SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB
(Mark One)

(x)  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 For the fiscal year ended December 31, 1997

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

     For the transition period from             to
   
     Commission file number 0-1665

                               EXTECH CORPORATION
                 (Name of small business issuer in its charter)
      Delaware                                           36-2476480
 (State or other jurisdiction of                        (I.R.S Employer
  incorporation or organization)                        Identification No.)

  90 Merrick Avenue, East Meadow, New York                 11554
 (Address of principal executive offices)               (Zip Code)

Issuer's telephone number (516) 794-6300

Securities registered under Section 12(b) of the Exchange Act:

     Title of each class              Name of each exchange on which registered
            none

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 par value
                                (Title of class)

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

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

     State issuer's revenues for its most recent fiscal year: $996,618

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: $1,797,321 as of March 25, 1998

     (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

     Check whether the issuer has filed all documents and reports to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes No .

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest  practicable date:  5,591,367 shares outstanding
as of March 25, 1998

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a)  Business Development

     (i)  International Airport Hotel

     EXTECH  Corporation  (the  "Company" or "EXTECH"),  through a  wholly-owned
subsidiary,  IAH, Inc. ("IAH"),  operates the International Airport Hotel in San
Juan,  Puerto  Rico (the  "Hotel").  The Hotel is located on the site of the San
Juan  International  Airport  (the  "Airport")  and occupies the third and fifth
floors of the main  terminal  building.  In addition to its 57 guest rooms,  the
Hotel has a lobby area.  The Hotel caters  generally to  commercial  and tourist
travelers in transit.  IAH also operates a video game room on the terminal level
of the  Airport.  Reference  is  also  made  to  Item 6  hereof  for  additional
information regarding the Hotel.

     The Hotel is marketed through  brochures,  local advertising and in-airport
advertising. Its operations are highly seasonal, with the disproportionate share
of its revenues being generated  during the first several months of the calendar
year.  Approximately  10% of the  total  room  sales for the Hotel for 1997 were
attributable to one customer.

     The Hotel is the only hotel actually located on the site of the Airport. As
such,  it has little  direct  competition  for the tourist  trade or  commercial
travelers seeking only sleeping  accommodations at the Airport.  The Puerto Rico
Ports Authority (the "Ports Authority"),  the owner of the Hotel, had authorized
the  construction  of an  additional  hotel in the parking  lot of the  Airport;
however,  the Ports  Authority has advised IAH that it has abandoned its plan to
construct such hotel and instead has determined to upgrade and expand the Hotel.
No assurance can be given,  however, that an additional hotel or hotels will not
be  developed  at the site of, or near,  the  Airport,  in which  case IAH could
encounter significant competition with respect to the operations of the Hotel.

     On July 22,  1988,  IAH  entered  into a lease  agreement  with  the  Ports
Authority  pursuant to which the Ports Authority  granted IAH a lease to operate
the Hotel for five years  until June 30,  1993,  plus,  at the option of IAH, an
additional  five year term to end June 30, 1998  (subject to agreement as to the
rental amount payable, which the parties agreed to negotiate in good faith).

     In 1992, in accordance  with the lease  agreement,  IAH exercised its right
for a five year  extension of its lease.  At the time,  the Ports  Authority was
uncertain as to whether it wished to build a new hotel in the parking lot of the
Airport or upgrade the existing  Hotel  (located in the Airport  terminal)  and,
therefore,  requested that IAH accept a 30 month  extension of the then existing
term.  IAH  agreed  to a 30 month  extension  and  signed a  supplemental  lease
agreement  with the Ports  Authority  in May 1992  extending  the lease  term to
December 31, 1995. IAH is of the belief that, pursuant to the supplemental lease
agreement,  it retained  the option to  continue  the lease for a period of five
years to December 31, 2000.

                                        2

     In July 1993, the Assistant  Director of Operations of the Ports  Authority
forwarded  to IAH a letter  containing  the terms of a  proposed  ten year lease
extension  which IAH  approved,  signed  and  returned  to the Ports  Authority.
Although the letter setting forth the terms of the extension  agreement with IAH
does not make the Ports  Authority's  approval  conditional upon the approval of
its Board of Directors,  the Ports  Authority has taken such position and, since
Board of Directors  approval was not  obtained,  the Ports  Authority  takes the
position  that the  extension is not in effect.  IAH is of the belief that a ten
year  agreement  has been  entered  into  between  IAH and the  Ports  Authority
pursuant to the  foregoing or that,  alternatively,  it  exercised  its right to
extend the term of the lease to December 31, 2000.

     Based upon IAH's refusal to acknowledge that, effective January 1, 1996, it
occupied  the Hotel on a  month-to-month  basis,  in  February  1996,  the Ports
Authority  requested  that IAH vacate,  surrender  and  deliver the  premises by
February 29, 1996.  Following the receipt of such request, IAH brought an action
in the  Superior  Court of San Juan,  Puerto Rico for  declaratory  judgment and
possessory injunction against the Ports Authority with respect to the Hotel. The
action  seeks  a  declaratory  judgment  that,  among  other  alternatives,  IAH
exercised  an option with respect to its lease for the Hotel for an extension of
the term of five years commencing on January 1, 1996 or that the Ports Authority
executed a new lease agreement for a ten year period commencing on such date.

     In seeking to protect its interests under the original lease agreement,  as
extended,  in April 1997,  IAH  purchased a bank  certificate  of deposit in the
amount of $40,000 and  pledged it to the Ports  Authority  as  security  for the
payment of  amounts  due under the lease  agreement,  as  required  by the terms
thereof (but which previously had not been delivered).

     (ii) Dealers Choice Automotive Planning, Inc.

     In November 1997, the Company  entered into a non-binding  letter of intent
with  respect to the  acquisition  of all of the issued and  outstanding  Common
Shares of Dealers Choice Automotive Planning, Inc. ("DCAP") as well as interests
in  certain  entities  affiliated  with  DCAP.  DCAP  and  such  affiliates  are
privately-held and are engaged primarily in the retail  automotive,  motorcycle,
and boat casualty and liability  insurance  business,  having an aggregate of 52
wholly-owned, joint venture and franchise locations in the New York metropolitan
area.

