated financial statements are
presented for illustrative purposes only and do not purport to represent the
actual results and financial position of the consolidated entities had the
Public Offering and the Acquisitions occurred on the dates described above, nor
are they necessarily indicative of the future operating results or financial
position of the consolidated entities after the Public Offering and the
Acquisitions.

The Acquisitions will be accounted for as the combining of three entities
under common control similar to the pooling-of-interests method of accounting
with the net assets of Eagle and JEH Eagle recorded at historical carryover
values. The 2,000,000 shares of Common Stock to be issued to TDA will be
recorded at Eagle's and JEH Eagle's historical book values at the date of the
Acquisitions. Accordingly, these transactions will not result in any
re-evaluation of the Company's, Eagle's or JEH Eagle's assets or the creation of
additional goodwill. The 300,000 shares of the Company's Common Stock to be
issued to James E. Helzer will be accounted for as additional purchase price in
connection with the Acquisition by JEH Eagle of JEH Co. and such shares will be
valued at the public offering price of $5.00 per share.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 30, 1998

(HISTORICAL)
------------------------------------------------
EAGLE JEH/EAGLE
THE SUPPLY, SUPPLY, PRO FORMA
COMPANY INC. INC. COMBINED ADJUSTMENTS PRO FORMA
--------- ----------- ----------- ----------- ----------- -----------

ASSETS
CURRENT ASSETS:
$6,126,000 (1)
Cash.................................. $ 145,974 $ 23,087 $ 14,697 $ 183,758 78,591 (2) $ 6,388,349
Accounts and notes receivable--net.... 8,722,191 11,373,716 20,095,907 20,095,907
Inventories........................... 6,313,829 10,817,806 17,131,635 17,131,635
Deferred tax asset.................... 194,251 167,616 361,867 361,867
Due from related party................ 250,000 250,000 250,000
Other current assets.................. 204,138 432,529 276,115 912,782 912,782
--------- ----------- ----------- ----------- ----------- -----------
Total current assets.............. 350,112 15,685,887 22,899,950 38,935,949 6,204,591 45,140,540

IMPROVEMENTS AND EQUIPMENT-- Net........ 1,371,165 2,323,109 3,694,274 3,694,274
EXCESS COST OF INVESTMENT OVER NET ASSET
ACQUIRED--Net......................... 2,725,018 2,725,018 1,500,000 (3) 4,225,018
DEFERRED FINANCING COSTS................ 241,923 241,923 241,923
--------- ----------- ----------- ----------- ----------- -----------
TOTAL ASSETS............................ $ 350,112 $17,057,052 $28,190,000 $45,597,164 $7,704,591 $53,301,755
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable...................... $10,305,757 $8,957,345 $19,263,102 $19,263,102
Accrued expenses and other current
liabilities......................... $ 137,035 540,742 1,568,183 2,245,960 $ (10,000 )(1) 2,235,960
Current portion of long-term debt..... 11,000 1,012,638 1,023,638 1,023,638
Notes payable--shareholders........... 300,000 300,000 (300,000 )(1) 0
Loan payable--affiliated company...... 400,000 400,000 400,000
Federal and state income taxes due to
Parent.............................. (4,000) 101,000 324,000 421,000 421,000
--------- ----------- ----------- ----------- ----------- -----------
Total current liabilities......... 433,035 11,358,499 11,862,166 23,653,700 (310,000 ) 23,343,700

LONG TERM DEBT.......................... 7,106,888 14,278,020 21,384,908 (2,000,000 )(1) 19,384,908
DUE TO TDA INDUSTRIES, INC AND
AFFILIATED COMPANIES.................. 148,616 148,616 148,616
DEFERRED TAX LIABILITIES................ 54,724 19,000 73,724 73,724
--------- ----------- ----------- ----------- ----------- -----------
Total liabilities................. 433,035 18,520,111 26,307,802 45,260,948 (2,310,000 ) 42,950,948
--------- ----------- ----------- ----------- ----------- -----------

SHAREHOLDERS' EQUITY (DEFICIENCY)
Preferred shares...................... 0
Common shares......................... 240 59,300 30 59,570 (58,900 )(1) 670
Additional paid-in capital............ 293,865 1,000,000 1,349,970 2,643,835 8,436,000 (1) 12,638,735
58,900 (1)
1,500,000 (3)
Retained earnings..................... (377,028) 828,730 532,198 983,900 (2,770,228 )(2) (1,786,328)
--------- ----------- ----------- ----------- ----------- -----------
(82,923) 1,888,030 1,882,198 3,687,305 7,165,772 10,853,077
Less: Due from TDA Industries, Inc.
and affiliated companies............ (3,351,089) (3,351,089) 2,848,819 (2) (502,270)
--------- ----------- ----------- ----------- ----------- -----------
Total shareholders' equity
(deficiency).................... (82,923) (1,463,059) 1,882,198 336,216 10,014,591 10,350,807
--------- ----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY)................... $ 350,112 $17,057,052 $28,190,000 $45,597,164 $7,704,591 $53,301,755
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------

See notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(1) Reflects the Public Offering of 2,000,000 shares of Common Stock at an
offering price of $5.00 per share and 2,500,000 Warrants at an offering
price of $.125 per Warrant including the application of cash toward the
aggregate offering expenses of approximately $1,876,000 and the planned
reduction of debt of $2,000,000. See "Underwriting" and "Use of Proceeds."

(2) Reflects the consummation of the Acquisitions. Upon the closing of the
Public Offering, Eagle and JEH Eagle combined will have no less than
$1,000,000 in book value. The Due from TDA Industries, Inc. and Affiliated
Companies account ("Inter-company Account") includes a receivable for a
$502,270 mortgage obligation on property previously owned by Eagle on which
Eagle remains the primary obligor. The mortgage obligation reflected in
Eagle's financial statements for financial reporting purposes is offset by a
corresponding increase in the Inter-company Account. The dividend of
$2,848,819 is the amount that would cancel, in the form of a non-cash
dividend, the entire Due from TDA Industries, Inc. and affiliated companies,
except for the off-setting receivable. To the extent the dividend results in
a combined minimum equity for Eagle and JEH Eagle of less than $1,000,000,
TDA has agreed to pay the difference in cash within forty-five days after
the closing of the Public Offering. The $78,591 represents the amount of
repayment required from TDA assuming the Acquisitions had taken place on
April 30, 1998. The actual amount of the dividend will vary based on the
amount of the Inter-company Account and the combined equity of both Eagle
and JEH Eagle on the date the Acquisitions actually occur. See "Risk
Factors," "The Acquisitions" and "Certain Transactions."

(3) Reflects the issuance of 300,000 shares of Common Stock to be issued to
James E. Helzer. Such shares will be accounted for as additional purchase
price in connection with the acquisition by JEH Eagle of JEH Co. and have
been valued at the public offering price of $5.00 per share.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

TEN MONTHS ENDED APRIL 30, 1998
----------------------------------------------------------------------------------

THE EAGLE JEH/EAGLE PRO FORMA
COMPANY(10) SUPPLY, INC. SUPPLY, INC. COMBINED ADJUSTMENTS PRO FORMA
---------- ------------ ------------ ------------ ----------- ------------
REVENUES..................................... $ 47,170,583 $55,677,225 $102,847,808 $102,847,808
COST OF SALES................................ 37,210,797 43,181,116 80,391,913 80,391,913
---------- ------------ ------------ ------------ ------------
9,959,786 12,496,109 22,455,895 22,455,895
---------- ------------ ------------ ------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES................................... 8,877,418 10,219,674 19,097,092 $ 30,000(4) 19,620,092
433,000(1)
60,000(2)
DEPRECIATION AND AMORTIZATION 387,162 278,163 665,325 665,325
AMORTIZATION OF EXCESS OF COST OF INVESTMENT
OVER NET ASSET ACQUIRED.................... 160,295 160,295 83,000(3) 243,295
AMORTIZATION OF DEFERRED FINANCING COSTS..... 48,385 48,385 48,385
---------- ------------ ------------ ------------ ----------- ------------
9,264,580 10,706,517 19,971,097 606,000 20,577,097
---------- ------------ ------------ ------------ ----------- ------------
INCOME FROM OPERATIONS....................... 695,206 1,789,592 2,484,798 (606,000) 1,878,798
---------- ------------ ------------ ------------ ----------- ------------
INTEREST INCOME (EXPENSE)
Interest income............................ 21,490 22,255 43,745 43,745
Interest expense........................... $(10,000) (480,768) (955,649) (1,446,417) 150,000(5) (1,296,417)
---------- ------------ ------------ ------------ ----------- ------------
(10,000) (459,278) (933,394) (1,402,672) 150,000 (1,252,672)
---------- ------------ ------------ ------------ ----------- ------------
(LOSS) INCOME BEFORE (BENEFIT)
PROVISION FOR INCOME TAXES................. (10,000) 235,928 856,198 1,082,126 (456,000) 626,126
(BENEFIT) PROVISION FOR INCOME TAXES......... (4,000) 101,000 324,000 421,000 (169,000)(8) 252,000
---------- ------------ ------------ ------------ ----------- ------------
NET (LOSS) INCOME............................ $ (6,000) $ 134,928 $ 532,198 $ 661,126 $(287,000) $ 374,126
---------- ------------ ------------ ------------ ----------- ------------
------------
Basis Net Income per Share (9)............... $ 0.07
------------
------------
Weighted Average Number of Shares Outstanding
(9)........................................ 5,675,743
------------
------------
Diluted Net Income per Share (9)............. $ 0.06
------------
------------
Weighted Average Number of Shares Outstanding
and Dilutive Warrants (9).................. 5,915,743
------------
------------

See notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED JUNE 30, 1997
---------------------------------------------------------------------------------

THE EAGLE JEH PRO FORMA
COMPANY(10) SUPPLY, INC. COMPANY(11) COMBINED ADJUSTMENTS PRO FORMA
---------- ------------ ----------- ------------- ----------- ------------
REVENUES..................................... $57,575,712 $70,516,345 $ 128,092,057 $128,092,057
COST OF SALES................................ 46,104,588 54,226,199 100,330,787 100,330,787
---------- ------------ ----------- ------------- ------------
11,471,124 16,290,146 27,761,270 27,761,270
---------- ------------ ----------- ------------- ------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES................................... $ 675 9,968,759 16,686,072 26,655,506 $ 36,000 (4) 25,199,799
520,000 (1)
72,000 (2)
(2,083,707 (6)
DEPRECIATION AND AMORTIZATION................ 593,720 583,085 1,176,805 1,176,805
AMORTIZATION OF EXCESS OF COST OF INVESTMENT 100,000 (3)
OVER NET ASSETS ACQUIRED................... 192,000 (7) 292,000
AMORTIZATION OF DEFERRED FINANCING COSTS..... 58,000 (7) 58,000
---------- ------------ ----------- ------------- ----------- ------------
675 10,562,479 17,269,157 27,832,311 (1,105,707 ) 26,726,604
---------- ------------ ----------- ------------- ----------- ------------
(LOSS) INCOME FROM OPERATIONS................ (675) 908,645 (979,011 ) (71,041) 1,105,707 1,034,666
---------- ------------ ----------- ------------- ----------- ------------
OTHER INCOME (EXPENSE)
Interest income............................ 22,217 6,601 28,818 28,818
Interest expense........................... (599,086) (842,515 ) (1,441,601) 180,000 (5) (1,565,601)
(304,000 (7)
Registration costs......................... (370,353) (370,353) (370,353)
---------- ------------ ----------- ------------- ----------- ------------
(370,353) (576,869) (835,914 ) (1,783,136) (124,000 ) (1,907,136)
---------- ------------ ----------- ------------- ----------- ------------
(LOSS) INCOME BEFORE
(BENEFIT) PROVISION FOR INCOME TAXES....... (371,028) 331,776 (1,814,925 ) (1,854,177) 981,707 (872,470)
(BENEFIT) PROVISION FOR INCOME TAXES......... 140,000 140,000 (308,000 (8) (168,000)
---------- ------------ ----------- ------------- ----------- ------------
NET (LOSS) INCOME............................ $(371,028) $ 191,776 $(1,814,925) $ (1,994,177) $1,289,707 $ (704,470)
---------- ------------ ----------- ------------- ----------- ------------
---------- ------------ ----------- ------------- ----------- ------------
Basic Net Income per Share (9)............... $ (0.13)
------------
------------
Weighted Average Number of Shares Outstanding
(9)........................................ 5,523,068
------------
------------
Diluted Net Income per Share (9)............. $ (0.13)
------------
------------
Weighted Average Number of Shares Outstanding
and Dilutive Warrants (9).................. 5,523,068
------------
------------

See notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(1) To reflect the compensation payable pursuant to employment agreements with Messrs.
Fields and Friedman which commence upon closing of the Public Offering and
consummation of the Acquisitions. See "Management" and "Certain Transactions."
(2) To reflect amounts payable pursuant to the administrative and strategic services
agreements with TDA for office space, administrative, financial and strategic
consulting services, which commence upon completion of the Public Offering and
consummation of the Acquisitions.
(3) Reflects amortization over a 15 year period of the additional purchase price resulting
from the issuance of 300,000 shares to James E. Helzer in connection with the
acquisition by JEH Eagle of JEH Co.
(4) Reflects the amount payable in connection with the Underwriter's financial consulting
agreement.
(5) Reflects the reduction in interest expense in connection with the assumed pay-down of
long-term debt. See "Use of Proceeds."
(6) Reflects the compensation differential between James E. Helzer's aggregate salary and
S corporation distributions during the period prior to the sale of JEH Co. to JEH
Eagle and the contractual amount of Mr. Helzer's compensation subsequent thereto. This
adjustment is the result of changed circumstances that exist following the sale of JEH
Co. to JEH Eagle. Mr. Helzer's duties and responsibilities will not diminish with the
result that other costs will be incurred that would offset the pro forma adjustment to
compensation expenses. Management believes that this adjustment is necessary for
investors to more realistically access the impact of the contemplated acquisition. See
"Certain Transactions."
(7) Reflects amortization of goodwill over 15 years created by the acquisition of JEH Co.
by JEH Eagle; the interest expense differential between the interest cost associated
with the debt incurred to fund the acquisition and provide post acquisition working
capital compared to the historical interest expense incurred by JEH Co. for working
capital lines of credit and the amortization of deferred financing costs.
(8) To reflect income taxes relating to the foregoing adjustments and, with respect to the
year ended June 30, 1997, a pro forma tax benefit relating to the operations of JEH
Co. (Predecessor) during the period it was taxed as an S Corporation.
(9) Basic income (loss) per Common Share is based on the weighted average number of shares
outstanding and includes 2,100,000 shares issued in connection with the Company's
initial capitalization, 300,000 shares issued as part of the Company's Private
Placement, 2,000,000 and 300,000 shares to be issued to TDA and James E. Helzer,
respectively, in connection with the Acquisitions and 975,743 and 823,068 shares
("Additional Shares") in the ten months ended April 30, 1998 and year ended June 30,
1997, respectively, for the shares assumed to be issued in the Public Offering, the
proceeds of which would be used to retire $2,000,000 of debt and replace the capital
in excess of the respective period's earnings, which is represented by the non-cash
dividend. Dilutive net income (loss) per Common Share for the ten months ended April
30, 1998 also includes the dilutive effect of the 300,000 Warrants issued in the
Private Placement. The computations exclude shares to be issued in connection with the
Public Offering in excess of the Additional Shares. The Underwriter's Warrant and
options to be granted upon the closing of the Public Offering pursuant to the
Company's 1996 Stock Option Plan are not dilutive and have not been included. See
"Risk Factors," "Certain Transactions," "The Acquisitions" and the Financial
Statements and the Notes thereto.
(10) The Company was formed on May 1, 1996 and has had limited operations through April 30,
1998.
(11) Reflects the operations of JEH Co. for the year ended June 30, 1997 prior to its
Acquisition by JEH Eagle as of July 1, 1997.

SELECTED FINANCIAL INFORMATION

Prior to the contemplated Acquisitions, the Company has had limited
operations. The historical selected financial information included in the
statement of operations has been prepared on a basis which combines the Company
(organized on May 1, 1996), Eagle Supply, Inc. ("Eagle") and JEH/Eagle Supply,
Inc. ("JEH Eagle") (acquired on July 1, 1997) as three entities controlled by
TDA Industries, Inc. ("TDA") because the separate financial data of the Company
would not be meaningful. Information with respect to the Company is included
from May 1, 1996 (inception), information for Eagle is included for all periods
presented and information with respect to JEH Eagle is included from July 1,
1997.

The selected financial information presented below should be read in
conjunction with the consolidated financial statements and the notes thereto,
the unaudited financial statements and the notes thereto and the unaudited pro
forma condensed consolidated financial statements included elsewhere herein. The
historical information contained in the table at and for the fiscal years ended
June 30, 1997, 1996 and 1995 has been derived from audited financial statements,
and is qualified in its entirety by, and should be read in connection with the
audited financial statements (and the notes thereto) appearing elsewhere in this
Prospectus. The historical information at and for the fiscal years ended June
30, 1994 and 1993 have been derived from audited financial statements which are
not included in this Prospectus. The historical information at and for the ten
months ended April 30, 1998 and 1997 have been derived from unaudited financial
statements which, in the opinion of management, include all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation of the financial condition and results of operations. The unaudited
financial statements are included elsewhere in this Prospectus. The results of
interim periods are not necessarily indicative of the results to be obtained in
a full fiscal year. The selected financial information pro forma is derived from
the Unaudited Pro Forma Condensed Consolidated Financial Statements appearing
elsewhere herein. The following financial information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the "Unaudited Pro Forma Condensed Consolidated
Financial Statements."

SELECTED FINANCIAL INFORMATION

PRO FORMA(6)
------------------------
TEN MONTHS
YEAR ENDED ENDED
JUNE 30, APRIL 30,
1998 1997 1998
----------- ----------- -----------

THE COMPANY
COMBINED(1) APRIL 30,
JUNE 30 1998
---------------------------------------------------------- -----------

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

(1) Information with respect to the Company is included in the statement of
operations data from May 1, 1996 (inception), information for Eagle is
included for all periods presented and information with respect to JEH Eagle
is included from July 1, 1997.

(3) As used herein, EBITDA reflects net income (loss) increased by the effects
of interest expense, income tax provisions, depreciation and amortization
expense. EBITDA is used by management, along with other measures of
performance, to assess the Company's financial performance. EBITDA should
not be considered in isolation or as an alternative to measures of operating
performance or cash flows pursuant to generally accepted accounting
principles. In addition, the measure of EBITDA may not be comparable to
similar measures reported by other companies.

(6) See Unaudited Pro Forma Condensed Consolidated Statements of Operations.

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

The following discussion and analysis should be read in conjunction with the
Financial Statements and notes thereto appearing elsewhere in this Prospectus.

Prior to the contemplated Acquisitions, the Company has had limited
operations and activities consisting of seeking an underwriter, negotiating the
terms of the Acquisitions, negotiating and consummating a private placement for
the sale of common stock and warrants and a sale of promissory notes, seeking a
listing of the Company's securities on NASDAQ, and preparing and filing its
registration statement including ancillary documents and amendments. All
comparisons in Results of Operations and Liquidity and Capital Resources for
periods subsequent to July 1, 1997 relate to the combined activities of the
Company, Eagle and JEH Eagle, subsequent to its acquisition which was effective
as of July 1, 1997, as three entities under common control. All comparisons for
any periods prior to July 1, 1997 relate to the combined operations of the
Company and Eagle only. The separate financial information for the Company is
not meaningful. The discussion and analysis included under the caption
Predecessor Company relates to the operations of JEH Co. prior to being acquired
by JEH Eagle.

INTRODUCTION

The Company was organized on May 1, 1996 to raise capital and acquire, own,
integrate and operate seasoned, privately-held companies engaged in the
wholesale distribution of roofing supplies and related products industry and
companies which manufacture products for or supply products to such industry.
Simultaneously with the closing of the Public Offering, the Company will
consummate the Acquisitions. Although the primary focus of the Company's
expansion and acquisition program will be on seeking suitable acquisition
candidates which are engaged in the wholesale distribution of roofing supplies
and related products, the Company will consider the purchase of manufacturers or
vendors of products which may be distributed through its wholesale distribution
business.

Eagle, which was founded in Florida in 1905, distributes roofing supplies
and related products to contractors and subcontractors engaged in commercial and
residential roofing repair and the construction of new residential and
commercial properties. JEH Co. was founded in 1982 by James E. Helzer and
substantially all of the assets and business of JEH Co. was sold to JEH Eagle in
July of 1997. JEH Eagle distributes roofing supplies, drywall and plywood to
roofing contractors, builders, and developers engaged primarily in the
construction industry. Both Eagle and JEH Eagle rely on their own direct sales
forces and distribution facilities to generate sales. Historically, Eagle and
JEH Eagle have entered into arrangements with customers on a basis permitting
either party to the arrangement to have the right to terminate the arrangement
at any time prior to performance without liability or penalty. Upon consummation
of the Acquisitions, Eagle and JEH Eagle will become wholly-owned subsidiaries
of the Company and will constitute the only business operations of the Company
until and unless the Company consummates additional acquisitions.

The Company has funded itself since inception by (i) selling 300,000 shares
of its Common Stock and 300,000 Warrants in the Private Placement pursuant to
which the Company derived aggregate gross proceeds of $300,000; (ii) issuing
$300,000 in principal amount of its promissory notes to TDA ($150,000) and two
other stockholders, Hi-Tel Group, Inc. ($100,000) and Paul Schmidt ($50,000) and
(iii) incidental other borrowings from TDA.

COMPARISON OF TRENDS OF EAGLE, JEH CO. AND JEH EAGLE

REVENUES

Although both Eagle and JEH Eagle rely heavily on repeat business, they have
differing strategies on entering into new markets. Eagle has historically
entered into new or grew in existing markets based solely

upon management's evaluation of where it believed growth was expected and
whether these areas could support another roofing distributor whereas JEH Co.
historically entered into new markets on the heels of storms and, therefore, JEH
Co.'s new distribution centers had the tendency to show more immediate growth in
revenues which would help defray startup costs. As storm-related revenues
subside, management of JEH Co. would evaluate whether or not the area could
support the distribution center based upon future growth expectations whereas
Eagle's new distributions centers were gradually opened as new and permanent
centers.

This conceptual difference has the tendency to cause more fluctuation in JEH
Eagle's revenues than in Eagle's as shown in the numbers presented. Although it
is the Company's belief that both entities have a solid core of repeat business
that will continue to sustain growth from existing operating centers, the
Company anticipates most of Eagle's and JEH Eagle's future growth to come from
the opening of new distribution centers and the introduction of new product
lines into existing distribution centers. Generally, as a percentage of the
combined revenues of Eagle and JEH Co. in non-storm related periods, Eagle and
JEH Co. contributed approximately 45% and 55%, respectively, of such combined
revenues. Recently, neither Eagle nor JEH Co. have had the benefit of
significant storms to increase revenues, but when they occur, JEH Eagle should
benefit to a greater degree than Eagle because of the likelihood of storms of
more intensity and frequency occurring in JEH Eagle's market areas.

The following is a comparison of accounts receivable turnover levels for
Eagle, JEH Eagle and JEH Eagle's predecessor, JEH Co. Eagle's accounts
receivable turnover ratios have remained within a fairly narrow range while JEH
Eagle's and JEH Co.'s accounts receivable turnover ratios show a declining
trend. This declining trend may be attributed to increased revenues in 1994,
1995 and 1996 from storm related business in the Texas markets, the continued
growth in the Colorado markets and the expansion into the Indianapolis, Indiana,
market followed by a subsequent slow-down in business due to the "El Nino"
weather patterns and the recent paucity of significant storms which resulted in
the business of certain customers slowing dramatically. As result of these
factors, JEH Co. began to experience difficulty in collecting its receivables
during the end of its 1996 year and the six month period ending June 30, 1997.

ACCOUNTS RECEIVABLE
PERIOD TURNOVER RATIO*
------------------------ ---------------------

Eagle
Ten Months April 30,
1998 5.73
1997 6.33
Fiscal Year June 30,
1997 6.39
1996 6.52
1995 6.27
1994 5.97
JEH Eagle and JEH Co.
Ten Months April 30,
1998 6.82
1997 7.57
Six Months June 30,
1997 6.72
1996 7.58
Calendar Year
1996 9.09
1995 11.24
1994 12.38

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

* Computation is based on each period's credit sales divided by average
accounts receivable.

GROSS PROFIT MARGINS

Although both Eagle and JEH Eagle operate in similar industries, more of JEH
Co.'s historical revenues have come from sales of residential roofing
(approximately 79% on average) than sales of commercial roofing (approximately
6% on average) or other products (approximately 15% on average). Eagle's
historical revenues have come from sales of residential roofing (approximately
55% on average), sales of commercial roofing (approximately 31% on average) and
other products (approximately 14% on average). Revenues generated from
residential sales generally produce higher gross profit margins than commercial
sales which are generally shipped directly to the customer from the vendor. For
this reason, JEH Co.'s historical gross profit margins on average are
approximately two percentage points higher than Eagle's gross profit margin,
approximately 22.3% and 20.3%, respectively. The Company expects that in the
future it will be able to consolidate Eagle's and JEH Eagle's purchasing power
and therefore be able to buy product more favorably.

The following is a comparison of inventory turnover levels for Eagle, JEH
Eagle and JEH Co. Eagle's inventory turnover ratios have been adjusted for
purposes of this analysis to the lower of FIFO cost or market and all of the
ratios exclude the impact of purchases made from vendors for direct shipment. As
can be seen from the following comparison, Eagle's inventory turnover ratios
have remained within a narrower range than the inventory turnover ratios of JEH
Eagle and JEH Co. Whereas Eagle maintains fairly steady levels of inventory, the
JEH Eagle and JEH Co. inventory levels can flucuate significantly in
anticipation of storm related business. At April 30, 1998, June 30, 1997, April
30, 1997 and June 30, 1996, JEH Eagle and JEH Co.'s inventory levels had been
increased in anticipation of storms that did not materialize, which resulted in
a decline in inventory turnover ratios.

INVENTORY
PERIOD TURNOVER RATIO*
------------------------ ---------------------

Eagle
Ten Months April 30,
1998 5.69
1997 5.73
Fiscal Year June 30,
1997 6.25
1996 7.04
1995 6.96
1994 6.19
JEH Eagle and JEH Co.
Ten Months April 30,
1998 5.12
1997 5.83
Six Months June 30,
1997 4.90
1996 6.38
Calendar Year
1996 7.80
1995 9.07
1994 9.38

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

* Computation is based on each period's out of stock sales divided by average
accounts receivable.

RESULTS OF OPERATIONS

TEN-MONTH PERIOD ENDED APRIL 30, 1998 COMPARED TO
TEN-MONTH PERIOD ENDED APRIL 30, 1997

Revenues of the Company during the ten-month period ended April 30, 1998
increased by approximately $55,712,000 (118.2%) compared to the 1997 ten-month
period. This increase is due almost entirely to the acquisition of JEH Co., in
July 1997 by JEH Eagle. Sales of JEH Eagle during the 1998 ten-month period were
approximately $55,677,000. Excluding the sales of JEH Eagle, revenues of the
Company would have been approximately $47,171,000 in the 1998 ten-month period,
an increase of approximately $35,000 (less than .1%) from the comparable 1997
ten-month period. This slight increase was comprised of an increase of
approximately $1,951,000 in sales to customers out of warehouse inventory,
offset by a decrease in direct sales shipments to customers from vendors of
approximately $1,916,000. Sales of both Eagle and JEH Eagle during the 1998
ten-month period were adversely affected by the "El Nino" weather patterns.
Unusually heavy and record rainfall in the southeast and the paucity of
significant storms in the southwest negatively impacted sales of Eagle and JEH
Eagle, respectively, whereas hurricanes and intense rainstorms accompanied by
strong winds, which can cause significant roof damage, did not occur in any
significant amount in the Company's market areas.

Cost of goods sold increased between the 1998 and 1997 ten-month periods at
a lesser rate than the increase in revenues between these ten-month periods.
Accordingly, cost of goods sold as a percentage of revenues decreased to 78.2%
in the ten-month period ended April 30, 1998 from 79.3% in the ten-month period
ended April 30, 1997, and gross profit as a percentage of revenues increased to
21.8% in the ten-month period ended April 30, 1998 from 20.7% in the ten-month
period ended April 30, 1997. This increase in gross profit margin may be
attributed primarily to the relative increase in the 1998 ten-month period in
sales to customers out of warehouse inventory which carry a higher gross profit
margin than direct sales shipments to customers from vendors. Whereas a
significant amount of the sales to Eagle's customers are direct shipments from
vendors, almost all of the sales to customers of JEH Eagle are out of warehouse
inventory. The Company's management is unable to predict if sales to customers
out of warehouse inventory is a trend that will continue in the future.

Operating expenses increased by approximately $11,035,000 (123.5%) between
the 1998 and 1997 ten-month periods. This increase is due almost entirely to the
acquisition of JEH Co. by JEH Eagle as of July 1, 1997. Operating expenses of
JEH Eagle during the 1998 ten-month period were approximately $10,707,000,
including approximately $160,000 of amortization of cost of investment over net
assets acquired (goodwill) and approximately $48,000 of amortization of deferred
financing costs attributable to the acquisition. Excluding the operating
expenses of JEH Eagle, operating expenses of the Company would have been
approximately $9,265,000 in the 1998 ten-month period, an increase of
approximately $328,000 (3.7%) from the 1997 ten-month period. This increase is
primarily due to the increase in data processing expenses of approximately
$240,000 due to an upgrading, in March 1997, of Eagle's data processing hardware
and software, and an increase in payroll of approximately $225,000 due primarily
to additional manpower needed to service warehouse sales. These increases were
partially offset by a decrease in rent expense of approximately $111,000
attributable to Eagle's entering into a lease for part of its corporate offices
to a third party tenant in May 1997. Operating expenses as a percentage of
revenues was 19.4% in the 1998 period compared to 19% in the 1997 ten-month
period.

Interest expense increased by approximately $942,000 (186.7%) between the
1998 and 1997 ten-month periods. This increase is due principally to the
interest expense incurred by JEH Eagle of approximately $956,000 on its
long-term debt used primarily to fund its acquisition in July 1997 of JEH Co.
Excluding the interest expense of JEH Eagle, interest expense of the Company
would have been approximately $491,000 in the 1998 ten-month period, a decrease
of approximately $14,000 (2.7%) from the 1997 ten-month period. This decrease is
due to the reduction in interest expense on borrowings under Eagle's revolving

credit facility (approximately $24,000) offset by an increase in interest
expense on short-term borrowings by the Company (approximately $10,000).

FISCAL YEAR ENDED JUNE 30, 1997 COMPARED TO
FISCAL YEAR ENDED JUNE 30, 1996

Revenues of the Company during the fiscal year ended June 30, 1997 decreased
by approximately $1,687,000 (2.8%) compared to the 1996 fiscal year. This
decrease was primarily due to the decrease in revenues derived from storm
related business in fiscal 1996 from Hurricane Opal (approximately $6,495,000),
and a decrease in revenues from distribution centers that did not benefit from
Hurricane Opal (approximately $578,000). This decrease in revenues was partially
offset by additional revenues generated in fiscal 1997 from distribution centers
opened in fiscal 1996 (approximately $5,386,000).

At June 30, 1997, all of the Company's fifteen distribution centers had been
in operation for at least one year. No distribution centers were closed during
this fiscal year.

Cost of goods sold decreased between the fiscal years 1997 and 1996 at a
lesser rate than the decrease in revenues between these fiscal years.
Accordingly, cost of goods sold as a percentage of revenues increased to 80.1%
in the fiscal year 1997 from 78.8% in the fiscal year 1996, and gross profit as
a percentage of revenues decreased to 19.9% in the fiscal year 1997 from 21.2%
in the fiscal year 1996. This decrease in gross profit margin may be attributed
primarily to the decrease in fiscal 1997 in sales generated at distribution
centers which benefitted from storm related business and sales to customers out
of warehouse inventory which carry a higher gross profit margin than direct
sales shipments to customers from vendors.

Operating expenses increased by approximately $675,000 (6.8%) between the
fiscal years 1997 and 1996. Operating expenses in fiscal 1997 includes
approximately $546,000 of operating expenses attributable to distribution
centers opened in fiscal 1996. Operating expenses as a percentage of revenues
were 18.3% in the fiscal year 1997 compared to 16.7% in the fiscal year 1996.

Other expenses of approximately $370,000 in fiscal 1997 represents
registration costs and expenses incurred by the Company in connection with the
filing in 1996 of its registration statement for an initial public offering of
its securities.

FISCAL YEAR ENDED JUNE 30, 1996 COMPARED TO
FISCAL YEAR ENDED JUNE 30, 1995

Revenues of the Company during the fiscal year ended June 30, 1996 increased
by approximately $8,779,000 (17.4%) compared to the 1995 fiscal year. This
increase was primarily due to revenues in the aggregate amount of approximately
$4,057,000 generated from new distribution centers opened during fiscal 1996,
improvement in business in market areas served by distribution centers opened
for at least one year (approximately $1,487,000), and additional business
resulting from Hurricane Opal of approximately $7,842,000 as hurricanes as well
as intense rainstorms accompanied by strong winds can cause significant roof
damage. During the fiscal year ended June 30, 1996, revenues decreased by
approximately $4,608,000, which revenues had been generated from a distribution
center sold as of June 30, 1995.

At June 30, 1996, the Company had ten distribution centers opened for at
least one year. The Company's revenues during the fiscal year ended June 30,
1996 from distribution centers opened for at least one year increased by
approximately $9,329,000 (20.3%) from the fiscal year ended June 30, 1995. This
increase in such revenues may be attributed to an improvement in business in
general and the additional business that resulted from the hurricane damage in
Florida in the late summer and fall of 1995.

Cost of goods sold increased between the fiscal years 1996 and 1995 at a
lesser rate than the increase in revenues between these fiscal years.
Accordingly, cost of goods sold as a percentage of revenues decreased to 78.8%
in the fiscal year 1996 from 80.7% in the fiscal year 1995, and, accordingly,
gross profit

as a percentage of revenues increased to 21.2% in the fiscal year 1996 from
19.3% in the fiscal year 1995. This increase in gross profit margin may be
attributed primarily to the increase in fiscal 1996 in sales to customers out of
warehouse inventory which carry a higher gross profit margin than direct sales
shipments to customers from vendors. The Company's management is unable to
determine if the increase in revenues during the fiscal year ended June 30,
1996, as compared to its fiscal year ended June 30, 1995, was the result of unit
price increases to any significant extent as opposed to increased sales volume.

Operating expenses increased by approximately $981,000 (11%) between the
fiscal years 1996 and 1995 at a lesser rate than the increase in revenues
between these fiscal years. Operating expenses in fiscal 1995 includes
approximately $1,064,000 of operating expenses attributable to the distribution
centers that was sold as of June 30, 1995; and fiscal 1996 includes
approximately $1,007,000 of start-up costs and expenses attributable to new
distribution centers operations, and increased operating expenses in the
aggregate amount of approximately $1,039,000 comprised primarily of payroll and
related costs and transportation expenses directly related to the increase in
business in fiscal 1996. Operating expenses as a percentage of revenues were
16.7% in the fiscal year 1996 compared to 17.6% in the fiscal year 1995.

Interest expense increased by approximately $316,000 between fiscal 1996 and
1995. Interest expense in fiscal 1995 is for less than a full year since
borrowings under Eagle's revolving credit facility commenced in December 1994.
See "--Liquidity and Capital Resources."

FISCAL YEAR ENDED JUNE 30, 1995 COMPARED TO
FISCAL YEAR ENDED JUNE 30, 1994

Revenues of the Company during the fiscal year ended June 30, 1995 decreased
by approximately $3,442,000 (6.4%) compared to the 1994 fiscal year. This
decrease was primarily due to the disposition in fiscal 1994 of two distribution
centers located in south Florida which were not profitable but generated
revenues in the aggregate amount of approximately $6,704,000 in that fiscal
year. This decrease in revenues was partially offset from revenues in the
aggregate amount of approximately $2,726,000 generated in fiscal 1995 from two
distribution centers opened in July 1994.

At June 30, 1995, the Company had eight distribution centers opened for at
least one year. The Company's revenues during the fiscal year ended June 30,
1995 from distribution centers opened at least one year increased only nominally
(approximately $303,000) from the fiscal year ended June 30, 1994. During the
fiscal year ended June 30, 1994, revenues decreased by approximately $6,971,000,
which revenues had been generated from two distribution centers which, as noted
above, were disposed of during this fiscal year.

Cost of goods sold decreased between the fiscal years 1995 and 1994 at a
lesser rate than the decrease in revenues between these fiscal years.
Accordingly, cost of goods sold as a percentage of revenues increased to 80.7%
in the fiscal year 1995 from 80.2% in the fiscal year 1994, and, accordingly,
gross profit as a percentage of revenues decreased to 19.3% in the fiscal year
1995 from 19.8% in the fiscal year 1994. This decrease in gross profit margin
may be attributed primarily to the decrease in fiscal 1995 in sales to customers
out of warehouse inventory which carry a higher gross profit margin than direct
sales shipments to customers from vendors.

Operating expenses decreased by approximately $1,008,000 (10.2%) between the
fiscal years 1995 and 1994 at a greater rate than the decrease in revenues
between these fiscal years. Operating expenses in fiscal 1994 includes
approximately $2,416,000 of operating expenses attributable to the two disposed
south Florida distribution centers; and operating expenses in fiscal 1995
includes approximately $985,000 of start-up costs and expenses attributable to
new distribution center operations and costs and expenses incurred in connection
with winding down the operations in south Florida. Operating expenses as a
percentage of revenues were 17.6% in the fiscal year 1995 compared to 18.4% in
the fiscal year 1994.

Interest expense increased by approximately $254,000 between the fiscal
years 1995 and 1994. During the fiscal year ended June 30, 1995, the Company
paid interest on the amount of Eagle's borrowings under its revolving credit
facility which commenced in December 1994. See "--Liquidity and Capital
Resources."

PREDECESSOR COMPANY

The following discussion and analysis should be read in conjunction with the
JEH Co. Financial Statements and notes thereto appearing elsewhere in this
Prospectus. This discussion and analysis are included for information purposes
only since JEH Eagle acquired JEH Co. effective July 1, 1997.

JEH EAGLE TEN-MONTH PERIOD ENDED APRIL 30, 1998 COMPARED TO
JEH CO. TEN-MONTH PERIOD ENDED APRIL 30, 1997

Revenues during the ten-month period ended April 30, 1998 decreased by
approximately $3,966,000 (6.7%) compared to the 1997 ten-month period. This
decrease may be primarily attributed to the adverse effects of the "El Nino"
weather patterns and the paucity of significant storms in JEH Eagle's market
areas.

Cost of goods sold decreased between the 1998 and 1997 ten-month periods at
a slightly greater rate than the decrease in revenues between these ten-month
periods. Accordingly, cost of goods sold as a percentage of revenues decreased
to 77.6% in the 1998 period from 77.7% in the 1997 period, and, accordingly,
gross profit as a percentage of revenues increased to 22.4% in the 1998 period
from 22.3% in the 1997 period.

Operating expenses decreased by approximately $1,926,000 (15.2%) between the
1998 and 1997 ten-month periods at a greater rate than the decrease in revenues
between these periods. This decrease is primarily due to the reduction in the
compensation of the owner of JEH Co. (approximately $2,078,000) since the
acquisition in July 1997. Prior to the acquisition in July 1997, JEH Co. was a
Subchapter S corporation, and the compensation of its owner was discretionary.
Operating expenses as a percentage of revenues were 19.2% in the 1998 period
compared to 21.2% in the 1997 period.

Interest expense increased by approximately $271,000 between the 1998 and
1997 ten-month periods. This increase is due principally to the increase in
interest expense resulting from the increase in JEH Eagle's long-term debt
incurred to fund its acquisition of JEH Co. in July 1997.

SIX MONTH PERIOD ENDED JUNE 30, 1997 COMPARED TO
SIX MONTH PERIOD ENDED JUNE 30, 1996

Revenues of JEH Co. during the six-month period ended June 30, 1997
decreased by approximately $3,882,000 (11.8%) compared to the six-month period
ended June 30, 1996. This decrease may be primarily attributed to a reduction in
revenues in its Texas markets (approximately $9,111,000) due to the adverse
effects of the "El Nino" weather patterns and the paucity of significant storms
in its market areas, offset by the continued growth in its Colorado markets
(approximately $3,314,000) and its Indianapolis, Indiana, market (approximately
$1,884,000).

Cost of goods sold decreased between the 1997 and 1996 six-month periods at
a greater rate than the decrease in revenues between these six-month periods.
Accordingly, cost of goods sold as a percentage of revenues decreased to 73.7%
in the 1997 six-month period from 78.4% in the 1996 six-month period, and,
accordingly, gross profit as a percentage of revenues increased to 26.3% in the
1997 six-month period from 21.6% in the 1996 six-month period.

Operating expenses increased by approximately $2,445,000 (41.5%) between the
1997 and 1996 six-month periods at a greater rate than the increase in revenues
between these periods. This increase is primarily due to an increase in the
provision for doubtful accounts of approximately $2,055,000 due to the
deterioration of certain customer accounts receivable. Management of JEH Co. has
historically based its

provision for doubtful accounts on an evaluation of the levels of its trade
accounts receivable, the aging and collection history of such receivables, and
the business conditions in each market area in which JEH Co. operated. In
establishing its estimates of the levels of the provisions for doubtful accounts
required for each reporting period, management also estimated the value of the
collateral and/or the personal guarantees received from certain customers with
past-due balances. The majority of the provision for doubtful accounts relates
to specific customers with past-due balances. During the latter part of calendar
1996, certain customer accounts began to age, and JEH Co. began to experience
more difficulty in collecting its receivables. Accordingly, JEH Co. increased
its provision for doubtful accounts and related allowance for doubtful accounts
to $844,235 and $321,718, respectively, in calendar 1996 from $334,732 and
$181,336, respectively, in 1995. Additionally, write-offs of its customer
accounts increased to $703,853 in 1996 from $334,732 in 1995. JEH Co. realized
increased revenues from its customers in 1996 from business related to storms in
certain of its market areas; however, no such storms occurred in the spring of
1997 in any of JEH Co.'s market areas. As a result, the business of certain of
JEH Co.'s customers slowed dramatically and receivables continued to
deteriorate. As a result of the foregoing circumstances, which changed during
the six-month period ended June 30, 1997 as compared to the latter part of
calendar 1996, the level and age of certain customers' accounts had worsened
significantly from prior periods, and other customers who have historically been
current began to pay late and their accounts began to age as well. Accordingly,
management performed a critical assessment of the quality of its receivables and
current business conditions and determined that an increase in the allowance for
doubtful accounts of $2,232,338 at June 30, 1997 was appropriate. Other
increases in operating expenses during the 1997 six-month period included
commissions (approximately $265,000) and increased payroll and related costs
(approximately $97,000). Operating expenses as a percentage of revenues were
28.7% in the 1997 six-month period compared to 17.9% in the 1996 six-month
period.

Interest expense increased by approximately $76,000 between the 1997 and
1996 six-month periods. This increase is due principally to increased borrowing
incurred by JEH Co. used primarily to fund its growth in current markets and
expansion into new markets.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO
YEAR ENDED DECEMBER 31, 1995

Revenues of JEH Co. during the year ended December 31, 1996 increased by
approximately $1,072,000 (1.5%) compared to the year ended December 31, 1995.
This increase may be primarily attributed to JEH Co.'s expansion into the
Indianapolis, Indiana, market (approximately $3,488,000) and JEH Co.'s continued
growth in its Colorado markets (approximately $4,371,000), offset by a decline
in revenues in its Texas markets (approximately $6,787,000). The decline in the
Texas markets may be attributed to the slow-down in business generated from the
significant storms experienced in 1995 and the lack of any significant storms in
1996.

Cost of goods sold increased between the 1996 and 1995 years at a greater
rate than the increase in revenues between these years. Accordingly, cost of
goods sold as a percentage of revenues increased to 79% in 1996 from 77.8% in
1995, and, accordingly, gross profit as a percentage of revenues decreased to
21% in 1996 from 22.2% in 1995. This decrease in gross profit margins may be
directly attributable to the decrease in storm related revenues which tend to
carry higher gross profit margins.

Operating expenses decreased by approximately $1,166,000 (7.3%) between the
1996 and 1995 years at a greater rate than the decrease in revenues between
these years. This decrease is primarily due to a reduction in the compensation
of the owner of JEH Co. (approximately $1,659,000), offset by increased expenses
attributable to the expansion into the Indianapolis, Indiana, market
(approximately $370,000), and an increase in the provision for doubtful accounts
(approximately $291,000) due to the deterioration of certain customer accounts
receivable. Operating expenses as a percentage of revenues were 19.8% in 1996
compared to 21.7% in 1995.

Interest expense increased by approximately $217,000 between the 1996 and
1995 years. This increase is due principally to increased borrowing by JEH Co.
to fund its growth in current markets and expansion into new markets.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO
YEAR ENDED DECEMBER 31, 1994

Revenues of JEH Co. during the year ended December 31, 1995 increased by
approximately $15,520,000 (26.6%) compared to the year ended December 31, 1994.
This increase may be primarily attributed to an increase in revenues in JEH
Co.'s Texas markets (approximately $14,119,000), which may be attributed to the
business generated from significant storms, and JEH Co.'s continued growth in
its Colorado markets (approximately $6,124,000), which also benefited from storm
related business, offset by a decline in revenues due to the withdrawal from the
Oklahoma market (approximately $4,723,000).

Cost of goods sold increased between the 1995 and 1994 years at a lesser
rate than the increase in revenues between these years. Accordingly, cost of
goods sold as a percentage of revenues decreased to 77.8% in 1995 from 79.8% in
1994, and, accordingly, gross profit as a percentage of revenues increased to
22.2% in 1995 from 20.2% in 1994. This increase in gross profit margins may be
directly attributable to the increase in storm related revenues which tend to
carry higher gross profit margins.

Operating expenses increased by approximately $4,679,000 (41.4%) between the
1995 and 1994 years at a greater rate than the increase in revenues between
these years. This increase is primarily due to an increase in the compensation
of the owner of JEH Co. (approximately $1,635,000), other payroll and related
costs (approximately $1,461,000), commissions (approximately $203,000), vehicle
expenses (approximately $307,000), insurance (approximately $210,000) and an
increase in the provision for doubtful accounts (approximately $163,000). These
increases in operating expenses, except perhaps for the increase in the
compensation of the owner of JEH Co., may be directly attributable to the
increased revenues generated from storm related business in JEH Co.'s Texas and
Colorado markets. Operating expenses as a percentage of revenues were 21.7% in
1995 compared to 19.4% in 1994.

Interest expense increased by approximately $108,000 between the 1995 and
1994 years. This increase is due principally to increased borrowing by JEH Co.
used primarily to fund its growth in current markets and expansion into new
markets.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its operations through operating cash
flow, support from TDA or affiliates of TDA and the proceeds from the Company's
June 1996 private placement and February 1998 issuance of promissory notes.

Eagle is a party to a Loan Agreement (the "Eagle Facility") which expires in
2002 and provides for secured borrowing consisting of a revolving credit
facility in the amount of $7.5 million. The Eagle Facility is collateralized by
certain of Eagle's current assets, approximating $15,036,000 at April 30, 1998.
The initial borrowing, in the amount of approximately $4.6 million, was advanced
to TDA partially in payment of intercompany debt. TDA has guaranteed the
obligations of Eagle under the Loan Agreement. At June 30, 1997 and April 30,
1998, Eagle's borrowings under its revolving credit facility were $6,693,236 and
$6,615,618, respectively. In May 1998, the Eagle Facility was amended to include
a $900,000 equipment loan. The Eagle Facility borrowings are based on a formula
relating to certain levels of receivables and inventory. Except for the
equipment loan, only interest is payable monthly and is based on a floating rate
equal to the lender's prime rate plus one-half percent or Libor plus two and
one-half percent, at Eagle's option. The principal amount of the equipment loan
is payable in equal consecutive monthly installments based upon a 75 month
amortization schedule with any remaining principal amount due upon the earlier
of August 1, 2004 or the end of the facility's initial or renewal term.

The Company's working capital was approximately $15,282,000 at April 30,
1998 (including approximately $11,038,000 of working capital of JEH Eagle)
compared to $6,233,000 at June 30, 1997. At April 30, 1998, the Company's
current ratio was 1.65 to 1 compared to 1.73 to 1 at June 30, 1997.

During the ten-month period ended April 30, 1998, cash flows used in
operating activities approximated $71,000, such amount consisted primarily of
net income of $661,000, depreciation and amortization of $874,000, allowance for
doubtful accounts of $431,000, decreased levels of other assets of $606,000,
increased levels of trade accounts payable of $4,023,000, accrued expenses and
other current liabilities of $110,000, and federal and state taxes due to Parent
of $281,000, offset by increased by levels of deferred income taxes of $170,000,
accounts and notes receivables of $3,670,000, and inventories of $3,217,000.
During the fiscal year ended June 30, 1997, cash flows used in operating
activities approximated $767,000. Such amount consisted primarily of
depreciation and amortization of $594,000 and decreased levels of inventories of
$320,000, offset by a net loss of $179,000, increased levels of accounts and
notes receivable of $223,000, decreased levels of trade accounts payable of
$430,000, accrued expenses and other current liabilities of $162,000, and
federal and state taxes due to Parent of $653,000.

During the ten-month period ended April 30, 1998, cash flows used in
investing approximated ($3,193,000). Such amounts consisted primarily of capital
expenditures of $1,249,000 and payment for the purchase of JEH Co. of
$1,994,000. During the fiscal year ended June 30, 1997 cash flows used in
investing activities approximated $216,000. Such amount consisted primarily of
capital expenditures of $296,000, offset by proceeds from the sale of equipment
of $80,000.

Capital expenditures approximated $296,000, $900,000 and $1,249,000 during
the fiscal years ended June 30, 1997 and 1996 and ten-month period ended April
30, 1998, respectively. Management of the Company presently anticipates a
significant increase in such expenditures in the next twelve months of not less
than $2,000,000, of which approximately $1,600,000 will be financed and used for
the purchase of trucks and forklifts for the Company's currently existing
operations, in anticipation of increased business and to upgrade its vehicles to
compete better in its market areas.

During the ten-month period ended April 30, 1998, cash flows provided by
financing activities approximated $2,128,000. Such amount consisted primarily of
principal borrowings on long-term debt of $113,223,000, proceeds from the
issurance of notes payable--shareholders of $300,000 and loan payable--
affiliated company of $400,000 and a capital contribution from the Parent of
$1,350,000, offset by an increase in deferred registration costs of $204,000,
principal reductions on long-term debt of $111,393,000, a decrease in due to
Parent and affiliated companies of $647,000 and dividends paid to Parent of
$900,000. During the fiscal year ended June 30, 1997, cash flows provided by
financing activities approximated $1,575,000. Such amount consisted primarily of
principal borrowings on long-term debt of $64,165,000 and a decrease in due from
Parent and affiliated companies of $1,258,000, offset by principal reductions on
long-term debt of ($62,648,000) and dividends paid to Parent of $1,250,000.

During Eagle's fiscal years ended June 30, 1996 and June 30, 1997, Eagle
made dividend payments of $1,097,000 and $1,250,000, respectively, to TDA. After
June 30, 1997 through April 30, 1998, Eagle made dividend payments of $900,000
to TDA and will continue to make dividend payments to TDA until the Public
Offering is completed and the Acquisitions are consummated. Such continuing
dividend payments will be made monthly and will be in the approximate amount of
$150,000 per month. Additionally, during each of said fiscal years, TDA
allocated to Eagle the sum of $50,000 for accounting and auditing fees. Upon the
closing of the Public Offering and consummation of the Acquisitions all such
accounting and auditing fees will be incurred directly by Eagle. See "Certain
Transactions."

Upon closing of the Public Offering and consummation of the Acquisitions,
Eagle and JEH Eagle combined will have no less than $1,000,000 in book value
after Eagle cancels, in the form of a non-cash dividend, all indebtedness of TDA
to Eagle, except for an approximately $502,000 receivable from TDA relating to a
mortgage in the same amount on property previously owned by Eagle and for which
Eagle remains the primary obligor, with TDA contributing sufficient cash, within
forty-five days after the closing

of the Public Offering and consummation of the Acquisitions to achieve that book
value in the event of a deficiency. Eagle will not make dividend payments to the
Company following the closing of the Public Offering and the consummation of the
Acquisitions. It is anticipated that the increase in available funds will be
partially offset by the salaries to be paid to Messrs. Fields and Friedman in
the aggregate annual amount of $520,000 and the aggregate annual amount of
$72,000 payable to TDA pursuant to the respective employment and services
agreements of each of Messrs. Fields and Friedman and of TDA with the Company
and JEH Eagle. If effected as of April 30, 1998, the amount of such non-cash
dividend from Eagle to TDA would have been approximately $2,849,000. See
"Certain Transactions."

As Eagle has historically made dividend payments to TDA, the current monthly
dividend payments to TDA are not anticipated to vary Eagle's cash sufficiency
from it's historical levels and, as the dividend payments to TDA will cease upon
the closing of the Public Offering and consummation of the Acquisitions, it is
anticipated that Eagle's available funds from operations will be increased. It
can be anticipated that this increase in available funds will be partially
offset by the salaries to be paid to Messrs. Fields and Friedman in the future
and the amounts payable to TDA pursuant to the services agreements with the
Company and JEH Eagle. See "Management" and "Certain Transactions."

Although a portion of the net proceeds of the Public Offering are to be used
for inventory purchases for new distribution centers, the Company does not
presently intend to increase the inventory levels at Eagle's present
distribution centers with such proceeds. See "Use of Proceeds."

The Company believes that its existing sources of liquidity, including its
present availability under its revolving credit facilities and its current cash
flows, will be adequate to sustain its normal operations and to satisfy its
current working capital and capital expenditure requirements for the next
eighteen to twenty-four months.

In July 1997 JEH Eagle acquired substantially all of the assets and the
business of JEH Co., a Texas corporation, wholly owned by James E. Helzer, now
the President of the Company, Eagle and JEH Eagle. The purchase price, as
adjusted, was approximately $14,473,000, consisting of $13,600,000 in cash, and
a five-year $873,000 principal amount note bearing interest at the rate of 6%
per year. The purchase price and the note are subject to further adjustments
under certain conditions. The first $250,000 of the adjustments was to be paid
in cash but as other adjustments to the purchase price are anticipated, JEH
Eagle elected to postpone the $250,000 payment from JEH Co. until other
adjustments to the purchase price are resolved, and the $250,000 payment has
been established as a receivable due on demand from JEH Co. Certain, potentially
substantial, contingent payments, as additional future consideration to JEH Co.,
or its designee, are to be paid by JEH Eagle. JEH Co. is to receive a percentage
of the EBITDA or the modified EBITDA (as defined) of the business acquired (the
"JEH EBITDA") on a per year non-cumulative basis for each of JEH Eagle's fiscal
years ending on June 30 of 1998 through 2002 (the "Applicable Period"). If the
JEH EBITDA reaches $3,000,000, $4,000,000 and $5,000,000 in the foregoing fiscal
years, JEH Co. or its designee is to receive 35%, 40% and 50%, respectively, of
that fiscal year's JEH EBITDA. In addition to the foregoing percentages of JEH
EBITDA, if the JEH EBITDA (plus $50,000 of Mr. Helzer's compensation under his
employment agreement) (x) for any fiscal year in the Applicable Period is not
less than $4,400,000, JEH Eagle is to pay JEH Co. or its designee $1,000,000,
provided that the aggregate amount of such payments is not to exceed $2,000,000;
and (y) in the aggregate during the Applicable Period is not less than
$20,000,000, JEH Eagle is to pay JEH Co. or its designee the sum of $1,350,000
plus the amount of the difference, if any, between $2,000,000 and the amount to
be paid under (x). Additionally, with respect to certain Total Accounts
Receivable Reserves, as defined (the "JEH Reserves") which were established at
the date of the acquisition, if JEH Eagle reduces the amount of the JEH
Reserves, in any fiscal year during the Applicable Period, JEH Co. or its
designee is to be paid 100% of the reduction until the JEH Reserves are not less
than $2,500,000 and 50% of the reduction in the JEH Reserves below $2,300,000
down to $600,000. Both of the immediately foregoing percentage payments to JEH
Co. or its designee are subject to adjustment in certain events. Additionally,
if this Public Offering is completed prior to June 30, 2002 and in the event
certain JEH EBITDA levels are reached for JEH Eagle

during the period from July 1, 1997 through the date of consummation of this
Public Offering, JEH Co. or its designee will be entitled to receive (i)
$1,000,000 or (ii) $1,350,000 (either in cash or in shares of the Company's
Common Stock valued at its public offering price) if the JEH EBITDA level is (i)
less than $3,800,000 per year but not less than $3,600,000 per year, or (ii) not
less than $3,800,000 per year, respectively. The Company will issue 300,000
shares of its Common Stock and not pay the foregoing amounts to James E. Helzer
in fulfillment of the obligation set forth in the immediately preceding
sentence, even if the JEH EBITDA does not reach the required levels. James E.
Helzer and E.G. Helzer serve as Eagle's President and Senior Vice
President-Operations of Eagle at salaries of $50,000 and $25,000 per year,
respectively. Pursuant to their arrangements with Eagle, James E. Helzer and
E.G. Helzer are also entitled to receive 20% and 6%, respectively, of Eagle's
income before taxes in excess of $600,000 per year. James E. Helzer and E.G.
Helzer are employed as President and Senior Vice President-Operations,
respectively, of the Company and Eagle pursuant to oral agreements that can be
terminated by either party without notice or penalty.

In order to pay a substantial portion of the purchase price for the
acquisition of JEH Co.'s business and to provide working capital for JEH Eagle,
JEH Eagle in July 1997 entered into a five year loan agreement for a credit
facility of up to $20,000,000 (the "JEH Facility") guaranteed by TDA and
collateralized by substantially all of the assets of JEH Eagle. The JEH Facility
consists of a $3,000,000 term loan, a $2,475,000 equipment loan and, the
balance, a revolving credit loan. The principal amount of the term loan is
payable in 48 equal monthly installments of $62,500. The term loan is due on the
earlier of August 1, 2001 or the loan agreement's termination. The outstanding
balance of the term loan at April 30, 1998 was approximately $2,438,000. The
term loan bears interest at Libor plus three and one-quarter percent or the
lender's prime rate plus one and one-half percent, as JEH Eagle may elect. The
principal amount of the equipment loan is payable in equal consecutive monthly
installments of $20,536 based upon a 76 month amortization schedule with any
remaining principal amount due upon the earlier of August 1, 2004 or the end of
the loan agreement's initial or renewal term. The outstanding balance of the
equipment loan at April 30, 1998 was approximately $1,541,000. The equipment
loan bears interest at Libor plus two and one-half percent or the lender's prime
rate plus one-half percent, as JEH Eagle may elect. The principal amount of the
revolving credit loan is payable upon the earlier of the loan agreement's
termination or other stated events. The outstanding balance on the revolving
credit loan at April 30, 1998 was approximately $10,348,000. The revolving
credit loan bears interest at Libor plus two and one-half percent or the
lender's prime rate plus one-half percent, as JEH Eagle may elect. All interest
payments under the foregoing loans are payable monthly in arrears. The maximum
amount borrowable under the JEH Facility is determined by a Borrowing Base as
defined in the JEH Facility.

Of the $13,850,000 initial cash payment portion of the $14,850,000 JEH Co.
tentative purchase price, approximately $12,500,000 was supplied pursuant to the
JEH Facility and approximately $1,350,000 was contributed to JEH Eagle by TDA as
equity capital. In connection with the acquisition of JEH Co.'s business and
assets, JEH Eagle paid TDA a financing fee of $150,000.

For the Company to acquire JEH Eagle, the JEH Facility lending institution's
consent will be required. Similarly, for the Company to acquire Eagle, the Eagle
Facility lending institution's consent will be required. See "The Acquisitions"
and "Certain Transactions."

IMPACT OF INFLATION

General inflation in the economy has driven the operating expenses of many
businesses higher, and, accordingly, each of the Combined Entities have
increased salaries and bore higher prices for supplies, goods and services. The
Combined Entities continuously seek methods of reducing costs and streamlining
operations while maximizing efficiency through improved internal operating
procedures and controls. While each of the Combined Entities is subject to
inflation as described above, the Company, Eagle and JEH Eagle believe that
inflation currently does not have a material effect on Eagle's or JEH Eagle's
operating results, but there can be no assurance that this will continue to be
so in the future.

YEAR 2000 COMPLIANCE

The Year 2000 Compliance issue is the result of computer programs being
written using two digits rather than four to define the applicable year.
Computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

In 1997, Eagle commenced the upgrade of its data processing equipment and a
conversion to new software programs that are Year 2000 compliant. Additionally,
management has started to integrate and centralize certain of Eagle's and JEH
Eagle's administrative functions, including data processing, and JEH Eagle will
be utilizing and adopting Eagle's upgraded data processing equipment and new
software programs. Accordingly, management has determined that the Year 2000
Compliance issue will not pose significant operational problems for its computer
systems.

The Company is in the process of initiating formal communications with all
of its significant suppliers and large customers to determine the extent to
which the Company is vulnerable to those third parties' failure to remediate
their own Year 2000 Compliance issue. There can be no guarantee that the systems
of other companies on which the Company's systems rely will be timely converted
and would not have an adverse effect on the Company's systems.

The Company will utilize both internal and external resources to reprogram,
or replace and test the software for the Year 2000 modifications. The Company
anticipates completing the Year 2000 project not later than January 1, 1999,
which is prior to any anticipated impact on its operating systems. The total
cost of the project is estimated at $300,000 and is being expensed over the
three-year term of the operating lease for the equipment and software.

The estimated cost of the project and the date on which the Company believes
it will complete the Year 2000 modifications and testing processes are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources,
third party modification plans and other factors. However, there can be no
assurance that these estimates will be achieved, and actual results could differ
materially from those anticipated.

THE ACQUISITIONS

Simultaneously with the closing of the Public Offering, the Company will
consummate the Acquisitions. The Underwriter and the Company have agreed that at
the consummation of the Acquisitions, the Combined Entities have a book value of
$1,000,000 and that TDA will receive 2,000,000 shares of the Company's Common
Stock. The Company, TDA, Eagle and JEH Eagle have not allocated the
consideration for Eagle or JEH Eagle. The foregoing number of shares of the
Company's Common Stock to be issued to TDA was determined by negotiations among
the Company, TDA and the Underwriter. Factors considered in said negotiations
included but were not limited to (a) the historical results of the Combined
Entities, (b) their future business prospects, (c) their position in their
industry principally on a combined basis, (d) the breadth of their product
lines, (e) their customer bases, (f) the experience of their management and
personnel, (g) the locations of their distribution facilities, and (h) their net
worth. 300,000 shares of the Company's Common Stock to be issued to Mr. Helzer
were determined by negotiations between JEH Eagle and JEH Co. at the time of JEH
Eagle's acquisition of substantially all of the business and assets of JEH Co.
Additionally, as part of the Acquisitions, TDA guarantees that the Combined
Entities will have a book value of no less than $1,000,000 after Eagle cancels,
in the form of a non-cash dividend, all indebtedness of TDA to Eagle, except for
an approximately $502,000 receivable from TDA relating to and offsetting a
mortgage in the same amount on property previously owned by Eagle and for which
Eagle remains the primary obligor, with TDA contributing cash sufficient to
achieve that book value in the event of a deficiency. Any payment to Eagle or
JEH Eagle by TDA to satisfy the $1,000,000 combined book value requirement set
forth above will be paid to Eagle or JEH Eagle by TDA within forty-five days of
the closing of the Public Offering and consummation of the Acquisitions. At
April 30, 1998, TDA's indebtedness to Eagle, excluding the foregoing receivable
offsetting such mortgage, was approximately $2,849,000. Upon consummation of the
Acquisitions, Eagle and JEH Eagle will become wholly-owned subsidiaries of the
Company and will constitute the only business operations and sources of revenue
of the Company until such time, if any, as the Company consummates additional
acquisitions.

TDA, through a wholly-owned subsidiary, 39 Acre Corp., has rented to Eagle
on a month-to-month basis without formal written leases the premises for several
of Eagle's distribution facilities and Eagle's executive offices at aggregate
annual rentals of approximately $709,000 and $782,000 during its fiscal years
ended June 30, 1996 and 1997, respectively. Upon successful completion of the
Public Offering and the consummation of the Acquisitions, Eagle and TDA intend
to enter into ten-year leases for said premises on economic terms substantially
similar to current arrangements. However, the leases will now be written on a
long-term, ten-year basis, and it is anticipated that TDA will derive a profit
therefrom. The Company believes that the rent and other terms of the written
lease agreements to be entered into between 39 Acre Corp. and Eagle are on at
least as favorable terms as Eagle would expect to negotiate with unaffiliated
third parties. Neither Eagle nor 39 Acre Corp. will be permitted to terminate
the leases before the end of the term without a breach or default by the other
party.

The Company and Eagle have entered into employment agreements with Messrs.
Fields and Friedman, to become effective upon closing of the Public Offering and
consummation of the Acquisitions, pursuant to which they will act as Chairman of
the Board and Chief Executive Officer, and Executive Vice President, Chief
Financial Officer, Treasurer, Secretary and a Director of the Company and Eagle,
respectively, for a five-year period, at annual salaries of $200,000 each,
subject to annual increases or bonuses as may be determined by the Board of
Directors.

JEH Eagle has entered into agreements with Messrs. Fields and Friedman
pursuant to which they act as Chairman of the Board of Directors and Chief
Executive Officer, and Executive Vice President, Chief Financial Officer,
Treasurer, Secretary and a Director of JEH Eagle, respectively, for a five-year
period which commenced in July 1997, at annual salaries of $60,000 each, subject
to annual increases and bonuses as may be determined by JEH Eagle's Board of
Directors. The compensation payable to Messrs. Fields and Friedman under their
employment agreements shall commence upon the closing of the Public Offering and
consummation of the Acquisitions.

Pursuant to the foregoing employment agreements, Messrs. Fields' and
Friedman's written consent is required if they are to be employed other than in
proximity to their residences. Messrs. Fields and Friedman reside in Connecticut
and New York, respectively. The agreements require Eagle and JEH Eagle to
provide their beneficiaries and each of them, respectively, with twelve months
salary in the event of death or disability and indemnify Messrs. Fields and
Friedman to the full extent permitted under the Delaware General Corporation
Law. Their agreements do not require either Messrs. Fields or Friedman to commit
a specific amount of their time to the affairs of Eagle or JEH Eagle. However,
Messrs. Fields and Friedman will devote no less time than they deem reasonably
necessary to carry out their duties to the Company, Eagle and JEH Eagle.

The Company's and JEH Eagle's agreements with Messrs. Fields and Friedman
contain provisions for payments of salary and benefits following a change of
control (as defined) of the Company or JEH Eagle, the failure to reappoint
either of them to his position, a salary reduction or the Company's or JEH
Eagle's failure to perform its obligation under their respective agreements. In
general, under such circumstances, each of Messrs. Fields and Friedman would be
entitled to a cash payment equivalent to his salary for the remaining term of
his agreement, and continued life, health and disability insurance benefits for
a period of two years.

Eagle had purchased the premises for its Birmingham, Alabama, distribution
center from an unrelated third party in April 1994, with a purchase money
mortgage and promissory note in the principal amount of $550,000 to be paid in
fifty-nine equal monthly installments of approximately $4,700 and a "balloon"
payment of approximately $440,000 in April 1999. The mortgage and promissory
note for the Birmingham, Alabama, premises bears interest at the lending bank's
fluctuating prevailing prime rate. Prior to June 30, 1994, Eagle transferred
this property to TDA in partial repayment of intercompany debt, and TDA then
transferred the property to a wholly-owned subsidiary. The amount of the
intercompany debt that was satisfied in fiscal 1994 by the transfer of the
Birmingham, Alabama, property from Eagle to TDA was approximately $216,000. In
fiscal 1995, the approximate amount of $90,000 of leasehold improvements on a
property in Jacksonville, Florida, was transferred from Eagle to TDA in
satisfaction of intercompany debt. The Jacksonville, Florida, property had been
leased by Eagle from 39 Acre Corp. and operated as a distribution center until
the sale by Eagle of this distribution center in June 1995. 39 Acre Corp. is the
TDA subsidiary to which the Birmingham, Alabama, property and the improvements
on the Jacksonville, Florida, property were ultimately transferred. Eagle
remains liable for the payments under this mortgage and, in the event of a
default under the mortgage by 39 Acre Corp., Eagle could be held liable for the
monthly and "balloon" mortgage payments in addition to its rental payments.
Eagle's rental payments to 39 Acre Corp. for the Birmingham, Alabama, property
have exceeded the mortgage payments for this property and have not required
Eagle to pay any sums in excess of its rental payments. See "Business," "Certain
Transactions" and Financial Statements and the notes thereto.

Eagle also remains responsible to Eagle Holding, Inc., a TDA subsidiary,
pursuant to a lease for Eagle's former Fort Lauderdale, Florida, distribution
center expiring on May 1, 1999, which requires annual rental payments and a
"balloon" payment of approximately $580,000 due on May 1, 1999 for an industrial
revenue bond underlying these premises. These premises have been subleased by
Eagle to an unrelated third party at an annual rental in excess of Eagle's lease
obligation. The payments by Eagle have included through April 30, 1998 a ratable
share of the "balloon" payment. These payments, together with anticipated
sublessee rental payments, are currently projected by the Company to fully fund
the "balloon" payment.

Upon completion of the Public Offering and consummation of the Acquisitions,
TDA will indemnify Eagle for any payments that Eagle is required to make which
are in excess of Eagle's obligations under the Birmingham, Alabama, and Fort
Lauderdale, Florida, leases and relate to the mortgage or the industrial revenue
bonds for the Birmingham, Alabama and Fort Lauderdale, Florida, properties,
respectively.

In July 1997 JEH Eagle acquired substantially all of the assets and the
business of JEH Co., a Texas corporation, wholly-owned by James E. Helzer, now
the President of the Company, Eagle and JEH Eagle. The purchase price, as
adjusted, was approximately $14,473,000, consisting of $13,600,000 in cash, and
a five-year $873,000 principal amount note bearing interest at the rate of 6%
per year. The purchase price and the note are subject to further adjustments
under certain conditions. The first $250,000 of the adjustments was to be paid
in cash by JEH Co. to JEH Eagle but, as other adjustments to the purchase price
are anticipated, JEH Eagle elected to postpone the $250,000 payment from JEH Co.
until other adjustments to the purchase price are resolved, and the $250,000
payment has been established as a receivable due on demand from JEH Co. Certain,
potentially substantial, contingent payments, as additional future consideration
to JEH Co., or its designee, are to be paid by JEH Eagle. JEH Co. is to receive
a percentage of the EBITDA or the modified EBITDA (as defined) of the business
acquired (the "JEH EBITDA") on a per year non-cumulative basis for each of JEH
Eagle's fiscal years ending on June 30 of 1998 through 2002 (the "Applicable
Period"). If the JEH EBITDA reaches $3,000,000, $4,000,000 and $5,000,000 in the
foregoing fiscal years, JEH Co. or its designee is to receive 35%, 40% and 50%,
respectively, of that fiscal year's JEH EBITDA. In addition to the foregoing
percentages of JEH EBITDA, if the JEH EBITDA (plus $50,000 of Mr. Helzer's
compensation under his employment agreement) (x) for any fiscal year in the
Applicable Period is not less than $4,400,000, JEH Eagle is to pay JEH Co. or
its designee $1,000,000, provided that the aggregate amounts of such payments is
not to exceed $2,000,000; and (y) in the aggregate during the Applicable Period
is not less than $20,000,000, JEH Eagle is to pay JEH Co. or its designee the
sum of $1,350,000 plus the amount of the difference, if any, between $2,000,000
and the amount to be paid under (x). Additionally, with respect to certain Total
Accounts Receivable Reserves, as defined (the "JEH Reserves") which were
established at the date of the Acquisition, if JEH Eagle reduces the amount of
the JEH Reserves, in any fiscal year during the Applicable Period, JEH Co. or
its designee is to be paid 100% of the reduction until the JEH Reserves are not
less than $2,500,000 and 50% of the reduction in the JEH Reserves below
$2,300,000 down to $600,000. Both of the immediately foregoing percentage
payments to JEH Co. or its designee are subject to adjustment in certain events.
Additionally, if this Public Offering is completed prior to June 30, 2002 and in
the event certain JEH EBITDA levels are reached for JEH Eagle during the period
from July 1, 1997 through the date of consummation of this Public Offering, JEH
Co. or its designee will be entitled to receive (i) $1,000,000 or (ii)
$1,350,000 (either in cash or in the Company's Common Stock valued at its public
offering price) if the JEH EBITDA level is (i) less than $3,800,000 per year but
not less than $3,600,000 per year, or (ii) not less than $3,800,000 per year,
respectively. The Company will issue 300,000 shares of its Common Stock and not
pay the foregoing amounts to James E. Helzer in fulfillment of the obligation
set forth in the immediately preceding sentence, even if the JEH EBITDA does not
reach the required levels. James E. Helzer and E.G. Helzer serve as Eagle's
President and Senior Vice President-Operations of Eagle at salaries of $50,000
and $25,000 per year, respectively and are also entitled to receive 20% and 6%,
respectively, of Eagle's income before taxes in excess of $600,000 per year.
Messrs. Helzers are employed by the Company and Eagle pursuant to oral
agreements that can be terminated by either party without notice or penalty.

For the Company to acquire JEH Eagle, the JEH Facility lending institution's
consent will be required. Similarly for the Company to acquire Eagle, the Eagle
Facility lending institution's consent will be required.

Assuming the required consents from the lending institutions are obtained
and the Public Offering and the Acquisitions are completed and consummated, TDA
has advised the Company that in the event Eagle or JEH Eagle seek increased
lines of credit, new lines of credit or other changes in either credit facility
which would give TDA the right to terminate or decline to grant a new guarantee,
TDA may seek compensation from the Company. No such compensation has been agreed
upon, could be material to the Company, Eagle and/or JEH Eagle and result in a
material benefit to TDA and certain officers and directors of TDA. In the event
TDA were to exercise any such right to terminate a guarantee or decline to grant
a new guarantee, credit facilities may no longer be available to Eagle and/or
JEH Eagle or credit facilities may be available only upon materially different
terms and conditions including, but not limited to, a reduced availability of
funds, additional and/or higher interest rates and charges and other more
restrictive financial terms and conditions. Any of the foregoing events could
have a material adverse effect upon the Company, Eagle and/or JEH Eagle.

James E. Helzer had rented to JEH Co. and continues to rent to JEH Eagle,
pursuant to five-year written leases, the premises for several of JEH Eagle's
executive offices and distribution centers at aggregate annual rentals of
approximately $486,000. Rental payments to Mr. Helzer for the several
distribution centers he leases to JEH Eagle aggregated $428,000 and $402,000 for
JEH Co.'s fiscal year ended December 31, 1996 and JEH Eagle's ten-month period
ended April 30, 1998, respectively.

TDA and JEH Eagle have entered into an agreement pursuant to which TDA
provides JEH Eagle with certain services including (i) managerial, (ii)
strategic planning, (iii) banking negotiation, (iv) investor relations, and (v)
advisory services relating to acquisitions for a five-year term which commenced
in July 1997. The monthly fee, the payment of which is to commence upon the
closing of the Public Offering and the consummation of the Acquisitions, for the
foregoing services is $3,000.

Upon completion of the Public Offering and consummation of the Acquisitions,
TDA will provide office space and administrative services to the Company at
TDA's offices in New York City pursuant to an administrative services agreement
to be entered into by the Company and TDA. The term of the administrative
services agreement will be on a month-to-month basis. The fee payable by the
Company to TDA for such administrative services will be $3,000 per month. Prior
to the date of this Prospectus, the Company utilized office space and
administrative services provided by TDA without charge.

BUSINESS

INTRODUCTION

The Company was organized to raise capital and acquire, own, integrate and
operate seasoned, privately-held companies engaged in the wholesale distribution
of roofing supplies and related products industry and companies which
manufacture products for or supply products to such industry. Simultaneously
with the closing of the Public Offering, the Company will consummate the
Acquisitions of Eagle and JEH Eagle. The Company and the Underwriter have agreed
that the Combined Entities have a book value of not less than $1,000,000. See
"Certain Transactions." Eagle was founded in Florida in 1905. Eagle is a general
wholesale distributor of a complete line of roofing supplies and related
products through its own sales force and distribution facilities to roofing
supply and related products contractors and sub-contractors in the geographic
areas where Eagle has distribution centers. Such contractors and sub-contractors
are engaged in commercial and residential roofing repair and the construction of
new residential and commercial properties. JEH Co. was founded in 1982 and
substantially all of its business and assets was sold to JEH Eagle in July of
1997. Similar to Eagle, JEH Eagle is a general wholesale distributor of roofing
supplies within the geographic areas of its distribution facilities using
similar sales methods. JEH Eagle also distributes drywall, plywood, vinyl siding
and similar products to contractors, builders, and developers primarily engaged
in the construction industry while Eagle only recently added drywall products at
several of its distribution centers. Upon consummation of the Acquisitions,
Eagle and JEH Eagle will become wholly-owned subsidiaries of the Company and
will constitute the only business operations of the Company until and unless the
Company consummates additional acquisitions. Although the primary focus of the
Company's expansion and acquisition program will be on seeking suitable
acquisition candidates which are engaged in the wholesale distribution of
roofing supplies and related products, the Company will consider the purchase of
manufacturers or vendors of products which may be distributed through its
wholesale distribution business.

During Eagle's fiscal years ended June 30, 1996 and 1997, Eagle had revenues
of approximately $59,262,000 and $57,576,000, respectively, and net income of
approximately $1,315,000 and $192,000, respectively. For the ten-month period
ended April 30, 1998, Eagle had revenues and net income of approximately
$47,171,000 and $135,000, respectively.

During JEH Co.'s fiscal year ended December 31, 1996 and six-month period
ended June 30, 1997, JEH Co. had revenues of approximately $74,893,000 and
$28,979,000, respectively, and net income of approximately $171,000 and a net
loss of approximately $1,179,000, respectively. During JEH Eagle's ten-month
period ended April 30, 1998, JEH Eagle had revenues of approximately $55,677,000
and net income of approximately $532,000, respectively.

The Company's activities to date have been limited primarily to its initial
organization, negotiating the terms and conditions of the Public Offering and
the Acquisitions and obtaining initial financing.

STRATEGY

Based upon its management's experience in the industry, the Company believes
that the roofing supplies and related products distribution industry is
fragmented and has the potential for consolidation in response to the
competitive disadvantages faced by smaller distributors. The Company believes
that the industry is characterized by a large number of relatively small local
distribution companies and a few very large, multi-branch and multi-regional
distributors and a large, national multi-branch distributor. Roofing supplies
products distributors are overwhelmingly privately owned, relationship-based
companies that emphasize service, delivery and reliability as well as
competitive pricing and breadth of product line to their customers. The Company
believes that the competitive environment faced by small distributors, coupled
with the desire of many owners of such distributors for liquidity, has prompted
a trend toward industry consolidation that offers significant opportunities for
expansion oriented distributors, such as the Company. The Company believes that
there are opportunities for a company which has the capability to

source and distribute products effectively to serve the roofing supplies and
related products markets and to effect cost savings and increased profit
opportunities through efficiencies of scale which can be applied to companies
acquired in the roofing supplies and related products industry.