     The letter of intent provides that, in consideration for the shares of DCAP
and interests in such  affiliates,  EXTECH will issue shares of its Common Stock
constituting a substantial minority interest in EXTECH. In addition,  the letter
of  intent  contemplates  that  management  of DCAP,  together  with  Morton  L.
Certilman,  President  of  EXTECH,  and Jay M.  Haft,  Chairman  of the Board of
EXTECH, will purchase,  in the aggregate,  the 1,800,000 shares of EXTECH Common
Stock owned by Sterling  Foster  Holding  Corp.  (see Item 11 hereof) as well as
other shares of Common Stock from EXTECH,  with the result that the shareholders
of DCAP would own  approximately  one-half of the  outstanding  shares of Common
Stock of EXTECH.  It is contemplated that the purchases by the DCAP shareholders
will be made following  loans of funds by EXTECH and Messrs.  Certilman and Haft
for such purposes.

                                        3

     Simultaneously  with the  signing of the letter of  intent,  EXTECH  loaned
$325,000 to DCAP. The note evidencing the loan (the "$325,000  Note") is payable
in installments  commencing on April 21, 1998 and ending no later than September
30, 1998. In March 1998, EXTECH loaned an additional  $114,000 to DCAP. The note
evidencing  the loan (the  "$114,000  Note" and together with the $325,000 Note,
the "DCAP Notes") is payable on September 30, 1998. The payment of the principal
amounts of the DCAP Notes,  together with interest at the rate of 10% per annum,
is secured by a pledge of the shares of DCAP and certain of its affiliates  and,
with  respect to the  $114,000  Note,  by the  personal  guarantees  of the DCAP
shareholders.  It  is  contemplated  that,  upon  the  signing  of a  definitive
agreement with respect to the contemplated acquisition, EXTECH will lend to DCAP
up to an additional $311,000.

     The  consummation  of the  transaction is subject to the  satisfaction of a
number of conditions,  including certain third party and governmental  approvals
and the negotiation and execution of a mutually acceptable  definitive agreement
among the parties.  No assurances  can be given that the  acquisition  will take
place upon the terms described above or otherwise.

     (iii) Pipe Harness Clamp

     The Company  holds a patent for a  specialized  clamping  device (the "Pipe
Harness  Clamp")  designed  to  connect  principally  underground  pipe lines of
similar and  dissimilar  materials.  In July 1991,  the Company and an unrelated
third party (the "Licensee")  entered into a License and Royalty  Agreement (the
"License  Agreement")  pursuant to which the Licensee was granted the  exclusive
right to manufacture, use, market and sell (either directly or on the Licensee's
behalf) the Pipe Harness Clamp.

     The License Agreement provides that, among other matters, the Licensee will
pay  royalty  payments  for the license of the Pipe  Harness  Clamp in an amount
equal to 5% of Net Sales  (as  defined  in the  License  Agreement)  of the Pipe
Harness  Clamp until such time as the aggregate  amount of the royalty  payments
total $1,000,000 and thereafter an amount equal to 2.5% of Net Sales of the Pipe
Harness Clamp (the "Net Sales  Royalty").  The License  Agreement  also provides
that the Licensee will pay a percentage of royalty  payments that are payable to
the Licensee  pursuant to a certain License and Technical  Assistance  Agreement
(the  "Technical  Assistance  Agreement").  The Company is to receive,  for each
twelve month period that the Technical Assistance Agreement is in effect, 23.68%
of all amounts in excess of $100,000 received by the Licensee in accordance with
the terms of the  Technical  Assistance  Agreement  (the  "Technical  Assistance
Royalty"),  the  aggregate  of which  payments to the  Company  shall not exceed
$1,480,000.  Since inception of the License Agreement,  the Company has received
an aggregate of approximately  $179,891 in Technical Assistance Royalty payments
pursuant to the License  Agreement (none of which was accrued during 1997),  but
has received no Net Sales Royalty payments. No assurances can be given regarding
the commercial marketability of the Pipe Harness Clamp.

                                        4

     (iv) Robeson Industries Corp.

     In  February  1993,  the  Company  entered  into a  Subscription  and Stock
Purchase Agreement (the "Subscription  Agreement") with Robeson Industries Corp.
("Robeson")  pursuant to which the  Company  agreed to  purchase  from  Robeson,
subject to the conditions set forth therein, (i) approximately 15% of the issued
and  outstanding  shares  of  capital  stock  of  Robeson  and  (ii)  all of the
outstanding  shares  of  capital  stock  of  Robeson's  wholly-owned  Hong  Kong
subsidiary,  Robeson  Industries  Hong Kong Ltd.  ("Hong  Kong") (the "Hong Kong
Shares").

     In May 1993,  the  Company  advised  Robeson  that it was  terminating  the
Subscription Agreement due to the nonfulfillment of certain of the conditions to
the  obligation  of the  Company to  consummate  the  transactions  contemplated
thereby.  The  Company  also made  demand  upon  Robeson  for  repayment  of the
principal  amount  of  $320,000  loaned  by the  Company  during  1992 and 1993,
together with interest thereon, as well as reimbursement of expenses incurred by
the Company in connection with the Subscription Agreement.

     Subsequently,  in May 1993,  Robeson filed a petition for bankruptcy  under
Chapter 11 of the Bankruptcy Act with the United States Bankruptcy Court for the
District of New Jersey (the  "Court").  In September  1993,  the Company filed a
proof  of  claim  in such  proceeding  as a  secured  creditor  to  recover  the
approximate amount of $534,000.

     Pursuant to a Plan of  Reorganization  of Robeson (the "Plan")  approved by
the Court, in September 1994, in  consideration of the $320,000 in loans made by
the Company to Robeson and other recoverable  expenses,  the reorganized Robeson
issued to the Company a promissory  note (the  "Original  Robeson  Note") in the
principal amount of $385,000. The Original Robeson Note provided for the payment
of interest at the rate of 8% per annum and the  repayment  of  principal  in 48
consecutive  monthly  installments  of varying  amounts.  Pursuant  to the Plan,
payment of the  Original  Robeson  Note was secured by a pledge of the Hong Kong
Shares.  In  addition,  pursuant  to the Plan,  the  Company  received a nominal
minority equity interest in Robeson.