The Company plans to seek acquisition candidates primarily in the roofing
supplies and related products industry throughout the United States, with
greater emphasis on the Southeastern, Midwestern and Western regions and less
emphasis on the Northeastern region of the United States. However, the Company
may consider acquisition candidates in any of the foregoing regions of the
United States if an exceptional opportunity arises. Initial acquisition
candidates will be sought in the roofing supply industry, and the factors that
the Company may consider in reviewing a potential acquisition candidate include,
but are not limited to, the following: (i) geographical locations; (ii)
operations contiguous to current areas of operations; (iii) members of its
management; (iv) economic viability; (v) the experience of management; (vi)
revenues; (vii) historical profitability; (viii) balance sheet quality; (ix)
product lines carried; (x) type of customers; (xi) qualities of fleet; (xii)
size and number of locations; and (xiii) vendors. As the characteristics of
potential acquisition candidates can vary widely, the Company is unable to
indicate the weight to be given to the foregoing and other factors, and the
foregoing factors should not be considered to be set forth in the Company's
order of priority. Acquisition candidates will be sought by members of the
management team and the officers of the Company, Eagle and JEH Eagle.
Additionally, potential acquisition candidates may be made known to the Company
from various sources such as business brokers, venture capitalists, members of
the financial community, vendors, others who may present unsolicited proposals
and through industry associations. In certain circumstances, the Company may
agree to pay a finder's fee for services provided by persons who are not
currently executive officers of the Company, Eagle or JEH Eagle, or executive
officers or directors of TDA, which submit acquisition candidates to the Company
that are subsequently acquired by the Company. However, in the event an
acquisition candidate is submitted to and acquired by the Company by a director
of the Company, Eagle or JEH Eagle who is not an executive officer of the
Company, Eagle or JEH Eagle, the Company anticipates that it may pay any such
person a finder's fee the same as if such person were an independent third
party. Any such finder's fee will be paid at the then prevailing market rates as
determined by the Company's executive officers and be subject to approval by the
Company's Board of Directors if such a fee is to be paid to an affiliate of the
Company. No such finder's fee will be paid to TDA or persons who are officers or
directors of TDA. Purchase prices for the Company's potential acquisition
candidates will be determined by negotiations conducted by the Company's
management with the prospective sellers. The Company's management will conduct a
review of a potential acquisition candidate's business operations and historical
financial information in connection with the negotiating process. The Company
intends to attempt to make such acquisitions at an amount related to the
candidate's book value. However, the Company may pay a sum in excess of a
candidate's book value if the Company's assessment of the candidate's product
lines, geographic market area, competitive position in that market, customer mix
(commercial or residential), the fair market value of its assets or perceived
potential future profit warrants such a premium.

The Company anticipates that it will be able to enhance the profit potential
of acquired companies by combining their operations with the operations of Eagle
and/or JEH Eagle. It is anticipated that acquired companies should be able to
take advantage of (as well as, by becoming affiliated with Eagle and/or JEH
Eagle, enhance) Eagle's and/or JEH Eagle's ability to obtain volume discounts
and other favorable terms (many of which are dependent on the volume of
purchases) from vendors, enabling the acquired companies to obtain better
purchasing terms and thereby offer more competitive pricing to customers as a
result of Eagle's and JEH Eagle's practice of negotiating prices and terms from
vendors on a company-wide or multi-center basis. Additionally, it is anticipated
that acquired companies should also be able to take advantage of Eagle's
centralized administrative and data processing systems which provide real-time
management information systems and centralized administrative functions, thereby
relieving acquired companies of some record keeping and administrative functions
and enabling them to reduce personnel and overhead expenses. Also, acquired
companies should be able to use Eagle's centralized administrative and data
processing systems, among other things, to monitor inventory levels and sales by
distribution

center, allowing each distribution center manager to better assure that his
center has sufficient and balanced product inventory to meet the customer needs
in that market area. JEH Eagle and Eagle have begun to integrate their computer
systems with the objective to fully integrate their systems by the end of 1998
to allow for certain administrative, purchasing, billing, collection, credit
control and other similar functions to be combined at one location. The Company
anticipates that any future acquisitions will have their similar administrative
and other functions integrated with this combined facility. The operations of
acquired companies may be enhanced by expanding the product lines that they
carry, if they carry fewer product lines than Eagle or JEH Eagle currently
carry. Acquired companies may also be able to draw upon the industry experience
of Eagle's or JEH Eagle's management to improve their product knowledge,
training of branch managers and sales personnel, and ability to service
customers. The Company intends to provide expansion capital, if necessary, and
administrative and management services to acquired companies.

The Company considers suitable acquisition candidates to be privately-owned
companies having a history of profitable operations or for which profitable
potential is perceived by the Company's management. Additionally, as roofing and
related products distributors are overwhelmingly relationship based, suitable
acquisition candidates should have key managerial personnel willing to continue
their employment after the acquisition and a stable sales force that the
Company's management anticipates to remain substantially in place after the
acquisition. Suitable acquisition candidates may also include the assets and
sites of entities which may not be currently profitable or which may be
underperforming but located in a geographical market area that the Company's
management believes to have profitable potential when restructured and placed
under new management. The Company has no present intention to make any
acquisitions from any of its affiliates other than the Acquisitions.

In formulating its acquisition strategy, the Company has relied upon the
experience of management in the wholesale distribution of roofing supplies and
related products industry. The majority of distribution center managers have
been associated with Eagle or JEH Eagle for more than ten years. James E.
Helzer, the President of the Company, Eagle and JEH Eagle, founded JEH Co. in
1982 and was its owner and chief executive officer until substantially all of
its business and assets were acquired by JEH Eagle. E.G. Helzer, Senior Vice
President-Operations of the Company, Eagle and JEH Eagle was associated with JEH
Co. since its inception in 1982. In 1982, JEH Co. commenced operations and by
the time of its acquisition in July 1997, it had eleven distribution centers.
Douglas P. Fields and Frederick M. Friedman, executive officers and directors of
the Company, Eagle and JEH Eagle, have been executive officers and directors of
Eagle for approximately twenty-five years. In 1973, at the time Eagle was
acquired by TDA, it had one distribution center. Eagle now has fifteen
distribution centers.

The Combined Entities have an aggregate of approximately 62 managerial
employees. It is planned that the managerial staffs of the Combined Entities,
other members of their staffs and the Company's executive officers, other than
Messrs. Fields and Friedman, will principally provide administrative and
management services to any acquired companies with Messrs. Fields and Friedman
providing oversight of such management and administrative assistance expertise
in evaluating and negotiating and financing acquisitions. Messrs. Fields and
Friedman each have more than twenty-five years experience in the management of
acquisition oriented companies. Under their management, TDA acquired Eagle, JEH
Eagle, a distributor of flooring products, a tennis facility, a number of
distributors of plumbing, heating, electrical and hardware supplies, a
manufacturer of electrical products, a number of other companies and various
real estate. James E. Helzer, an executive officer of the Company, Eagle and JEH
Eagle founded JEH Co. and developed it into a roofing supply distributor with
eleven distribution centers in six states. Although Messrs. Fields and Friedman
have not agreed to devote any specified amount of time to the Company and the
Combined Entities, they intend to devote such time as is necessary to perform
the foregoing services. James E. Helzer has agreed to devote a substantial
amount of his time to the Company, Eagle and JEH Eagle. See "Management".

Although the Company has not specifically identified any probable
acquisition candidates and does not currently have any agreements, arrangements
or commitments with respect to any proposed acquisition in place, other than the
Acquisitions, based upon its management's experience in the industry, it
believes that there are a number of suitable acquisition candidates that may
meet its criteria. However, there can be no assurance that any additional
acquisitions will be consummated. The Company intends to seek out prospective
acquisition candidates in businesses that complement or are otherwise related to
the business of Eagle and/or JEH Eagle. The Company anticipates that it will
finance future acquisitions, if any, through a combination of cash (including a
substantial portion of the net proceeds of the Public Offering), issuances of
shares of capital stock of the Company and additional equity or debt financing.
There can be no assurance that the Company will be able to obtain additional
equity or debt financing on terms acceptable to the Company or at all.

EXPANSION

Management intends to pursue expansion of the operations of the Combined
Entities by adding new distribution centers with the proceeds of the Public
Offering and by internal growth. During the 1997 calendar year, the Combined
Entities opened one (1) new distribution center and is exploring the possibility
of opening several more distribution centers during calendar year 1998.

The Company has allocated approximately $2,176,000 from the net proceeds of
the Public Offering to establish six new distribution centers and approximately
$700,000 to make leasehold improvements to existing distribution centers and to
purchase equipment (trucks, forklifts and similar items) to support the planned
six additional distribution centers which are intended to be opened within
twenty-four months following the completion of the Public Offering and
consummation of the Acquisitions. The Company presently anticipates that the six
additional distribution centers will be leased from third parties not affiliated
with the Company, Eagle or JEH Eagle. There can be no assurance that any or all
of such new distribution centers will be opened within such twenty-four month
period or at all.

BUSINESS

Eagle and JEH Eagle are general wholesale distributors of a complete line of
roofing supplies and related products through their own sales forces to roofing
supply and related products contractors and sub-contractors in the geographic
areas where they have distribution centers. Such contractors and sub-contractors
are engaged in commercial and residential roofing repair and the construction of
new residential and commercial properties.

Eagle also distributes sheet metal products used in the roofing repair and
construction industries and has begun the distribution of drywall products. JEH
Eagle also distributes drywall, plywood and related products and, solely in
Colorado, vinyl siding to the construction industry. In general, products
distributed include equipment, tools and accessory products for the removal of
old roofing, re-roofing and roof construction, and related materials such as
shingles, tiles, insulation, liquid roofing materials, fasteners, ventilation
materials, sheet metal of the type used in the roofing industry, drywall and
plywood. Principally in Colorado, sales to retail customers are made but are
believed by the Company to be very small in dollar volume.

The following chart indicates the approximate percentage of the indicated
product categories sold by Eagle and JEH Eagle for the periods indicated:

RESIDENTIAL COMMERCIAL
ROOFING ROOFING SHEET METAL DRYWALL AND PLYWOOD
------------- ------------- --------------- ---------------------

EAGLE
FISCAL YEAR ENDED JUNE 30,
1995................................................. 49% 35% 16% N/A
1996................................................. 57% 31% 12% N/A
1997................................................. 55% 32% 13% N/A
Ten Months Ended April 30, 1998...................... 59% 27% 13% 1%

JEH EAGLE
FISCAL YEAR ENDED DECEMBER 31,
1995................................................. 83% 4% N/A 13%
1996................................................. 81% 5% N/A 14%
1997................................................. 79% 6% N/A 15%
Six Months Ended June 30, 1997....................... 79% 6% N/A 15%
Ten Months Ended April 30, 1998...................... 72% 9% 3% 16%

Eagle has grown from nine distribution centers at June 30, 1991, including
locations in Florida (seven) and Alabama (two), to its current level of fifteen
distribution centers including locations in Florida (eleven), Alabama (three)
and Mississippi (one). Eagle has pursued its expansion activities by opening new
distribution centers. Similarly, JEH Co. grew from six distribution centers in
1990, including locations in Texas (five) and Colorado (one) to eleven
distribution centers, including locations in Texas (five), Colorado (four),
Indiana (one) and Virginia (one). JEH Co. in the past and JEH Eagle now,
occasionally, establishes temporary distribution centers in response to storms
which have created temporary markets. After opening a new distribution center,
the initial focus is to develop a customer base, to develop and improve the
distribution center's market position and operational efficiency and then to
expand its customer base.

After a distribution center is opened, the policy of the Combined Entities
is to continue to assess each distribution center's performance and
profitability. As a result of this ongoing assessment, the Combined Entities
have on occasion sold or closed certain distribution centers.

OPERATING STRATEGY

Key elements of the current operating strategy of the Combined Entities are
as follows:

PURCHASING ECONOMIES. Eagle, JEH Eagle and, where possible, the Combined
Entities negotiate with suppliers to obtain volume discounts and other favorable
terms. Individual distribution center managers are responsible within their
inventory budgets for selecting and ordering inventory tailored to the varied
needs of customers in their local markets. Management believes the Combined
Entities are able to obtain competitive pricing and purchasing terms, maintain a
broad and balanced product line, ensure timely delivery of products, maintain
appropriate inventory levels and maintain satisfactory relationships with
vendors.

CENTRALIZING MANAGEMENT INFORMATION SYSTEMS AND ADMINISTRATION. Eagle
maintains centralized computer and data processing systems to support decision
making throughout its organization including what management believes to be an
in-depth credit analysis of its customers. Distribution centers are equipped
with on-line, real time management information systems. Eagle's management
information systems enable management to perform, control and monitor accounts
receivable, inventory levels, order entry, invoicing, sales and profitability by
distribution center. Each Eagle distribution center is, therefore, able to
respond to specific customer needs and overall market demand and to monitor the
effects of actions or decisions on

performance and profitability. Eagle has also centralized many administrative
functions, such as payroll and employee benefits, credit and collection,
insurance, accounting and internal auditing, cash management, human resources,
fleet management safety and legal, both to achieve economies of scale and to
help managers remain focused on maximizing profitability of their distribution
centers. Following JEH Eagle's acquisition of JEH Co.'s distribution centers in
July of 1997, Eagle and JEH Eagle began to integrate their computer, data
processing and management information systems, and it is anticipated that by the
end of calendar year 1998, Eagle and JEH Eagle will be functioning on the same
computer hardware and software systems. See "--Strategy."

DECENTRALIZING OPERATIONS. The Combined Entities have adopted a
decentralized operating philosophy to maximize responsiveness to customers'
varied needs and to give distribution center managers a sense of responsibility
for the performance of their own operations and the Combined Entities as a
whole. While the Combined Entities negotiate purchase prices and terms for many
products from many vendors on a joint or multi-center basis and each uses
central management information systems to achieve economies of scale, each
distribution center manager is responsible for selecting and ordering inventory
to meet the needs of his customers, for staffing, for controlling all line item
expenses (other than central administration allocated items), for product
pricing and profit margins, and for creating his annual budget. Further, each
distribution center manager has individual profit and loss responsibility for
his distribution center and receives incentive compensation based upon the
profitability of his distribution center.

PRINCIPAL PRODUCTS

Eagle and JEH Eagle distribute a variety of roofing supplies and related
products and accessories for use in the commercial and residential roofing
repair and construction industries.

RESIDENTIAL ROOFING PRODUCTS. Shingles (asphalt, ceramic, slate, concrete,
fiberglass and fiberglass combined with asphalt), tiles, felt, insulation,
waterproof underlaying, ventilation systems and skylights.

COMMERCIAL ROOFING PRODUCTS. Asphalt, cements, tar, other coatings,
modified bitumen and roll roofings.

SHEET METAL PRODUCTS. These products are sold principally by Eagle and
include aluminum, copper, galvanized and stainless sheet metal.

DRYWALL/PLYWOOD PRODUCTS. These products are sold principally by JEH Eagle
and include sheet rock and plywood. They have been introduced into two of
Eagle's distribution centers since the fall of 1997.

Eagle and JEH Eagle also sell accessory products related to each of the
foregoing, including, but not limited to, roofing equipment, power and hand
tools and fasteners.

VENDORS

The Combined Entities distribute products manufactured by a number of major
vendors. GAF is Eagle's largest supplier, accounting for approximately 21%, 23%,
and 22% of Eagle's product lines during its fiscal years ended June 30, 1996 and
1997 and ten-month period ended April 30, 1998, respectively. During the
foregoing periods, three other vendors' products accounted for an aggregate of
approximately 23%, 32%, and 20%, respectively, of Eagle's product lines. Atlas
Roofing Corp., a supplier of residential and commercial roofing materials, is
JEH Eagle's largest supplier, accounting for approximately 22%, 15%, and 15% of
JEH Co.'s product lines during its fiscal years ended December 31, 1995 and 1996
and JEH Eagle's product lines during the ten-month period ended April 30, 1998,
respectively. During the foregoing periods, three other vendors products
accounted for an aggregate of approximately 31%, 34%, and 30%, respectively, of
JEH Co.'s and JEH Eagle's product lines. Included within the foregoing three
vendors were GAF and Elk which accounted for approximately 15%, and 10%, 16% and
10% of JEH Co.'s product lines during its fiscal years ended December 31, 1995
and 1996 and 16% and 11% of JEH Eagle's

product lines during its ten month period ended April 30, 1998, respectively.
Neither of the Combined Entities have written long term supply agreements with
any vendors. Management believes that in the event of any interruption of
product deliveries from any suppliers, they will be able to secure suitable
replacement suppliers on acceptable terms. There can be no assurance that they
will be able to secure suitable replacement suppliers on acceptable terms or at
all.

CUSTOMERS, SALES AND MARKETING

The Combined Entities sell and distribute roofing supplies and related
products to approximately 5,000 customers engaged in commercial and residential
roofing repair and the construction of new residences and commercial properties
from distribution centers in seven states. During Eagle's and JEH Eagle's
ten-month periods ended April 30, 1997 and 1998, practically all of their
customers purchased products pursuant to short-term credit arrangements. Sales
efforts are primarily directed through their salespersons assigned to their
distribution centers including "inside" counter persons who serve walk-in and
call-in customers and "outside" salespersons calling upon past, current and
potential customers. Salespersons rely upon a range of selling techniques all
based upon personal and telephone contact, which techniques include but are not
limited to "cold calling" for new customers, maintaining relationships with
current and former customers, and arranging or locating projects for customers.
Neither of the Combined Entities have long term written supply agreements with
any of their customers. No Eagle customer accounted for more than 3% of Eagle's
sales during either of its fiscal year ended June 30, 1997 or ten-month period
ended April 30, 1998. Similarly, no JEH Co. or JEH Eagle customer accounted for
more than 4% of JEH Co.'s or JEH Eagle's sales during either of their fiscal
year ended December 31, 1996 or ten-month period ended April 30, 1998,
respectively.

COMPETITION

Each of the Combined Entities faces substantial competition in the wholesale
distribution of roofing supplies from relatively smaller distributors, retail
distribution centers and from a number of multi-regional and national wholesale
distributors of building products including suppliers of roofing products which
are larger than the Combined Entities, including American Builders & Contractors
Supply Co., Inc., Cameron Ashley Building Products, Inc., Allied Building
Products and Bradco Supply Corporation, which have greater financial resources
than the Combined Entities. Each of the Combined Entities currently competes in
the wholesale distribution of roofing supplies on the basis of competitive
pricing, breadth of product line, prompt delivery, service, providing discounts
for prompt payment and on the abilities of its personnel. To a substantially
lesser degree, they also compete with larger high volume discount general
building supply stores selling standardized lower priced products, sometimes at
lower prices, but not carrying the breadth of product lines or offering the same
service as provided by full service wholesale distributors such as the Combined
Entities. Each of the Combined Entities competes with its competitors on the
basis of product delivery, credit extension, customer service and breadth of
product line.

The Company anticipates that it may experience competition from entities and
individuals (including venture capital partnerships and corporations, equity
funds, blind pool companies, competing wholesale roofing supply distribution
centers, large industrial and financial institutions, small business investment
companies and wealthy individuals) which are well-established and have greater
financial resources and more extensive experience than the Company, Eagle and
JEH Eagle combined in connection with identifying and effecting acquisitions of
the type sought by the Company. The Company's, Eagle's and JEH Eagle's combined
financial resources will be limited in comparison to those of many of such
competitors. Such competition could result in the loss of an acquisition
candidate or an increase in the price the Company would be required to pay for
such acquisitions.

BACKLOG

The businesses of the Combined Entities are conducted on the basis of
short-term orders and prompt delivery schedules precluding any substantial
backlog.

EMPLOYEES

At April 30, 1998, the Combined Entities employed approximately 392
full-time employees, including 6 executives, 62 managerial employees, 82
salespersons (including 39 "inside" salespersons), 201 warehouse persons,
drivers and helpers, and 41 clerical and administrative persons. Both Eagle and
JEH Eagle have experienced difficulties in retaining drivers and helpers because
of the tight job market in their respective market areas and the need for
drivers to be certified by the departments of motor vehicles and pass other
testing standards, but suitable replacements have been readily available without
economic impact. Neither of the Combined Entities is subject to any collective
bargaining agreement, and each believes that its relationship with its employees
is good.

The Company has no employees. The Company's management currently consists of
five officers, including two officers, Douglas P. Fields and Frederick M.
Friedman, neither of whom are required to commit a specific amount of their time
to the affairs of the Company. Each of Messrs. Fields and Friedman have
significant business interests outside of the Company, including but not limited
to TDA and its subsidiaries. Messrs. Fields and Friedman currently devote
substantially all of their business time to TDA and its subsidiaries, with
approximately 5% to 10% of that time being devoted to the Combined Entities.
Accordingly, Messrs. Fields and Friedman may have conflicts of interest in
allocating their time among various business activities. However, Messrs. Fields
and Friedman will devote no less time than they deem reasonably necessary to
carry out their duties to the Company, including the evaluation and negotiation
of potential acquisitions. See "The Acquisitions," "Management" and "Certain
Transactions."

FACILITIES

EAGLE

Eagle leases approximately 15,000 square feet of executive office space
located at 1451 Channelside Drive, Tampa, Florida 33629, from, 39 Acre Corp., a
wholly-owned subsidiary of TDA, at an approximate annual rental of $120,000.
Approximately 7,500 square feet of such space is subleased by Eagle to an
unrelated third party tenant. See "Certain Transactions."

The following tables list the locations of Eagle's showroom and distribution
centers.

LOCATIONS OWNED BY AND LEASED FROM A WHOLLY-OWNED TDA SUBSIDIARY
- ------------------------------------------------------------------------------------------------------------------

APPROXIMATE APPROXIMATE BASE
CITY AND STATE SQUARE FOOTAGE ANNUAL RENTAL
- ------------------------------------------------------------------------------- --------------- ----------------
Tampa, Florida................................................................. 69,000 $ 173,000
St. Petersburg, Florida........................................................ 25,000 $ 88,000
Holiday, Florida............................................................... 16,000 $ 56,000
Fort Myers, Florida............................................................ 16,000 $ 56,000
Lakeland, Florida.............................................................. 22,000 $ 66,000
Pensacola, Florida............................................................. 26,000 $ 90,000
Birmingham, Alabama............................................................ 39,000 $ 127,000(1)
Mobile, Alabama................................................................ 24,000 $ 65,000

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

(1) See "Certain Transactions."

As part of the foregoing leasing arrangements between Eagle and 39 Acre
Corp., additional undeveloped land is leased to Eagle from the TDA subsidiary.
That undeveloped land is used for storage or reserved for future use. The
locations and approximate acreage of the undeveloped land are as follows: Tampa
(one); St. Petersburg (two); Holiday (three); Ft. Myers (one and a third);
Pensacola (two and a half); and Birmingham (one).

As Eagle has been a wholly-owned subsidiary of TDA since 1973, generally
there has been no need for Eagle to enter into written leases with 39 Acre
Corp., which owns Eagle's foregoing distribution centers. All of the foregoing
current distribution centers of Eagle leased from 39 Acre Corp. have been leased
pursuant to oral agreements. Eagle has not entered into any written leases for
the foregoing premises. Upon the closing of the Public Offering and consummation
of the Acquisitions, Eagle will enter into written ten-year leases with 39 Acre
Corp. which will provide for base annual rentals substantially similar to those
set forth above for the first five years of such leases with provisions for
increases in rent based upon the consumer price index at the beginning of the
sixth year of such ten-year leases and with provisions for five-year renewal
options, increases in rent based upon the consumer price index, and lease terms,
additional rental and other charges customarily included in such leases,
including provisions requiring Eagle to insure and maintain and pay real estate
taxes on the premises as is currently required. The Company believes that the
rent and other terms of the written lease agreements to be entered into between
39 Acre Corp. and Eagle are on at least as favorable terms as Eagle would expect
to negotiate with unaffiliated third parties. Neither Eagle nor 39 Acre Corp.
will be permitted to terminate the leases before the end of their term without a
breach or default by the other party. See "The Acquisitions" and "Certain
Transactions."

At the time Eagle opened its former Fort Lauderdale, Florida, distribution
center, in the early part of the 1980s, TDA established a subsidiary, Eagle
Holding, Inc., to acquire that facility which was financed by the issuance of an
industrial revenue bond. The financial institution providing the industrial
revenue bond required a written lease between the TDA subsidiary and Eagle as a
precondition to the issuance of that bond. The term of Eagle's lease for the
Fort Lauderdale, Florida, premises continues through May 1, 1999 even though
Eagle has vacated those premises. Upon completion of the Public Offering and
consummation of the Acquisitions, TDA will indemnify Eagle for any payments that
Eagle is required to make which are in excess of Eagle's obligations under the
foregoing lease. The Fort Lauderdale, Florida, premises has been sublet to an
entity not otherwise affiliated with Eagle or TDA for a term expiring on May 1,
1999. See "The Acquisitions" and "Certain Transactions."

LOCATIONS LEASED FROM THIRD PARTIES
- ------------------------------------------------------------------------------------------------------------------

APPROXIMATE APPROXIMATE BASE
CITY AND STATE SQUARE FOOTAGE ANNUAL RENTAL
- ------------------------------------------------------------------------------- --------------- ----------------
Clearwater, Florida............................................................ 5,000 $ 23,000(1)
Montgomery, Alabama............................................................ 24,000 $ 44,000(2)
Panama City, Florida........................................................... 5,000 $ 63,000(3)
Fort Walton Beach, Florida..................................................... 8,000 $ 36,000(4)
Crystal River, Florida......................................................... 12,600 $ 42,000(5)
Tallahassee, Florida........................................................... 15,000 $ 45,000(6)
Gulfport, Mississippi.......................................................... 13,000 $ 32,000(7)

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

(1) The lease for the Clearwater, Florida, premises expires on or about August
31, 1998 and provides for a five-year renewal option with increased renewal
term rental payments based upon the Consumer Price Index ("CPI"), but not to
exceed 5%. Pursuant to this lease, Eagle is required to pay all municipal,
county and state taxes , maintain and carry comprehensive public liability
insurance on the premises.

(2) The lease for the Montgomery, Alabama, premises is on a month-to-month
basis. Pursuant to this lease, Eagle is required to pay its pro rata share
(as defined) of increases in certain taxes, such as property and taxes on
rentals, and premium increases for fire, casualty and other types of
coverage that the landlord maintains for these premises.

(3) The lease for the Panama City, Florida, premises expires on or about
February 15, 2001 and provides for a five-year renewal option at an
increased rental based on the CPI. Pursuant to this lease, Eagle is required
to maintain the premises and provide fire, windstorm and other insurance.
Additionally,

Eagle is required to pay all sales and use taxes imposed upon the rental
payments for the premises. Eagle has the right of first refusal to purchase
these premises in certain events.

(4) The lease for the Fort Walton Beach, Florida, premises expires on or about
December 31, 1998 and provides for a five-year renewal option at increased
rent based upon the CPI along with applicable sales and use taxes. Eagle is
also required to maintain liability insurance on the premises.

(5) The lease for the Crystal River, Florida, premises expires on June 30, 1998
and requires annual rental increases based upon the CPI. This lease provides
for a two-year renewal option. Eagle is also required to maintain the
premises, pay certain taxes (sales, use, rent, receipts) and pay public
liability insurance premiums.

(6) The lease for the Tallahassee, Florida, premises expires on July 31, 1999
and provides for two five-year renewal options with the base rental
escalating at the rate of three percent per year during option years and a
right of first refusal to purchase the premises. This lease requires Eagle
to pay any real estate and sales taxes, maintain the premises and provide
liability insurance.

(7) The lease for the Gulfport, Mississippi, premises expires on May 31, 1998
and provides for a five-year renewal option on terms and conditions to be
negotiated. This lease requires Eagle to maintain liability insurance on the
premises, maintain the premises and pay any real estate and personal
property taxes.

JEH EAGLE

JEH Eagle leases approximately 8,000 and 10,000 square feet of executive
office and showroom space located at 2500 U.S. Highway 287, Mansfield, Texas
76063 and 8221 E. 96th Avenue, Henderson, Colorado 80640, respectively, from
James E. Helzer, the President of the Company, Eagle and JEH Eagle. The annual
aggregate rental for the foregoing premises is combined with the rentals of
relevant distribution centers discussed below.

The following tables list the locations of JEH Eagle's distribution centers.

LOCATIONS OWNED BY AND LEASED FROM JAMES E. HELZER
- -----------------------------------------------------------------------------------------------------------------

APPROXIMATE APPROXIMATE BASE
CITY AND STATE SQUARE FOOTAGE ANNUAL RENTAL
- ------------------------------------------------------------------------------- -------------- ----------------
Henderson, Colorado............................................................ 100,000 $ 108,000
Colorado Springs, Colorado..................................................... 3,000 $ 19,000
Mansfield, Texas............................................................... 48,000 $ 213,000
Colleyville, Texas............................................................. 7,000 $ 42,000
Frisco, Texas.................................................................. 17,000 $ 60,000
Mesquite, Texas................................................................ 10,000 $ 43,000

The foregoing premises are leased to JEH Eagle from James E. Helzer pursuant
to five-year leases expiring in June 2002 providing the indicated base annual
rentals with provisions for five percent (5%) increases effective July 2000.
Except for the Frisco, Texas, premises, said leases grant JEH Eagle two five-
year renewal options providing for five percent (5%) increases in the base
annual rent during certain renewal years. Additional rental and other charges
for the foregoing leases include provision for JEH Eagle to insure and maintain
and pay all taxes on the premises. JEH Eagle also has a right of first refusal
to purchase the foregoing premises. The Company believes that such leases are on
terms no less favorable than JEH Eagle could have obtained from independent
third parties.

As part of the foregoing leases, additional undeveloped land is leased to
JEH Eagle from James E. Helzer. That undeveloped land is used for storage or
reserved for future use. The locations and

approximate acreage of the undeveloped land is as follows: Henderson (six),
Colorado Springs (three), Mansfield (twelve and a half), Colleyville (one and a
half), Frisco (two and a half) and Mesquite (two).

LOCATIONS LEASED FROM THIRD PARTIES
- ------------------------------------------------------------------------------------------------------------------

APPROXIMATE APPROXIMATE BASE
CITY AND STATE SQUARE FOOTAGE ANNUAL RENTAL
- ------------------------------------------------------------------------------- --------------- ----------------
Eagle, Colorado................................................................ 10,000 $ 72,000(1)
Fort Collins, Colorado......................................................... 9,000 $ 32,000(2)
Indianapolis, Indiana.......................................................... 15,000 $ 66,000(3)
Austin, Texas.................................................................. 56,000 $ 96,000(4)
Norfolk, Virginia.............................................................. 19,000 $ 55,000(5)

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

(1) The lease for the Eagle, Colorado, premises expires in April 1999 but may be
terminated by JEH Eagle on thirty days notice and provides for two two-year
renewal options. Pursuant to this lease, JEH Eagle is required to pay all
utility bills and assessments and maintain and carry comprehensive public
liability insurance on the premises.

(2) The lease for the Fort Collins, Colorado, premises is on a month-to-month
basis. JEH Eagle is required to pay its proportionate share of taxes,
insurance and maintenance charges for these premises and maintain the
portion of the premises it occupies.

(3) The lease for the Indianapolis, Indiana, premises expires in March 2002 and
requires JEH Eagle to pay real estate taxes and carry comprehensive public
liability insurance on the premises.

(4) The lease for the Austin, Texas, premises expired and continues on a
month-to-month basis and requires JEH Eagle to pay all real estate taxes and
carry comprehensive public liability insurance on the premises.

(5) The lease for the Norfolk, Virginia, premises expires in June 1998 and
requires JEH Eagle to pay all real estate taxes and assessments and maintain
and carry comprehensive public liability insurance on the premises.

TDA will provide office space and administrative services to the Company at
its offices in New York City pursuant to an administrative services agreement to
be entered into by the Company and TDA upon the closing of the Public Offering
and consummation of the Acquisitions. The term of the administrative services
agreement will be on a month-to-month basis. The fee payable by the Company to
TDA for such administrative services will be $3,000 per month. Prior to the
closing of the Public Offering, the Company utilized office space and
administrative services provided by TDA without charge. See "Certain
Transactions."

LEGAL PROCEEDINGS

Neither the Company, Eagle, nor JEH Eagle are subject to any material legal
proceedings.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

NAME AGE POSITION
- ------------------------------------------ --- ---------------------------------------------------------------

Douglas P. Fields(1)...................... 56 Chairman of the Board and Chief Executive Officer
James E. Helzer(1)........................ 57 President and Director Nominee, Vice Chairman Nominee of the
Board of Directors(4)
Frederick M. Friedman(1).................. 57 Executive Vice President, Treasurer, Secretary and a Director
E.G. Helzer............................... 46 Senior Vice President-Operations
Steven R. Andrews(2)(4)................... 43 Vice President--Legal and a Director
Paul D. Finkelstein(3)(4)................. 55 Director Nominee
John E. Smircina(1)(2)(3)(4).............. 66 Director Nominee
George Skakel III(2)(4)................... 47 Director Nominee

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

(1) Upon successful completion of the Public Offering and consummation of the
Acquisitions, said persons are anticipated to become members of the
Executive Committee of the Company's Board of Directors.

(2) Upon successful completion of the Public Offering and consummation of the
Acquisitions, said persons are anticipated to become members of the Audit
Committee of the Company's Board of Directors.

(3) Upon successful completion of the Public Offering and consummation of the
Acquisitions, said persons are anticipated to become members of the
Compensation Committee of the Company's Board of Directors.

(4) Upon successful completion of the Public Offering and consummation of the
Acquisitions, said person is anticipated to become the Company's Vice
President-Legal and/or a member of the Company's Board of Directors, as the
case may be.

Pursuant to Section 141(c)(1) of the Delaware Corporation Law, as applicable
to corporations formed in that state prior to July 1, 1996, the following powers
are reserved to a Delaware corporation's Board of Directors: amending a
corporation's certificate of incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the board of directors, fix the designations and any
of the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of a
corporation or fix the number of shares of any series of stock or authorize the
increase or decrease of the shares of any series), adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of a corporation's property and assets,
recommending to the stockholders a dissolution of a corporation or a revocation
of a dissolution, or amending the bylaws of a corporation; and, unless a
resolution, the bylaws or the certificate of incorporation expressly so
provides, the declaration of a dividend, the issuance of stock or adoption of a
certificate of ownership and merger.

Management of the Company believes that Messrs. Andrews, Finkelstein,
Smircina and Skakel may be considered to be independent directors of the
Company.

Set forth below is a brief background of the executive officers, directors
and director nominees of the Company, based on information supplied by them.

Douglas P. Fields has been the Chairman of the Board of Directors, Chief
Executive Officer and a Director of the Company since inception. From the
Company's inception until July 1996, Mr. Fields also served as its President.
For more than the past five years, Mr. Fields has been the Chairman of the Board
of Directors, President and Chief Executive Officer of TDA and Chief Executive
Officer and a Director of each of its subsidiaries, including Eagle, Cooper
Flooring International, Inc. ("CFI") (which was a subsidiary of TDA until it was
sold by TDA on June 12, 1998) and Northeastern Plastics, Inc. ("NPI") (which was
a subsidiary of TDA until August 1996 when it was acquired by Acqueren, Inc.
("AI") of which TDA currently owns 45% and of which Mr. Fields remains Chief
Executive Officer). Since February 1996, Mr. Fields has served as AI's Chief
Executive Officer and is required to devote 25% of his time to that corporation.
Since July 1997, Mr. Fields has held the positions of Chairman of the Board and
Chief Executive Officer of JEH Eagle. TDA is a holding company whose operating
subsidiaries are engaged primarily in the wholesale distribution of building
supplies (Eagle and JEH Eagle), the distribution of a variety of electrical
devices (NPI), the operation of an indoor tennis facility and the management of
real estate. Upon successful completion of the Public Offering and consummation
of the Acquisitions, it is anticipated that Mr. Fields will devote no less time
to the Company's affairs than he deems reasonably necessary to discharge his
duties to the Company. Mr. Fields received a Master's degree in Business
Administration from the Harvard University Graduate School of Business
Administration in 1966 and a B.S. degree from Fordham University in 1964.

Frederick M. Friedman has been Executive Vice President, Chief Financial
Officer, Treasurer, Secretary and a Director of the Company since inception. For
more than the past five years, Mr. Friedman has been Executive Vice President,
Chief Financial Officer, Treasurer, Secretary and a Director of TDA and Vice
President, Chief Financial Officer, Treasurer, Secretary and a Director of each
of its subsidiaries, including Eagle, CFI (which was a subsidiary of TDA until
it was sold by TDA on June 12, 1998) and NPI (which was a subsidiary of TDA
until August 1996 when it was acquired by AI). Since July 1997, Mr. Friedman has
held the same position with JEH Eagle. Since February 1996, Mr. Friedman has
held similar positions with AI and is required to devote 25% of his time to that
corporation. Upon successful completion of the Public Offering and consummation
of the Acquisitions, it is anticipated that Mr. Friedman will devote no less
time to the Company's affairs than he deems reasonably necessary to discharge
his duties to the Company. Mr. Friedman received a B.S. degree in Economics from
The Wharton School of the University of Pennsylvania in 1962.

James E. Helzer has been the President of JEH Eagle since July 1997 and
President of the Company and Eagle since December 1997. From 1982 until July
1997, Mr. James E. Helzer was the owner and Chief Executive Officer of JEH Co.

E.G. Helzer has been the Senior Vice President-Operations of JEH Eagle,
Eagle and the Company since July 1997, December 1997 and December 1997,
respectively. From 1994 until July 1997, Mr. E.G. Helzer was the Vice President
of Operations and Colorado Manager of JEH Co. From 1982 until 1994, he was JEH
Co.'s Manager Production and Service. E.G. Helzer is the brother of James E.
Helzer.

Steven R. Andrews has been a Director of the Company since May 1996. For
more than the past five years, Mr. Andrews has been engaged in the private
practice of law. Mr. Andrews received a Juris Doctor degree and an L.L.M. degree
in 1977 and 1978 from Stetson University and New York University, respectively.
Mr. Andrews has agreed to serve as the Company's Vice President-Legal upon the
consummation of this Public Offering and the Acquisitions. In his capacity as
the Company's Vice President-Legal, Mr. Andrews has entered into an agreement
with the Company requiring him to review the Company's and its officers' and
directors' compliance with their obligations under federal and state securities
laws. Mr. Andrews will be required to report his findings to the Audit Committee
of the Company's Board of Directors on a periodic basis. The Company's agreement
with Mr. Andrews does not require him to devote any minimum amount of time to
the foregoing obligations and provides him with compensation of $1,000 per
month.

Paul D. Finkelstein has been the president and director of the Regis
Corporation, an operator of beauty salons and a cosmetic sales company, for more
than the past five years and that corporation's Chief Executive Officer since
July 1996. Mr. Finkelstein received a Master's degree in Business Administration
from the Harvard University Graduate School of Business Administration in 1966
and a B.S. degree in Economics from The Wharton School of the University of
Pennsylvania in 1964.

John E. Smircina has been a partner in the law firm of Wade, Hughes and
Smircina, P.C since April 1993. From prior to 1991 to March 1993, Mr. Smircina
was self-employed as a consultant. For more than the past five years, Mr.
Smircina has been a Director of TDA, and he became a director of AI in February
1996. Mr. Smircina received a Master's degree in Industrial Management from Ohio
University in 1954 and a B.A. degree in Political Science from Ohio University
in 1953.

George Skakel III has been a private investor for more than the past five
years. Mr. Skakel received a B.S. degree in Economics from the University of
Delaware in 1973 and a master's degree in Business Administration from the
Harvard University Graduate School of Business Administration in 1978.

Directors of the Company serve until the next annual meeting of stockholders
of the Company and until their successors are elected and duly qualified.
Officers of the Company will be elected annually by the Board of Directors and
serve at the discretion of the Board of Directors.

The Board of Directors has established an Executive Committee which is
composed of Douglas P. Fields and Frederick M. Friedman. The Board of Directors
of the Company can delegate to the Executive Committee all of the powers and
authority (other than those reserved by statute to the full Board of Directors)
of the full Board of Directors in the management of the business and affairs of
the Company.

In connection with certain transactions which occurred in 1971 and 1973,
Messrs. Fields and Friedman and TDA, then a public company, without admitting or
denying the allegations set forth in a civil action commenced by the Commission,
in 1976 consented to a final judgement of permanent injunction which, in
summary, provided that Messrs. Fields and Friedman and TDA were permanently
enjoined from violating the registration, reporting, proxy and the anti-fraud
provisions of the federal securities laws and rules. Additionally, Messrs.
Fields and Friedman agreed to certain ancillary relief which included their
agreements, for a period of two years, to resign as directors of TDA and a
publicly held subsidiary of TDA and not to vote any securities of TDA and the
subsidiary owned or controlled by them. The Commission's complaint alleged,
among other things, that in 1973 TDA and Messrs. Fields and Friedman, in
connection with TDA's acquisition of Eagle, caused an improper finder's fee to
be paid to Messrs. Fields' and Friedman's designee with a portion of such
finder's fee being paid back to Mr. Friedman. Based upon facts related to the
injunctive action, in 1979, Messrs. Fields and Friedman were found guilty of
conspiring to violate the federal securities laws and making false statements in
filings made with the Commission. Messrs. Fields and Friedman were sentenced to
six and three months incarceration, respectively, and both were fined. Also, on
facts related to the injunctive action, Mr. Friedman was found guilty of mail
and wire frauds. Mr. Friedman was sentenced to one month incarceration on each
of three counts.

KEY PERSON LIFE INSURANCE

JEH Eagle maintains a "key person" life insurance policy in the amount of
$2,000,000 on the life of James E. Helzer, the President of the Company, Eagle
and JEH Eagle, naming JEH Eagle beneficiary of such policy. The Company
maintains "key person" life insurance policies in the amount of $1,000,000 on
each of the lives of Douglas P. Fields, its Chairman of the Board and Chief
Executive Officer, and Frederick M. Friedman, its Executive Vice President,
Chief Financial Officer, Treasurer, Secretary and a Director of the Company.

EXECUTIVE COMPENSATION

The following table sets forth certain summary information with respect to
the compensation paid by the Company, Eagle or JEH Eagle for services rendered
in all capacities to each of these entities during each of their last two fiscal
years by those persons indicated. Neither the Company, Eagle nor JEH Eagle have
had any other executive officer whose total annual salary and bonus exceeded
$100,000 for either of said fiscal years:

SUMMARY COMPENSATION TABLE

FISCAL YEAR
NAME AND ENDED
PRINCIPAL POSITION JUNE 30, SALARY BONUS
- --------------------------------------------------------------------------------- ------------- ---------- -----------

Douglas P. Fields,............................................................... 1997 $ 0 $ 0
Chief Executive Officer of the Company, Eagle and JEH Eagle (1997 only) 1996 $ 0 $ 0
Thomas W. Havnes,................................................................ 1997 $ 120,000 $ 0
former executive officer 1996 $ 104,200 $ 0

Mr. Havnes was the President of Eagle from February 1994 until December
1997, Senior Vice President of Eagle from December 1997 until February 1998. Mr.
Havnes had also been the Company's President from July 1996 until December 1997
and its Senior Vice President until February 1998.

EMPLOYMENT AGREEMENTS AND ARRANGEMENTS

The Company, Eagle and JEH Eagle have entered into agreements with four
persons who are anticipated to receive cash compensation in excess of $100,000
per year.

JEH Eagle has entered into agreements with Messrs. Fields and Friedman,
pursuant to which they act as Chairman of the Board of Directors and Chief
Executive Officer, and Executive Vice President, Chief Financial Officer,
Treasurer, Secretary and a Director of JEH Eagle, respectively, for a five-year
period which commenced in July 1997, at annual salaries of $60,000 each, subject
to annual increases and bonuses as may be determined by JEH Eagle's Board of
Directors. The compensation payable to Messrs. Fields and Friedman under their
employment agreements shall commence upon the closing of the Public Offering and
consummation of the Acquisitions.

The Company's and JEH Eagle's agreements with Messrs. Fields and Friedman
contain provisions for payments of salary and benefits following a change of
control (as defined) of the Company or JEH Eagle, the failure to reappoint
either of them to his position, a salary reduction or the Company or JEH Eagle's
failure to perform its obligation under their respective agreements. In general,
under such circumstances, each of Messrs. Fields and Friedman would be entitled
to a cash payment equivalent to his salary for the remaining term of his
agreement, and continued life, health and disability insurance benefits for a
period of two years.

JEH Eagle has also entered into agreements with Messrs. James E. Helzer and
E.G. Helzer pursuant to which they serve as executive officers of JEH Eagle for
terms of five and three years, respectively, which commenced in July 1997, at
annual salaries of $250,000 and $125,000 as to Mr. James E. Helzer and Mr. E.G.
Helzer, respectively, subject to annual review by JEH Eagle's Board of
Directors. Additionally, as of January 1, 1998, James E. Helzer has accepted the
positions of President of the Company and Eagle. James E. Helzer will continue
as the President of JEH Eagle and will become Vice Chairman of the Company's
Board of Directors upon closing of the Public Offering and consummation of the
Acquisitions. As additional compensation, James E. Helzer's salary was increased
by $50,000 to $300,000 per year and he is required to devote approximately 80%
of his working time to the Company, Eagle and JEH Eagle. Additionally, E.G.
Helzer is to continue as the Senior Vice President-Operations of JEH Eagle and
has agreed to accept the positions of Senior Vice President-Operations of Eagle
and the Company as of January 1, 1998, and his salary was increased by $25,000
to $150,000 per year. Additionally, James E. Helzer and E.G. Helzer are entitled
to receive 20% and 6%, respectively, of Eagle's earnings before taxes in excess
of $600,000 per year. James E. Helzer and E.G. Helzer are employed as President
and Senior Vice President-Operations, respectively, of the Company and Eagle
pursuant to oral agreements that can be terminated by either party without
notice or penalty. See "The Acquisitions" and "Certain Transactions."

James E. Helzer, as the sole shareholder and Chief Executive Officer of JEH
Co., received compensation from JEH Co. of approximately $3,988,000, $2,330,000
and $120,000 for JEH Co.'s fiscal years ended December 31, 1995 and 1996 and six
month period ended June 30, 1997, respectively.

Upon the closing of the Public Offering and consummation of the
Acquisitions, pursuant to the Company's 1996 Stock Option Plan, the Company
intends to grant to each of Messrs. Douglas P. Fields, Frederick M. Friedman,
James H. Helzer and E.G. Helzer options exercisable to purchase 35,000, 35,000,
100,000 and 50,000 shares of Common Stock, respectively. Such options will have
a term of ten years and will be exercisable at the offering price of the Common
Stock sold pursuant to the Public Offering. Such options will vest as to 20% of
the underlying shares of Common Stock on each successive anniversary of the date
of grant commencing one year from the date of the closing of the Public
Offering, provided that they are employees of the Company on such dates.

Following the completion of the Public Offering and consummation of the
Acquisitions, it is anticipated that Messrs. Fields, Friedman and Helzer will
hold the positions set forth opposite their names for the corporations indicated
below:

NAME THE COMPANY EAGLE JEH EAGLE
- --------------------------- --------------------------- --------------------------- ---------------------------

Douglas P. Fields.......... Chairman of the Board and Chairman of the Board and Chairman of the Board and
Chief Executive Officer Chief Executive Officer Chief Executive Officer
James E. Helzer............ President and Vice Chairman President and Director President and Director
of the Board of Directors
Frederick M. Friedman...... Executive Vice President, Executive Vice President, Executive Vice President,
Treasurer, Secretary and Treasurer, Secretary and Treasurer, Secretary and
Director Director Director
E.G. Helzer................ Senior Vice President- Senior Vice President- Senior Vice President-
Operations Operations Operations

COMPENSATION OF DIRECTORS

Directors of the Company do not receive compensation for their services as
directors; however, the Board of Directors may authorize the payment of
compensation to directors for their attendance at regular and special meetings
of the Board and for attendance at meetings of committees of the Board as is
customary for similar companies. Directors will be reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties to
the Company. Upon completion of the Public Offering and consummation of the
Acquisitions, all non-officer directors and director nominees, except for Mr.
Andrews and Mr. Smircina, of the Company will each receive options to purchase
10,000 shares of the Company's Common Stock, exercisable at $5.00 per share.

LIMITATION ON LIABILITY OF DIRECTORS

The Delaware General Corporation Law permits a corporation, through its
Certificate of Incorporation, to exonerate its directors from personal liability
to the corporation or to its stockholders for monetary damages for breach of
fiduciary duty of care as a director, with certain exceptions. The exceptions
include a breach of the director's duty of loyalty, acts or omissions not in
good faith or which involve intentional misconduct or knowing violation of law,
improper declarations of dividends, and transactions from which the directors
derived an improper personal benefit. The Company's Certificate of Incorporation
exonerates its directors from monetary liability to the extent permitted by this
statutory provision. The Company has been advised that it is the position of the
Commission that, insofar as the foregoing provision may be invoked to disclaim
liability for damages arising under the Securities Act, that provision is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

STOCK OPTION PLAN

In August 1996, the Board of Directors adopted and the stockholders approved
the Company's 1996 Stock Option Plan (the "1996 Stock Option Plan"). The 1996
Stock Option Plan provides for the grant of (i) options that are intended to
qualify as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422A of the Internal Revenue Code, as amended (the "Code"),
to certain employees, directors and consultants and (ii) options not intended to
so qualify ("Non-Qualified Stock Options") to employees (including directors and
officers who are employees of the Company), directors and consultants. The total
number of shares of Common Stock for which options may be granted under the 1996
Stock Option Plan is 1,000,000 shares. Upon the closing of the Public Offering
and consummation of the Acquisitions, the Company intends to grant options
exercisable into 700,000 shares of Common Stock to various of its employees,
including options to purchase an aggregate of 220,000 shares which will be
issued

to Messrs. Fields, Friedman, James E. Helzer, and E.G. Helzer. The exercise
price of these options will be the price to the public of the shares of Common
Stock offered in the Public Offering.

Upon the closing of the Public Offering and consummation of the
Acquisitions, Messrs. Finkelstein and Skakel, director nominees of the Company,
will each be granted options to purchase 10,000 shares of Common Stock pursuant
to the Company's 1996 Stock Option Plan. Such options will have a term of ten
years and will be exercisable at $5.00 per share and will vest on the first
anniversary of the date of grant.

The 1996 Stock Option Plan is to be administered by the Board of Directors
or a committee appointed by the Board of Directors which will determine the
terms of options granted, including the exercise price, the number of shares
subject to the option and the terms and conditions of exercise. No option
granted under the 1996 Stock Option Plan is transferable by the optionee other
than by will or the laws of descent and distribution and each option is
exercisable during the lifetime of the optionee only by such optionee.

The exercise price of all stock options granted under the 1996 Stock Option
Plan must be at least equal to the fair market value of such shares on the date
of grant. With respect to any participant who owns stock possessing more than
10% of the voting rights of all classes of the Company's outstanding capital
stock, the exercise price of any Incentive Stock Option must be not less than
110% of the fair market value on the date of grant. The term of each option
granted pursuant to the 1996 Stock Option Plan may be established by the Board
of Directors or a committee of the Board of Directors, in its sole discretion;
provided, however, that the maximum term of each Incentive Stock Option granted
pursuant to the 1996 Stock Option Plan is ten years. With respect to any
Incentive Stock Option granted to a participant who owns stock possessing more
than 10% of the voting rights of all classes of the Company's outstanding
capital stock, the maximum term is five years. Options shall become exercisable
at such times and in such installments as the Board of Directors or a committee
of the Board of Directors shall provide in the terms of each individual option.

OPTIONS GRANTED PURSUANT TO THE 1996 STOCK OPTION PLAN TO EXECUTIVE OFFICERS,
DIRECTORS AND DIRECTOR NOMINEES OF THE COMPANY

The table below shows, as to each of the executive officers, Directors and
Director Nominees of the Company and as to all executive officers, Directors and
Director Nominees of the Company as a group, the following information with
respect to stock options to be granted under the 1996 Stock Option Plan: (i) the
aggregate amounts of shares of Common Stock subject to options to be granted on
the closing date of the Public Offering and consummation of the Acquisitions;
and (ii) the price or range per share option exercise price for options to be
granted on the closing date of the Public Offering and consummation of the
Acquisitions for these individuals. No other options for these individuals have
been issued or will be issued and outstanding on the closing date of the Public
Offering and consummation of the Acquisitions.

NAMES OF EXECUTIVE OFFICERS, SHARES SUBJECT PER SHARE
DIRECTORS AND DIRECTOR NOMINEES TO OPTIONS EXERCISE PRICE
- ----------------------------------------------------------------------------------- -------------- ---------------

Douglas P. Fields(1)............................................................... 35,000 $ 5.00
Frederick M. Friedman(1)........................................................... 35,000 $ 5.00
James E. Helzer(1)................................................................. 100,000 $ 5.00
E.G. Helzer(1)..................................................................... 50,000 $ 5.00
Paul D. Finkelstein(2)............................................................. 10,000 $ 5.00
George Skakel III(2)............................................................... 10,000 $ 5.00
All Executive Officers, Directors and Director Nominees as a group (8 persons)..... 240,000 $ 5.00

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

(1) All of the options to be granted to Messrs. Fields, Friedman, James E.
Helzer and E.G. Helzer will vest at a rate of 20% per year from the closing
date of the Public Offering with the initial 20% vesting

on the first anniversary of such closing date, limited, however, such that
the total amount of all options granted to each of them and vesting in any
single year does not exceed $100,000 at the exercise price.

(2) The options to be granted to Messrs. Finkelstein and Skakel will not vest
until one year from the closing date of the Public Offering.

OTHER COMPENSATION

Eagle and JEH Eagle provide basic health, major medical and life insurance
for its employees, including its executive officers. Eagle and JEH Eagle have
also adopted 401(K) Retirement Savings Plans for eligible employees, as
described below. No other retirement, pension or similar program has been
adopted by the Company, Eagle or JEH Eagle. These and other benefits may be
adopted by the Company for its employees in the future.

In July 1992 and January 1998, Eagle and JEH Eagle adopted 401(K) Retirement
Savings Plans for employees of Eagle and JEH Eagle, respectively (the "401(K)
Plan"). Eligible employees include all employees of Eagle and JEH Eagle who have
completed one year of employment and have attained the age of 21. The 401(K)
Plan permits employees to make voluntary contributions to the 401(K) Plan up to
a dollar limit set by law. Eagle and JEH Eagle may contribute discretionary
matching contributions equal to a determined percentage of the employees'
contributions. Benefits under the 401(K) Plan are distributable upon retirement,
disability, termination of employment or certain financial hardship, subject to
regulatory requirements. Each participant's share of Eagle's and JEH Eagle's
contributions vests at the rate of 20% per year until after six years of
service, at which time the participant becomes fully vested.

A $9,000 contribution to the 401(K) Plan was made by Eagle during its fiscal
year ended June 30, 1997. Amounts to be contributed in the future are at the
discretion of Eagle's and JEH Eagle's Boards of Directors. Accordingly, it is
not possible to estimate the amount of benefits that will be payable to
participants in the 401(K) Plan upon their retirement. The trustees under the
401(K) Plan are Robert L. Noojin and Dennis J. Paliaga.

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of the date of this Prospectus, after
giving effect to the Acquisitions as if they had occurred on that date, certain
information concerning beneficial ownership of shares of Common Stock with
respect to (i) each person known to the Company to own 5% or more of the
outstanding shares of Common Stock, (ii) each executive officer, director and
director nominee of the Company, and (iii) all officers, directors and director
nominees of the Company as a group:

AMOUNT AND NATURE APPROXIMATE PERCENTAGE OF APPROXIMATE PERCENTAGE OF
OF BENEFICIAL COMMON STOCK OWNED COMMON STOCK OWNED
OWNERSHIP BEFORE PUBLIC OFFERING AFTER PUBLIC OFFERING(5)
---------------------- --------------------------- ---------------------------

TDA Industries, Inc.(1).............. 4,000,000(2) 85.1% 59.7%
Douglas P. Fields(1)................. 4,000,000(2)(3) 85.1% 59.7%
Frederick M. Friedman(1)............. 4,000,000(2)(3) 85.1% 59.7%
James E. Helzer(1)................... 300,000(3)(4) 6.4% 4.5%
E.G. Helzer(1)....................... 0(3) * *
Steven R. Andrews(1)................. 100,000 2.1% 1.5%
Paul D. Finkelstein(1)............... 0(3) * *
John E. Smircina(1).................. 4,000,000(2) 85.1% 59.7%
George Skakel III(1)................. 0(3) * *
All executive officers, directors and
director-nominees as a group (8
persons)........................... 4,400,000(2)(3) 93.6% 65.7%

* Denotes less than 1%.

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

(1) The address for TDA Industries, Inc. is 122 East 42nd Street, New York, New
York 10168. The address for Messrs. Fields and Friedman is c/o Eagle Supply
Group, Inc. at the foregoing street address, Suite 1116. The address for Mr.
Andrews is 822 North Monroe Street, Tallahassee, Florida 32303. The address
for Messrs. Helzer is 2500 U.S. Highway 287, Mansfield, Texas 76063. The
address for Mr. Finkelstein is c/o Regis Corp., 7201 Metro Boulevard,
Minneapolis, Minnesota 55439-2130. The address for Mr. Smircina is 616 N.
Washington Street, Alexandria, Virginia 22314. The address for Mr. Skakel is
333 Ludlow Street, Stamford, Connecticut 06902.

(2) Includes 2,000,000 shares of Common Stock currently owned by TDA. Also
includes 2,000,000 shares of Common Stock to be issued to TDA upon
consummation of the Acquisitions. Messrs. Fields and Friedman are officers
and directors and principal stockholders of TDA. Mr. Smircina is a director
of TDA. Each of Messrs. Fields, Friedman and Smircina may be deemed to
exercise voting control over securities of the Company owned by TDA.

(3) Does not include options granted under the Company's 1996 Stock Option Plan.
See "Management."

(4) Includes 300,000 shares of Common Stock to be issued to James E. Helzer
pursuant to the agreement by which JEH Eagle acquired substantially all of
the assets and business of JEH Co.

(5) All approximate percentages after the Public Offering give effect to the
issuance of the foregoing 2,000,000 and 300,000 shares of the Company's
Common Stock to TDA and James E. Helzer, respectively.

CERTAIN TRANSACTIONS

Simultaneously with the closing of the Public Offering, the Company will
consummate the Acquisitions. The Underwriter and the Company have agreed that at
the consummation of the Acquisitions, the Combined Entities have a book value of
not less than $1,000,000 after Eagle cancels, in the form of a non-cash
dividend, all indebtedness of TDA to Eagle, except for an approximately $502,000
receivable from TDA relating to and offsetting a mortgage in the same amount on
property previously owned by Eagle and for which Eagle remains the primary
obligor, with TDA contributing sufficient cash to Eagle or JEH Eagle, within
forty-five days after the closing of the Public Offering and consummation of the
Acquisitions, to achieve that book value in the event of a deficiency. At April
30, 1998, TDA's indebtedness to Eagle, excluding the foregoing receivable
offsetting such mortgage, was approximately $2,849,000. The number of shares of
the Company's Common Stock to be issued to TDA in connection with the
Acquisitions was determined by negotiations among the Company, TDA and the
Underwriter. Factors considered in such negotiations included but were not
limited to (a) the historical results of the Combined Entities, (b) their future
business prospects, (c) their industry position, principally on a combined
basis, (d) their product line breadth, (e) their customer bases, (f) the
experience of their management and personnel, (g) the locations of their
distribution facilities, and (h) their net worth. The number of shares to be
issued to James E. Helzer were determined by negotiations among JEH Eagle and
JEH Co. at the time of the acquisition of substantially all of the business and
assets of JEH Co. by JEH Eagle. The consideration to be paid by the Company to
TDA for the Acquisitions was determined by negotiations among the Company, TDA
and the Underwriter, without independent appraisal. Upon consummation of the
Acquisitions, Eagle and JEH Eagle will become wholly-owned subsidiaries of the
Company and will constitute the only business operations and sources of revenue
of the Company until such time, if any, as the Company consummates additional
acquisitions. The Company, TDA, Eagle and JEH Eagle have not allocated the
consideration for Eagle or JEH Eagle. See "The Acquisitions."

TDA is a holding company which operates five business enterprises, including
Eagle, JEH Eagle and real estate investment companies. At the date of this
Prospectus, Eagle and JEH Eagle are wholly owned by TDA. See "Principal
Stockholders." For TDA's fiscal years ended June 30, 1996 and 1997, Eagle's
revenues constituted a majority of TDA's revenues.

In 1994, Eagle secured a revolving credit facility in the amount of
$7,500,000 now due in 2002 and guaranteed by TDA (the "Eagle Facility"). Eagle's
obligations under the Eagle Facility are collateralized by certain tangible and
intangible current assets of Eagle with borrowings based on a formula relating
to certain levels of receivables and inventory, as defined therein. By June 30,
1995, Eagle used its borrowings under this revolving credit facility to repay
$2,325,533 of its indebtedness to TDA and to advance $3,308,681 to TDA. At June
30, 1997 and April 30, 1998, Eagle's borrowings under its revolving credit
facility were approximately $6,693,000 and $6,616,000, respectively. The Eagle
Facility requires TDA's reaffirmation of its guaranty in certain events
including, but not limited to, the event that TDA or TDA's stockholders cease to
own all of Eagle's securities.

TDA, through a wholly-owned subsidiary, 39 Acre Corp., has rented to Eagle
on a month-to-month basis without formal written leases the premises for several
of Eagle's distribution facilities and Eagle's executive offices at aggregate
annual rentals of approximately $709,000 and $782,000 during its fiscal years
ended June 30, 1996 and 1997, respectively. The Company believes that the
amounts of these rental payments are fair and reasonable to Eagle and are not in
excess of what Eagle would be required to pay independent third parties for
comparable facilities. Upon successful completion of the Public Offering and the
consummation of the Acquisitions, Eagle and TDA intend to enter into ten-year
leases for said premises on economic terms substantially similar to current
arrangements. However, the leases will now be written and on a long-term, ten
year basis, and it is anticipated that TDA will derive a profit therefrom. The
Company believes that the rent and other terms of the written lease agreements
to be entered into between 39 Acre Corp. and Eagle are on at least as favorable
terms as Eagle would expect to negotiate

with unaffiliated third parties. Neither Eagle nor 39 Acre Corp. will be
permitted to terminate the leases before the end of their term without a breach
or default by the other party. See "Business."

Eagle also remains responsible to Eagle Holding, Inc., a wholly-owned
subsidiary of TDA, pursuant to a lease for Eagle's former Fort Lauderdale,
Florida, distribution center expiring on May 1, 1999, which requires approximate
annual rental payments including a "balloon" payment of approximately $580,000
due on May 1, 1999 for an industrial revenue bond underlying these premises.
These premises have been subleased by Eagle to an unrelated third party at an
approximate annual rental of $240,000, which amount is approximately equal to
Eagle's lease obligation. The payments by Eagle to Eagle Holding, Inc. have
included through April 30, 1998 a ratable share of the "balloon" payment. These
payments, together with anticipated sublessee rental payments, are currently
projected by the Company to fully fund the "balloon" payment. Upon completion of
the Public Offering and consummation of the Acquisitions, TDA will indemnify
Eagle for any payments that Eagle is required to make which are in excess of
Eagle's obligations under the foregoing properties.

During its fiscal years ended June 30, 1996 and 1997, Eagle made dividend
payments to TDA of $1,097,000 and $1,025,000, respectively. After June 30, 1997,
Eagle has continued to make dividend payments of approximately $900,000 through
April 30, 1998 to TDA. During each of Eagle's last three fiscal years, Eagle was
allocated by TDA the amounts of $50,000 for accounting and auditing fees. Upon a
closing of the Public Offering and consummation of the Acquisitions, all such
dividends will cease and such accounting and auditing fees will be incurred
directly by Eagle. See the Financial Statements and the Notes thereto.

In or about May 1996, the Company sold 2,000,000 shares of its Common Stock
to TDA and 100,000 shares of its Common Stock to Steven R. Andrews for the
aggregate sum of $210. TDA and Mr. Andrews were the Company's founding
stockholders and are also the principal stockholder and a Director of the
Company, respectively. In connection with the Acquisitions, TDA will be issued
2,000,000 shares of the Company's Common Stock.

During its fiscal year ended June 30, 1996, Eagle lent $300,000 to a former
TDA subsidiary, Cooper Flooring International, Inc. which was repaid in that
same fiscal year together with interest at the rate of 9 1/4% per year. In
February, 1998, Eagle Holding, Inc., a TDA subsidiary, lent Eagle $400,000
repayable on demand but without interest, which amount remains outstanding as of
April 30, 1998. The loan was made to enhance Eagle's working capital. Management
anticipates that this loan will be paid in full prior to the closing of the
Public Offering and consummation of the Acquisitions.

In June and July 1996, the Company sold an aggregate of 300,000 shares of
its Common Stock and a like number of Warrants to 12 private investors for
aggregate gross proceeds of $300,000. See "Selling Securityholders."

In July 1997, JEH Eagle acquired substantially all of the assets and the
business of JEH Co., a Texas corporation, wholly-owned by James E. Helzer, now
the President of the Company, Eagle and JEH Eagle. The purchase price, as
adjusted, was approximately $14,473,000, consisting of $13,600,000 in cash, and
a five-year $873,000 principal amount note bearing interest at the rate of 6%
per year. The purchase price and the note are subject to further adjustments
under certain conditions. The first $250,000 of the adjustments was to be paid
in cash by JEH Co. to JEH Eagle but, as other adjustments to the purchase price
are anticipated, JEH Eagle elected to postpone the $250,000 payment from JEH Co.
until other adjustments to the purchase price are resolved, and the $250,000
payment has been established as a receivable due on demand from JEH Co. Certain,
potentially substantial, contingent payments, as additional future consideration
to JEH Co., or its designee, are to be paid by JEH Eagle. JEH Co. is to receive
a percentage of the EBITDA or the JEH EBITDA on a per year non-cumulative basis
for each of JEH Eagle's five fiscal years in the Applicable Period. If the JEH
EBITDA reaches $3,000,000, $4,000,000 and $5,000,000 in the foregoing fiscal
years, JEH Co. or its designee is to receive 35%, 40% and 50%, respectively, of
that fiscal year's JEH EBITDA. In addition to the foregoing percentages of JEH
EBITDA, if the JEH EBITDA (plus $50,000 of Mr. Helzer's compensation under his
employment agreement) (x) for any fiscal year in the Applicable Period is not
less than $4,400,000, JEH Eagle is to pay JEH Co. or its designee $1,000,000,
provided that the aggregate amounts of such payments is not to exceed
$2,000,000; and (y) in the aggregate during the Applicable Period is not less
than $20,000,000, JEH Eagle is to pay JEH Co. or its designee the sum of
$1,350,000 plus the amount of the difference, if any, between $2,000,000 and the
amount to be paid under (x). Additionally, with respect to the JEH Reserves
which were established at the date of the acquisition, if JEH Eagle reduces the
amount of the JEH Reserves in any fiscal year during the Applicable Period, JEH
Co. or its designee is to be paid 100% of the reduction until the JEH Reserves
are not less than $2,500,000 and 50% of the reduction in the JEH Reserves below
$2,300,000 down to $600,000. Both of the immediately foregoing percentage
payments to JEH Co. or its designee are subject to adjustment in certain events.
Additionally, if this Public Offering is completed prior to June 30, 2002 and in
the event certain JEH EBITDA levels are reached for JEH Eagle during the period
from July 1, 1997 through the date of consummation of this Public Offering, JEH
Co. or its designee will be entitled to receive (i) $1,000,000 or (ii)
$1,350,000 (either in cash or in the Company's Common Stock valued at its public
offering price) if the JEH EBITDA level is (i) less than $3,800,000 per year but
not less than $3,600,000 per year, or (ii) not less than $3,800,000 per year,
respectively. The Company will issue 300,000 shares of its Common Stock and not
pay the foregoing amounts to James E. Helzer in fulfillment of the obligation
set forth in the immediately preceding sentence, even if the JEH EBITDA does not
reach the required levels. James E. Helzer and E.G. Helzer serve as Eagle's
President and Senior Vice President-Operations of Eagle at salaries of $50,000
and $25,000 per year, respectively and are also entitled to receive 20% and 6%,
respectively, of Eagle's income before taxes in excess of $600,000 per year.
Messrs. Helzers are employed by the Company and Eagle pursuant to oral
agreements that can be terminated by either party without notice or penalty.

In order to pay a substantial portion of the purchase price for the
acquisition of JEH Co.'s business and to provide working capital to JEH Eagle,
JEH Eagle in July 1997 entered into a five year loan agreement for a credit
facility of up to $20,000,000 (the "JEH Facility") guaranteed by TDA and
collateralized by substantially all of the assets of JEH Eagle. The JEH Facility
consists of a $3,000,000 term loan, a $2,475,000 equipment loan and, the
balance, a revolving credit loan. The principal amount of the term loan is
payable in 48 equal monthly installments of $62,500. The term loan is due on the
earlier of August 1, 2001 or the loan agreement's termination. The outstanding
balance of the term loan at April 30, 1998 was approximately $2,438,000. The
term loan bears interest at Libor plus three and one-quarter percent or the
lender's prime rate plus one and one-half percent, as JEH Eagle may elect. The
principal amount of the equipment loan is payable in equal consecutive monthly
installments of $20,536 based upon an 84 month amortization schedule with any
remaining principal amount due upon the earlier of August 1, 2004 or the end of
the loan agreement's initial or renewal term. The outstanding balance of the
equipment loan at April 30, 1998 was approximately $1,541,000. The equipment
loan bears interest at Libor plus two

and one-half percent or the lender's prime rate plus one-half percent, as JEH
Eagle may elect. The principal amount of the revolving credit loan is payable
upon the earlier of the loan agreement's termination or other stated events. The
outstanding balance of the revolving credit loan at April 30, 1998 was
approximately $10,348,000. The revolving credit loan bears interest at Libor
plus two and one-half percent or the lender's prime rate plus one-half percent,
as JEH Eagle may elect. All interest payments under the foregoing loans are
payable monthly in arrears. The maximum amount borrowable under the JEH Facility
is determined by a Borrowing Base as defined in the JEH Facility.

Of the $13,850,000 initial cash payment portion of the $14,850,000 JEH Co.
tentative purchase price, approximately $12,500,000 was supplied pursuant to the
JEH Facility and approximately $1,350,000 was contributed to JEH Eagle by TDA as
equity capital. In connection with the acquisition of JEH Co., JEH Eagle paid
TDA a financing fee of $150,000. For the Company to acquire JEH Eagle, the JEH
Facility lending institution's consent will be required.

James E. Helzer had rented to JEH Co. and continues to rent to JEH Eagle,
pursuant to five-year written leases, the premises for several of JEH Eagle's
distribution centers and JEH Eagle's executive offices at aggregate annual
rentals of approximately $486,000. Rental payments to Mr. Helzer for the several
distribution facilities he leases to JEH Eagle aggregated $428,000 and $402,000
for JEH Co.'s fiscal year ended December 31, 1996 and JEH Eagle's ten month
period ended April 30, 1998, respectively. The Company believes that the amounts
of these rental payments are fair and reasonable to JEH Eagle and are not in
excess of what JEH Eagle would be required to pay independent third parties for
comparable facilities. See "The Acquisitions" and "Business."

During its fiscal year ended December 31, 1996 and six-month period ended
June 30, 1997, JEH Co. had substantial indebtedness to James E. Helzer for funds
advanced by him to JEH Co. As part of JEH Eagle's purchase of substantially all
of the business and assets of JEH Co., JEH Eagle did not assume this liability
to Mr. Helzer.

During its fiscal year ended December 31, 1996 and six month period ended
June 30, 1997, JEH Co. made sales aggregating approximately $985,000 and
$327,000 to Classic Roofs and Indy Roofing Service, respectively, two entities
owned by Jay James Helzer, the son of James E. Helzer. During the ten month
period ended April 30, 1998, JEH Eagle made sales aggregating approximately
$904,000 to the foregoing two entities. Management of the Company believes that
such sales by JEH Eagle to the two entities owned by the son of James E. Helzer
were made on terms no less favorable to JEH Eagle than sales made to independent
third parties.

In February of 1998, the Company sold an aggregate of $300,000 in principal
amount of its promissory notes to three of its stockholders, including TDA, for
aggregate gross proceeds of $300,000. TDA purchased $150,000 of said notes and
Hi-Tel Group, Inc. and Paul Schmidt purchased $100,000 and $50,000 of said
notes, respectively. Said notes bear interest at the rate of 15% per year
through June 30, 1998 which decreases to 6% per year after that date. The notes
mature on the earlier of thirty months after issuance or the closing of this
Public Offering. The Company intends to repay said notes in full with the net
proceeds of this Public Offering.

TDA for such administrative services will be $3,000 per month. Prior to the date
of this Prospectus, the Company utilized office space and administrative
services provided by TDA without charge.

The foregoing transactions that Eagle and JEH Eagle have engaged in with TDA
have benefitted or may be deemed to have benefitted TDA directly or indirectly.
Messrs. Fields and Friedman, the Company's Chief Executive Officer and Chairman
of its Board of Directors and Executive Vice President, Chief Financial Officer,
Treasurer, Secretary, and a Director of the Company, respectively, are also
executive officers, directors and principal stockholders of TDA and have
benefitted or may be deemed to have benefitted, directly or indirectly, from
Eagle's and JEH Eagle's transactions with TDA. TDA is a holding company which,
among other things, owns Eagle, JEH Eagle, 45% of AI, an indoor tennis facility,
and owns and manages commercial and undeveloped real estate. TDA and/or certain
of its subsidiaries derive funds from all of the foregoing sources, including
dividend and lease payments from Eagle. These sources pay TDA's operating
expenses, including the payment of salaries and benefits to Messrs. Fields and
Friedman. See "Management."

The foregoing transactions that Eagle and JEH Eagle have engaged in with
James E. Helzer have benefitted or may be deemed to have benefitted Mr. Helzer,
directly or indirectly. James E. Helzer is the President of the Company, Eagle
and JEH Eagle. See "The Acquisitions" and "Management."

Messrs. Fields and Friedman are also officers, directors and principal
stockholders of TDA, and Mr. Smircina is an officer and director of TDA, and,
consequently, they will be able, through TDA, to direct the election of the
Company's directors, effect significant corporate events and generally direct
the affairs of the Company. The Company does not intend to enter into any
material transactions, loans or forgiveness of loans with any affiliates, except
as contemplated or disclosed in this Prospectus, unless such transaction is fair
and reasonable to the Company and is on terms no less favorable than could be
obtained from unaffiliated third parties. Additionally, any such event must be
approved by a majority of the Company's directors who do not have an interest in
such a transaction and who have had access, at the Company's expense, to
independent legal counsel. See "Management."

Each of TDA and Messrs. Fields and Friedman may be deemed to be a "promoter"
of the Company as such term is defined under the federal securities laws.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue up to 25,000,000 shares of Common Stock,
$.0001 par value per share, 2,400,000 of which are issued and outstanding as of
the date of this Prospectus. The holders of shares of the Company's Common Stock
are entitled to receive dividends equally when, as and if declared by the Board
of Directors, out of funds legally available therefor.

Subject to the rights that may be designated by the Board of Directors to
the holders of any shares of Preferred Stock, the holders of the Common Stock
have voting rights, one vote for each share held of record, and are entitled
upon liquidation of the Company to share ratably in the net assets of the
Company available for distribution. Shares of the Company's Common Stock do not
have cumulative voting rights. Therefore, the holders of a majority of the
shares of Common Stock may elect all of the directors of the Company and control
its affairs and day to day operations. The shares of Common Stock are not
redeemable and have no preemptive or similar rights. All 2,400,000 outstanding
shares of the Company's Common Stock are fully paid and non-assessable.
2,000,000 shares of the Company's Common Stock are owned by TDA and 100,000
shares are owned by Steven R. Andrews, Esq. TDA and Mr. Andrews purchased their
shares of the Company's Common Stock at the per share par value. The remaining
300,000 shares of the Company's Common Stock were sold in the Private Placement.
In connection with the Acquisitions, TDA and James E. Helzer will be issued
2,000,000 and 300,000 shares of the Company's Common Stock, respectively.

PREFERRED STOCK

The Company is authorized to issue 2,500,000 shares of Preferred Stock, par
value $.0001 per share ("Preferred Stock"). The Board of Directors of the
Company, without further stockholder action, may issue shares of Preferred Stock
in any number of series and may establish as to each such series the designation
and number of shares to be issued and the relative rights and preferences of the
shares of each series, including provisions regarding voting powers, redemption,
dividend rights, rights upon liquidation and conversion rights. The issuance of
shares of Preferred Stock by the Board of Directors could adversely affect the
rights of holders of Common Stock by, among other matters, establishing
preferential dividends, liquidation rights and voting power. The Company has not
issued any shares of Preferred Stock and has no present intention to issue
shares of Preferred Stock. The issuance thereof could discourage or defeat
efforts to acquire control of the Company through acquisition of shares of
Common Stock. The Company has agreed not to issue any shares of Preferred Stock
until the third anniversary of the date of this Prospectus without the
Underwriter's written consent.

REDEEMABLE COMMON STOCK PURCHASE WARRANTS

The Company has authorized the issuance of up to 2,875,000 Redeemable Common
Stock Purchase Warrants to be sold in the Public Offering. As of the date of
this Prospectus, the Company had 300,000 Warrants issued and outstanding. Said
300,000 issued and outstanding Warrants were sold as part of the Private
Placement.

The following statements and summaries of the material provisions of the
Warrants are subject to the more detailed provisions of the Warrants, a copy of
which has been included as an Exhibit to the Registration Statement of which
this Prospectus forms a part.

RIGHTS TO PURCHASE SHARES OF COMMON STOCK

Each Warrant entitles the registered holder to purchase from the Company one
share of Common Stock at an exercise price of $5.50 per share during the period
commencing on the date of this Prospectus and ending on the fifth anniversary of
such date, except for the 300,000 Warrants sold as part of the Private

Placement which expire on the third anniversary of such date. The exercise price
is subject to adjustment in certain circumstances as defined herein.

EXERCISE

Each holder of a Warrant may exercise such Warrant, in whole or in part, by
surrendering the certificate evidencing such Warrant, with the form of election
to purchase attached to such certificate properly completed and executed,
together with payment of the exercise price and any required transfer taxes, to
the Company. No Warrants may be exercised unless at the time of exercise there
is a current prospectus encompassing the shares of Common Stock issuable upon
the exercise of such Warrants under an effective registration statement. The
Company will endeavor to maintain an effective registration statement, including
such current prospectus, so long as any of the exercisable Warrants remain
outstanding. While it is the Company's intention to comply with this intention,
there can be no assurance that it will be able to do so.

The exercise price and any required transfer taxes will be payable in cash
or by certified or official bank check payable to the Company. If fewer than all
of the Warrants evidenced by a warrant certificate are exercised, a new
certificate will be issued for the remaining number of Warrants. Certificates
evidencing the Warrants may be exchanged for new certificates of different
denominations by presenting the Warrant certificate at the offices of the
Company's Warrant Agent.