     The first three payments  under the Original  Robeson Note were received by
the Company in October,  November and December  1994.  Effective  January  1995,
Robeson ceased making  payments under the Original  Robeson Note. In March 1995,
the Company demanded full payment of the Original  Robeson Note,  foreclosed its
security interest with respect to the Hong Kong Shares and purchased such shares
at an auction sale.

     In September  1995, the Company agreed to cancel the Original  Robeson Note
in  consideration  for the issuance by Robeson of a new  promissory  note in the
principal  amount of $125,000  (the "New  Robeson  Note").  The New Robeson Note
provides  for  interest  at the  rate  of 8% per  annum  and was  payable  in 27
consecutive  monthly  installments  of  principal  and  interest of $5,000.  The
Company has received  monthly  installments  sporadically  under the New Robeson
Note,  but not on a  current  basis.  The  balance  of the New  Robeson  Note at
December 31, 1997 was $59,500.

                                        5

     (v) Phone America International, Inc.

     In  February  1996,  the  Company  announced  that  it had  entered  into a
non-binding  letter of intent  to  acquire  Phone  America  International,  Inc.
("Phone America"),  an interexchange  telecommunications  carrier engaged in the
design,  development and marketing of prepaid  telephone calling cards and other
telephone products.

     Concurrently with the execution of the letter of intent, the Company loaned
$50,000  to  Transcends  Telecom  Corporation  ("Transcends"),   a  wholly-owned
subsidiary of Phone America,  for working capital purposes.  The note evidencing
the loan (the "Transcends Note") was payable on or after August 26, 1996 upon 30
days notice.  Payment of the principal amount of the Transcends  Note,  together
with  interest at the rate of 10% per annum,  was secured by a pledge of certain
shares of Phone America Common Stock as well as by a lien on accounts receivable
of Transcends.

     Subsequent to February  1996,  the Company  decided not to  consummate  the
foregoing  transaction due to Phone America's  excessive  funding  requirements.
Thereafter,  in November  1996,  following the  discontinuance  of operations by
Transcends and Phone America,  Transcends  defaulted on its note and the Company
foreclosed on its security  interest in  Transcends'  accounts  receivable.  The
Company obtained a peaceful  surrender of the accounts  receivable and, pursuant
to collection  proceedings  brought against the account debtors,  as of December
31, 1997, had collected an aggregate of approximately  one-half of the principal
amount of the Transcends Note.

     (vi) Other Business Opportunities

     During  1996  and  1997,   the  Company   explored  a  number  of  business
opportunities  in connection  with the  acquisition  and/or  operation of sports
franchises  and  negotiated  acquisition  agreements  in  connection  therewith.
However, no transactions were consummated.

     (vii) General

     The Company was  incorporated  in the State of Delaware on August 25, 1961.
The Company's principal executive offices are located at 90 Merrick Avenue, East
Meadow,  New York  11554,  and its  telephone  number  at such  office  is (516)
794-6300.

(b)  Business of Issuer

     (i) International Airport Hotel

     Reference is made to Items 1(a)(i) and 2 hereof.

     (ii) Dealers Choice Automotive Planning, Inc.

     Reference is made to Item 1(a)(ii) hereof.

                                        6

     (iii) Pipe Harness Clamp

     Reference is made to Item 1(a)(iii) hereof.

     (iv) Other Business Opportunities

     Reference is made to Item 1(a)(vi) hereof.

     (v) Number of Employees

     As of December  31,  1997,  the Company  and its  subsidiaries  employed 17
persons.

ITEM 2. DESCRIPTION OF PROPERTY

     The executive offices of the Company are located at 90 Merrick Avenue, East
Meadow, New York where  approximately 200 square feet of space are occupied on a
month-to-month basis at a monthly rental of $500.

     The  Hotel is leased by IAH from the Ports  Authority.  The  annual  rental
obligation  for the Hotel  equals the greater of $169,400 or 20% of annual gross
revenues,  as defined.  Total rent expense under the lease  amounted to $181,178
for 1997 as compared to $189,610 for 1996.

     Reference  is made to Item  1(a)(i)  hereof  for a  discussion  of  certain
pending litigation with regard to IAH's lease rights in the Hotel.

ITEM 3. LEGAL PROCEEDINGS

     Reference  is made to Item  1(a)(i)  hereof  for a  discussion  of  certain
pending litigation with regard to the Hotel.

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

     Not applicable.

                                        7

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Market Information

     The Company's Common Stock is traded in the over-the-counter  market on the
National  Association  of Securities  Dealers'  Bulletin  Board under the symbol
"EXTH". The following table sets forth, for the periods indicated,  the high and
low  closing  bid prices  for the  Company's  Common  Stock as  reported  by the
National Quotation Bureau, Inc.:

1997 Calendar Year              High          Low

First Quarter                   $  1/2       $ 3/8
Second Quarter                     1/2         1/2
Third Quarter                    1-1/4         1/2
Fourth Quarter                   1-5/16       11/16

1996 Calendar Year              High          Low

First Quarter                   $1/4         $1/16
Second Quarter                   7/16         1/4
Third Quarter                    7/16         3/8
Fourth Quarter                   3/8          3/8

     The above quotations reflect  interdealer  prices,  without retail mark-up,
mark-down or commission, and may not necessarily represent actual transactions.

(b)  Holders

     As of March 25,  1998,  there were 3,015  record  holders of the  Company's
Common Stock.

(c)  Dividends

     The Company has neither  declared nor paid any cash dividends on its Common
Stock during its two most recent  fiscal  years and the Board of Directors  does
not  contemplate  the  payment  of  dividends  in the  foreseeable  future.  Any
decisions as to the future  payment of dividends will depend on the earnings and
financial  position  of the  Company  and such  other  factors  as the  Board of
Directors deems relevant.

                                        8

(d)  Recent Sales of Unregistered Securities

     Not applicable.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations:

     In 1997,  the  Company had total  revenues  of  $996,618  and a net loss of
$143,992 as compared  to  revenues  of  $1,118,647  and a net loss of $5,099 for
1996.

     Room  rental and other  departmental  revenue  for the Hotel  decreased  by
$39,705  (4.09%) during 1997. The net profit for the Hotel,  on a  "stand-alone"
basis, was $96,876 in 1997 as compared to $109,322 in 1996.

     Interest  income  increased by $27,567 from 1996 to 1997 due to the receipt
in June 1996 of $800,000 in funds from a private  placement of Common Stock. See
Item 12 hereof.

     No royalty  income was earned  during 1997 with respect to the Pipe Harness
Clamp as the required  revenue  threshold  for the payment of royalties  was not
met. See Item 1(a)(iii) hereof.

     In 1997, the Company  incurred costs and expenses of $1,136,616 as compared
to $1,119,090  in 1996,  representing  an increase of $17,526.  The increase was
attributable  primarily  to an  increase  in bad debt and  energy  costs and was
offset by a decrease in  corporate  and sundry,  departmental,  and lease rental
costs and expenses.

     Reference  is made to Item  1(a)(i)  hereof for a  discussion  of a certain
litigation with the Ports Authority with regard to the Hotel.  Reference is also
made to  Item  1(a)(ii)  hereof  for a  discussion  regarding  the  contemplated
acquisition of DCAP and related entities.

Liquidity and Capital Resources:

     As of  December  31,  1997,  the Company  had  $1,040,389  in cash and cash
equivalents  as  compared  to  $1,318,121  in 1996,  representing  a decrease of
$277,732.  Such  decrease was  primarily the result of the $325,000 loan made in
November 1997 to DCAP as discussed under Item 1(a)(ii) hereof.

     As of December  31,  1997,  the Company  had a working  capital  surplus of
$1,150,732  and,  except as described in Item 1(a)(ii)  hereof,  had no material
commitments for capital expenditures.

                                        9

     Reference is made to Items  1(a)(ii),  (iv) and (v) hereof for a discussion
of the status of (i) certain  notes in the  principal  amounts of  $325,000  and
$114,000  issued  by DCAP to the  Company  in  November  1997  and  March  1998,
respectively,  (ii) a certain note in the principal amount of $125,000 issued by
Robeson  to the  Company  in  September  1995 and  (iii) a  certain  note in the
principal  amount of $50,000  issued by  Transcends  to the  Company in February
1996.

     Reference is also made to Item 1(a)(i)  hereof for a discussion  of certain
litigation with the Ports Authority with regard to the Hotel.

ITEM 7. FINANCIAL STATEMENTS

     The  financial  statements  required  by this Item 7 are  included  in this
Annual Report on Form 10-KSB following Item 13 hereof.

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

     There were no changes in accountants due to disagreements on accounting and
financial  disclosure  during the  twenty-four  month period ended  December 31,
1997.

                                       10

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

     Directors and Executive Officers

     The following  table sets forth the positions  and offices  presently  held
with the Company by each  Director and executive  officer,  his age and the year
from which such person's service on the Company's Board of Directors dates:

                                  Position and Offices held     Director
    Name                Age       held with the Company           Since

Jay M. Haft             62        Chairman of the Board           1989
Morton L. Certilman     66        President and Director          1989
Leon Lapidus            53        Director                        1989
Brian K. Ziegler        43        Secretary and Treasurer          --

     Jay M. Haft has served as the Company's Chairman of the Board since October
1989.  Mr. Haft has been  engaged in the  practice of law for more than the past
five  years  and  serves  as  counsel  to Parker  Duryee  Rosoff & Haft.  He was
previously a senior  corporate  partner of such firm (1989- 1994). Mr. Haft is a
strategic and financial  consultant for growth stage companies.  He is active in
international  corporate  finance,  mergers and acquisitions,  as well as in the
representation  of emerging growth  companies.  He has actively  participated in
strategic planning and fund raising for many high-tech  companies,  leading edge
medical  technology  companies  and  technical  product,  service and  marketing
companies. Mr. Haft is a Managing General Partner of Gen Am "1" Venture Fund, an
international  venture  capital  fund.  Mr.  Haft is also a Director of numerous
public and private corporations,  including Robotic Vision Systems,  Inc., Noise
Cancellation  Technologies,  Inc., Encore Medial Corporation,  Viragen, Inc., PC
Service Source,  Inc., DUSA  Pharmaceuticals,  Inc., Oryx Technology  Corp., CCA
Companies and Thrift Management, Inc., all of whose securities are traded in the
over-the-counter   market,  and  serves  as  Chairman  of  the  Board  of  Noise
Cancellation  Technologies,  Inc. Mr. Haft is a member of the Florida Commission
for Government  Accountability to the People, Co- President of the Dade Venue of
the Miami Ballet and a Director of the Concert Association of Florida.  Mr. Haft
received B.A. and LL.B. degrees from Yale University.

     Morton L.  Certilman  has served as the Company's  President  since October
1989.  Mr.  Certilman  has been engaged in the practice of law for more than the
past  five  years  and is a member of the law firm of  Certilman  Balin  Adler &

                                       11

Hyman, LLP. Mr. Certilman is Chairman of the Long Island Regional Planning Board
and the Northrop/Grumman  Master Planning Council, and is a Director of the Long
Island  Association,  the New Long Island Partnership and the Long Island Sports
Commission.  Mr.  Certilman has lectured  extensively  before bar  associations,
builders' institutes,  title companies, real estate institutes,  banking and law
school  seminars,  The Practicing  Law  Institute,  The Institute of Real Estate
Management  and at annual  conventions  of such  organizations  as the  National
Association  of Home  Builders,  the  Community  Associations  Institute and the
National Association of Corporate Real Estate Executives.  He is a member of the
faculty of the American Law Institute/American  Bar Association,  as well as the
Institute on Condominium and Cluster Developments of the University of Miami Law
Center.  Mr. Certilman has written various articles in the condominium field, is
the author of the New York State Bar  Association  Condominium  Cassette and the
Condominium portion of the State Bar Association book on "Real Property Titles",
and is the editor of the New York Land Report.  Mr. Certilman is a member of the
Advisory  Board of First American  Title  Insurance  Company of New York and the
American College of Real Estate Lawyers. Mr. Certilman received an LL.B. degree,
cum laude, from Brooklyn Law School.