ADJUSTMENTS

The exercise price and the number of shares of Common Stock purchasable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events including stock dividends, reclassifications, reorganizations,
consolidations, mergers, and certain issuances and redemptions of Common Stock
and securities convertible into or exchangeable for Common Stock excluding the
Company's 2,100,000 shares of Common Stock issued to TDA and Mr. Andrews, any
issuances of the Company's securities in connection with the Private Placement,
the Public Offering and the Company's stock option plan. No adjustments in the
exercise price will be required to be made with respect to the Warrants until
cumulative adjustments amount to $.05. In the event of any capital
reorganization, certain reclassifications of the Common Stock, any consolidation
or merger involving the Company (other than (i) a consolidation or merger which
does not result in any reclassification or change in the outstanding shares of
Common Stock or (ii) the Acquisitions or the acquisition of any other business),
or sale of the properties and assets of the Company, as, or substantially as, an
entirety to any other corporation, Warrants will thereupon become exercisable
only for the number of shares of stock or other securities, assets, or cash to
which a holder of the number of shares of Common Stock of the Company
purchasable (at the time of such reorganization, reclassification,
consolidation, merger or sale) upon exercise of such Warrants would have been
entitled upon such reorganization, reclassification, consolidation, merger or
sale.

OTHER RIGHTS

In the event of an adjustment in the number of shares of Common Stock
issuable upon exercise of the Warrants, the Company will not be required to
issue fractional shares of Common Stock upon exercise of the Warrants. In lieu
of fractional shares of Common Stock, there will be paid to the holders of the
Warrants, at the time of such exercise, an amount in cash equal to the same
fraction of the current market price of a share of Common Stock of the Company.

Warrantholders do not have voting or any other rights of stockholders of the
Company and are not entitled to dividends, if any.

REDEMPTION OF WARRANTS

If the market price of the Common Stock shall have averaged at least $10.00
per share for a period of thirty consecutive trading days at any time after the
date of this Prospectus, the Company may redeem the Warrants by paying holders
$.25 per Warrant, provided that notice of such redemption is mailed not later
than 10 days after the end of such period and prescribes a redemption date at
least thirty days thereafter. For these purposes, the market price of the Common
Stock shall mean closing per share bid price, as reported by NASDAQ SmallCap, so
long as the Common Stock is quoted on NASDAQ SmallCap, and if the Common Stock
is listed on a national securities exchange or on NASDAQ-NMS system, shall be
determined by the closing sales price on the primary exchange on which the
Common Stock is traded on or NASDAQ-NMS if such shares are not listed on an
exchange. Warrantholders will be entitled to exercise Warrants at any time up to
the business day next preceding the redemption date. The Warrants are not
redeemable prior to the first anniversary of the date of this Prospectus without
the written consent of the Underwriter. Additionally, the Warrants may not be
redeemed unless at the time of redemption there is a current prospectus
encompassing the shares of Common Stock issuable upon exercise of such Warrants
under a registration statement effective and current under the Securities Act
and the "Blue Sky" laws then applicable to the holders of the warrants.

WARRANT AGREEMENT

Upon the closing of the Public Offering and consummation of the
Acquisitions, the Company will enter into a warrant agreement ("Warrant
Agreement") with Continental Stock Transfer & Trust Company, as warrant agent
("Warrant Agent"). It is anticipated that the Warrant Agreement will contain
provisions permitting the Company and the Warrant Agent, without the consent of
the Warrant holders, to supplement or amend the Warrant Agreement in order to
cure any ambiguity or defect or to make any other provisions in regard to
matters or questions arising thereunder that the Company and the Warrant Agent
may deem necessary or desirable and that does not adversely affect the interests
of the Warrantholders.

UNDERWRITER'S WARRANT AND STOCK WARRANTS

The Company has agreed to grant the Underwriter a Warrant and Stock Warrants
entitling the holders thereof to purchase an aggregate of 450,000 shares of the
Company's Common Stock. See "Underwriting."

DIVIDEND POLICY

The Company has not paid dividends to date. The payment of dividends, if
any, in the future is within the discretion of the Board of Directors. The
payment of dividends, if any, in the future will depend upon the Company's
earnings, capital requirements and financial conditions and other relevant
factors. The Company's Board of Directors does not presently intend to declare
any dividends in the foreseeable future but instead intends to retain all
earnings, if any, for use in the Company, Eagle's and JEH Eagle's business
operations.

TRANSFER AGENT AND WARRANT AGENT

The Transfer Agent for the Company's Common Stock and the Warrant Agent for
the Company's Warrants is Continental Stock Transfer & Trust Company, New York,
New York.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Public Offering and consummation of the Acquisitions,
the Company will have 6,700,000 shares of Common Stock outstanding (7,000,000
shares if the Underwriter's Overallotment Option is exercised in full). All of
the shares of Common Stock sold in the Public Offering will be freely tradeable
without restriction or further registration under the Securities Act, except for
any shares purchased by an "affiliate" of the Company which will be subject to
certain limitations of Rule 144 adopted under the Securities Act.

2,100,000 of the 2,400,000 presently outstanding shares of Common Stock and
the 2,300,000 shares of Common Stock to be issued to TDA and James E. Helzer
will be restricted securities and will be subject to the resale limitations
provided for in Rule 144. Under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company, which has owned restricted shares of Common Stock beneficially for
at least one year, is entitled to sell, within any three month period, a number
of shares that does not exceed the greater of 1% of the total number of
outstanding shares of the same class or, if the Common Stock is quoted on an
exchange, the average weekly trading volume during the four calendar weeks
preceding the sale. A non-affiliate which has not been an affiliate of the
Company for at least the three months immediately preceding the sale and which
has beneficially owned such shares for at least two years is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above. A minimum of one year must elapse between the later of the date of the
acquisition of the Company's Securities from the Company or from an affiliate of
the Company and any resale of the Company's Securities in reliance on Rule 144
for the account of either an acquiror or any subsequent holder of the Company's
Securities.

The holders of approximately 400,000 (including the 300,000 shares of Common
Stock to be issued to James E. Helzer) and 300,000 shares of the Company's
Common Stock have agreed not to sell, for periods of two years and fifteen
months, respectively, from the date of this Prospectus, any shares of the
Company's Common Stock without the prior written consent of the Underwriter.
TDA, the holder of 4,000,000 shares of the Company's Common (including the
2,000,000 shares of the Company's Common Stock to be issued in connection with
the Acquisitions) has agreed not to sell for a period of two years from the date
of this Prospectus any shares of the Company's Common Stock.

Furthermore, in connection with the Public Offering, the Underwriter has
been granted warrants to purchase up to 200,000 shares of Common Stock and up to
250,000 Warrants to purchase up to an additional 250,000 shares of Common Stock.
The holders thereof have the right to require the Company to register said
Underwriter's Warrants and/or the underlying securities under certain
circumstances. In addition, the holders of said warrants have the right to
"piggy-back" said Underwriter's Warrants and/or underlying securities on
registration statements of the Company. Any exercise of such registration rights
may result in dilution in the interest of the Company's stockholders, may hinder
efforts by the Company to arrange future financing and may have an adverse
effect on the market price for the Company's securities.

Prior to the Public Offering, there has been no market for any securities of
the Company. The effect, if any, of public sales of any of the Company's
securities by present securityholders or the availability of such securities for
future sale at prevailing market prices cannot be predicted. Nevertheless, the
possibility that substantial amounts of the Company's securities may be resold
in the public market may adversely affect prevailing market prices for the
Company's securities, if any such market should develop.

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, Barron
Chase Securities, Inc. (the "Underwriter") has agreed to purchase from the
Company an aggregate of 2,000,000 Shares and 2,500,000 Warrants (collectively,
the "Securities"). The Securities are offered by the Underwriter subject to
prior sale, when, as and if delivered to and accepted by the Underwriter and
subject to approval of certain legal matters by counsel and certain other
conditions. The Underwriter is committed to purchase all Securities offered by
this Prospectus, if any are purchased (other than those covered by the
Overallotment Option described below).

The Company has been advised by the Underwriter that the Underwriter
proposes to offer the Securities to the public at the offering prices set forth
on the cover page of this Prospectus. The Underwriter has advised the Company
that the Underwriter proposes to offer the Securities through members of the
National Association of Securities Dealers, Inc. ("NASD"), and may allow
concessions, in its discretion, to certain selected dealers who are members of
the NASD and who agree to sell the Securities in conformity with the NASD's
Conduct Rules. Such concessions will not exceed the amount of the underwriting
discount that the Underwriter is to receive.

The Company has granted to the Underwriter an Overallotment Option,
exercisable for 45 days from the Effective Date, to purchase up to an additional
300,000 Shares and an additional 375,000 Warrants at the respective public
offering prices less the Underwriting Discounts set forth on the cover page of
this Prospectus. The Underwriter may exercise this option solely to cover
overallotments in the sale of the Securities being offered by this Prospectus.

Officers and directors of the Company may introduce the Underwriter to
persons to consider the Public Offering and to purchase Securities either
through the Underwriter or through participating dealers. In this connection, no
Securities have been reserved for those purchases and officers and directors
will not receive any commissions or any other compensation.

The Company has agreed to pay to the Underwriter a commission of ten percent
(10%) of the gross proceeds of the Public Offering (the "Underwriting
Discount"), including the gross proceeds from the sale of the Overallotment
Option, if exercised. In addition, the Company has agreed to pay to the
Underwriter the Non-Accountable Expense Allowance of three percent (3%) of the
gross proceeds of the Public Offering, including proceeds from any Securities
purchased pursuant to the Overallotment Option. The Company has paid to the
Underwriter a $50,000 advance in respect of the Non-Accountable Expense
Allowance. The Underwriter's expenses in excess of the Non-Accountable Expense
Allowance will be paid by the Underwriter. To the extent that the expenses of
the Underwriter are less than the amount of the Non-Accountable Expense
Allowance received, such excess shall be deemed to be additional compensation to
the Underwriter. The Underwriter has informed the Company that it does not
expect sales to discretionary accounts to exceed five percent (5%) of the total
number of Securities offered by the Company hereby.

The Company has agreed to engage the Underwriter as a financial advisor at a
fee of $108,000, which is payable to the Underwriter on the Closing Date.
Pursuant to the terms of a financial advisory agreement, the Underwriter has
agreed to provide, at the Company's request, advice to the Company concerning
potential merger and acquisition and financing proposals, whether by public
financing or otherwise. The Company has also agreed that if the Company
participates in any transaction which the Underwriter has introduced in writing
to the Company during a period of five years after the Closing (including
mergers, acquisitions, joint ventures and any other business transaction for the
Company introduced in writing by the Underwriter), and which is consummated
after the Closing (including an acquisition of assets or stock for which it
pays, in whole or in part, with shares or other securities of the Company), or
if the Company retains the services of the Underwriter in connection with any
such transaction (an "Introduced Consummated Transaction"), then the Company
will pay for the Underwriter's services an amount equal to 5% of up to one
million dollars of value paid or received in the

transaction, 4% of the next million of such value, 3% of the next million of
such value, 2% of the next million of such value, and 1% of the next million
dollars of such value and of all such value above $4,000,000.

Prior to the Public Offering, there has been no public market for the shares
of Common Stock or the Warrants. Consequently, the initial public offering
prices for the Securities, and the terms of the Warrants (including the exercise
price of the Warrants), have been determined by negotiation between the Company
and the Underwriter. Among the factors considered in determining the public
offering prices were the history of, and the prospects for, the Company's
business, an assessment of the Company's management, the Company's past and
present operations, its development and the general condition of the securities
market at the time of the Public Offering. The initial public offering prices do
not necessarily bear any relationship to the Company's assets, book value,
earnings, or other established criteria of value. Such prices are subject to
change as a result of market conditions and other factors, and no assurance can
be given that a public market for the Shares or the Warrants will develop after
the Closing, or if a public market in fact develops, that such public market
will be sustained, or that the Shares or the Warrants can be resold at any time
at the offering or any other price. See "Risk Factors."

At the Closing, the Company will issue to the Underwriter and/or persons
related to the Underwriter, for nominal consideration, the Common Stock
Underwriter Warrants to purchase up to 200,000 shares of Common Stock (the
"Underlying Shares") and the Warrant Underwriter Warrants to purchase up to
250,000 warrants (the "Underlying Warrants"). The Common Stock Underwriter
Warrants, the Warrant Underwriter Warrants and the Underlying Warrants are
sometimes referred to in this Prospectus as the "Underwriter Warrants." The
Common Stock Underwriter Warrants and the Warrant Underwriter Warrants will be
exercisable for a five-year period commencing on the Effective Date. The initial
exercise price of each Common Stock Underwriter Warrant shall be $8.25 per
Underlying Share (165% of the public offering price). The initial exercise price
of each Warrant Underwriter Warrant shall be $.20625 per Underlying Warrant
(165% of the public offering price). Each Underlying Warrant will be exercisable
for a five-year period commencing on the Effective Date to purchase one share of
Common Stock at an exercise price of $8.25 per share of Common Stock. The
Underwriter Warrants will be restricted from sale, transfer, assignment or
hypothecation for a period of twelve months from the Effective Date by the
holder, except (i) to officers of the Underwriter and members of the selling
group and officers and partners thereof; (ii) by will; or (iii) by operation of
law.

The Common Stock Underwriter Warrants and the Warrant Underwriter Warrants
contain provisions providing for appropriate adjustment in the event of any
merger, consolidation, recapitalization, reclassification, stock dividend, stock
split or similar transaction. The Underwriter Warrants contain net issuance
provisions permitting the holders thereof to elect to exercise the Underwriter
Warrants in whole or in part and instruct the Company to withhold from the
securities issuable upon exercise, a number of securities, valued at the current
fair market value on the date of exercise, to pay the exercise price. Such net
exercise provision has the effect of requiring the Company to issue shares of
Common Stock without a corresponding increase in capital. A net exercise of the
Underwriter Warrants will have the same dilutive effect on the interests of the
Company's stockholders as will a cash exercise. The Underwriter Warrants do not
entitle the holders thereof to any rights as a stockholder of the Company until
such Underwriter Warrants are exercised and shares of Common Stock are purchased
thereunder.

The Underwriter Warrants and the securities issuable thereunder may not be
offered for sale except in compliance with the applicable provisions of the
Securities Act. The Company has agreed that if it shall cause a post-effective
amendment, a new registration statement, or similar offering document to be
filed with the Commission, the holders shall have the right, for seven (7) years
from the Effective Date, to include in such registration statement or offering
statement the Underwriter Warrants and/or the securities issuable upon their
exercise at no expense to the holders. Additionally, the Company has agreed
that, upon request by the holders of 50% or more of the Underwriter Warrants
during the period commencing one

year from the Effective Date and expiring four years thereafter, the Company
will, under certain circumstances, register the Underwriter Warrants and/or any
of the securities issuable upon their exercise.

In order to facilitate the offering of the Common Stock and Warrants, the
Underwriter may engage in transactions that stabilize, maintain or otherwise
affect the price of the Common Stock and Warrants. Specifically, the Underwriter
may overallot in connection with the Offering, creating a short position in the
Common Stock and Warrants for its own account. In addition, to cover
overallotments or to stabilize the price of the Common Stock and Warrant, the
Underwriter may bid for, and purchase, shares of Common Stock and Warrants in
the open market. Finally, the Underwriter may reclaim selling concessions
allowed to a dealer for distributing the Common Stock and Warrants in the Public
Offering, if the Underwriter repurchases previously distributed Common Stock or
Warrants in transactions to cover the Underwriter's short position in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock and Warrants above independent
market levels. The Underwriter is not required to engage in these activities,
and may end any of these activities at any time.

The Company has agreed to indemnify the Underwriter against any costs or
liabilities incurred by the Underwriter by reason of misstatements or omissions
to state material facts in connection with the statements made in the
Registration Statement filed by the Company with the Commission under the
Securities Act (together with all amendments and exhibits thereto, the
"Registration Statement") and this Prospectus. The Underwriter has in turn
agreed to indemnify the Company against any costs or liabilities by reason of
misstatements or omissions to state material facts in connection with the
statements made in the Registration Statement and this Prospectus, based on
information relating to the Underwriter and furnished in writing by the
Underwriter. To the extent that these provisions may purport to provide
exculpation from possible liabilities arising under the federal securities laws,
in the opinion of the Commission, such indemnification is contrary to public
policy and therefore unenforceable.

The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to copies
of each such agreement which are filed as exhibits to the Registration
Statement. See "Additional Information."

SELLING SECURITYHOLDERS

Concurrently with this Public Offering, 300,000 shares of Common Stock
underlying Warrants sold in the Company's Private Placement have been registered
for immediate resale. The Company will not receive any proceeds from sales of
the shares of the Company's Common Stock by the Selling Securityholders. To the
best of the Company's knowledge, none of the holders of such securities or their
affiliates has ever held any position or office with the Company or had any
other material relationship with the Company. The holders of such securities
have agreed not to sell, transfer, hypothecate or otherwise dispose of, for a
period of fifteen months from the date of this Prospectus, an aggregate of
300,000 shares of Common Stock and 300,000 Warrants and the 300,000 shares of
Common Stock underlying said Warrants without the prior written consent of the
Underwriter.

THE ACQUISITIONS OFFERING

Also concurrently with this Public Offering and to consummate the
Acquisitions, the Company will issue 2,000,000 shares of Common Stock to TDA.
300,000 shares of the Company's Common Stock will be issued to James E. Helzer,
pursuant to the agreement by which JEH Eagle acquired substantially all of the
assets and business of JEH Co. and the transactions by which said shares will be
issued have been registered. TDA is the Company's majority stockholder, it will
be selling the Acquisitions to the Company, and certain of its executive
officers and directors are also executive officers and directors of the entities
to be acquired. James E. Helzer is an executive officer of the Company and the
entities to be acquired. TDA and James E. Helzer have derived and will derive
significant financial benefits in transactions with the Company, Eagle and JEH
Eagle. As TDA and Mr. Helzer are affiliates of the Company, such shares will
remain "restricted" securities as such term is defined in the Securities Act and
the rules and regulations promulgated thereunder. Additionally, TDA has agreed
not to sell, transfer, hypothecate or otherwise dispose of, for a period of two
years from the date of this Prospectus, any shares of the Company's Common Stock
owned by it on the date hereof and to be acquired in connection with the Public
Offering and the Acquisitions. Mr. Helzer has agreed not to sell, transfer,
hypothecate or otherwise dispose of, for a period of two years from the date of
this Prospectus, said 300,000 shares of the Company's Common Stock without the
prior written consent of the Underwriter.

LEGAL MATTERS

The validity of the issuance of the securities offered in the Public
Offering will be passed upon for the Company by Gusrae, Kaplan & Bruno, New
York, New York. Certain legal matters in connection with the Public Offering
will be passed upon for the Underwriter by David A. Carter, P.A., Boca Raton,
Florida.

EXPERTS

The balance sheets of the Company as of June 30, 1997 and 1996 and the
related consolidated statements of operations, shareholders' equity (deficiency)
and cash flows for the year ended June 30, 1997 and the period May 1, 1996
(inception) to June 30, 1996 appearing in this Prospectus and Registration
Statement have been audited by Deloitte & Touche LLP, independent auditors, as
set forth in their report thereon appearing elsewhere herein and has been so
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.

The balance sheets of Eagle Supply, Inc. as of June 30, 1997 and 1996 and
the related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended June 30, 1997 appearing in
this Prospectus and Registration Statement have been audited by Deloitte &
Touche LLP, independent auditors, as set forth in their report thereon appearing
elsewhere herein and has been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

The balance sheets of the JEH Company for the six months ended June 30, 1997
and years ended December 31, 1996 and 1995 and the related statements of
operations, retained earnings and cash flows for the six months ended June 30,
1997 and each of the years in the three year period ended December 31, 1996
appearing in this Prospectus and Registration Statement have been audited by
Waters, Murray & Associates, independent auditors, as set forth in their report
thereon appearing elsewhere herein and has been so included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed with the Washington, D.C. office of the Commission a
Registration Statement (the "Registration Statement") under the Securities Act
with respect to the Securities offered by this Prospectus. This Prospectus does
not contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and this
offering, reference is made to the Registration Statement, including the
exhibits filed therewith, which may be inspected without charge or copies made
at prescribed rates from the Commission at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549 or at its Northeast Regional Office located
at Seven World Trade Center, New York, New York 10048. Statements contained in
the Prospectus as to the contents of any contract or other document are not
necessarily complete and reference is made to each such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

Upon effectiveness of the Registration Statement, of which this Prospectus
forms a part, the Company will be subject to the reporting requirements of the
Exchange Act and in accordance therewith will file reports and other information
with the Commission. Reports and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at the following addresses: Northeast Regional
Office, Seven World Trade Center, New York, New York 10048; and Midwest Regional
Office, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
Commission maintains a website that contains reports, proxies and information
statements and other information regarding issuers that file electronically with
the Commission. The Commission's website is located at http://www.sec.gov.

INDEX TO FINANCIAL STATEMENTS

PAGE
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EAGLE SUPPLY GROUP, INC.
INDEPENDENT AUDITORS' REPORT.............................................................................. F-3
Balance Sheets at June 30, 1997 and 1996................................................................ F-4
Statements of Operations for the Year Ended June 30, 1997 and the Period May 1, 1996 (inception) to June
30, 1996.............................................................................................. F-5
Statements of Shareholders' Equity (Deficiency) for the Year Ended June 30, 1997 and the Period May 1,
1996 (inception) to June 30, 1996..................................................................... F-6
Statements of Cash Flows for the Year Ended June 30, 1997 and the Period May 1, 1996 (inception) to June
30, 1996.............................................................................................. F-7
Notes to Financial Statements for the Year Ended June 30, 1997 and the Period May 1, 1996 (inception) to
June 30, 1996......................................................................................... F-8
Unaudited Balance Sheet at April 30, 1998............................................................... F-11
Unaudited Statements of Operations and Deficiency for the Ten Months Ended April 30, 1998 and 1997...... F-12
Unaudited Statements of Cash Flows for the Ten Months Ended April 30, 1998 and 1997..................... F-13
Notes to Unaudited Financial Statements for the Ten Months Ended April 30, 1998 and 1997................ F-14

EAGLE SUPPLY, INC.
INDEPENDENT AUDITORS' REPORT.............................................................................. F-17
Balance Sheets at June 30, 1997 and 1996................................................................ F-18
Statements of Operations for the Years Ended June 30, 1997, 1996 and 1995............................... F-19
Statements of Shareholder's Equity for the Years Ended June 30, 1997, 1996 and 1995..................... F-20
Statements of Cash Flows for the Years Ended June 30, 1997, 1996 and 1995............................... F-21
Notes to Financial Statements for the Years Ended June 30, 1997, 1996 and 1995.......................... F-22
Unaudited Balance Sheet at April 30, 1998............................................................... F-29
Unaudited Statements of Operations and Retained Earnings for the Ten Months Ended April 30, 1998 and
1997.................................................................................................. F-30
Unaudited Statements of Cash Flows for the Ten Months Ended April 30, 1998 and 1997..................... F-31
Notes to Unaudited Financial Statements for the Ten Months Ended April 30, 1998 and 1997................ F-32

JEH COMPANY, INC.
INDEPENDENT AUDITORS' REPORT.............................................................................. F-35
Balance Sheet at June 30, 1997.......................................................................... F-36
Statements of Operations and Retained Earnings for the Six-Months Ended June 30, 1997 and Unaudited June
30, 1996.............................................................................................. F-37
Statements of Cash Flows for the Six-Months Ended June 30, 1997 and Unaudited June 30, 1996............. F-38
Notes to Financial Statements for the Six-Months Ended June 30, 1997 and Unaudited June 30, 1996........ F-39

INDEPENDENT AUDITORS' REPORT.............................................................................. F-45
Balance Sheets at December 31, 1996 and 1995............................................................ F-46
Statements of Operations and Retained Earnings for the Years Ended December 31, 1996, 1995 and 1994..... F-47
Statements of Cash Flows for the Years Ended December 31, 1996, 1995 and 1994........................... F-48
Notes to Financial Statements for the Years Ended December 31, 1996, 1995 and 1994...................... F-49

F-1

PAGE
-----------

JEH/EAGLE SUPPLY, INC.
Unaudited Balance Sheet at April 30, 1998............................................................... F-56
Unaudited Statements of Operations for the Ten Months Ended April 30, 1998 and 1997..................... F-57
Unaudited Statements of Cash Flows for the Ten Months Ended April 30, 1998 and 1997..................... F-58
Notes to Unaudited Financial Statements for the Ten Months Ended April 30, 1998......................... F-59

F-2

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
Eagle Supply Group, Inc.

We have audited the accompanying balance sheets of Eagle Supply Group, Inc.
(a majority-owned subsidiary of TDA Industries, Inc.) as of June 30, 1997 and
1996 and the related statements of operations, shareholders' equity (deficiency)
and cash flows for the year ended June 30, 1997 and the period May 1, 1996
(inception) to June 30, 1996. These financial statements are the responsibility
of management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Eagle Supply Group, Inc. as of June 30, 1997
and 1996, and the results of its operations and its cash flows for the year
ended June 30, 1997 and the period May 1, 1996 (inception) to June 30, 1996, in
conformity with generally accepted accounting principles.

As discussed in Note 6, the accompanying financial statements for the year
ended June 30, 1997 have been restated for the write-off of previously deferred
registration costs of $52,289.

/s/ Deloitte & Touche LLP

September 12, 1997
(June 4, 1998 as to the first paragraph, November 13, 1997 as to the second
paragraph and
February 9, 1998 as to the third paragraph of Note 6 and December 12, 1997 as to
the second paragraph of Note 4)
New York, New York

F-3

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

BALANCE SHEETS

JUNE 30, 1997 AND 1996

1997 1996
----------- -----------

(RESTATED
NOTE 6)

ASSETS

CASH.................................................................................... $ 5,366 $ 243,960
STOCK SUBSCRIPTIONS RECEIVABLE.......................................................... -- 56,250
----------- -----------
$ 5,366 $ 300,210
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' (DEFICIENCY) EQUITY

CURRENT LIABILITIES:
Accrued expenses and other current liabilities........................................ $ 82,289 $ --
Loan payable to shareholder........................................................... -- 6,105
----------- -----------
Total current liabilities......................................................... 82,289 6,105
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 6)

SHAREHOLDERS' (DEFICIENCY) EQUITY (Note 4):
Preferred shares, $.0001 par value per share, 2,500,000 shares authorized, none issued
and outstanding..................................................................... -- --
Common shares, $.0001 par value per share, 25,000,000 shares authorized, 2,400,000
issued and outstanding.............................................................. 240 240
Additional paid-in capital............................................................ 293,865 293,865
Deficit............................................................................... (371,028) --
----------- -----------
Total shareholders' (deficiency) equity........................................... (76,923) 294,105
----------- -----------
$ 5,366 $ 300,210
----------- -----------
----------- -----------

See notes to financial statements.

F-4

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

STATEMENTS OF OPERATIONS

YEAR ENDED JUNE 30, 1997 AND THE PERIOD MAY 1, 1996 (INCEPTION)
TO JUNE 30, 1996

1997 1996
----------- -----------

(RESTATED
NOTE 6)
ADMINISTRATIVE EXPENSES................................................................. $ 675 $ --
----------- -----------
LOSS FROM OPERATIONS.................................................................... (675) --
----------- -----------
OTHER EXPENSE:
Registration costs (Note 6)........................................................... (370,353) --
----------- -----------
NET LOSS................................................................................ $ (371,028) $ --
----------- -----------
----------- -----------

See notes to financial statements.

F-5

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)

YEAR ENDED JUNE 30, 1997 (RESTATED NOTE 6) AND THE PERIOD MAY 1, 1996
(INCEPTION)

TO JUNE 30, 1996

COMMON SHARES ADDITIONAL
----------------------- PAID-IN
SHARES AMOUNT CAPITAL DEFICIENCY TOTAL
---------- ----------- ---------- ----------- -----------

BALANCE, MAY 1, 1996................................. -- $ -- $ -- $ -- $ --
Proceeds from sale of common shares................ 2,100,000 210 -- -- 210
Proceeds from private placement, net of related
expenses......................................... 300,000 30 293,865 -- 293,895
---------- ----- ---------- ----------- -----------
BALANCE, JUNE 30, 1996............................... 2,400,000 240 293,865 -- 294,105
Net loss........................................... -- -- -- (371,028) (371,028)
---------- ----- ---------- ----------- -----------
BALANCE, JUNE 30, 1997............................... 2,400,000 $ 240 $ 293,865 $ (371,028) $ (76,923)
---------- ----- ---------- ----------- -----------
---------- ----- ---------- ----------- -----------

See notes to financial statements.

F-6

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

STATEMENTS OF CASH FLOWS

YEAR ENDED JUNE 30, 1997 AND THE PERIOD MAY 1, 1996 (INCEPTION)
TO JUNE 30, 1996

1997 1996
----------- ----------

(RESTATED
NOTE 6)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................................................... $ (371,028) $ --
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Increase in accrued expenses and other current liabilities......................... 82,289 --
----------- ----------
Net cash used in operating activities............................................ (288,739) --
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) proceeds from loan payable to shareholder................................. (6,105) 6,105
Proceeds from sale of common shares.................................................... -- 210
Proceeds from private placement........................................................ -- 300,000
Decrease (increase) in stock subscriptions receivable.................................. 56,250 (56,250)
Costs associated with private placement................................................ -- (6,105)
----------- ----------
Net cash provided by financing activities........................................ 50,145 243,960
----------- ----------
NET (DECREASE) INCREASE IN CASH.......................................................... (238,594) 243,960
CASH, BEGINNING OF YEAR/PERIOD........................................................... 243,960 --
----------- ----------
CASH, END OF YEAR/PERIOD................................................................. $ 5,366 $ 243,960
----------- ----------
----------- ----------

See notes to financial statements.

F-7

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1997 AND PERIOD MAY 1, 1996 (INCEPTION) TO JUNE 30, 1997

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BUSINESS DESCRIPTION--Eagle Supply Group, Inc. (the "Company") is a
majority-owned subsidiary of TDA Industries, Inc. ("TDA" or the "Parent") and
was organized to acquire, integrate and operate seasoned, privately-held
companies operating in the roofing supplies and related products distribution
industry and companies which manufacture products for or supply products to such
industry.

ACQUISITIONS--Upon completion of the Offering described in Note 6, the
Company will acquire all of the issued and outstanding common shares of Eagle
Supply, Inc. ("Eagle") and JEH/Eagle Supply, Inc. ("JEH Eagle") (the
"Acquisitions") from TDA for consideration consisting of 2,000,000 of the
Company's common shares. The Acquisitions will be accounted for as the combining
of three entities under common control, similar to a pooling of interests, with
the net assets of Eagle and JEH Eagle recorded at historical carryover values.
The 2,000,000 common shares to be issued to TDA will be recorded at Eagle's and
JEH Eagle's historical net book value at the date of acquisition. Accordingly,
this transaction will not result in any revaluation of Eagle's or JEH Eagle's
assets or the creation of any goodwill. Upon the consummation of the
Acquisitions, Eagle and JEH Eagle will become wholly-owned subsidiaries of the
Company and will constitute the sole business operations of the Company until
such time, if any, as the Company consummates additional acquisitions. As a
result of the Acquisitions, the financial statements of the Company, Eagle and
JEH Eagle will be combined. The financial statements of Eagle will be included
in the consolidated financial statements for all periods presented and the
financial statements of JEH Eagle will be included in the consolidated financial
statements for periods subsequent to the acquisition of JEH Company, Inc. by JEH
Eagle on July 1, 1997. Eagle and JEH Eagle operate in a single industry segment.

The Company is dependent on its ability to raise funds through debt or
equity financing in order to meet its obligations and accomplish its acquisition
objectives.

INCOME TAXES--The Company is included in the consolidated Federal and state
income tax returns of its Parent. Income taxes are calculated on a separate
return filing basis.

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

2. TRANSACTIONS WITH PARENT AND AFFILIATED COMPANIES

During the period ended June 30, 1996, TDA advanced $6,105 to the Company
which was used by the Company to pay certain costs and expenses related to its
private placement in June 1996 described in Note 6. This advance was repaid to
TDA in July 1996.

3. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES

TDA will provide office space and administrative services to the Company at
its offices in New York City pursuant to an administrative services agreement to
be entered into by the Company and TDA upon the closing of the Offering
described in Note 6 and consummation of the Acquisitions described in Note 1.
The administrative services agreement will be on a month-to-month basis, and the
fee payable by the Company to TDA for such services will be $3,000 per month.
Further, TDA and JEH Eagle have entered into an agreement pursuant to which TDA
provides JEH Eagle with certain management services. This

F-8

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED JUNE 30, 1997 AND PERIOD MAY 1, 1996 (INCEPTION) TO JUNE 30, 1997

3. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

agreement is for a period of five years and commenced in July 1997. The fee
payable to TDA for such services, to commence upon the completion of the
Offering and the consummation of the Acquisitions, is $3,000 per month.

Eagle operates a substantial portion of its business from facilities which
it leases from a subsidiary of TDA on a month-to-month basis. Upon completion of
the Offering and the consummation of the Acquisitions, Eagle and TDA intend to
enter into ten-year leases for such facilities.

The Chief Executive Officer and Chairman of the Board of Directors of the
Company is an officer and a director of TDA, Eagle and JEH Eagle. Additionally,
the Executive Vice President, Secretary, Treasurer and a director of the Company
is an officer and a director of TDA, Eagle and JEH Eagle. A director nominee of
the Company is also a director of TDA.

The Company and Eagle have entered into employment agreements with their
Chief Executive Officer and their Executive Vice President, Secretary and
Treasurer, to become effective upon closing of the Offering and consummation of
the Acquisitions, for a five-year period at annual salaries of $200,000 each,
subject to annual increases or bonuses as may be determined by the Board of
Directors. Further, in July 1997, JEH Eagle entered into five-year employment
agreements with such officers at annual salaries of $60,000 each. The payment of
such salaries by JEH Eagle shall commence upon completion of the Offering and
the consummation of the Acquisitions. The employment agreements provide for,
among other things, payments of salary and continued benefits, under certain
conditions.

4. SHAREHOLDERS' EQUITY (DEFICIENCY)

INITIAL CAPITALIZATION--In May 1996, the Company approved the issuance of
2,000,000 of its common shares to TDA (a founding shareholder) for a
subscription price of $200 and 100,000 common shares to another founding
shareholder and director for a subscription price of $10.

On December 12, 1997 the Company increased its authorized number of shares
from 17,000,000 to 27,500,000. The number of preferred shares was increased from
2,000,000 to 2,500,000 and the number of common shares was increased from
15,000,000 to 25,000,000. There was no change in the par value per share.

PREFERRED SHARES--The preferred shares may be issued in one or more series,
the terms of which may be determined at the time of issuance by the Board of
Directors, without further action by shareholders, and may include voting rights
(including the right to vote as a series on particular matters), preferences as
to dividends and liquidation, conversion and redemption rights and sinking fund
provisions.

COMMON SHARES--Holders of common shares are entitled to one vote for each
share held of record on each matter submitted to a vote of shareholders. There
is no cumulative voting for election of directors. Subject to the prior rights
of any series of preferred shares which may from time to time be outstanding,
holders of common shares are entitled to receive dividends when and if declared
by the Board of Directors out of funds legally available thereof and, upon the
liquidation, dissolution or winding up of the Company, are entitled to share
ratably in all assets remaining after payment of liabilities and payment of
accrued dividends and liquidation preferences on the preferred shares, if any.
Holders of common shares have no pre-emptive rights and have no rights to
convert their common shares into any other securities.

F-9

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED JUNE 30, 1997 AND PERIOD MAY 1, 1996 (INCEPTION) TO JUNE 30, 1997

4. SHAREHOLDERS' EQUITY (DEFICIENCY) (CONTINUED)

WARRANTS--Each warrant entitles the registered holder to purchase one common
share at an exercise price of $5.00 per share (subject to adjustment) for three
years commencing on the date of the Offering, provided that during such time a
current prospectus relating to the common shares is then in effect and the
common shares are qualified for sale or exempt from qualification under
applicable state securities laws. The warrants that will be included in the
Offering are transferable separately from the common shares (Note 6).

STOCK OPTION PLAN--In August 1996, the Board of Directors adopted and
shareholders approved the Company's 1996 Stock Option Plan (the "1996 Stock
Option Plan"). The 1996 Stock Option Plan provides for the grant of options that
are intended to qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422A of the Internal Revenue Code, as amended (the
"Code"), to certain employees, officers and directors. The total number of
common shares for which options may be granted under the 1996 Stock Option Plan
is 1,000,000 common shares. Upon the closing of the Offering, the Company
intends to grant options exercisable into 700,000 common shares to various of
its employees and certain of its officers and directors. All of such options
will have a term of ten years. The exercise price of these options will be the
price to the public of the common shares offered in the Offering and will vest
at a rate of no more than 20% per year commencing on the first anniversary of
the date of grant.

5. PRIVATE PLACEMENT

In June 1996, the Company sold an aggregate of 300,000 common shares and
300,000 warrants to private investors for aggregate gross proceeds of $300,000.

6. INITIAL PUBLIC OFFERING

In April 1996, the Company signed a letter of intent with an underwriter for
an initial public offering. This offering was not consummated, and, except for
$52,289, the registration costs incurred by the Company in connection with the
filing of its registration statement for that offering were expensed in fiscal
1997. Subsequent to the issuance of the 1997 financial statments, Management
determined that the $52,289 of registration costs previously deferred as of June
30, 1997, should have been expensed in fiscal 1997. Accordingly, the financial
statements for the year ended June 30, 1997 have been restated.

In September 1997, as amended in November 1997, the Company signed a new
letter of intent with the same underwriter for an initial public offering (the
"Offering"). The Offering is expected to be for 2,000,000 common shares, par
value $.0001 per share, of the Company and 2,500,000 redeemable common share
purchase warrants.

In February 1998, the Company borrowed an aggregate of $300,000 pursuant to
promissory notes issued to TDA ($150,000) and two other shareholders of the
Company. The promissory notes provide for interest at the rate of 15% per annum
through June 30, 1998 and 6% per annum thereafter. The promissory notes mature
on the earlier of August 9, 2000 or upon the closing of the Offering described
above. The proceeds from the issuance of the promissory notes are being used to
pay certain costs and expenses relating to the Offering.

The costs incurred in connection with the Offering will be offset against
the proceeds at the closing.

* * * * *

F-10

EAGLE SUPPLY GROUP, INC.

(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED BALANCE SHEET

APRIL 30, 1998

ASSETS

CASH............................................................................. $ 145,974
FEDERAL AND STATE TAXES DUE FROM PARENT.......................................... 4,000
DEFERRED REGISTRATION COSTS...................................................... 204,138
---------
$ 354,112
---------
---------
LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Accrued expenses and other current liabilities................................. $ 137,035
Notes payable--shareholders (Note 6)........................................... 300,000
---------
Total current liabilities.................................................. 437,035
---------

COMMITMENTS AND CONTINGENCIES (Notes 2, 3 and 6)

SHAREHOLDERS' DEFICIENCY (Note 4):
Preferred shares, $.0001 par value per share, 2,500,000 shares authorized,
none issued and outstanding.................................................. --
Common shares, $.0001 par value per share, 25,000,000 shares authorized,
2,400,000 issued and outstanding............................................. 240
Additional paid-in capital..................................................... 293,865
Deficiency..................................................................... (377,028)
---------
Total shareholders' deficiency............................................. (82,923)
---------
$ 354,112
---------
---------

See notes to unaudited financial statements.

F-11

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED STATEMENTS OF OPERATIONS AND DEFICIENCY

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

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

ADMINISTRATIVE EXPENSES..................................................................... $ -- $ 421
----------- ---------
LOSS FROM OPERATIONS........................................................................ -- (421)
INTEREST EXPENSE............................................................................ 10,000 --
----------- ---------
LOSS BEFORE BENEFIT FOR INCOME TAXES........................................................ (10,000) (421)
BENEFIT FOR INCOME TAXES.................................................................... 4,000 --
----------- ---------
NET LOSS.................................................................................... (6,000) (421)
DEFICIENCY, BEGINNING OF PERIOD............................................................. (371,028) --
----------- ---------
DEFICIENCY, END OF PERIOD................................................................... $ (377,028) $ (421)
----------- ---------
----------- ---------

See notes to unaudited financial statements.