     Leon Lapidus has been the  President of the Mibro Group,  a privately  held
importer,  packager and  distributor  of  hardware,  for more than the past five
years.  Mr.  Lapidus  received a B.A.  degree from Hunter  College and an M.B.A.
degree from the Bernard M. Baruch  College of the City of New York.  Mr. Lapidus
is the brother-in-law of Mr. Haft.

     Brian K.  Ziegler has been engaged in the practice of law for more than the
past  five  years  and is a member of the law firm of  Certilman  Balin  Adler &
Hyman,  LLP. Mr. Ziegler  received a B.S.  degree,  cum laude,  from the Wharton
School of the University of Pennsylvania,  and a J.D. degree and an LL.M. degree
in Taxation  from the  University  of Miami  School of Law.  Mr.  Ziegler is the
son-in-law of Mr. Certilman.

     Each  Director   will  hold  office  until  the  next  Annual   Meeting  of
Stockholders  and until his  successor  is elected and  qualified,  or until his
earlier  resignation or removal.  Each executive  officer will hold office until
the next  regular  meeting of the Board of Directors  following  the next Annual
Meeting of  Stockholders  and until his  successor is elected or  appointed  and
qualified, or until his earlier resignation or removal.

     Section 16(a) Beneficial Ownership Reporting Compliance

     To the Company's knowledge,  based solely on a review of the copy of a Form
4 furnished  to the Company and written  representations  that no other  reports
were required  during the fiscal year ended December 31, 1997, all Section 16(a)
filing  requirements  applicable  to the Company's  officers,  Directors and 10%
stockholders were complied with.

                                       12

ITEM 10. EXECUTIVE COMPENSATION

(a)  Summary Compensation Table

     The  following  table  sets  forth  certain   information   concerning  the
compensation  of Morton L. Certilman,  President of the Company,  for the fiscal
years ended  December 31, 1995,  1996 and 1997. No other person who served as an
executive  officer of the Company as of December 31, 1997 had a total salary and
bonus for the year then ended in excess of $100,000.

                                    Annual Compensation
   Name and Principal                                 All Other
       Position               Year      Salary      Compensation
   Morton L. Certilman        1997     $150,000          -0-*
     President                1996     $101,250          -0-*
                              1995     $ 50,000          -0-*

*    Excludes  fees  payable  during  1995,  1996  and  1997 by the  Company  to
     Certilman Balin Adler & Hyman,  LLP, a law firm of which Mr. Certilman is a
     member.

(b)  Option Grants

     No grants of stock  options  were made to Mr.  Certilman  during the fiscal
year ended December 31, 1997.

(c)  Aggregated Option Exercises and Fiscal Year-End Option Value

     Mr.  Certilman did not exercise any options  during the year ended December
31, 1997 and held no options as of such date.

(d)  Long-Term Incentive Plan Awards

     No awards were made to Mr.  Certilman during the fiscal year ended December
31, 1997 under any long-term incentive plan.

(e)  Compensation of Directors

     Each Director is entitled to receive a $500 fee for each Directors' meeting
he attends.  In addition,  Directors are reimbursed for travel expenses incurred
in connection with attendance at such meetings.

                                       13

(f)  Employment  Contracts,  Termination  of  Employment  and  Change-in-Control
     Arrangements

     Reference is made to Item  1(a)(ii)  hereof for a discussion  regarding the
contemplated acquisition of DCAP and related entities.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth certain  information  as of March 25, 1998
regarding the  beneficial  ownership of the Company's  shares of Common Stock by
(i) each  person who is known by the  Company to  beneficially  own or  exercise
voting or dispositive  control over more than 5% of the Company's  Common Stock,
(ii) each present  Director  and (iii) all of the  Company's  present  executive
officers and Directors as a group. Reference is made to Item 1(a)(ii) hereof for
a  discussion  regarding  the  contemplated  acquisition  of  DCAP  and  related
entities.  No  adjustments  have been made to the table set forth  below to give
effect to the contemplated acquisition.

                                                              Approximate
  Name and Address                     Number of Shares       Percentage
  of Beneficial Owner                  Beneficially Owned     of Class

Morton L. Certilman............        2,611,893(1)(2)(3)       46.7%
  The Financial Center
    at Mitchel Field
  90 Merrick Avenue
  East Meadow, New York

Adam R. Lieberman..................    1,800,000(2)(4)          32.2%
 1 Bay Club Drive
 Bayside, New York

Jay M. Haft....................           905,393(1)(5)         16.2%
  201 S. Biscayne Blvd.
  Suite 3000
  Miami, Florida

Leon Lapidus...................             20,000              *
  111 Sinnott Road
  Scarborough Ontario
  M1L 4S6 Canada

All executive officers
and Directors as a group
(4 persons)....................        3,537,286(3)(5)(6)       63.3%

*    Less than 1%.

                                       14

(1)  Messrs.  Certilman  and  Haft  have  previously  filed a  Schedule  13D and
     amendments  thereto under the Securities  Exchange Act of 1934, as amended,
     with respect to their respective  equity interests in the Company.  In view
     of  their  intention  to  consult  with  each  other  with  respect  to the
     acquisition,  voting and disposition of their  respective  shares,  Messrs.
     Certilman and Haft may be deemed a group. Accordingly, the group of Messrs.
     Certilman and Haft beneficially owns 3,517,286 shares of Common Stock. Such
     amount represents  approximately  62.9% of the outstanding shares of Common
     Stock  of  the  Company.  However,  each  of  Messrs.  Certilman  and  Haft
     independently  makes his own  decisions  with  respect to the  acquisition,
     voting and disposition of the shares of Common Stock directly owned by him.
     Further,  neither Mr.  Certilman nor Mr. Haft has any economic  interest in
     the shares of Common Stock directly owned by the other.

(2)  Pursuant to a certain Amended and Restated Voting Trust Agreement, dated as
     of December 30, 1996,  between  Sterling Foster Holding Corp.  ("SFHC") and
     Mr.  Certilman,  as voting  trustee (the "Voting  Trust  Agreement"),  SFHC
     transferred voting control over all 1,800,000 shares of Common Stock of the
     Company it presently  owns to Mr.  Certilman  during the three year term of
     the Voting Trust Agreement.