F-12

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED STATEMENTS OF CASH FLOWS

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

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

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................................. $ (6,000) $ (421)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Changes in operating assets and liabilities:
Increase in accrued expenses and other current liabilities........................ 54,746 --
Increase in federal and state taxes due from Parent............................... (4,000) --
----------- -----------
Net cash provided by (used in) operating activities............................. 44,746 (421)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable--shareholders................................. 300,000 --
Decrease in stock subscriptions receivable............................................ -- 56,250
Increase in deferred registration costs............................................... (204,138) (281,602)
Repayment of loan payable to shareholder.............................................. -- (6,105)
----------- -----------
Net cash provided by (used in) financing activities............................. 95,862 (231,457)
----------- -----------
NET INCREASE (DECREASE) IN CASH......................................................... 140,608 (231,878)
CASH, BEGINNING OF PERIOD............................................................... 5,366 243,960
----------- -----------
CASH, END OF PERIOD..................................................................... $ 145,974 $ 12,082
----------- -----------
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes due from Parent.......................................................... $ 4,000 --
----------- -----------
----------- -----------

See notes to unaudited financial statements.

F-13

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

1. BASIS OF FINANCIAL STATEMENT PRESENTATION

The financial statements of Eagle Supply Group, Inc. (the "Company"), a
majority-owned subsidiary of TDA Industries, Inc. ("TDA" or the "Parent") have
been prepared by the Company, which is responsible for their integrity and
objectivity, without audit. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for the fair presentation
of financial position, results of operations and cash flows have been included.
These financial statements, which, to the best of management's knowledge and
belief, were prepared in accordance with generally accepted accounting
principles, should be read in conjunction with the financial statements of the
Company for the fiscal years ended June 30, 1997 and 1996 and notes thereto
included elsewhere in this Prospectus. Operating results for the interim period
are not necessarily indicative of results for the entire year.

2. ACQUISITIONS

Upon completion of the Offering described in Note 6, the Company will
acquire all of the issued and outstanding common shares of Eagle Supply, Inc.
("Eagle") and JEH/Eagle Supply, Inc. ("JEH Eagle") (the "Acquisitions") from TDA
for consideration consisting of 2,000,000 of the Company's common shares. The
Acquisitions will be accounted for as the combining of three entities under
common control, similar to a pooling of interests, with the net assets of Eagle
and JEH Eagle recorded at historical carryover values. The 2,000,000 common
shares to be issued to TDA will be recorded at Eagle's and JEH Eagle's
historical net book value at the date of acquisition. Accordingly, this
transaction will not result in any revaluation of Eagle's or JEH Eagle's assets
or the creation of any goodwill. Upon the consummation of the Acquisitions,
Eagle and JEH Eagle will become wholly-owned subsidiaries of the Company and
will constitute the sole business operations of the Company until such time, if
any, as the Company consummates additional acquisitions. As a result of the
Acquisitions, the financial statements of the Company, Eagle and JEH Eagle will
be combined. The financial statements of Eagle will be included in the
consolidated financial statements for all periods presented and the financial
statements of JEH Eagle will be included in the consolidated financial
statements for periods subsequent to its acquisition on July 1, 1997 by TDA.
Eagle and JEH Eagle operate in a single industry segment.

3. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES

TDA will provide office space and administrative services to the Company at
its offices in New York City pursuant to an administrative services agreement to
be entered into by the Company and TDA upon the closing of the Offering
described in Note 6 and the consummation of the Acquisitions described in Note
2. The administrative services agreement will be on a month-to-month basis, and
the fee payable by the Company to TDA for such services will be $3,000 per
month. Further, TDA and JEH Eagle have entered into an agreement pursuant to
which TDA provides JEH Eagle with certain management services. This agreement is
for a period of five years and commenced in July 1997. The fee payable to TDA
for such services, to commence upon the completion of the Offering and the
consummation of the Acquisitions, is $3,000 per month.

Eagle operates a substantial portion of its business from facilities which
it leases from a subsidiary of TDA on a month-to-month basis. Upon completion of
the Offering and the Acquisitions, Eagle and TDA intend to enter into ten-year
leases for such facilities.

F-14

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

3. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
The Chief Executive Officer and Chairman of the Board of Directors of the
Company is an officer and a director of TDA, Eagle and JEH Eagle. Additionally,
the Executive Vice President, Secretary, Treasurer and a director of the Company
is an officer and a director of TDA, Eagle and JEH Eagle. A director nominee of
the Company is also a director of TDA.

4. SHAREHOLDERS' DEFICIENCY

WARRANTS--Each warrant entitles the registered holder to purchase one common
share at an exercise price of $5.50 per share (subject to adjustment) for five
years commencing on the date of the Offering, provided that during such time a
current prospectus relating to the common shares is then in effect and the
common shares are qualified for sale or exempt from qualification under
applicable state securities laws. The warrants that will be included in the
Offering are transferable separately from the common shares (Note 6).

F-15

EAGLE SUPPLY GROUP, INC.
(A MAJORITY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

4. SHAREHOLDERS' DEFICIENCY (CONTINUED)
STOCK OPTION PLAN--In August 1996, the Board of Directors adopted and
shareholders approved the Company's 1996 Stock Option Plan (the "1996 Stock
Option Plan"). The 1996 Stock Option Plan provides for the grant of options that
are intended to qualify as incentive stock options ("Incentive Stock Options")
within the meaning of Section 422A of the Internal Revenue Code, as amended (the
"Code"), to certain employees, officers and directors. The total number of
common shares for which options may be granted under the 1996 Stock Option Plan
is 1,000,000 common shares. Upon the closing of the Offering, the Company
intends to grant options exercisable into 700,000 common shares to various of
its employees and certain of its officers and directors. All of such options
will have a term of ten years. The exercise price of these options will be the
price to the public of the common shares offered in the Offering and will vest
at a rate of no more than 20% per year commencing on the first anniversary of
the date of grant.

5. PRIVATE PLACEMENT

In June 1996, the Company sold an aggregate of 300,000 common shares and
300,000 warrants to private investors for aggregate gross proceeds of $300,000.

6. INITIAL PUBLIC OFFERING

In April 1996, the Company signed a letter of intent with an underwriter for
an initial public offering. This offering was not consummated, and the
registration costs incurred by the Company in connection with the filing of its
registration statement for that offering were expensed in fiscal 1997.

The costs incurred in connection with the Offering will be offset against
the proceeds at the closing.

* * * * *

F-16

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of
Eagle Supply, Inc.

We have audited the accompanying balance sheets of Eagle Supply, Inc. (a
wholly-owned subsidiary of TDA Industries, Inc.) as of June 30, 1997 and 1996
and the related statements of operations, shareholder's equity and cash flows
for each of the three years in the period ended June 30, 1997. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Eagle Supply, Inc. as of June 30, 1997 and
1996, and the results of its operations and its cash flows for each of the three
years in the period ended June 30, 1997, in conformity with generally accepted
accounting principles.

/s/ Deloitte & Touche LLP
September 3, 1997
(November 13, 1997 as to the first paragraph of Note 8)
Tampa, Florida

F-17

EAGLE SUPPLY , INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

BALANCE SHEETS

JUNE 30, 1997 AND 1996

1997 1996
------------- -------------

ASSETS

CURRENT ASSETS:
Cash............................................................................. $ 1,029,774 $ 198,441
Accounts receivable--trade (net of allowance for doubtful accounts--
1997--$450,000; 1996--$465,000) (Note 3)....................................... 8,530,600 8,291,831
Inventories (Note 3)............................................................. 4,505,534 4,825,902
Deferred tax asset (Note 5)...................................................... 188,558 193,528
Other current assets............................................................. 539,696 535,731
------------- -------------
Total current assets......................................................... 14,794,162 14,045,433
IMPROVEMENTS AND EQUIPMENT (net of accumulated depreciation and amortization)
(Notes 2 and 3).................................................................. 1,054,309 1,433,099
------------- -------------
$ 15,848,471 $ 15,478,532
------------- -------------
------------- -------------
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable................................................................. $ 7,763,779 $ 8,193,812
Accrued expenses and other current liabilities................................... 569,569 814,158
Current portion of long-term debt................................................ 11,000 11,000
Federal and state income taxes due to Parent..................................... 140,000 793,000
------------- -------------
Total current liabilities.................................................... 8,484,348 9,811,970
LONG-TERM DEBT (Note 3)............................................................ 7,195,163 5,678,243
DEFERRED TAX LIABILITY (Note 5).................................................... 70,912 90,339
------------- -------------
Total liabilities............................................................ 15,750,423 15,580,552
------------- -------------
COMMITMENTS AND CONTINGENCIES (Notes 4, 6 and 8)
SHAREHOLDER'S EQUITY (DEFICIENCY):
Common shares, $100 par value per share, 1,500 shares authorized,
593 issued and outstanding..................................................... 59,300 59,300
Additional paid-in capital....................................................... 1,000,000 1,000,000
Retained earnings................................................................ 1,593,802 2,652,026
------------- -------------
2,653,102 3,711,326
Less: Due from Parent and affiliated companies (Note 4)...................... (2,555,054) (3,813,346)
------------- -------------
Total shareholder's equity (deficiency)...................................... 98,048 (102,020)
------------- -------------
$ 15,848,471 $ 15,478,532
------------- -------------
------------- -------------

See notes to financial statements.

F-18

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

STATEMENTS OF OPERATIONS

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

1997 1996 1995
------------- ------------- -------------

REVENUES............................................................ $ 57,575,712 $ 59,262,226 $ 50,483,469
COST OF SALES....................................................... 46,104,588 46,685,356 40,743,901
------------- ------------- -------------
11,471,124 12,576,870 9,739,568
------------- ------------- -------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ( including a provision
for doubtful accounts of $299,433, $203,133 and $403,169 in 1997,
1996 and 1995, respectively (Notes 4, 6, 7 and 9)................. 9,968,759 9,348,749 8,373,548
DEPRECIATION........................................................ 593,720 538,831 532,906
------------- ------------- -------------
10,562,479 9,887,580 8,906,454
------------- ------------- -------------
INCOME FROM OPERATIONS.............................................. 908,645 2,689,290 833,114
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Interest income..................................................... 22,217 23,250 22,511
Interest expense (Note 3)........................................... (599,086) (604,505) (288,036)
------------- ------------- -------------
(576,869) (581,255) (265,525)
------------- ------------- -------------
INCOME BEFORE PROVISION FOR INCOME TAXES............................ 331,776 2,108,035 567,589
PROVISION FOR INCOME TAXES (Note 5)................................. 140,000 793,000 215,000
------------- ------------- -------------
NET INCOME.......................................................... $ 191,776 $ 1,315,035 $ 352,589
------------- ------------- -------------
------------- ------------- -------------

See notes to financial statements.

F-19

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

STATEMENTS OF SHAREHOLDER'S EQUITY

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

DUE FROM
COMMON SHARES ADDITIONAL PARENT AND
---------------------- PAID-IN RETAINED AFFILIATED
SHARES AMOUNT CAPITAL EARNINGS TOTAL COMPANIES TOTAL
----------- --------- ------------ ------------- ------------- ------------- -------------

BALANCE, JULY 1, 1994......... 593 $ 59,300 $ 1,000,000 $ 2,502,937 $ 3,562,237 $ -- $ 3,562,237
Net income.................... -- -- -- 352,589 352,589 -- 352,589
Due from Parent and affiliated
companies-- net.............. -- -- -- -- -- (3,872,579) (3,872,579)
Dividend paid to Parent....... -- -- -- (421,535) (421,535) -- (421,535)
--- --------- ------------ ------------- ------------- ------------- -------------
BALANCE, JUNE 30, 1995........ 593 59,300 1,000,000 2,433,991 3,493,291 (3,872,579) (379,288)
Net income.................... -- -- -- 1,315,035 1,315,035 -- 1,315,035
Due from Parent and affiliated
companies-- net.............. -- -- -- -- -- 59,233 59,233
Dividend paid to Parent....... -- -- -- (1,097,000) (1,097,000) -- (1,097,000)
--- --------- ------------ ------------- ------------- ------------- -------------
BALANCE, JUNE 30, 1996........ 593 59,300 1,000,000 2,652,026 3,711,326 (3,813,346) (102,020)
Net income.................... -- -- -- 191,776 191,776 -- 191,776
Due from Parent and affiliated
companies-- net.............. -- -- -- -- -- 1,258,292 1,258,292
Dividend paid to Parent....... -- -- -- (1,250,000) (1,250,000) -- (1,250,000)
--- --------- ------------ ------------- ------------- ------------- -------------
BALANCE, JUNE 30, 1997........ 593 $ 59,300 $ 1,000,000 $ 1,593,802 $ 2,653,102 $ (2,555,054) $ 98,048
--- --------- ------------ ------------- ------------- ------------- -------------
--- --------- ------------ ------------- ------------- ------------- -------------

See notes to financial statements.

F-20

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

STATEMENTS OF CASH FLOWS

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

1997 1996 1995
------------ ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................................ $ 191,776 $ 1,315,035 $ 352,589
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Depreciation........................................................ 593,720 538,831 532,906
Deferred income taxes............................................... (14,457) 84,017 (21,580)
(Decrease) increase in allowance for doubtful accounts.............. (15,550) (286,215) 74,049
Loss (gain) on sale of equipment.................................... 710 (975) (29,561)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable........................ (223,219) 755,529 (1,673,344)
Decrease (increase) in inventories................................ 320,368 (1,306,440) (363,528)
(Increase) decrease in other current assets....................... (3,965) (210,264) 209,103
(Decrease) increase in accounts payable........................... (430,033) 739,801 1,011,027
(Decrease) increase in accrued expenses and other current
liabilities..................................................... (244,589) 331,519 133,302
(Decrease) increase in federal and state taxes due to Parent...... (653,000) 578,000 (59,000)
------------ ----------- -----------
Net cash (used in) provided by operating activities............. (478,239) 2,538,838 165,963
------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................................................. (296,071) (900,498) (339,628)
Proceeds from sale of equipment....................................... 80,431 37,050 98,873
------------ ----------- -----------
Net cash used in investing activities........................... (215,640) (863,448) (240,755)
------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal borrowings on long-term debt................................ 64,165,367 62,358,731 33,017,747
Principal reductions on long-term debt................................ (62,648,447) (63,496,045) (26,738,309)
Decrease (increase) in due from Parent and affiliated
companies--net...................................................... 1,258,292 59,233 (5,542,619)
Dividend paid to Parent............................................... (1,250,000) (1,097,000) (421,535)
------------ ----------- -----------
Net cash provided by (used in) financing activities............. 1,525,212 (2,175,081) 315,284
------------ ----------- -----------
NET INCREASE (DECREASE) IN CASH......................................... 831,333 (499,691) 240,492
CASH, BEGINNING OF YEAR................................................. 198,441 698,132 457,640
------------ ----------- -----------
CASH, END OF YEAR....................................................... $ 1,029,774 $ 198,441 $ 698,132
------------ ----------- -----------
------------ ----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest................................ $ 599,086 $ 604,505 $ 288,036
------------ ----------- -----------
------------ ----------- -----------
Income taxes paid to Parent........................................... $ 140,000 $ 793,000 $ 215,000
------------ ----------- -----------
------------ ----------- -----------
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfer of leasehold improvements in payment of intercompany debt.... $ -- $ -- $ 90,204
------------ ----------- -----------
------------ ----------- -----------

See notes to financial statements.

F-21

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BUSINESS DESCRIPTION--Eagle Supply, Inc. (the "Company") is a wholly-owned
subsidiary of TDA Industries, Inc. ("TDA" or the "Parent) and is engaged in the
wholesale distribution of roofing supplies and related products utilized
primarily in the construction industry throughout Florida, Alabama and
Mississippi. The Company operates in a single industry segment.

RECLASSIFICATION--The June 30, 1997 and 1996 balance sheets have been
reclassified to reflect the gross-up of a mortgage obligation on property
transferred to TDA in prior years (Note 3). The mortgage obligation is offset by
an equal increase in the amount due from Parent and affiliated companies.

INVENTORIES--Inventories are valued at the lower of cost or market. Cost is
determined by using the last-in, first-out (LIFO) method. If inventories had
been valued at the lower of first-in, first-out (FIFO) cost or market,
inventories would be higher by approximately $511,000, $510,000 and $527,000 for
fiscal 1997, 1996 and 1995, respectively, and income before provision for income
taxes would have increased by approximately $1,000 and decreased by
approximately $17,000 and $30,000 in fiscal 1997, 1996 and 1995, respectively.

DEPRECIATION AND AMORTIZATION--Depreciation and amortization of improvements
and equipment are provided principally by an accelerated method at various rates
calculated to extinguish the carrying values of the respective assets over their
estimated useful lives.

INCOME TAXES--The Company is included in the consolidated Federal and state
income tax returns of its Parent. Income taxes are calculated on a separate
return filing basis.

LONG-LIVED ASSETS--Financial Accounting Standards Board Statement Number
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" requires that they be stated at the lower of the
expected net realizable value or cost. The carrying value of long-lived assets
is periodically reviewed to determine whether impairment exists. The review is
based on comparing the carrying amount of the asset to the undiscounted
estimated cash flows over the remaining useful lives. No impairment is indicated
as of June 30, 1997. The Company has adopted this statement and the impact has
not been significant,

FAIR VALUE OF FINANCIAL INSTRUMENTS--The following disclosure of the
estimated fair value of financial instruments is made in accordance with the
requirements of Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial Instruments". The estimated fair
value amounts have been determined by the Company, using available market
information and appropriate valuation methodologies. However, considerable
judgment is required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

F-22

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED
EXPENSES--The carrying amounts of these items are a reasonable estimate of their
fair value.

LONG-TERM DEBT--Interest rates that are currently available to the Company
for issuance of debt with similar terms and remaining maturities are used to
estimate fair value for debt issues for which no market quotes are available.
The carrying amount of this item is a reasonable estimate of fair value.

The fair value estimates presented herein are based on pertinent information
available to management as of June 30, 1997. Although management is not aware of
any factors that would significantly affect the estimated fair value amounts,
such amounts have not been comprehensively revalued for purposes of these
financial statements since that date, and current estimates of fair value may
differ significantly from the amounts presented herein.

2. IMPROVEMENTS AND EQUIPMENT

The major classes of property, plant and equipment are as follows:

JUNE 30, ESTIMATED
-------------------------- USEFUL
1997 1996 LIVES
------------ ------------ ----------

Automotive equipment..................................................... $ 1,953,036 $ 2,404,487 5 years
Furniture, fixtures and equipment........................................ 2,155,812 2,063,708 5-7 years
Leasehold improvements................................................... 597,890 587,226 10 years
------------ ------------
4,706,738 5,055,421
Less: Accumulated depreciation and amortization.......................... 3,652,429 3,622,322
------------ ------------
$ 1,054,309 $ 1,433,099
------------ ------------
------------ ------------

3. LONG-TERM DEBT

Long-term debt consists of the following:

JUNE 30,
--------------------------
1997 1996
------------ ------------

Revolving credit loan (A)............................................................. $ 6,693,236 $ 5,163,529
Variable rate mortgage (8 1/2% at June 30, 1997), payable in monthly installments
through April 1999 (B).............................................................. 512,927 525,714
------------ ------------
7,206,163 5,689,243
Less: Current portion of long-term debt............................................... 11,000 11,000
------------ ------------
$ 7,195,163 $ 5,678,243
------------ ------------
------------ ------------

A) The Company is a party to a Loan Agreement, which provides for secured
borrowing consisting of a four-year revolving credit facility in the amount of
$7,500,000, guaranteed by the Parent. This facility expires in December 1998.
Obligations under the revolving credit facility are collateralized by certain
current assets of the Company (aggregating approximately $13,036,000 at June 30,
1997). Borrowings are

F-23

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

3. LONG-TERM DEBT (CONTINUED)

based on a formula relating to certain levels of receivables and inventory, as
defined. Interest only is payable monthly at a floating rate equal to the
lender's prime rate, plus one-half percent, or at the London interbank offered
rate, plus two and one-half percent, at the option of the Company.

B) During fiscal 1994, the Company purchased land and a building in
Birmingham, Alabama, for $735,000, of which $550,000 was financed by a first
mortgage. The mortgage is repayable in fifty-nine equal monthly installments of
approximately $4,700 each and a balloon payment of approximately $440,000 due in
April 1999. During fiscal 1994, the Company transferred this property, including
related improvements (at a net book value of $216,189, net of the mortgage), to
the Parent in partial repayment of intercompany debt. The Company remains the
primary obligor on this mortgage.

The future payments of long-term debt are as follows:

YEAR ENDING
JUNE 30, AMOUNT
- -------------------------------------------------------------------------------- ------------

1998............................................................................ $ 11,000
1999............................................................................ 7,195,163
------------
$ 7,206,163
------------
------------

4. TRANSACTIONS WITH PARENT AND AFFILIATED COMPANIES

The Company is liable for certain lease payments to a real estate subsidiary
of the Parent under a lease for a former distribution center in Fort Lauderdale,
Florida, including a balloon payment due May 1, 1999 in the approximate amount
of $580,000 relating to industrial revenue bonds issued to acquire and develop
the Fort Lauderdale property. The Company has no direct obligation on the
industrial revenue bond, which obligation is reflected in the financial
statements of the real estate subsidiary of the Parent. The lease expires on May
1, 1999. These premises have been subleased to an unrelated third party at an
annual rental in excess of the Company's annual lease obligation. The payments
by the Company have included, through June 30, 1997, a ratable share of the
balloon payment.

The Company operates a substantial portion of its business from facilities
which it has been leasing from a subsidiary of the Parent on a month-to-month
basis. The Company intends to enter into long-term leases for these facilities.
Rent expense for these facilities, net of annual sublease income of
approximately $200,000, including taxes and other occupancy costs, aggregated
approximately $782,000, $709,000 and $710,000 in fiscal 1997, 1996 and 1995,
respectively. Aggregate related party future minimum rental commitments will
approximate $790,000 under the anticipated long-term lease agreements.

F-24

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

4. TRANSACTIONS WITH PARENT AND AFFILIATED COMPANIES (CONTINUED)

The approximate future minimum rental commitments under these related party
leases, net of sublease income of approximately $200,000, are as follows:

YEAR ENDING
JUNE 30, AMOUNT
- -------------------------------------------------------------------------------- ------------

1998........................................................................ $ 790,000
1999........................................................................ 790,000
2000........................................................................ 790,000
2001........................................................................ 790,000
2002........................................................................ 790,000
------------
$ 3,950,000
------------
------------

Except for audit fees and accounting services which are provided by the
Parent, the Company's financial statements include all costs of doing business.
Fees of $50,000 have been charged to the Company by the Parent in each of fiscal
1997, 1996 and 1995. Such fees represent audit fees and accounting services
incurred on behalf of the Company. Management believes that the allocation of
such costs is fair and reasonable.

During fiscal 1997 and 1996, the Company loaned various amounts for varying
periods to a subsidiary of the Parent. The highest balance outstanding at any
time during fiscal 1997 and 1996 was $300,000. Such amounts were repaid prior to
June 30, 1997 with interest computed at the rate of 9 1/4% per annum.

The following is a reconciliation of the activity in the Due from Parent and
Affiliated Companies account for the periods presented:

YEAR ENDED JUNE 30,
-----------------------------------------

1997 1996 1995
------------ ------------ -------------
Balance, beginning of year........................................ $ 3,813,346 $ 3,872,579 $ (1,670,040)
Fees for auditing and accounting services......................... (50,000) (50,000) (50,000)
Interest expense paid to Parent................................... (30,484) -- --
Transfer of property to Parent.................................... -- -- 90,204
Cash advances--net................................................ (1,177,808) (9,233) 5,502,415
------------ ------------ -------------
Balance, end of year.............................................. $ 2,555,054 $ 3,813,346 $ 3,872,579
------------ ------------ -------------
------------ ------------ -------------

The Due from Parent and Affiliated Companies account represents a
non-interest bearing advance account with the Company's Parent and certain other
subsidiaries of the Parent. The interest rate related to the long-term debt
incurred to fund the activity in this account is based on a floating rate equal
to the lender's prime rate, plus one-half percent, or at the London interbank
offered rate, plus two and one-half percent, at the option of the Company.

F-25

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

5. INCOME TAXES

Components of the provision for income taxes are as follows:

YEAR ENDED JUNE 30,
----------------------------------

1997 1996 1995
---------- ---------- ----------
Current:
Federal.................................................................. $ 134,457 $ 609,000 $ 203,131
State and local.......................................................... 20,000 99,983 33,449
Deferred................................................................. (14,457) 84,017 (21,580)
---------- ---------- ----------
$ 140,000 $ 793,000 $ 215,000
---------- ---------- ----------
---------- ---------- ----------

A reconciliation of income taxes at the Federal statutory rate to amounts
provided is as follows:

YEAR ENDED JUNE 30,
----------------------------------

1997 1996 1995
---------- ---------- ----------
Tax provision at statutory rate.......................................... $ 112,804 $ 716,732 $ 193,468
State and local income taxes............................................. 13,000 60,000 19,866
Other--net............................................................... 14,196 16,268 1,666
---------- ---------- ----------
$ 140,000 $ 793,000 $ 215,000
---------- ---------- ----------
---------- ---------- ----------

Temporary differences which give rise to net deferred tax assets and
liabilities are as follows:

JUNE 30,
----------------------

1997 1996
---------- ----------
Deferred tax assets:
Reserve for bad debts..................................................................... $ 170,852 $ 176,762
Inventory capitalization.................................................................. 17,706 16,766
---------- ----------
188,558 193,528
Deferred tax liability:
Depreciation.............................................................................. (70,912) (90,339)
---------- ----------
Net deferred tax asset.................................................................... $ 117,646 $ 103,189
---------- ----------
---------- ----------

6. COMMITMENTS AND CONTINGENCIES

The Company is committed to unrelated parties for long-term leases for
property, automotive and data processing equipment. The leases expire on various
dates through 2002. Certain of the leases for property include renewal options
and provide for the payment of taxes and other occupancy costs.

F-26

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

6. COMMITMENTS AND CONTINGENCIES (CONTINUED)

The approximate future minimum rental commitments with unrelated parties
under these leases are as follows:

YEAR ENDING
JUNE 30, AMOUNT
- ----------------------------------------------------------------------------- ------------

1998..................................................................... $ 1,591,000
1999..................................................................... 1,264,000
2000..................................................................... 1,073,000
2001..................................................................... 790,000
2002..................................................................... 790,000
------------
$ 5,508,000
------------
------------

Rent expense for the property and equipment under these leases amounted to
approximately $853,000, $371,000 and $191,000 in fiscal 1997, 1996 and 1995,
respectively, and includes certain occupancy costs.

During the fiscal years ended June 30, 1997, 1996 and 1995, the Company
purchased approximately 23%, 21% and 19%, respectively, of its product lines
from one supplier. Since similar products are available to the Company from
other suppliers, the loss of this supplier would not have a material adverse
effect on the business of the Company.

The Company has a 401 (k) plan covering eligible employees (the "Plan"). The
Plan provides for contributions at the Company's discretion. A contribution in
the amount of $9,000 was made to the Plan in fiscal 1997. No contribution was
made to the Plan in fiscal 1996 or 1995.

7. BRANCH OPENING AND CLOSING COSTS

The Company's results of operations in fiscal 1997 include start-up costs
and operating losses of approximately $273,000 attributable to new branches; and
additional expenses in the amount of approximately $80,000 attributable to the
operations of branches disposed of in prior fiscal years.

During fiscal 1996, the Company opened four new branches, one of which was
closed prior to the end of the fiscal year, and commenced the distribution of a
new product line. The Company's results of operations in fiscal 1996 include
start-up costs and operating losses of approximately $290,000 attributable to
these four branches and the introduction of the new product line; and additional
expenses in the amount of approximately $32,000 attributable to the operations
of branches disposed of in prior fiscal years.

During fiscal 1995, the Company opened two new branches and discontinued
operating one additional branch. The Company's results of operations in fiscal
1995 include start-up costs and operating losses in the aggregate amount of
approximately $418,000 attributable to these branches and additional expenses in
the amount of approximately $252,000 attributable to the operations of branches
disposed of in prior fiscal years.

F-27

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED JUNE 30, 1997, 1996 AND 1995

8. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES

In September 1997, as amended in November 1997, Eagle Supply Group, Inc.
("Eagle"), a majority-owned subsidiary of TDA, signed a letter of intent with an
underwriter for an initial public offering (the "Offering"). The Offering is
expected to be for 2,000,000 common shares, par value $.0001 per share, of Eagle
and 2,500,000 redeemable common share purchase warrants.

Upon closing of the Offering, Eagle will acquire all of the issued and
outstanding capital stock of the Company from its Parent. The acquisition will
be accounted for as the combining of two entities under common control, similar
to a pooling of interests, and will not result in any revaluation of the
Company's assets or the creation of goodwill. Upon the consummation of the
acquisition, the Company will become a wholly-owned subsidiary of Eagle.

9. ALLOWANCE FOR DOUBTFUL ACCOUNTS

BALANCE AT
YEAR ENDING BEGINNING BALANCE AT
JUNE 30, OF YEAR PROVISION WRITEOFFS END OF YEAR
- --------------------------------------- ---------- ---------- ----------- -----------

1995................................... $ 677,327 $ 403,169 $ (329,120) $ 751,376
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------

1996................................... $ 751,376 $ 203,133 $ (489,348) $ 465,161
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------

1997................................... $ 465,161 $ 299,433 $ (314,983) $ 449,611
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------

* * * * *

F-28

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED BALANCE SHEET

APRIL 30, 1998

ASSETS

CURRENT ASSETS:
Cash......................................................................... $ 23,087
Accounts receivable--trade (net of allowance for doubtful accounts of
$465,000)
(Note 3)................................................................... 8,722,191
Inventories (Note 3)......................................................... 6,313,829
Deferred tax asset........................................................... 194,251
Other current assets......................................................... 432,529
----------
Total current assets..................................................... 15,685,887
IMPROVEMENTS AND EQUIPMENT (net of accumulated depreciation and amortization)
(Note 2)..................................................................... 1,371,165
----------
$17,057,052
----------
----------
LIABILITIES AND SHAREHOLDER'S DEFICIENCY

CURRENT LIABILITIES:
Accounts payable............................................................. $10,305,757
Accrued expenses and other current liabilities............................... 540,742
Current portion of long-term debt (Note 3)................................... 11,000
Loan payable--affiliated company (Note 4).................................... 400,000
Federal and state income taxes due to Parent................................. 101,000
----------
Total current liabilities................................................ 11,358,499
LONG-TERM DEBT (Note 3)........................................................ 7,106,888
DEFERRED TAX LIABILITY......................................................... 54,724
----------
Total liabilities........................................................ 18,520,111
----------
COMMITMENTS AND CONTINGENCIES (Notes 4)

SHAREHOLDER'S DEFICIENCY:
Common shares, $100 par value per share, 1,500 shares authorized,
593 issued and outstanding................................................. 59,300
Additional paid-in capital..................................................... 1,000,000
Retained earnings.............................................................. 828,730
----------
1,888,030
Less: Due from Parent and affiliated companies (Note 4).................. (3,351,089)
----------
Total shareholder's deficiency........................................... (1,463,059)
----------
$17,057,052
----------
----------

See notes to unaudited financial statements.

F-29

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

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

REVENUES........................................................................... $ 47,170,583 $ 47,135,658
COST OF SALES...................................................................... 37,210,797 37,383,678
------------- -------------
9,959,786 9,751,980
------------- -------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(including a provision for doubtful accounts of $256,274 and $260,241 in 1998 and
1997, respectively) (Note 5)..................................................... 8,877,418 8,441,024
DEPRECIATION....................................................................... 387,162 495,152
------------- -------------
9,264,580 8,936,176
------------- -------------
INCOME FROM OPERATIONS............................................................. 695,206 815,804
------------- -------------
OTHER INCOME (EXPENSE):
Interest income.................................................................. 21,490 19,851
Interest expense................................................................. (480,768) (504,457)
------------- -------------
(459,278) (484,606)
------------- -------------
INCOME BEFORE PROVISION FOR INCOME TAXES........................................... 235,928 331,198
PROVISION FOR INCOME TAXES......................................................... 101,000 132,000
------------- -------------
NET INCOME......................................................................... 134,928 199,198
RETAINED EARNINGS, BEGINNING OF PERIOD............................................. 1,593,802 2,652,026
DIVIDEND PAID TO PARENT............................................................ (900,000) (1,050,000)
------------- -------------
RETAINED EARNINGS, END OF PERIOD................................................... $ 828,730 $ 1,801,224
------------- -------------
------------- -------------

See notes to unaudited financial statements.

F-30

EAGLE SUPPLY, INC.

(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED STATEMENTS OF CASH FLOWS

TEN MONTHS ENDED APRIL 30, 1998

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

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...................................................................... $ 134,928 $ 199,198
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation.................................................................. 387,162 495,152
Deferred income taxes......................................................... (21,881) (69,061)
Increase in allowance for doubtful accounts................................... 14,981 129,159
Changes in operating assets and liabilities:
Increase in accounts receivable............................................. (206,572) (174,627)
Increase in inventories..................................................... (1,808,295) (389,581)
Decrease (increase) in other current assets................................. 107,167 (31,725)
Increase (decrease) in accounts payable..................................... 2,541,978 (588,924)
Decrease in accrued expenses and other current liabilities.................. (28,827) (337,527)
Decrease in federal and state income taxes due to Parent.................... (39,000) (661,000)
-------------- --------------
Net cash provided by (used in) operating activities....................... 1,081,641 (1,428,936)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................................................ (704,018) (141,654)
-------------- --------------
Net cash used in investing activities..................................... (704,018) (141,654)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal borrowings on long-term debt.......................................... 52,522,694 53,630,934
Principal reductions on long-term debt.......................................... (52,610,969) (52,378,903)
Proceeds from loan payable--affiliated company.................................. 400,000 --
Decrease (increase) in due from Parent and affiliated companies--net............ (796,035) 1,334,029
Dividend paid to Parent......................................................... (900,000) (1,050,000)
-------------- --------------
Net cash (used in) provided by financing activities....................... (1,384,310) 1,536,060
-------------- --------------
NET DECREASE IN CASH.............................................................. (1,006,687) (34,530)
CASH, BEGINNING OF PERIOD......................................................... 1,029,774 198,441
-------------- --------------
CASH, END OF PERIOD............................................................... $ 23,087 $ 163,911
-------------- --------------
-------------- --------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest........................................ $ 480,768 $ 504,457
-------------- --------------
-------------- --------------
Income taxes paid to Parent..................................................... $ 101,000 $ 132,000
-------------- --------------
-------------- --------------

See notes to unaudited financial statements.

F-31

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

1. BASIS OF FINANCIAL STATEMENT PRESENTATION

The financial statements of Eagle Supply, Inc. (the "Company"), a
wholly-owned subsidiary of TDA Industries, Inc. ("TDA" or the "Parent") have
been prepared by the Company, which is responsible for their integrity and
objectivity, without audit. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for the fair presentation
of financial position, results of operations and cash flows have been included.
These financial statements, which, to the best of management's knowledge and
belief, were prepared in accordance with generally accepted accounting
principles, should be read in conjunction with the financial statements of the
Company for the fiscal years ended June 30, 1997 and 1996 and notes thereto
included elsewhere in this Prospectus. Operating results for the interim period
are not necessarily indicative of results for the entire year.

2. IMPROVEMENTS AND EQUIPMENT

The major classes of property, plant and equipment at April 30, 1998 are as
follows:

ESTIMATED
USEFUL
LIVES
----------

Automotive equipment................................................ $ 2,180,797 5 years
Furniture, fixtures and equipment................................... 2,348,940 5-7 years
Leasehold improvements.............................................. 718,653 10 years
------------
5,248,390
Less: Accumulated depreciation and amortization..................... 3,877,225
------------
$ 1,371,165
------------
------------

3. LONG-TERM DEBT

At April 30, 1998, long-term debt consists of the following:

Revolving credit loan (A)....................................... $6,615,618
Variable rate mortgage (8 1/2% at April 30, 1998), payable in
monthly installments through April 1999 (B)................... 502,270
---------
7,117,888
Less: Current portion of long-term debt 11,000
---------
$7,106,888
---------
---------

A) The Company is a party to a Loan Agreement, which provides for secured
borrowing consisting of a revolving credit facility in the amount of $7,500,000,
guaranteed by the Parent. On April 27, 1998, this facility was amended to extend
its maturity to the year 2002. Obligations under the revolving credit facility
are collateralized by certain current assets of the Company. Borrowings are
based on a formula relating to certain levels of receivables and inventory, as
defined. Interest only is payable monthly at a floating rate equal to the
lender's prime rate, plus one-half percent, or at the London interbank offered
rate, plus two and one-half percent, at the option of the Company.

F-32

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

3. LONG-TERM DEBT (CONTINUED)

4. TRANSACTIONS WITH PARENT AND AFFILIATED COMPANIES

During the ten months ended April 30, 1998, a subsidiary of TDA made a loan
to the Company in the amount of $400,000 as a short-term working capital
advance. This loan is non-interest bearing and is due on demand. Fees of
approximately $42,000 have been charged to the Company by TDA in each of the
ten-month periods ended April 30, 1998 and 1997. Such fees represent audit fees
and accounting services incurred on behalf of the Company.

During the ten-month period ended April 30, 1997, the Company loaned various
amounts for varying periods to a subsidiary of TDA. The highest balance
outstanding at any time during such periods was $250,000. Such amounts were
repaid prior to April 30, 1997 with interest computed at the rate of 9 1/4% per
annum. No such loans were made during the ten-month period ended April 30, 1998.

The following is a reconciliation of the activity in the Due from Parent and
Affiliated Companies account for the ten-month period ended April 30, 1998:

Balance, beginning of period................................ $2,555,054
Fees for auditing and accounting services................. (41,667)
Cash advances--net........................................ 837,702
----------
Balance, end of period...................................... $3,351,089
----------
----------

5. CONTEMPLATED AND OTHER TRANSACTIONS WITH RELATED PARTIES

The Company's President and Senior Vice President--Operations receive,
pursuant to oral agreements that can be terminated by either party without
notice or penalty, salaries of $50,000 and $25,000 per year, respectively.
Pursuant to the foregoing agreements, these individuals are also entitled to
receive 20% and 6%, respectively, of the Company's income before taxes in excess
of $600,000 per year.

In September 1997, Eagle Supply Group, Inc. ("Eagle"), a majority-owned
subsidiary of TDA, signed a letter of intent with an underwriter for an initial
public offering (the "Offering"). The Offering is expected to be for 2,000,000
common shares, par value $.0001 per share, of Eagle and 2,500,000 redeemable
common share purchase warrants.

F-33

EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

5. CONTEMPLATED AND OTHER TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
Upon closing of the Offering, Eagle will acquire all of the issued and
outstanding capital stock of the Company from its Parent. The acquisition will
be accounted for as the combining of two entities under common control, similar
to a pooling of interests, and will not result in any revaluation of the
Company's assets or the creation of goodwill. Upon the consummation of the
acquisition, the Company will become a wholly-owned subsidiary of Eagle.

6. ALLOWANCE FOR DOUBTFUL ACCOUNTS

BALANCE AT
PERIOD ENDING BEGINNING BALANCE AT
APRIL 30, OF PERIOD PROVISION WRITE-OFFS END OF PERIOD
- --------------- ---------- ---------- ----------- -------------

1997........ $ 751,376 $ 260,241 $ (417,297) $ 594,320
---------- ---------- ----------- -------------
---------- ---------- ----------- -------------
1998........ $ 449,611 $ 256,274 $ (241,293) $ 464,592
---------- ---------- ----------- -------------
---------- ---------- ----------- -------------

* * * * *

F-34

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of
JEH Company, Inc.

We have audited the accompanying balance sheet of JEH Company, Inc. (a Texas
corporation) as of June 30, 1997, and the related statement of operations and
retained earnings, and cash flows for the six months then ended. 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 JEH Company, Inc. as of June
30, 1997, and the results of its operations and its cash flows for the six
months then ended in conformity with generally accepted accounting principles.