(3)  Includes  1,800,000  shares  held by Mr.  Certilman  pursuant to the Voting
     Trust  Agreement  and  360,000  shares held in a  retirement  trust for his
     benefit.

(4)  The  shares  are  registered  in the name of  SFHC;  Mr.  Lieberman  is the
     beneficial owner of these shares by reason of his position as President and
     sole stockholder of SFHC.

(5)  Includes  12,500  shares held in a retirement  trust for the benefit of Mr.
     Haft.

(6)  Includes  5,000  shares  held in a  retirement  trust for the benefit of an
     executive officer and 20,000 shares held by such executive  officer's wife.
     Such executive officer disclaims  beneficial  ownership of the shares owned
     by his wife.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Pursuant to a certain  Subscription  Agreement,  dated June 3, 1996, by and
between the Company,  Mr.  Certilman,  Mr. Haft,  and SFHC,  the Company  issued
3,200,000  shares of Common Stock at a price of $0.25 per share (the "Offering")
for a total subscription price of $800,000. Of such amount, $450,000 was paid by
SFHC for the purchase of  1,800,000  shares and $175,000 was paid by each of Mr.
Haft and Mr.  Certilman for the purchase of 700,000 shares each. The proceeds of
the  Offering  were  intended  to  be  used  in  connection  with  the  business
opportunities described in Item 1(a)(vi) hereof.

     As described in Item 1(a)(ii) hereof, the Company has entered into a letter
of intent with respect to the  acquisition of all of the issued and  outstanding
Common Shares of DCAP as well as interests in certain  entities  affiliated with

                                       15

DCAP.  Four of such  affiliated  entities are one-half owned by Mr.  Certilman's
daughter;  however,  her  interest in such  entities is not  contemplated  to be
purchased,  and no shares of EXTECH Common Stock or other consideration is to be
issued to her in connection with the acquisition.

     Certilman Balin Adler & Hyman,  LLP, a law firm of which Mr. Certilman is a
member,  serves as counsel to the Company. It is presently anticipated that such
firm will  continue to  represent  the Company  and/or its  affiliates  and will
receive  fees for its services at rates and in amounts not greater than would be
paid to unrelated law firms performing similar services.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)  Exhibits

Exhibit
Number              Description of Exhibit

3(a) Certificate of Incorporation, as amended(1)

 (b) By-laws, as amended(2)

9    Amended and Restated Voting Trust Agreement, dated December 30, 1996, among
     Sterling Foster Holding Corp. and Morton L. Certilman, as voting trustee(3)

10(a) Agreement, dated July 22, 1988, between the Ports Authority and IAH(1)

10(b) Resolution of Board of  Directors  of Ports  Authority,  dated  August 10,
      1994, regarding rental obligation of the Hotel(4)

10(c) Amended and Restated 1990 Stock Option Plan(1)

10(d) License and Royalty Agreement,  dated July 1991,  among the Company,  IFTI
      Capital Appreciation Management Corporation, and NPS Products, Inc.(5)

10(e) Subscription  Agreement, dated as of June 3, 1996,  between Mr. Certilman,
      Mr. Haft, SFHC and the Company (6)

10(f) $325,000 Promissory  Note,  dated  November  26,  1997,  from  DCAP to the
      Company

10(g) $114,000 Promissory Note, dated March 20, 1998, from DCAP to the Company

21    Subsidiaries of the Registrant(4)

27    Financial Data Schedule

                                       16

(1)  Denotes document filed as an exhibit to the Company's Annual Report on Form
     10-KSB for the year ended  December  31,  1993 and  incorporated  herein by
     reference.

(2)  Denotes document filed as an exhibit to the Company's Annual Report on Form
     10-KSB for the year ended  December  31,  1989 and  incorporated  herein by
     reference.

(3)  Denotes document filed as an exhibit to the Company's Annual Report on Form
     10-KSB for the year ended  December  31,  1996 and  incorporated  herein by
     reference.

(4)  Denotes document filed as an exhibit to the Company's Annual Report on Form
     10-KSB for the year ended  December  31,  1994 and  incorporated  herein by
     reference.

(5)  Denotes document filed as an exhibit to the Company's Annual Report on Form
     10-K for the year  ended  December  31,  1991 and  incorporated  herein  by
     reference.

(6)  Denotes  document  filed as an exhibit to the Company's  Current  Report on
     Form  8-K for an  event  dated  June 3,  1996 and  incorporated  herein  by
     reference.

(b)  Reports on Form 8-K

     No report on Form 8-K was filed by the Company  during the last  quarter of
the fiscal year ended December 31, 1997.

                                       17

                       EXTECH CORPORATION AND SUBSIDIARIES

                               REPORT ON AUDITS OF
                        CONSOLIDATED FINANCIAL STATEMENTS

                        TWO YEARS ENDED DECEMBER 31, 1997

                                      INDEX

                                                                       Page

Independent auditors' report                                           F-2

Consolidated balance sheet                                             F-3

Consolidated statements of operations                                  F-4

Consolidated statement of stockholders' equity                         F-5

Consolidated statements of cash flows                                  F-6

Notes to consolidated financial statements                      F-7 - F-10

                        CONSOLIDATED FINANCIAL STATEMENTS

               Report of Independent Certified Public Accountants

Board of Directors and Stockholders
EXTECH CORPORATION
East Meadow, New York

We  have  audited  the  accompanying   consolidated   balance  sheet  of  EXTECH
CORPORATION   and   Subsidiaries  as  of  December  31,  1997  and  the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the  years  in the  two-year  period  ended  December  31,  1997.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of EXTECH CORPORATION
and Subsidiaries as of December 31, 1997 and the results of their operations and
their cash flows for each of the years in the two-year period ended December 31,
1997 in conformity with generally accepted accounting principles.

                                                 /s/ Holtz Rubenstein & Co., LLP
                                                 HOLTZ RUBENSTEIN & CO., LLP

Melville, New York
March 20, 1998

                                       F-2

                       EXTECH CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1997

             ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                         $1,040,389
   Accounts receivable, net of allowance for doubtful
      accounts of approximately $1,700                                   36,500
   Notes receivable, net of allowance for doubtful accounts
      of approximately $35,000 (Note 4)                                 355,316
   Inventories                                                            6,122
   Prepaid expenses and other current assets                             15,958
                                                                      ---------
        Total current assets                                          1,454,285

PROPERTY AND EQUIPMENT, net (Note 3)                                    118,856

OPERATING EQUIPMENT, net                                                  9,191

RESTRICTED CERTIFICATE OF DEPOSIT (Note 5)                               40,000
                                                                      ---------

                                                                     $1,622,332
                                                                      ==========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                  $    1,487
   Accrued expenses (Notes 6 and 7)                                     147,866
   Debentures payable (Note 8)                                          154,200
                                                                      ----------
        Total current liabilities                                       303,553

MINORITY INTEREST                                                           560

COMMITMENT AND CONTINGENCY (Note 11)

STOCKHOLDERS' EQUITY:  (Note 12)
   Common stock, $.01 par value; authorized 10,000,000 shares;
      issued and outstanding 5,591,367 shares                            55,914
   Capital in excess of par                                           5,264,950
   Deficit                                                           (4,002,645)
                                                                      1,318,219
                                                                      ---------

                                                                     $1,622,332
                                                                      ==========

                 See notes to consolidated financial statements

                                       F-3

                       EXTECH CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                       Years Ended
                                                       December 31,
                                                1997                1996

REVENUES:  (Note 14)
   Rooms                                   $  895,238          $  936,976
   Other operating departments                 34,991              32,958
   Interest, net                               66,389              38,822
   Royalty income                                -                109,891
                                           ----------           ----------

        Total revenues                        996,618           1,118,647
                                           ----------           ----------

COSTS AND EXPENSES:
   Administrative and general                 123,366             124,697
   Bad debt (recovery)                         13,421             (21,174)
   Corporate and sundry (Note 9)              343,189             352,812
   Departmental                               372,217             380,711
   Depreciation and amortization               52,185              51,544
   Energy costs                                23,197              14,285
   Lease rentals (Note 11)                    181,178             189,610
   Property operation and maintenance          27,863              26,605
                                           ----------           ---------

        Total costs and expenses            1,136,616           1,119,090
                                           ----------           ---------

LOSS BEFORE INCOME TAXES                     (139,998)               (443)

INCOME TAXES (Note 10)                          3,994               4,656
                                           ----------           ----------

NET LOSS                                   $ (143,992)          $  (5,099)
                                           ==========           ========= 

BASIC LOSS PER COMMON SHARE (Note 13)      $    (.026)          $   (.001)
                                           -----------          ----------

WEIGHTED AVERAGE NUMBER OF SHARES OF
   COMMON STOCK OUTSTANDING (Note 13)       5,591,367            4,236,176
                                            =========            =========

                 See notes to consolidated financial statements

                                       F-4

                       EXTECH CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                                           Capital
                                     Common Stock         in Excess
                                 Shares       Amount        of Par         Deficit        Total

Balance, January 1, 1996     2,391,367      $  23,914     $4,496,950    $(3,853,554)    $  667,310

Issuance of stock            3,200,000         32,000        768,000           -           800,000

Net loss for the year             -              -              -            (5,099)        (5,099)
                             ---------       --------      ----------    -----------     ----------

Balance, December 31, 1996   5,591,367         55,914      5,264,950     (3,858,653)     1,462,211

Net loss for the year             -              -              -          (143,992)      (143,992)
                             ---------       --------      ----------    -----------     ----------

Balance, December 31, 1997   5,591,367       $ 55,914     $5,264,950    $(4,002,645)    $1,318,219
                             =========       ========     ==========    ===========     ==========

                 See notes to consolidated financial statements

                                       F-5

                       EXTECH CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                           Years Ended
                                                                           December 31,
                                                                      1997                1996

CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                         
   Net loss                                                      $  (143,992)          $   (5,099)
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
        Depreciation and amortization                                 52,185               51,544
        Bad debts                                                     13,421              (20,948)
        Changes in operating assets and liabilities:
           (Increase) decrease in assets:
             Accounts receivable                                      12,891                1,830
             Prepaid expenses and other assets                       107,137             (114,802)
           Increase (decrease) in liabilities:
             Accounts payable and accrued expenses                    22,398              (17,457)
                                                                   ---------             ----------
        Net cash provided by (used in) operating activities           64,040             (104,932)
                                                                   ---------             ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                               (16,091)                (175)
   Notes receivable - net                                           (285,681)             (21,728)
   Purchase of restricted certificate of deposit                     (40,000)                -
                                                                   ---------             -------
        Net cash (used in) investing activities                     (341,772)             (21,903)
                                                                   ---------            ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of common stock                                             -                 800,000
                                                                   ---------            ---------
        Net cash provided by financing activities                       -                 800,000
                                                                   ---------            ---------

Net (decrease) increase in cash and cash equivalents                (277,732)             673,165

Cash and cash equivalents, beginning of year                       1,318,121              644,956
                                                                   ---------            ---------

Cash and cash equivalents, end of year                            $1,040,389           $1,318,121
                                                                  ==========           ==========

                 See notes to consolidated financial statements

                                       F-6

                       EXTECH CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 1997 AND 1996

1.   Summary of Significant Accounting Policies:

     a.   Description of business

          The Company's  operations are within one industry as lodging sales and
     related  revenues  accounted  for  substantially  all  revenues  during the
     two-year period ended December 31, 1997.

     b.   Principles of consolidation

          The  consolidated  financial  statements  include the  accounts of the
     Company, its wholly-owned subsidiaries and a 90% owned inactive subsidiary.
     All intercompany transactions and balances have been eliminated.

     c.   Inventories

          Inventories, consisting of merchandise and supplies, are stated at the
     lower of cost or market. Cost is determined on a first-in, first-out basis.

     d.   Property and equipment

          Property and  equipment are stated at cost.  Depreciation  is provided
     using the  straight-line  method  over the  estimated  useful  lives of the
     related  assets.  Leasehold  improvements  are  being  amortized  using the
     straight-line method over the remaining term of the lease.

     e.   Concentration of credit risk

          The  Company  invests its excess  cash in  deposits  and money  market
     accounts with major financial  institutions and has not experienced  losses
     related to these investments.

     f.   Statement of cash flows

          For purposes of the statement of cash flows, the Company considers all
     highly liquid debt  instruments with a maturity of three months or less, as
     well as bank money market accounts, to be cash equivalents.

     g.   Estimates

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

     h.   Reclassifications

          Certain reclassifications have been made to the consolidated financial
     statements  for the  year  ended  December  31,  1996 to  conform  with the
     classifications used in 1997.