Waters, Murray & Associates
August 20, 1997

Mansfield, Texas

F-35

JEH COMPANY, INC.
BALANCE SHEET

JUNE 30, 1997

ASSETS
CURRENT ASSETS
Cash and cash equivalents.................................................... $ 284,428
Accounts receivable-trade, net of allowance for doubtful accounts of
$2,554,056 (Notes G and K)................................................. 8,127,463
Accounts receivable--related party (Note B).................................. 138,654
Inventories (Notes A and G).................................................. 9,409,302
Other receivables............................................................ 664,696
----------
Total current assets....................................................... 18,624,543
FIXED ASSETS--NET OF ACCUMULATED DEPRECIATION (NOTES A,D, F AND G)............. 2,114,523
OTHER ASSETS (NOTE E).......................................................... 1,029,648
----------
TOTAL ASSETS................................................................... $21,768,714
----------
----------

LIABILITIES & SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable............................................................. $7,575,628
Accrued expenses............................................................. 1,476,133
Current portion of long-term debt (Note G)................................... 8,450,642
Obligation under capital leases-current portion.............................. 19,299
----------
Total current liabilities.................................................. 17,521,702
----------
LONG-TERM LIABILITIES
Note payable to shareholder (Note B)......................................... 3,486,991
----------
Total long-term liabilities................................................ 3,486,991
----------
TOTAL LIABILITIES.............................................................. 21,008,693
----------
COMMITMENTS AND CONTINGENCIES (NOTE H)
SHAREHOLDER'S EQUITY...........................................................
Common shares, $1 par value, 100,000 shares authorized, 1,000 issued and
outstanding................................................................ 1,000
Additional paid in capital................................................... 126,967
Retained earnings............................................................ 632,054
----------
Total shareholder's equity................................................. 760,021
----------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY....................................... $21,768,714
----------
----------

See accompanying notes and auditor's report

F-36

JEH COMPANY, INC.

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

1997 1996
------------- -------------

NET SALES.......................................................................... $ 28,978,685 $ 32,860,284
COST OF SALES...................................................................... 21,354,749 25,775,974
------------- -------------
Gross profit..................................................................... 7,623,936 7,084,310
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES....................................... 8,331,690 5,887,103
------------- -------------
(Loss) income from operations.................................................... (707,754) 1,197,207
------------- -------------
OTHER INCOME (EXPENSE)
Other income..................................................................... 1,384 6,166
Interest expense................................................................. (472,926) (396,858)
------------- -------------
(471,542) (390,692)
------------- -------------
Net (loss) income................................................................ (1,179,296) 806,515
RETAINED EARNINGS:
Beginning of period.............................................................. 1,811,350 1,640,461
------------- -------------
End of period.................................................................... $ 632,054 $ 2,446,976
------------- -------------
------------- -------------

See accompanying notes and auditor's report

F-37

JEH COMPANY, INC.

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

1997 1996
-------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income............................................................... $ (1,179,296) $ 806,515
Adjustments to reconcile net (loss) income to cash provided by (used in)
operating activities:
Depreciation and amortization................................................. 277,387 307,471
Gain on sale of assets........................................................ (16,278) (27,570)
Changes in assets and liabilities
Accounts receivable......................................................... 983,397 (2,438,493)
Inventory................................................................... (1,400,333) (1,847,217)
Accounts payable and accrued expenses....................................... 2,814,718 2,799,223
Other assets................................................................ (622,337) 102,860
Related party receivable.................................................... 8,652 (72,453)
-------------- --------------
Total adjustments........................................................... 2,045,206 (1,176,179)
-------------- --------------
Net cash provided by (used in) operating activities............................. 865,910 (369,664)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................................................ (435,860) (55,450)
Proceeds from sale of assets.................................................... 42,839 84,200
Increase in other non-current assets............................................ (56,655) (85,572)
-------------- --------------
Net cash used in investing activities........................................... (449,676) (56,822)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal borrowings on long-term debt.......................................... 16,848,841 16,217,940
Principal reductions on long-term debt.......................................... (15,943,456) (14,870,984)
Principal borrowings on capital leases.......................................... 8,713 --
Principal reductions on capital leases.......................................... (5,431) (12,245)
Principal reductions on note payable to shareholder............................. (1,238,414) (1,656,448)
-------------- --------------
Net cash used in financing activities........................................... (329,747) (321,737)
-------------- --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.............................. 86,487 (748,223)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.................................. 197,941 1,038,229
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........................................ $ 284,428 $ 290,006
-------------- --------------
-------------- --------------
SUPPLEMENTAL INFORMATION
Cash paid for interest expense.................................................. $ 472,926 $ 396,858
-------------- --------------
-------------- --------------

See accompanying notes and auditor's report

F-38

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of JEH Company, Inc. (the
Company), is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management, who is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.

The statements of operations and retained earnings and cash flows for the
six months ended June 30, 1996 are unaudited. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for the fair
presentation of results of operations and cash flows have been included. These
unaudited financial statements, which to the best of management's knowledge and
belief, were prepared in accordance with generally accepted accounting
principles, should be read in conjunction with the financial statements of the
Company for the years ended December 31, 1996, 1995 and 1994 and the notes
thereto included elsewhere in this Prospectus. Operating results for the interim
periods are not necessarily indicative of results for the entire year.

ORGANIZATION

The Company, a Texas corporation, was incorporated in May 1982. The Company
is engaged primarily in the sale of building materials to roofing contractors.
The Company's home office and primary outlet is in Mansfield, Texas, with other
locations in Texas, Colorado, Virginia, Indiana and Iowa. The accompanying
financial statements are prepared utilizing the accrual method of accounting
whereby revenue is recognized when earned and expenses are recognized when
incurred.

CASH AND CASH EQUIVALENTS

For the purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with a maturity of three months or less to
be cash equivalents.

INVENTORIES

Inventories, which consist primarily of roofing materials, are stated at the
lower of cost or market. Cost is determined using the first-in, first-out (FIFO)
method.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments". The estimated fair value amounts have been determined by
the companies, using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting market
data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that the
companies could realize in a current market exchange. The use of different
market assumptions and/or estimation methodologies may have a material effect on
the estimated fair value amounts.

CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED
EXPENSES--The carrying amounts of these items are a reasonable estimate of their
fair value.

F-39

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

LONG-TERM DEBT--Interest rates that are currently available to the Company
for issuance of debt with similar terms and remaining maturities are used to
estimate fair value for debt issues for which no market quotes are available.
The carrying amounts of this item is a reasonable estimate of fair value.

FIXED ASSETS

Transportation equipment, furniture and fixtures, and equipment are carried
at cost. Expenditures for renewals and betterments are capitalized and
maintenance and repairs are expensed as incurred. Depreciation is computed using
the straight-line method over the useful life of the depreciable asset.
Leasehold improvements are carried at cost and are amortized using the
straight-line method over the estimated useful life of the related asset.

INCOME TAXES

In July 1990, the Company elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code. Accordingly, the Company does not pay
Federal corporate income taxes on its taxable income. Instead, the shareholder
is liable for individual income taxes on the Company's taxable income. Although
the income recognition timing differences originating before attaining S
corporation status will reverse, they will not generate a tax liability at the
Company level so long as S corporation status is maintained.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.

RECLASSIFICATIONS

Certain amounts for the six months ended June 30, 1996 have been
reclassified to conform to the June 30, 1997 presentation. The reclassifications
have no effect on the results of operations for the six months ended June 30,
1996.

NOTE B--RELATED PARTY TRANSACTIONS

The Company leases its office facilities in Mansfield, Frisco, Mesquite and
Colleyville, Texas, and in Colorado Springs and Henderson, Colorado, from the
Company's shareholder. No long-term lease agreements exist for these sites.
Facility rent paid during the six-month periods ended June 30, 1997 and 1996
amounted to approximately $228,000 and $223,000, respectively.

The Company's financial statements include all costs of doing business.

F-40

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE B--RELATED PARTY TRANSACTIONS (CONTINUED)
The Company transacts business with other companies which are either owned
by the Company's shareholder, or owned by relatives of the Company's
shareholder. A summary of these transactions in the six-month period ended June
30, 1997 is as follows:

RELATED
TOTAL SALES RECEIVABLES
- ------------------------------------------------------------------------------- -----------

$326,824....................................................................... $ 138,654
-----------
-----------

The following is a reconciliation of the activity in the note payable to
shareholder account for the periods presented:

SIX MONTHS ENDED JUNE 30,
----------------------------

1997 1996
------------- -------------
Balance, beginning of period........................................................ $ 4,725,405 $ 4,622,887
Principal reductions.............................................................. (1,238,414) (1,267,626)
------------- -------------
Balance, end of period.............................................................. $ 3,486,991 $ 3,355,261
------------- -------------
------------- -------------

The note payable to shareholder is due on demand. At June 30, 1997, the
interest rate on the note payable to shareholder was 9.75% per annum.

Compensation paid to the Company's sole shareholder during the six-month
periods ended June 30, 1997 and 1996 was approximately $120,000 and $116,000,
respectively.

Related companies participate with the Company in its employee benefit
programs; costs associated with the related companies are reimbursed to the
Company. (See Note I).

F-41

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE C--CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to credit risk
consist principally of trade receivables. The Company sells primarily to
customers in Texas and Colorado. A summary of these transactions for the
six-month period ended June 30, 1997 is as follows:

TOTAL SALES:
- ---------------------------------------------------------------------------

Texas...................................................................... $ 17,895,853
Colorado................................................................... 9,161,018
Indiana.................................................................... 1,888,289
Virginia................................................................... 33,525
-------------
$ 28,978,685
-------------
-------------
Accounts Receivable--Net:
Texas...................................................................... $ 5,625,048
Colorado................................................................... 4,501,130
Indiana.................................................................... 660,470
Virginia................................................................... 33,525
-------------
$ 10,820,173
Less: Related party........................................................ (138,654)
Less: Allowance for doubtful accounts...................................... (2,554,056)
-------------
$ 8,127,463
-------------
-------------

NOTE D--FIXED ASSETS

Fixed assets, which are stated at cost, at June 30, 1997 consist of the
following:

ESTIMATED
USEFUL
LIVES
----------------

Transportation equipment..................................... $ 2,994,473 5 to 7 years
Furniture & fixtures......................................... 140,716 5 to 7 years
Leasehold improvements....................................... 578,991 5 to 31.5 years
Equipment.................................................... 996,755 5 to 10 years
------------
4,710,935
Less: Accumulated depreciation............................... (2,596,412)
------------
$ 2,114,523
------------
------------

F-42

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE E--OTHER ASSETS

The Company's other assets at June 30, 1997 consist of the following:

Cash surrender value of life insurance.......................... $ 808,400
Notes receivable................................................ 189,252
Deposits and prepayments........................................ 31,996
---------
$1,029,648
---------
---------

The above Cash Surrender Value of Insurance represents the cash value of
several insurance policies carried on the life of the Company's shareholder. The
combined face values of the policies are $10,064,007 of which the Company is the
owner and primary beneficiary.

NOTE F--CAPITAL LEASES

Certain equipment is being held under a number of noncancelable capital
leases with terms ranging from thirty-six to sixty months. These assets are
stated on the balance sheet with equipment and amounted to $29,630. Accumulated
depreciation on these assets amounted to $27,157.

NOTE G--LONG-TERM DEBT

The Company's long-term debt at June 30, 1997 consist of the following:

$7,500,000 revolving line of credit to bank, secured by inventory and accounts
receivable; interest payable at 8.25% per annum; matures in June, 1997,
repaid on July 8, 1997....................................................... $7,500,000
Equipment note payable to bank, payable monthly with interest at 9.5% per annum
through July, 1997; collateralized by equipment.............................. 323,149
Equipment note payable to bank, payable monthly with interest at 9% per annum
through July, 1999; collateralized by equipment.............................. 366,659
Equipment note payable to bank, payable monthly with interest at 7% per annum
through July, 1997; collateralized by equipment.............................. 260,834
---------
8,450,642
Less: Current portion.......................................................... 8,450,642
---------
Long-term portion.............................................................. $ --
---------
---------

NOTE H--LEASE COMMITMENTS

The Company leases certain office and warehouse facilities under
noncancelable operating leases which expire on various dates through 2002. Total
rent expense to unrelated third parties for the six-month periods ended June 30,
1997 and 1996 was approximately $106,000 and $175,000, respectively.

F-43

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE H--LEASE COMMITMENTS (CONTINUED)
Future minimum annual rentals are as follows:

YEAR ENDING
DECEMBER 31,
- ---------------------------------------------------------------------------------

1997............................................................................. $ 269,000
1998............................................................................. 134,000
1999............................................................................. 67,000
2001............................................................................. 67,000
2002............................................................................. 17,000
----------
$ 554,000
----------
----------

NOTE I--DEFINED CONTRIBUTION PLAN

Employees of the Company are eligible to be participants in the retirement
plan of JEH Company, Inc. The plan is a non-qualified defined contribution plan
to which the Company contributes an amount equal to 50% of the employee's
contribution up to a total company contribution of $50 per month on after tax
basis. The Company contributed approximately $3,900 and $4,100 in 1997 and 1996,
respectively.

NOTE J--SUBSEQUENT EVENT

In early July 1997, the Company sold its roofing business including most of
its operating assets in exchange for $14,850,000 and the buyer assumed most of
its trade payables and accrued liabilities.

A summary of the transaction, which was effective as of July 1, 1997, is as
follows:

Total operating assets sold..................... $20,771,000
Debt assumed by purchaser....................... (8,816,000)
----------
Net assets sold............................. $11,955,000
----------
Sale price
Cash........................................ $13,850,000
Five-year note.............................. 1,000,000
----------
$14,850,000
----------
----------

In connection with the closing of this transaction, the Company repaid its
notes payable and capital lease obligations to other than related parties
(approximately $8,560,000).

NOTE K--ALLOWANCE FOR DOUBTFUL ACCOUNTS

BALANCE AT
PERIOD ENDED BEGINNING RECOVERIES/ BALANCE AT
JUNE 30, OF PERIOD PROVISION (WRITE-OFFS) END OF PERIOD
- --------------------------------- ---------- ------------ ----------- -------------

1996............................. $ 181,336 $ 328,060 $ 8,634 $ 518,030
---------- ------------ ----------- -------------
---------- ------------ ----------- -------------
1997............................. $ 321,718 $ 2,383,218 $ (150,880) $ 2,554,056
---------- ------------ ----------- -------------
---------- ------------ ----------- -------------

F-44

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 1997 AND UNAUDITED JUNE 30, 1996

NOTE K--ALLOWANCE FOR DOUBTFUL ACCOUNTS (CONTINUED)

Management of the Company has historically based its provision for doubtful
accounts on an evaluation of the levels of its trade accounts receivable, the
aging and collection history of such receivables, and the business conditions in
each market area in which the Company operates. In establishing its estimates of
the level of the provision for doubtful accounts required for each reporting
period, management also estimates the value of the collateral and/or the
personal guarantees received from certain customers with past due balances. The
majority of the allowance for doubtful accounts relates to specific customers
with past-due balances. During the latter part of calendar 1996, certain
customer accounts began to age, and the Company began to experience more
difficulty in collecting its receivables. Accordingly, the Company increased its
provision for doubtful accounts and related allowance for doubtful accounts to
$844,235 and $321,718, respectively, in calendar 1996 from $334,732 and
$181,336, respectively, in 1995. Additionally, write-offs of its customer
accounts increased to $703,853 in 1996 from $334,732 in 1995. The Company
realized increased revenues from its customers in 1996 from business related to
storms in certain of its market areas; however, no such storms occurred in the
spring of 1997 in any of the Company's market areas. As a result, the business
of certain of the Company's customers slowed dramatically and receivables
continued to deteriorate. As a result of the foregoing circumstances which
changed during the six-month period ended June 30, 1997 as compared to the
latter part of calendar 1996, the level and age of certain customers' accounts
had worsened significantly from prior periods, and other customers who have
historically been current began to pay late and their accounts began to age as
well. Accordingly, management performed a critical assessment of the quality of
its receivables and current business conditions and determined that an increase
in the allowance for doubtful accounts of $2,383,218 at June 30, 1997 was
appropriate.

* * * * *

F-45

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of
JEH Company, Inc.

We have audited the accompanying balance sheets of JEH Company, Inc. (a
Texas corporation) as of December 31, 1996 and 1995, and the related statements
of operations and retained earnings, and cash flows for each of the three years
in the period ended December 31, 1996. 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of JEH Company, Inc. as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.

/s/ Waters, Murray & Associates
August 20, 1997

Mansfield, Texas

F-46

JEH COMPANY, INC.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

1996 1995
------------- -------------

ASSETS
CURRENT ASSETS
Cash and cash equivalents........................................................ $ 197,943 $ 1,038,229
Accounts receivable-trade, net of allowance for doubtful accounts of $321,718 in
1996 and $181,336 in 1995 (Notes C and G)...................................... 9,128,164 7,343,865
Accounts receivable--related party (Note B)...................................... 130,002 133,476
Inventories (Notes A and G)...................................................... 8,008,969 7,152,389
Other receivables................................................................ 42,359 135,630
------------- -------------
Total current assets........................................................... 17,507,437 15,803,589
FIXED ASSETS--NET OF ACCUMULATED DEPRECIATION (NOTES A,D, F AND G)................. 1,982,610 2,555,356
OTHER ASSETS (NOTE E).............................................................. 972,993 783,171
------------- -------------
TOTAL ASSETS....................................................................... $ 20,463,040 $ 19,142,116
------------- -------------
------------- -------------

LIABILITIES & SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable................................................................. $ 8,114,195 $ 6,319,214
Accrued expenses................................................................. 912,071 916,954
Current portion of long-term debt (Note G)....................................... 4,380,179 5,091,985
Obligation under capital leases-current portion (Note F)......................... 9,942 19,341
------------- -------------
Total current liabilities...................................................... 13,416,387 12,347,494
------------- -------------
LONG-TERM LIABILITIES
Long-term debt less current portion (Note G)..................................... 375,856 387,342
Obligation under capital leases (Note F)......................................... 6,075 15,965
Note payable to shareholder (Note B)............................................. 4,725,405 4,622,887
------------- -------------
Total long-term liabilities.................................................... 5,107,336 5,026,194
------------- -------------
TOTAL LIABILITIES.................................................................. 18,523,723 17,373,688
------------- -------------
COMMITMENTS AND CONTINGENCIES (NOTE H)
SHAREHOLDER'S EQUITY
Common shares, $1 par value, 100,000 shares authorized, 1,000 issued and
outstanding.................................................................... 1,000 1,000
Additional paid in capital....................................................... 126,967 126,967
Retained earnings................................................................ 1,811,350 1,640,461
------------- -------------
Total shareholder's equity..................................................... 1,939,317 1,768,428
------------- -------------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY........................................... $ 20,463,040 $ 19,142,116
------------- -------------
------------- -------------

See accompanying notes and auditor's report

F-47

JEH COMPANY, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

1996 1995 1994
------------- ------------- -------------

Net sales........................................................... $ 74,893,485 $ 73,821,881 $ 58,301,755
Cost of sales....................................................... 59,142,964 57,422,141 46,530,465
------------- ------------- -------------
Gross profit...................................................... 15,750,521 16,399,740 11,771,290
Selling, general and administrative expenses........................ 14,818,402 15,984,277 11,304,852
------------- ------------- -------------
Income from operations............................................ 932,119 415,463 466,438
------------- ------------- -------------
Other income (expense)
Interest income................................................... 5,218 11,049 13,684
Interest expense.................................................. (766,448) (549,681) (441,340)
------------- ------------- -------------
(761,230) (538,632) (427,656)
------------- ------------- -------------
Net income (loss)................................................. 170,889 (123,169) 38,782
Retained Earnings:
At beginning of year.............................................. 1,640,461 1,763,630 1,724,848
------------- ------------- -------------
At end of year.................................................... $ 1,811,350 $ 1,640,461 $ 1,763,630
------------- ------------- -------------
------------- ------------- -------------

See accompanying notes and auditor's report

F-48

JEH COMPANY, INC.
STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

1996 1995 1994
------------- ------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................................. $ 170,889 $ (123,169) $ 38,782
Adjustments to reconcile net income (loss) to cash used in
operating activities:
Depreciation and amortization.................................... 613,169 642,595 529,716
Gain on sale of assets........................................... (32,968) (35,913) (7,337)
Changes in assets and liabilities
Accounts receivable............................................ (1,924,680) (1,554,563) (2,163,480)
Inventory...................................................... (856,580) (1,640,702) (1,106,752)
Accounts payable and accrued expenses.......................... 1,681,862 (108,235) 2,273,790
Other assets................................................... 292,269 (59,733) (307,050)
Related party receivable....................................... 3,474 135,178 (184,170)
------------- ------------- -------------
Total adjustments............................................ (223,454) (2,621,373) (965,283)
------------- ------------- -------------
Net cash used in operating activities................................ (52,565) (2,744,542) (926,501)
------------- ------------- -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................................... (155,803) (575,982) (1,746,406)
Proceeds from sale of assets....................................... 127,936 114,250 62,635
Decrease in notes receivable-related party......................... -- 523,137 46,863
------------- ------------- -------------
Net cash (used in) provided by investing activities.......... (27,867) 61,405 (1,636,908)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal borrowings on long-term debt............................. 38,970,564 29,252,866 36,606,449
Principal reductions on long-term debt............................. (39,813,917) (28,298,968) (34,133,190)
Principal reductions on capital leases............................. (19,019) (44,537) (59,464)
Principal reductions on note payable to shareholder................ (3,095,847) (3,084,854) (1,759,820)
Borrowings under note payable to shareholder....................... 3,198,365 5,412,180 1,803,250
------------- ------------- -------------
Net cash (used in) provided by financing activities.......... (759,854) 3,236,687 2,457,225
------------- ------------- -------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (840,286) 553,550 (106,184)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,038,229 484,679 590,863
------------- ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 197,943 $ 1,038,229 $ 484,679
------------- ------------- -------------
------------- ------------- -------------
SUPPLEMENTAL INFORMATION:
Cash paid for interest expense..................................... $ 766,448 $ 549,681 $ 441,340
------------- ------------- -------------
------------- ------------- -------------

See accompanying notes and auditor's report

F-49

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

The Company, a Texas corporation, was incorporated in May 1982. The Company
is engaged primarily in the sale of building materials to roofing contractors.
The Company's home office and primary outlet is in Mansfield, Texas, with other
locations in Texas, Colorado, Virginia, Indiana and Iowa. In 1995 and 1994, the
Company also had locations in Oklahoma and Kansas. The accompanying financial
statements are prepared utilizing the accrual method of accounting whereby
revenue is recognized when earned and expenses are recognized when incurred.

CASH AND CASH EQUIVALENTS

For the purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with a maturity of three months or less to
be cash equivalents.

INVENTORIES

Inventories, which consist primarily of roofing materials, are stated at the
lower of cost or market. Cost is determined using the first-in, first-out (FIFO)
method.

FAIR VALUE OF FINANCIAL INSTRUMENTS

CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED
EXPENSES--The carrying amounts of these items are a reasonable estimate of their
fair value.

The fair value estimates presented herein are based on pertinent information
available to management as of December 31, 1996. Although management is not
aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for

F-50

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

purposes of these financial statements since that date, and current estimates of
fair value may differ significantly from the amounts presented herein.

FIXED ASSETS

INCOME TAXES

USE OF ESTIMATES

RECLASSIFICATIONS

Certain amounts for the years ended December 31, 1995 and 1994 have been
reclassified to conform to the December 31, 1996 presentation. The
reclassifications have no effect on the results of operations for the years
ended December 31, 1995 and 1994.

NOTE B--RELATED PARTY TRANSACTIONS

The Company leases its office facilities in Mansfield, Frisco, Mesquite and
Colleyville, Texas, and in Colorado Springs and Henderson, Colorado, from the
Company's shareholder. No long-term lease agreements exist for these sites.
Facility rent paid during each of the years ended December 31, 1996, 1995 and
1994 amounted to approximately $428,000, $331,000 and $259,000, respectively.

The Company's financial statements include all costs of doing business.

F-51

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE B--RELATED PARTY TRANSACTIONS (CONTINUED)
The Company transacts business with other companies, which are either owned
by the Company's shareholder, or owned by relatives of the Company's
shareholder. A summary of these transactions in each of the years ended December
31, 1996, 1995 and 1994 is as follows:

YEAR ENDED RELATED
DECEMBER 31, TOTAL SALES RECEIVABLES
- ------------------------------------------------------------------- ------------ -----------

1996............................................................. $ 992,565 $ 130,002
------------ -----------
------------ -----------
1995............................................................. $ 1,627,855 $ 133,476
------------ -----------
------------ -----------
1994............................................................. $ 5,539,712 $ 268,564
------------ -----------
------------ -----------

The following is a reconciliation of the activity in the note payable to
shareholder account for the periods presented:

YEAR ENDED DECEMBER 31,
-------------------------------------------
1996 1995 1994
------------- ------------- -------------

Balance, beginning of period......................................... $ 4,622,887 $ 2,295,561 $ 2,252,131
Principal borrowings............................................... 3,198,365 5,412,180 1,803,250
Principal reductions............................................... (3,095,847) (3,084,854) (1,759,820)
------------- ------------- -------------
Balance, end of period............................................... $ 4,725,405 $ 4,622,887 $ 2,295,561
------------- ------------- -------------
------------- ------------- -------------

The note payable to shareholder is due on demand. At December 31, 1996, the
interest rate on the note payable to shareholder was 9.75% per annum.

Compensation paid to the Company's sole shareholder during each of the years
ended December 31, 1996, 1995 and 1994 was approximately $2,330,000, $3,988,000,
and $2,350,000, respectively. Such compensation included a base salary plus a
discretionary bonus.

Related companies participate with the Company in its employee benefit
programs; costs associated with the related companies are reimbursed to the
Company. (See Note I).

F-52

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE C--CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to credit risk
consist principally of trade receivables. The Company sells primarily to
customers in Texas and Colorado. A summary of these transactions for each of the
years ended December 31, 1996, 1995 and 1994 is as follows:

TOTAL SALES: 1996 1995 1994
- -------------------------------------------------------------------- ------------- ------------- -------------

Texas............................................................... $ 50,972,325 $ 57,104,971 $ 44,108,845
Colorado............................................................ 20,433,490 16,716,910 8,798,940
Indiana............................................................. 3,487,670 -- --
Oklahoma & Kansas................................................... -- -- 5,393,970
------------- ------------- -------------
$ 74,893,485 $ 73,821,881 $ 58,301,755
------------- ------------- -------------
------------- ------------- -------------
Accounts Receivable--Net:
Texas............................................................... $ 4,895,660 $ 5,035,349
Colorado............................................................ 4,414,432 2,617,777
Indiana............................................................. 269,792 --
Oklahoma & Kansas................................................... -- 5,551
------------- -------------
$ 9,579,884 $ 7,658,677
Less: Related party................................................. (130,002) (133,476)
Less: Allowance for doubtful accounts............................... (321,718) (181,336)
------------- -------------
$ 9,128,164 $ 7,343,865
------------- -------------
------------- -------------

NOTE D--FIXED ASSETS

Fixed assets, which are stated at cost, consist of the following:

ESTIMATED
USEFUL
1996 1995 LIVES
------------ ------------ ---------------

Transportation equipment............................................. $ 2,648,369 $ 2,806,317 5 to 7 years
Furniture & fixtures................................................. 132,003 132,003 5 to 7 years
Leasehold improvements............................................... 578,991 578,991 5 to 31.5 years
Equipment............................................................ 977,005 1,079,091 5 to 10 years
------------ ------------
4,336,368 4,596,402
Less: Accumulated depreciation....................................... (2,353,758) (2,041,046)
------------ ------------
$ 1,982,610 $ 2,555,356
------------ ------------
------------ ------------

F-53

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE E--OTHER ASSETS

The Company's other assets consist of the following:

1996 1995
---------- ----------

Cash surrender value of insurance..................................... $ 725,647 $ 553,504
Note receivable....................................................... 212,940 206,361
Deposits and prepayments.............................................. 34,406 23,306
---------- ----------
$ 972,993 $ 783,171
---------- ----------
---------- ----------

NOTE F--CAPITAL LEASES

Certain equipment is being held under a number of noncancelable capital
leases with terms ranging from thirty-six to sixty months. These assets are
stated on the balance sheet with equipment and amounted to $126,252 in 1996 and
$210,490 in 1995. Accumulated depreciation on these assets amounted to $95,570
in 1996 and $124,507 in 1995.

The following is a schedule by years of future minimum lease payments under
capital leases together with the present value of the net minimum lease
payments:

YEAR ENDING
DECEMBER 31, 1996 1995
- ------------------------------------------------------------------------ --------- ---------

1996.................................................................... $ -- $ 33,612
1997.................................................................... 10,620 10,620
1998.................................................................... 6,075 5,310
--------- ---------
Total lease payments.................................................... 16,695 49,542
Less amount representing interest....................................... 678 14,236
--------- ---------
Present value of future minimum lease payments.......................... $ 16,017 $ 35,306
--------- ---------
--------- ---------

This amount is stated on the balance sheet as follows:

1996 1995
--------- ---------

Obligations under capital leases........................................ $ 16,017 $ 35,306
Less: Current portion................................................... (9,942) (19,341)
--------- ---------
Long-term portion....................................................... $ 6,075 $ 15,965
--------- ---------
--------- ---------

F-54

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE G--LONG-TERM DEBT

The Company's long-term debt consist of the following:

1996 1995
------------ ------------

$6,000,000 revolving line of credit to bank, secured by inventory
and accounts receivable; interest payable at 8.25% per annum;
matures in June, 1997........................................... $ 3,970,618 $ 4,300,000
Equipment note payable to bank, payable monthly with interest at
9.5% per annum through June, 1999; collateralized by
equipment....................................................... 403,274 553,309
Equipment note payable to bank, payable monthly with interest at
7% per annum through June, 1998; collateralized by equipment.... 382,143 617,467
Other note payable................................................ -- 8,551
------------ ------------
4,756,035 5,479,327
Less: Current portion............................................. 4,380,179 5,091,985
------------ ------------
Long-term portion................................................. $ 375,856 $ 387,342
------------ ------------
------------ ------------

Aggregate maturities under this debt for the years subsequent to December
31, 1996, are as follows:

1997............................................................ $4,380,179
1998............................................................ $ 297,976
1999............................................................ 77,880
---------
$4,756,035
---------
---------

NOTE H--LEASE COMMITMENTS

The Company leases certain office and warehouse facilities under
noncancelable operating leases, which expire on various dates through 2002.
Total rent expense to unrelated third parties for the years ended 1996, 1995 and
1994 was approximately $189,000, $207,000 and $275,000, respectively.

Future minimum annual rentals are as follows:

YEAR ENDING
DECEMBER 31,
- ----------------------------------------------------------------------------------

1997.............................................................................. $ 275,000
1998.............................................................................. 269,000
1999.............................................................................. 135,000
2000.............................................................................. 67,000
2001.............................................................................. 67,000
2002.............................................................................. 17,000
----------
$ 830,000
----------
----------

F-55

JEH COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

NOTE I--DEFINED CONTRIBUTION PLAN

NOTE J--SUBSEQUENT EVENT

In early July 1997, the Company sold its roofing business including most of
its operating assets in exchange for $14,850,000 and the buyer assumed most of
its trade payables and accrued liabilities.

A summary of the transaction, which was effective as of July 1, 1997, is as
follows:

Total operating assets sold........................ $20,771,000
Debt assumed by purchaser.......................... (8,816,000)
----------
Net assets sold.................................. $11,955,000
----------
----------
Sale price
Cash............................................. $13,850,000
Five-year note................................... 1,000,000
----------
$14,850,000
----------
----------

In connection with the closing of this transaction, the Company repaid its
notes payable and capital lease obligations to other than related parties
(approximately $8,560,000).

NOTE K--ALLOWANCE FOR DOUBTFUL ACCOUNTS

BALANCE AT
YEAR ENDED BEGINNING BALANCE AT
DECEMBER 31, OF YEAR PROVISION WRITE-OFFS END OF YEAR
- ------------------------------------------- ---------- ---------- ----------- -----------

1994..................................... $ 184,905 $ 255,638 $ (259,207) $ 181,336
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
1995..................................... $ 181,336 $ 334,732 $ (334,732) $ 181,336
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
1996..................................... $ 181,336 $ 844,235 $ (703,853) $ 321,718
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------

* * * * *

F-56

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

UNAUDITED BALANCE SHEET

APRIL 30, 1998

ASSETS
CURRENT ASSETS:
Cash........................................................................... $ 14,697
Accounts receivable--trade (net of allowance for doubtful accounts of
$416,000) (Note 4)......................................................... 11,373,716
Inventories (Note 4)......................................................... 10,817,806
Deferred tax asset........................................................... 167,616
Due from related party (Note 2).............................................. 250,000
Other current assets......................................................... 276,115
----------
Total current assets....................................................... 22,899,950
IMPROVEMENTS AND EQUIPMENT (net of accumulated depreciation and amortization)
(Note 3)..................................................................... 2,323,109
EXCESS COST OF INVESTMENT OVER NET ASSETS ACQUIRED (net of accumulated
amortization) (Note 2)....................................................... 2,725,018
DEFERRED FINANCING COSTS (Note 2).............................................. 241,923
----------
$28,190,000
----------
----------
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable............................................................. $8,957,345
Accrued expenses and other current liabilities............................... 1,568,183
Current portion of long-term debt (Note 4)................................... 1,012,638
Federal and state income taxes due to Parent................................. 324,000
----------
Total current liabilities.................................................. 11,862,166
LONG-TERM DEBT (Note 4)........................................................ 14,278,020
DUE TO PARENT AND AFFILIATED COMPANIES (Note 5)................................ 148,616
DEFERRED TAX LIABILITY......................................................... 19,000
----------
Total liabilities.......................................................... 26,307,802
----------
COMMITMENTS AND CONTINGENCIES (Notes 2, 5 and 6)
SHAREHOLDER'S EQUITY (Note 1):
Common shares, $.01 par value per share,
3,000 shares authorized, issued and outstanding............................ 30
Additional paid-in capital................................................... 1,349,970
Retained earnings............................................................ 532,198
----------
Total shareholder's equity................................................. 1,882,198
----------
$28,190,000
----------
----------

See notes to unaudited financial statements.

F-57

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)
AND JEH COMPANY, INC. (PREDECESSOR)

UNAUDITED STATEMENTS OF OPERATIONS

TEN MONTHS ENDED APRIL 30, 1998 AND 1997

(PREDECESSOR)
1998 1997
------------- -------------

REVENUES........................................................................... $ 55,677,225 $ 59,643,286
COST OF SALES...................................................................... 43,181,116 46,366,527
------------- -------------
12,496,109 13,276,759
------------- -------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (including a provision for doubtful
accounts of $416,091 and $699,355 in 1998 and 1997, respectively) (Note 7)....... 10,219,674 12,143,534
DEPRECIATION....................................................................... 278,163 488,558
AMORTIZATION OF EXCESS OF COST OF INVESTMENT OVER NET ASSETS ACQUIRED.............. 160,295 --
AMORTIZATION OF DEFERRED FINANCING COSTS........................................... 48,385 --
------------- -------------
10,706,517 12,632,092
------------- -------------
INCOME FROM OPERATIONS............................................................. 1,789,592 644,667
------------- -------------
OTHER INCOME (EXPENSE):
Interest income.................................................................. 22,255 5,647
Interest expense................................................................. (955,649) (684,515)
------------- -------------
(933,394) (678,868)
------------- -------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES.................................... 856,198 (34,201)
PROVISION FOR INCOME TAXES......................................................... 324,000 --
------------- -------------
NET INCOME (LOSS).................................................................. $ 532,198 $ (34,201)
------------- -------------
------------- -------------

See notes to unaudited financial statements.

F-58

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)

AND JEH COMPANY, INC. (PREDECESSOR)

UNAUDITED STATEMENT OF CASH FLOWS

TEN MONTHS ENDED APRIL 30, 1998

(PREDECESSOR)
1998 1997
-------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................................................... $ 532,198 $ (34,201)
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation.................................................................. 278,163 488,558
Amortization of excess of cost of investment over net assets acquired......... 160,295 --
Amortization of deferred financing costs...................................... 48,385 --
Deferred income taxes......................................................... (148,616) --
Increase (decrease) in allowance for doubtful accounts........................ 416,091 (11,190)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable.................................. (3,462,917) 1,075,726
Increase in inventories..................................................... (1,408,504) (1,086,086)
Decrease in other current assets............................................ 499,054 67,809
Increase (decrease) in accounts payable..................................... 1,480,777 (1,286,318)
Increase (decrease) in accrued expenses and other current liabilities....... 83,869 (248,696)
Increase in federal and state income taxes due to Parent.................... 324,000 --
-------------- --------------
Net cash used in operating activities..................................... (1,197,205) (1,034,398)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................................................ (545,327) (124,385)
Payment for purchase of JEH Co. (Note 2)........................................ (1,943,441) --
-------------- --------------
Net cash used in investing activities..................................... (2,488,768) (124,385)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal borrowings on long-term debt.......................................... 60,699,783 53,581,891
Principal reductions on long-term debt.......................................... (58,782,157) (52,870,385)
Increase in due to Parent and affiliated companies - net........................ 148,616 462,701
Capital contribution from Parent................................................ 1,350,000 --
-------------- --------------
Net cash provided by financing activities................................. 3,416,242 1,174,207
-------------- --------------
NET (DECREASE) INCREASE IN CASH................................................... (269,731) 15,424
CASH, BEGINNING OF PERIOD......................................................... 284,428 290,006
-------------- --------------
CASH, END OF PERIOD............................................................... $ 14,697 $ 305,430
-------------- --------------
-------------- --------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest........................................ $ 955,649 $ 684,515
-------------- --------------
-------------- --------------
Income taxes paid to Parent..................................................... $ 324,000 $ --
-------------- --------------
-------------- --------------
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of JEH Co.:
Fair value of assets acquired................................................. $ 24,027,355
Liabilities assumed........................................................... (8,960,882)
Due from related party........................................................ 250,000
Note issued to seller......................................................... (873,032)
Bank debt incurred............................................................ (12,500,000)
--------------
Cash paid......................................................................... $ 1,943,441
--------------
--------------

See notes to unaudited financial statements.

F-59

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)
AND JEH COMPANY, INC. (PREDECESSOR)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

TEN MONTHS ENDED APRIL 30, 1998

1. BASIS OF FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING
POLICIES

The financial statements of JEH/Eagle Supply, Inc. (the "Company"), a
wholly-owned subsidiary of TDA Industries, Inc. ("TDA" or the "Parent") have
been prepared by the Company, which is responsible for their integrity and
objectivity, without audit. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for the fair presentation
of financial position, results of operations and cash flows have been included.
These financial statements, which, to the best of management's knowledge and
belief, were prepared in accordance with generally accepted accounting
principles. Operating results for the interim period are not necessarily
indicative of results for the entire year.

In July, 1997, the Company was formed for the purpose of acquiring the
assets and business of JEH Company, Inc. ("JEH Co." or the "Predecessor"). The
Company received an initial capital contribution from TDA of $1,350,000.

The statements of operations and cash flows of JEH Co. for the ten months
ended April 30, 1997 have been included for comparative purposes.

BUSINESS DESCRIPTION--The Company is engaged in the wholesale distribution
of roofing supplies and related products utilized primarily in the construction
industry throughout Texas, Colorado, Indiana and Virginia. The Company operates
in a single industry segment.

INVENTORIES--Inventories are valued at the lower of cost or market. Cost is
determined by using the first-in, first-out (FIFO) method.

INCOME TAXES--The Company is included in the consolidated Federal and state
income tax returns of its Parent. Income taxes are calculated on a separate
return filing basis.

LONG-LIVED ASSETS--Financial Accounting Standards Board Statement Number
121, "Accounting for the Impairment of Long-Lived assets and for Long-Lived
Assets to be Disposed of" requires that they be stated at the lower of the
expected net realizable value or cost. The carrying value of long-lived assets
is periodically reviewed to determine whether impairment exists. The review is
based on comparing the carrying amount of the asset to the undiscounted
estimated cash flows over the remaining useful lives. No impairment is indicated
as of April 30, 1998. The Company has adopted this statement and the impact has
not been significant.

F-60

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)
AND JEH COMPANY, INC. (PREDECESSOR)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998

1. BASIS OF FINANCIAL STATEMENT PRESENTATION AND SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
of fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

CASH AND CASH EQUIVALENTS, ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE AND ACCRUED
EXPENSES--The carrying amounts of these items are a reasonable estimate of their
fair value.

The fair value estimates presented herein are based on pertinent information
available to management as of April 30, 1998. Although management is not aware
of any factors that would significantly affect the estimated fair value amounts,
such amounts have not been comprehensively revalued for purposes of these
financial statements since that date, and current estimates of fair value may
differ significantly from the amounts presented herein.

2. ACQUISITION

On July 8, 1997, effective as of July 1, 1997, the Company acquired
substantially all of the assets and business of JEH Co., engaged in the
wholesale distribution of roofing supplies and related products utilized
primarily in the construction industry. The purchase price, as adjusted, was
$14,473,032 consisting of $13,600,000 in cash, net of $250,000 due from JEH Co.,
and a five-year, 6% per annum note in the principal amount of $873,032. The
purchase price and the note are subject to further adjustment under certain
conditions. Further, the Company is obligated for potentially substantial
additional payments if, among other factors, the business of the Company attains
certain levels of income, as defined, during the five-year period ending June
30, 2002. More specifically, JEH Co. or its designee is to receive a percentage
of the EBITDA or the modified EBITDA (as defined) of the Company (the "JEH
EBITDA") on a per year non-cumulative basis for each of the Company's fiscal
years ending on June 30 of 1998 through 2002 (the "Applicable Period"). If the
JEH EBITDA reaches $3,000,000, $4,000,000 and $5,000,000 in the foregoing fiscal
years, JEH Co. or its designee is to receive 35%, 40% and 50%, respectively, of
that fiscal year's JEH EBITDA. If the JEH EBITDA (plus $50,000 attributable to
an employment agreement) (x) for any fiscal year in the Applicable Period is not
less than $4,400,000, the Company is to pay JEH Co. or its designee $1,000,000,
provided that the aggregate amount of such payments is not to exceed $2,000,000;
and (y) in the aggregate during the Applicable Period is not less than
$20,000,000, the Company is to pay JEH Co. or its designee the sum of $1,350,000
plus the amount of the difference, if any, between $2,000,000 and the amount
paid under (x). Additionally, with respect to certain Total Accounts Receivable
Reserves, as defined (the "JEH Reserves"), which were established at date of
acquisition, if the Company reduces the amount of the JEH Reserves in any fiscal
year during the Applicable Period, JEH Co. or its designee is to be paid 100% of
the reduction until the JEH Reserves are not less than $2,500,000 and 50% of the
reduction in the JEH Reserves below $2,300,000 down to $600,000. Both of the
immediately foregoing percentage payments to JEH Co. or its designee are subject
to adjustment in certain instances. Additionally, if the Offering described in
Note 6 is consummated prior to June 30, 2002 and in the event certain JEH EBITDA
levels are reached for the Company during the period July 1, 1997 through the
date of consummation of the Offering, JEH Co. or its designee will be entitled
to receive $1,000,000 or $1,350,000

F-61

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)
AND JEH COMPANY, INC. (PREDECESSOR)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998

2. ACQUISITION (CONTINUED)

(either in cash or in common shares of the Company valued at the public offering
price) depending upon the JEH EBITDA level. Upon consummation of the Offering
and the sale of the Company as described in Note 6, Eagle Supply Group, Inc.
will issue 300,000 of its common shares in fulfillment of the obligation set
forth in the immediately preceding sentence, even if the JEH EBITDA does not
reach the required levels.

The foregoing transaction was accounted for as a purchase and, accordingly,
the results of the operations acquired from JEH Co. have been included in the
statement of operations from the effective date of the acquisition. This
transaction gave rise to approximately $2,885,000 of goodwill which is being
amortized over a fifteen-year period. Any additional payments to which JEH Co.
or its designee will be entitled will be accounted for as additional goodwill
which will be amortized over the remaining fifteen-year period.

The following unaudited pro forma operating information assumes that the
acquisition of JEH Eagle had instead occurred on July 1, 1996. Such pro forma
operating information does not purport to represent the actual results of
operations of the Company for the ten months ended April 30, 1997, nor is it
indicative of future operating results.

TEN MONTHS
ENDED
APRIL 30, 1997
----------------

Revenues.................................................................... $ 59,643,286
----------------
----------------
Income from operations...................................................... $ 2,043,775
----------------
----------------
Net income.................................................................. $ 1,772,641
----------------
----------------

3. IMPROVEMENTS AND EQUIPMENT

The major classes of property, plant and equipment at April 30, 1998 are as
follows:

ESTIMATED
USEFUL
LIVES
----------

Automotive equipment................................................ $ 1,738,772 5 years
Furniture, fixtures and equipment................................... 432,026 5-7 years
Leasehold improvements.............................................. 429,695 10 years
------------
2,600,493
Less: Accumulated depreciation and amortization..................... 277,384
------------
$ 2,323,109
------------
------------

F-62

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)
AND JEH COMPANY, INC. (PREDECESSOR)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998

4. LONG-TERM DEBT

At April 30, 1998, long-term debt consists of the following:

Revolving credit loan (A)...................................... $10,348,093
Term loan (A).................................................. 2,437,500
Equipment loan (A)............................................. 1,540,500
6% promissory note due July 2002 (Note 2)...................... 873,032
Equipment notes--other......................................... 91,533
----------
15,290,658
Less: Current portion of long-term debt........................ 1,012,638
----------
$14,278,020
----------
----------

A) In order to finance the purchase of the assets and business of JEH Co.
and to provide for working capital needs, the Company entered into an agreement
for a five-year credit facility in the aggregate amount of $20 million which is
collateralized by substantially all of the tangible and intangible assets of the
Company. The credit facility consists of a $3,000,000 term loan, a $1,725,000
equipment loan, and the balance in the form of a revolving credit loan. The term
loan is payable in 48 equal monthly installments, each in the amount of $62,500;
the equipment loan is payable in equal monthly installments, based on a
seven-year amortization schedule, each in the amount of $20,536, with a balloon
payment of $492,840 due on the earlier of August 1, 2004 or the end of the loan
agreement's initial or renewal term. The equipment and revolving credit loans
bear interest at the lender's prime rate, plus one-half percent, or at the
London interbank offered rate, plus two and one-half percent, at the option of
the Company. The term loan bears interest at the lender's prime rate, plus one
and one-half percent, or at the London interbank offered rate, plus three and
one-quarter percent, at the option of the Company. The credit facility has been
guaranteed by TDA.

5. TRANSACTIONS WITH PARENT AND AFFILIATED COMPANIES

The Company paid $150,000 to TDA for arranging the acquisition financing to
acquire JEH Co.'s business. Such amount is included in deferred financing costs
and is being amortized over the term of the credit facility.

The Company has entered into an agreement pursuant to which TDA provides the
Company with certain services including (i) managerial, (ii) strategic planning,
(iii) banking negotiation, (iv) investor relations, and (v) advisory services
relating to acquisitions for a five-year term which commenced in July 1997. The
monthly fee, the payment of which is to commence upon the closing of the
Offering and the consummation of the acquisition described in Note 6, for the
foregoing services is $3,000.

The Company leases several of its distribution center facilities and its
executive office from the President of the Company pursuant to five-year written
leases at annual rentals aggregating approximately $486,000. Rental payments for
these facilities and executive offices aggregated approximately $321,000 during
the ten-month period ended April 30, 1998.

The Company's financial statements include all costs of doing business.

6. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES

In September 1997, Eagle Supply Group, Inc. ("ESG"), a majority-owned
subsidiary of TDA, signed a letter of intent with an underwriter for an initial
public offering (the "Offering"). The Offering is expected

F-63

JEH/EAGLE SUPPLY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF TDA INDUSTRIES, INC.)
AND JEH COMPANY, INC. (PREDECESSOR)

NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)

TEN MONTHS ENDED APRIL 30, 1998

6. CONTEMPLATED TRANSACTIONS WITH RELATED PARTIES (CONTINUED)

to be for 2,000,000 common shares, par value $.0001 per share, of ESG and
2,500,000 redeemable common share purchase warrants.

Upon closing of the Offering, ESG will acquire all of the issued and
outstanding capital stock of the Company from its Parent. The acquisition will
be accounted for as the combining of two entities under common control, similar
to a pooling of interests, and will not result in any revaluation of the
Company's assets or the creation of additional goodwill. Upon the consummation
of the acquisition, the Company will become a wholly-owned subsidiary of ESG.

7. ALLOWANCE FOR DOUBTFUL ACCOUNTS

BALANCE AT
PERIOD ENDING BEGINNING BALANCE AT
APRIL 30, OF PERIOD PROVISION (WRITE-OFFS) END OF PERIOD
- ----------------------------------------- ---------- ---------- ----------- -------------

1998..................................... $ -- $ 416,091 $ -- $ 416,091
---------- ---------- ----------- -------------
---------- ---------- ----------- -------------

1997 (Predecessor)....................... $ 510,030 $ 699,355 $ (710,545) $ 498,840
---------- ---------- ----------- -------------
---------- ---------- ----------- -------------

* * * * *

F-64

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR A SOLICITATION IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE CIRCUMSTANCES OF THE COMPANY OR
THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE
---------

Prospectus Summary.............................. 3
Risk Factors.................................... 10
Dilution........................................ 20
Use of Proceeds................................. 22
Capitalization.................................. 24
Unaudited Pro Forma Condensed Consolidated
Financial Statements.......................... 25
Selected Financial Information.................. 31
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 34
The Acquisitions................................ 47
Business........................................ 51
Management...................................... 62
Principal Stockholders.......................... 70
Certain Transactions............................ 71
Description of Securities....................... 76
Shares Eligible for Future Sale................. 79
Underwriting.................................... 80
Selling Securityholders......................... 83
The Acquisitions Offering....................... 83
Legal Matters................................... 84
Experts......................................... 84
Additional Information.......................... 84
Index to Financial Statements................... F-1

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

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THE PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

EAGLE SUPPLY GROUP, INC.

2,000,000 SHARES OF
COMMON STOCK AND
2,500,000 REDEEMABLE
COMMON STOCK PURCHASE WARRANTS

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

PROSPECTUS

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

BARRON CHASE SECURITIES

7700 W. Camino Real
Boca Raton, Florida 33433
(561) 347-1200

Atlanta, Georgia
Beverly Hills, California
Boston, Massachusetts
Chicago, Illinois
Clearwater, Florida
Duluth, Georgia
East Boca Raton, Florida
Edison, New Jersey
Eureka Springs, Arkansas
Fort Lauderdale, Florida
Hasbrook Heights, New Jersey
LaJolla, California
Minneapolis, Minnesota
Naples, Florida
New York, New York
Orlando, Florida
Sarasota, Florida
Tampa, Florida
Tulsa, Oklahoma

, 1998

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

[ALTERNATE COVER PAGE FOR SELLING SECURITYHOLDERS' AND ACQUISITIONS' PROSPECTUS]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JULY 1, 1998

EAGLE SUPPLY GROUP, INC.

300,000 SHARES OF COMMON STOCK
---------------------

2,300,000 SHARES OF COMMON STOCK
---------------------

This Prospectus relates to the potential sale by certain selling
securityholders (the "Selling Securityholders") of 300,000 shares of common
stock (the "Common Stock") of Eagle Supply Group, Inc., a Delaware corporation
(the "Company"). None of the proceeds from the sale of the shares of the
Company's Common Stock by the Selling Securityholders will be received by the
Company. The Company will bear all expenses (other than selling commissions and
fees and expenses of counsel or other advisors to the Selling Securityholders)
in connection with the registration and sale of the Common Stock being offered
by the Selling Securityholders. The Selling Securityholders may not sell or
otherwise dispose of their shares of Common Stock underlying their Warrants for
a period of fifteen months from the date of this Prospectus without the
Underwriter's prior written consent.

The Common Stock will be offered by the Selling Securityholders in
transactions in the over-the-counter market, in negotiated transactions or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling Securityholders
may effect such transactions by selling the Common Stock to or through
broker/dealers, and such broker/dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholders and/or
the purchasers of the Common Stock for whom such broker/dealers may act as agent
or to whom they sell as principal, or both. The Selling Securityholders may be
deemed to be "underwriters" as defined in the Securities Act of 1933, as amended
(the "Securities Act"). If any broker/dealers are used by the Selling
Securityholders, any commission paid to broker/dealers and, if broker/ dealers
purchase any Common Stock as principals, any profits received by such
broker/dealers on the resales of the Securities may be deemed to be underwriting
discounts or commissions under the Securities Act. In addition, any profits
realized by the Selling Securityholders may be deemed to be underwriter
commissions. All costs, expenses and fees in connection with the registration of
the Common Stock offered by Selling Securityholders will be borne by the
Company. Brokerage commissions, if any, attributable to the sale of the Common
Stock will be borne by the Selling Securityholders. See "Selling
Securityholders" and "The Acquisitions Offering."

This Prospectus also relates to the issuance by the Company of 2,000,000
shares of the Company's Common Stock to be issued to TDA Industries, Inc.
("TDA") in connection with the Acquisitions (as defined herein) by the Company
of Eagle Supply, Inc. and JEH/Eagle Supply, Inc. occurring simultaneously with
the Public Offering (as defined herein) and 300,000 shares of the Company's
Common Stock to be issued to James E. Helzer pursuant to the agreement by which
substantially all of the business and assets of a company owned by Mr. Helzer,
JEH Company, were sold to JEH/Eagle Supply, Inc. TDA has agreed not to sell or
otherwise dispose of all such shares and all other shares of the Company's
Common Stock owned by it on the date hereof for a period of two years from the
date of this Prospectus. Mr. Helzer has agreed not to sell or otherwise dispose
of all such 300,000 shares of the Company's Common Stock for two years from the
date of this Prospectus without the Underwriter's prior written consent. See
"The Acquisitions Offering."

Concurrently with the commencement of this offering, the Company is
offering, by separate Prospectus, 2,000,000 shares of Common Stock and 2,500,000
Warrants (the "Public Offering") through Barron Chase Securities, Inc. the
Underwriter. It is anticipated that the offering by the Selling Securityholders
will not be commenced by any of the Selling Securityholders unless the Public
Offering is successfully completed, as unless it is so completed there will be
no expectation of a market developing for any of the Company's securities.

Prior to the Public Offering, there has been no public market for the Common
Stock or the Warrants. The Company has applied for the listing of the Common
Stock and the Warrants under the symbols " " and " ", respectively, on
the NASDAQ SmallCap Market ("NASDAQ SmallCap"). There can be no assurance that a
trading market in the Company's Common Stock or Warrants will develop or if it
does develop that it will

be sustained. The closing of the Public Offering is subject to the simultaneous
acquisition by the Company of Eagle Supply, Inc. and JEH/Eagle Supply, Inc.
------------------------

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE AND
SUBSTANTIAL DILUTION. SEE "RISK FACTORS," COMMENCING ON PAGE 10 AND
"DILUTION."
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "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.

THE DATE OF THIS PROSPECTUS IS , 1998.

[ALTERNATE PAGE FOR SELLING SECURITYHOLDERS' AND ACQUISITIONS' PROSPECTUS]

Securities Offered........................... 300,000 shares of Common Stock by the Selling
Securityholders and 2,300,000 shares of the
Company's Common Stock to be offered by the
Company in connection with the Public
Offering. See "Description of Securities,"
the "Selling Securityholders" and "The
Acquisitions Offering."

Common Stock Outstanding.....................

Before Public Offering..................... 4,700,000 shares(1)

After Public Offering...................... 6,700,000 shares(1)(2)

Use of Proceeds.............................. The Company will not receive any cash
proceeds from the Selling Securityholders
offering or the Acquisitions Offering.
However, the 2,300,000 shares of the
Company's Common Stock to be issued in the
Acquisitions Offering constitute part of the
consideration for the Acquisitions. See "Use
of Proceeds," "Capitalization," "Certain
Transactions," "Selling Securityholders",
"The Acquisitions" and "The Acquisitions
Offering."

Risk Factors................................. Investment in the Securities offered hereby
involves a high degree of risk and immediate
substantial dilution. See "Risk Factors" and
"Dilution."

Proposed NASDAQ SmallCap Symbols:(3)

Common Stock...............................

Warrants................................... W

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

(1) Includes 2,000,000 and 300,000 shares of Common Stock to be issued to TDA
and James E. Helzer, respectively. See "Certain Transactions" and "The
Acquisitions Offering."

(2) Includes the 2,000,000 shares of Common Stock to be issued in the Public
Offering but does not include (i) 300,000 shares of Common Stock, 375,000
Warrants and 375,000 shares of Common Stock underlying such Warrants subject
to the Underwriter's Overallotment Option; (ii) 2,500,000 shares of Common
Stock issuable upon the exercise of the Warrants to be sold in the Public
Offering; (iii) 300,000 shares of Common Stock issuable upon the exercise of
the Selling Securityholders' Warrants; (iv) 450,000 shares of Common Stock
issuable upon the exercise of the Underwriter's Warrant and Stock Warrant;
and (v) 1,000,000 shares of Common Stock reserved for issuance pursuant to
the Company's stock option plan of which 700,000 shares of Common Stock are
reserved for options to be granted upon completion of the Public Offering.
See "Public Offering," "Management," "Certain Transactions," "Description of
Securities," the "Selling Securityholders" and "The Acquisitions Offering."

(3) The proposed trading symbols do not imply that a liquid and active market
will be developed or sustained for the Company's Securities. See "Rick
Factors--Possible Suspension of the Company's Securities from NASDAQ
SmallCap Even if Listing is Obtained."

[ALTERNATE PAGE FOR SELLING SECURITYHOLDERS'
AND ACQUISITIONS' PROSPECTUS]

PUBLIC OFFERING

Concurrently with the Selling Securityholders' and The Acquisitions
Offerings, the Company is offering 2,000,000 shares of its Common Stock and
2,500,000 Warrants in the Public Offering through the Underwriter.

USE OF PROCEEDS

The Company will not receive any proceeds from the Selling Securityholders
or the Acquisitions Offering, although it will receive funds upon the exercise
of any of the Selling Securityholders' Warrants. The net proceeds to the Company
from the sale of 2,000,000 shares of Common Stock and 2,500,000 Warrants in the
Public Offering are estimated to be approximately $8,436,250 ($9,782,031 if the
Underwriter's Overallotment Option is exercised in full) after deducting
underwriting commissions and discounts and other expenses of the Public
Offering. The Company expects to use the net proceeds of the Public Offering
over the next twelve to twenty-four months approximately as follows:

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

(1) Represents the approximate amount that may be used to fund the potential
acquisition of businesses in accordance with the Company's current strategy
which is subject to change from time to time.

(3) To be used to reduce Eagle's and JEH Eagle's outstanding balance of
borrowings under their credit facilities. At April 30, 1998, Eagle had
borrowed approximately $6,616,000 under its credit facility. During Eagle's
June 30, 1995 fiscal year, Eagle used its borrowing under its credit
facility to repay approximately $2,326,000 of its indebtedness to TDA and to
advance approximately $3,309,000 to TDA. The remainder of the outstanding
balance of the credit facility was used to fund continuing operations. At
April 30, 1998, JEH Eagle had borrowed approximately $14,326,000 under its
credit facility of which approximately $12,500,000 was used to pay a part of
the purchase price of JEH Co.'s business and the balance was used for JEH
Eagle's working capital. The Eagle credit facility bears interest, at
Eagle's option, at either the lender's prime rate plus one-half percent or
the London interbank offered rate ("Libor") plus two and one-half percent.
The JEH Eagle credit facility bears interest, at JEH Eagle's option, at
Libor plus two and one-half percent or the lender's prime rate plus one-half
percent. Currently, Eagle and JEH Eagle pay interest based upon both rates.
The current annual rates of interest for both facilities is 9% based on the
prime rate and approximately 8.2% based on LIBOR, and both credit facilities
mature in July 2002. It is anticipated that the borrowings at the higher
interest rate will be reduced.

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

(FOOTNOTES CONTINUED FROM PRECEDING PAGE)
issuance or the closing of the Public Offering. The proceeds from the
issuance of the foregoing notes have and are being used to pay certain
expenses relating to the Public Offering, legal fees and expenses in
connection with seeking the listing of the Company's securities on NASDAQ
and the Acquisitions.

be used to finance potential acquisitions or for working capital. There can be
no assurance that the Overallotment Option or any of the Warrants will be
exercised.

[ALTERNATE PAGE FOR SELLING SECURITYHOLDERS'
AND ACQUISITIONS' PROSPECTUS]

SELLING SECURITYHOLDERS

The Registration Statement of which this Prospectus forms a part also covers
the offering of 300,000 shares of Common Stock, underlying a like number of
Warrants owned by the Selling Securityholders. The resale of such securities by
the Selling Securityholders is subject to prospectus delivery and other
requirements of the Securities Act.

The Company's securities are being offered by the following Selling
Securityholders in the amounts set forth below.

NUMBER OF SHARES NUMBER OF SHARES
OF COMMON STOCK OF COMMON STOCK
SELLING BENEFICIALLY REGISTERED
SECURITYHOLDER OWNED(1) HEREIN(2)
- ---------------------------------------------------------------------------- ----------------- -----------------

Nina Allen.................................................................. 50,000 25,000
William C. Bossung.......................................................... 50,000 25,000
James A. Croson............................................................. 50,000 25,000
D&R Partnership............................................................. 50,000 25,000
Eugene Geller............................................................... 25,000 12,500
Warren & Marianne Gilbert................................................... 50,000 25,000
HiTel Group, Inc............................................................ 100,000 50,000
Paul Schmidt................................................................ 62,500 31,250
Harry Falterbauer........................................................... 50,000 25,000
Florence & Eric Stein....................................................... 50,000 25,000
William Tonyes.............................................................. 50,000 25,000
Kenneth Zengage............................................................. 12,500 6,250

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

(1) The number of shares of Common Stock beneficially owned herein as set forth
above includes equal amounts of shares of Common Stock and shares of Common
Stock issuable on the exercise of Warrants.

(2) Such shares of Common Stock are receivable upon exercise of the Selling
Securityholders' Warrants.

After the completion of the sale by the respective Selling Securityholders
of the number of shares of Common Stock set forth opposite their names in the
second column above, none of the Selling Securityholders will beneficially own
1% or greater of shares of the Company's Common Stock.

The foregoing persons and entities have agreed not to sell, transfer,
hypothecate or otherwise dispose of, for a period of fifteen months from the
date of this Prospectus, an aggregate of 300,000 shares of Common Stock, 300,000
Warrants and the 300,000 shares of Common Stock underlying said Warrants which
are the subject of the Selling Securityholders' offering without the
Underwriter's prior written consent.

The shares of the Company's Common Stock underlying such Warrants may be
sold from time to time directly by the Selling Securityholders. Alternatively,
the Selling Securityholders may from time to time offer such securities through
underwriters, dealers or agents. The distribution of securities by the Selling
Securityholders may be effected in one or more transactions that may take place
on the over-the-counter market, including ordinary broker's transactions,
privately-negotiated transactions or through sales to one or more broker-dealers
for resale of such shares as principals, at market prices prevailing at the time
of sale. Commissions may be paid by the Selling Securityholders in connection
with such sales. The Selling Securityholders and intermediaries through whom
such securities are sold may be deemed "underwriters" within the meaning of the
Securities Act with respect to the securities offered, and any profits realized
or commissions received may be deemed underwriting compensation. The Company
will derive proceeds

from exercises of the Warrants but will not derive any proceeds from the sale of
the Company's securities by the Selling Securityholders. There can be no
assurance that any of the Selling Securityholders' Warrants will be exercised.

At a time an offer of securities is made by or on behalf of a Selling
Securityholder, it is the Company's intent that a prospectus be distributed
setting forth, based upon information provided by the Selling Securityholder,
the number of securities being offered and the terms of the offering, including
the name or names of any underwriters, dealers or agents, if any, the purchase
price paid by any underwriter for securities purchased from the Selling
Securityholder and any discounts, commissions or concessions allowed or
re-allowed or paid to dealers, and the proposed selling price to the public.

Sales of securities by the Selling Securityholders could have an adverse
effect on the market prices of the securities offered pursuant to the Public
Offering.

THE ACQUISITIONS OFFERING

Upon completion of the Public Offering and to consummate the Acquisitions,
the Company will issue 2,000,000 shares of its Common Stock to TDA. 300,000
shares of the Company's Common Stock will be issued to James E. Helzer pursuant
to the agreement by which JEH Eagle acquired substantially all of assets and
business of JEH Co. The offering of said shares will be made by the Company's
officers and directors directly to TDA and Mr. Helzer without the services of
any broker-dealer, agent or finder and no commissions or other remuneration will
be paid in connection with such sales. As TDA and Mr. Helzer are affiliates of
the Company, such shares will remain "restricted" securities as such term is
defined in the Securities Act and the rules and regulations promulgated
thereunder. Additionally, TDA has agreed not to sell, for a period of two years
from the date of this Prospectus, any shares of the Company's Common Stock owned
by it on the date hereof and to be acquired in connection with this Offering.
Mr. Helzer has agreed not to sell, for a period of two years from the date of
this Prospectus, said 300,000 shares of the Company's Common Stock without the
prior written consent of the Underwriter.

LEGAL MATTERS

The validity of the issuances of the securities offered hereby will be
passed upon for the Company by Gusrae, Kaplan & Bruno, New York, New York.

EXPERTS

The balance sheets of the JEH Company for the six months ended June 30, 1997
and years ended December 31, 1996 and 1995 and the related statements of
operations and cash flows for the six months ended June 30, 1997 and each of the
years in the three year period ended December 31, 1996 appearing in

this Prospectus and Registration Statement have been audited by Waters, Murray &
Associates, independent auditors, as set forth in their report thereon appearing
elsewhere herein and has been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

[ALTERNATE PAGE FOR SELLING SECURITYHOLDERS'
AND ACQUISITIONS' PROSPECTUS

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

TABLE OF CONTENTS

PAGE
---------

Prospectus Summary.............................. 3
Risk Factors.................................... 10
Dilution........................................ 20
Public Offering................................. 22
Use of Proceeds................................. 22
Capitalization.................................. 24
Unaudited Pro Forma Condensed
Consolidated Financial Statements............... 25
Selected Financial Information.................. 31
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 34
The Acquisitions................................ 47
Business........................................ 51
Management...................................... 62
Principal Stockholders.......................... 70
Certain Transactions............................ 71
Description of Securities....................... 76
Shares Eligible for Future Sale................. 79
Selling Securityholders......................... 80
The Acquisitions Offering....................... 81
Legal Matters................................... 81
Experts......................................... 81
Additional Information.......................... 82
Index to Financial Statements................... F-1

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

EAGLE SUPPLY GROUP, INC.

2,300,000 SHARES OF COMMON STOCK
- ---------------------------------

300,000 SHARES OF COMMON STOCK
- ---------------------------------

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

PROSPECTUS

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

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

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses of this offering, all of which are to be paid by the
Registrant, in connection with the issuance and distribution of the Securities
being registered, are as follows:

SEC Registration Fee......................................... $13,755.00
NASD Filing Fee.............................................. 4,800.00
Printing and Engraving Expenses.............................. 100,000.00*
Accounting Fees and Expenses................................. 125,000.00*
Legal Fees and Expenses...................................... 225,000.00*
Blue Sky Fees and Expenses................................... 45,000.00*
Transfer and Warrant Agent Fees and Expenses................. 7,500.00*
Miscellaneous Expenses....................................... 14,570.00*
----------
Subtotal..................................................... 535,625.00
Underwriter's Non Accountable Expense Allowance.............. 309,375.00(1)*
----------

Total........................................................ $845,000.00
----------
----------

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

(1) Assumes no exercise of overallotment option.

* Estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

In general, Section 145 of the Delaware General Corporation Law provides
that persons who are officers or directors of a corporation may be indemnified
by the corporation for acts performed in their capacities as such. The
Registrant's By-Laws authorize indemnification in accordance with and to the
extent permitted by said statute.

The Registrant's Certificate of Incorporation and By-Laws provide for
indemnification to the fullest extent permitted by law.

Reference is also made to Section 6 of the Underwriting Agreement filed as
Exhibit 1.1 to this Registration Statement.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The Registrant has sold the following securities within the past three
years:

DATE PERSON/ENTITY NUMBER OF SECURITIES CONSIDERATION
- --------- -------------------------- -------------------------- -----------------

05/17/96 TDA Industries, Inc. 2,000,000 shares of $ 200.00
Common Stock
06/06/96 Steven R. Andrews 100,000 shares of Common $ 10.00
Stock

II-1

In June and July 1996, the Company sold, to the persons and entities
identified below, the securities of the Company for the consideration indicated
opposite their names:

PERSON/ENTITY NUMBER OF SECURITIES CONSIDERATION
- ------------------------------- ------------------------------------------------------------- -----------------

Nina Allen..................... One Unit of the Company's Securities* $ 25,000.00
William C. Bossung............. One Unit of the Company's Securities* 25,000.00
James A. Croson................ One Unit of the Company's Securities* 25,000.00
D&R Partnership................ One Unit of the Company's Securities* 25,000.00
Eugene Geller.................. One Half of a Unit of the Company's Securities* 12,500.00
Warren & Marianne Gilbert One Unit of the Company's Securities* 25,000.00
HiTel Group, Inc. Two Units of the Company's Securities* 50,000.00
Paul Schmidt One and One-Fourth of a Unit of the Company's Securities* 31,250.00
Donald & Linda Silpe One Unit of the Company's Securities* 25,000.00
Florence & Eric Stein One Unit of the Company's Securities* 25,000.00
William Tonyes One Unit of the Company's Securities* 25,000.00
Ken Zengage One Fourth of a Unit of the Company's Securities* 6,250.00
-----------------

TOTAL $ 300,000.00
-----------------
-----------------

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

* Each Unit consisting of 25,000 shares of Common Stock and 25,000 Redeemable
Common Stock Purchase Warrants.

These transactions were exempt from registration under the Securities Act of
1933, as amended (the "Act"), under Section 4(2) of that Act as not involving a
public offering, and as to those sales set forth under subsection B above,
reliance is placed upon Rule 506 of Regulation D and Section 4(6) of the Act. No
underwriter was engaged by the Company in connection with the issuances
described above. The recipients of all of the foregoing securities represented
that such securities were being acquired for investment and not with a view to
the distribution thereof. In addition, the certificates evidencing such
securities bear restrictive legends.

II-2

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

EXHIBITS
(A)
- -----------

1.1 (Revised) Forms of Underwriting Agreement and Selected Dealers Agreement(2)
3.1 Registrant's Articles of Incorporation(2)
3.1(A) Amendment to Registrant's Articles of Incorporation(2)
3.2 Registrant's By-Laws(2)
4.1 (Revised) Form of Underwriter's Warrant Agreement with Form of Warrant Certificate(2)
4.2 (Revised) Form of Financial Advisory Agreement to be entered into by and between the Registrant and the
Underwriter(2)
4.3 (Revised) Form of Merger and Acquisition Agreement to be entered into by and between the Registrant and
the Underwriter(2)
4.4 Form of Common Stock Certificate(2)
4.5 Form of Redeemable Stock Purchase Warrants delivered to Selling Securityholders(2)
4.6 (Revised) Form of Redeemable Common Stock Purchase Warrants (1)
4.7 Form of Warrant Agreement between Registrant and Continental Stock Transfer & Trust Company(2)
5.1 Opinion of Gusrae, Kaplan & Bruno(3)
10.1 (Revised) Form of Stock Purchase Agreement between the Registrant and TDA Industries, Inc. ("TDA")(1)
10.2 Form of Employment Agreement between Registrant and Douglas P. Fields(2)
10.3 Form of Employment Agreement between Registrant and Frederick M. Friedman(2)
10.4 Eagle Supply, Inc. Mortgage and Note regarding its Birmingham, Alabama, Distribution Center(2)
10.5 Eagle Supply, Inc. Mortgage, Deed and Purchase Agreement regarding its Pensacola, Florida, Distribution
Center(2)
10.6 Eagle Supply, Inc. Lease, as Amended, regarding its former distribution center located in Fort
Lauderdale, Florida(2)
10.7 Eagle Supply, Inc. Credit Facility(2)
10.7(A) Amendment to Eagle Supply, Inc. Credit Facility and Equipment Note(1)
10.8 (Revised) Form of Lease to be entered into with wholly-owned subsidiary of TDA(1)
10.9 Registrant's Stock Option Plan(2)
10.10 Form of Administrative Services Agreement to be entered into by and between Registrant and TDA(2)
10.11 Asset Purchase Agreement among JEH/Eagle Supply, Inc. (formerly known as JEH Acquisition Corp.), James
E. Helzer and others(2)
10.12 JEH/Eagle Supply, Inc. Credit Facility(2)
10.12(A) Amendment to JEH/Eagle Supply, Inc. Credit Facility and Equipment Note(1)
10.13 JEH/Eagle Supply, Inc. Employment Agreement with Douglas P. Fields, as amended(2)
10.14 JEH/Eagle Supply, Inc. Employment Agreement with Frederick M. Friedman, as amended(2)
10.15 JEH/Eagle Supply, Inc. Employment Agreement with James E. Helzer(2)
10.16 JEH/Eagle Supply, Inc. Employment Agreement with E.G. Helzer(2)
10.17 JEH/Eagle Supply, Inc. Strategic Services Agreement with TDA Industries, Inc., as amended(2)
10.17(A) Second Amendment to JEH/Eagle Supply, Inc. Strategic Services Agreement with TDA Industries, Inc.(1)
10.18 JEH/Eagle Supply, Inc. leases with James E. Helzer for premises located in
(A) Henderson, Colorado(2)
(B) Colorado Springs, Colorado(2)
(C) Mansfield, Texas(2)
(D) Colleyville, Texas(2)
(E) Frisco, Texas(2)

II-3

EXHIBITS
(A)
- -----------

(F) Mesquite, Texas(2)
23.1 Consent of Gusrae, Kaplan & Bruno (to be included in Exhibit 5.1)(3)
23.2 Consent of Deloitte & Touche LLP(1)
23.3 Consent of Paul D. Finkelstein(2)
23.4 Consent of John E. Smircina(2)
23.5 Consent of George Skakel III(2)
23.6 Consent of Waters, Murray & Associates(1)
23.7 Consent of James E. Helzer(2)

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

(1) Filed herewith.

(2) Previously filed.

(3) To be Filed by Amendment.

All other schedules are omitted, as the required information is either
inapplicable or presented in the financial statements or related notes.

ITEM 17. UNDERTAKINGS

The Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering;

(4) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

(5) The undersigned registrant hereby undertakes to provide to the
underwriters, at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to the 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 the 30th day of June, 1998.

By: /s/ DOUGLAS P. FIELDS
-----------------------------------------
Douglas P. Fields,
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated:

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
Chairman of the Board of
/s/ DOUGLAS P. FIELDS Directors, Chief
- ------------------------------ Executive Officer and June 30, 1998
Douglas P. Fields Director (Principal
Executive Officer)

Executive Vice President,
/s/ FREDERICK M. FRIEDMAN Treasurer, Secretary and
- ------------------------------ Director (Principal June 30, 1998
Frederick M. Friedman Financial and Accounting
Officer)

- ------------------------------ Director , 1998
Steven R. Andrews

II-5

EXHIBIT INDEX

EXHIBIT DESCRIPTION OF EXHIBITS
- ----------- --------------------------------------------------------------------------------------------------------

1.1 (Revised) Forms of Underwriting Agreement and Selected Dealers Agreement(2)
3.1 Registrant's Articles of Incorporation(2)
3.1(A) Amendment to Registrant's Articles of Incorporation(2)
3.2 Registrant's By-Laws(2)
4.1 (Revised) Form of Underwriter's Warrant Agreement with Form of Warrant Certificate(2)
4.2 (Revised) Form of Financial Advisory Agreement to be entered into by and between the Registrant and the
Underwriter(2)
4.3 (Revised) Form of Merger and Acquisition Agreement to be entered into by and between the Registrant and
the Underwriter(2)
4.4 Form of Common Stock Certificate(2)
4.5 Form of Redeemable Stock Purchase Warrants delivered to Selling Securityholders(2)
4.6 (Revised) Form of Redeemable Common Stock Purchase Warrants(1)
4.7 Form of Warrant Agreement between Registrant and Continental Stock Transfer & Trust Company(2)
5.1 Opinion of Gusrae, Kaplan & Bruno(3)
10.1 (Revised) Form of Stock Purchase Agreement between the Registrant and TDA Industries, Inc. ("TDA")(1)
10.2 Form of Employment Agreement between Registrant and Douglas P. Fields(2)
10.3 Form of Employment Agreement between Registrant and Frederick M. Friedman(2)
10.4 Eagle Supply, Inc. Mortgage and Note regarding its Birmingham, Alabama, Distribution Center(2)
10.5 Eagle Supply, Inc. Mortgage, Deed and Purchase Agreement regarding its Pensacola, Florida, Distribution
Center(2)
10.6 Eagle Supply, Inc. Lease, as Amended, regarding its former distribution center located in Fort
Lauderdale, Florida(2)
10.7 Eagle Supply, Inc. Credit Facility(2)
10.7(A) Amendment to Eagle Supply, Inc. Credit Facility and Equipment Note(1)
10.8 (Revised) Form of Lease to be entered into with wholly-owned subsidiary of TDA(1)
10.9 Registrant's Stock Option Plan(2)
10.10 Form of Administrative Services Agreement to be entered into by and between Registrant and TDA(2)
10.11 Asset Purchase Agreement among JEH/Eagle Supply, Inc. (formerly known as JEH Acquisition Corp.), James
E. Helzer and others(2)
10.12 JEH/Eagle Supply, Inc. Credit Facility(2)
10.12(A) Amendment to JEH/Eagle Supply, Inc. Credit Facility and Equipment Note(1)
10.13 JEH/Eagle Supply, Inc. Employment Agreement with Douglas P. Fields, as amended(2)
10.14 JEH/Eagle Supply, Inc. Employment Agreement with Frederick M. Friedman, as amended(2)
10.15 JEH/Eagle Supply, Inc. Employment Agreement with James E. Helzer(2)
10.16 JEH/Eagle Supply, Inc. Employment Agreement with E.G. Helzer(2)
10.17 JEH/Eagle Supply, Inc. Strategic Services Agreement with TDA Industries, Inc., as amended(2)
10.17(A) Second Amendment to JEH/Eagle Supply, Inc. Strategic Services Agreement with TDA Industries, Inc.(1)
10.18 JEH/Eagle Supply, Inc. leases with James E. Helzer for premises located in
(A) Henderson, Colorado(2)
(B) Colorado Springs, Colorado(2)
(C) Mansfield, Texas(2)

EXHIBIT DESCRIPTION OF EXHIBITS
- ----------- --------------------------------------------------------------------------------------------------------

(D) Colleyville, Texas(2)
(E) Frisco, Texas(2)
(F) Mesquite, Texas(2)
23.1 Consent of Gusrae, Kaplan & Bruno (to be included in Exhibit 5.1)(3)
23.2 Consent of Deloitte & Touche LLP(1)
23.3 Consent of Paul D. Finkelstein(2)
23.4 Consent of John E. Smircina(2)
23.5 Consent of George Skakel III(2)
23.6 Consent of Waters, Murray & Associates(1)
23.7 Consent of James E. Helzer(2)

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

(1) Filed herewith.

(2) Previously filed.

(3) To be Filed by Amendment.