2.   Supplementary Information - Statement of Cash Flows:

     Cash paid for income  taxes was $4,918  and $7,141  during the years  ended
December 31, 1997 and 1996, respectively.

                                       F-7

3.   Property and Equipment:

     At December 31, 1997, property and equipment consists of the following:

        Furniture, fixtures and equipment                   $378,494
        Leasehold improvements                               133,696
                                                            --------
                                                             512,190
        Less accumulated depreciation and amortization       393,334
                                                            --------
                                                            $118,856
                                                            ========

4.   Notes Receivable:

     a. In 1994, pursuant to a Plan of Reorganization,  Robeson Industries Corp.
("Robeson") issued a promissory note to the Company for prior advances.  Robeson
ceased  making  payments on this note in January 1995.  In September  1995,  the
Company  canceled the note and Robeson issued a new note for $125,000 payable in
27 monthly  installments  of $5,000 with  interest at 8% per annum.  Robeson has
made 15 payments  under the note and is currently  delinquent  on the  remaining
payments. The balance on the note at December 31, 1997 was $59,500.

     b. In November  1997,  the Company signed a letter of intent related to the
purchase of all of the issued and  outstanding  common shares of Dealers  Choice
Automotive  Planning  Inc.  ("DCAP") as well as  interests  in certain  entities
affiliated with DCAP. In  consideration  for the  acquisition,  the Company will
issue  to the  shareholders  of  DCAP  and  affiliated  entities  shares  of the
Company's common stock.

     Additionally, the Company advanced $325,000 to DCAP with principal payments
of $20,000, in addition to interest, due on each of April 21, 1998, May 21, 1998
and June 21,  1998.  The  remaining  principal is due the latter of (i) July 21,
1998 or (ii) six months from the date the Company and DCAP agree not to complete
the purchase,  but no later than September 30, 1998. This note bears interest at
10% per annum and is secured by all of the shares of DCAP.

     On March 20, 1998,  the Company lent an additional  $114,000 to DCAP.  Upon
execution  of the  purchase  agreement,  the  Company  has  agreed  to  lend  an
additional $311,000.

5.   Restricted Certificate of Deposit:

     In April 1997,  as  requested  by the lease,  the Company  purchased a bank
certificate of deposit and pledged it to the Puerto Rico Ports Authority ("Ports
Authority") as security for payment of amounts due under the lease agreement.

6.   Accrued Expenses:

     At December 31, 1997, accrued expenses consist of the following:

        Rent                                     $ 59,883
        Professional fees                          39,868
        Payroll and related costs                  15,022
        Deferred compensation (Note 7)             14,963
        Room tax                                    7,770
        Other                                      10,360
                                                 --------

                                                 $147,866
                                                 ========

                                       F-8

7.   Deferred Compensation:

     The  Company  has an  agreement  to pay  special  compensation  to  certain
employees  who  at  the  date  of  retirement  have   accumulated  20  years  of
uninterrupted service.  Maximum amount payable per employee is $3,000. There are
seven employees  covered by this plan, four of them with 15 years of accumulated
service.  Compensation is accrued  pro-ratably from the inception of the plan to
the date  each  employee  is  eligible  for  benefits.  At  December  31,  1997,
approximately $15,000 has been accrued.

8.   Debentures Payable:

     In 1971, the Company, pursuant to a plan of arrangement, issued a series of
debentures  which  matured in 1977.  As of December 31, 1997,  $154,200 of these
debentures  have not been presented for payment.  Accordingly,  this balance has
been included as a current  liability in the accompanying  consolidated  balance
sheet.  Interest has not been accrued on the remaining  debentures  payable.  In
addition, no interest,  penalties or other charges have been accrued with regard
to any escheat obligation of the Company.

9.   Related Party Transaction:

     During the years ended  December 31, 1997 and 1996,  the Company leased its
corporate office facility from a partnership of which a stockholder/officer is a
member. Rent expense amounted to $6,000 for each of the years ended December 31,
1997 and 1996.

10.  Income Taxes:

     The 1997 and 1996 income of IAH, Inc., a  wholly-owned  subsidiary has been
calculated  excluding the loss of EXTECH,  as it is  separately  taxed under the
laws  of  Puerto  Rico.  A  provision  of   approximately   $4,000  and  $4,700,
respectively, has been made for this tax liability.

     For federal income taxes, the Company has net operating loss  carryforwards
of approximately $991,000 available to offset future taxable income which expire
in various years from 2005 through  2011.  In addition,  the Company has general
business tax credit  carryforwards  available to reduce  future  income taxes of
approximately $33,000. If not utilized, these credits are scheduled to expire in
various amounts through 2010. The Company  incurred  operating losses during the
past six years and losses are  expected in the early  subsequent  periods.  As a
result,  the  Company has not  recorded a deferred  tax asset in 1997 due to the
fact that a 100% valuation allowance would be needed.

11.  Commitment and Contingency:

     IAH, Inc.  leases the  International  Airport Hotel (the "Hotel")  property
pursuant  to an  operating  lease  with the Ports  Authority,  which  expired in
December  1995.  As  discussed  below,  IAH is of the belief that  pursuant to a
supplemental lease agreement, it retained the option to continue the lease for a
period  of five  years to  December  31,  2000,  which  right it  exercised,  or
alternatively, that the Ports Authority executed a new lease agreement for a ten
year term  commencing on January 1, 1996. The lease  agreement  provides for the
annual  rental  payments  to be equal to the  greater of  $169,400 or 20% of the
annual gross revenues, as defined, effective January 1, 1994. Total rent expense
under this lease  amounted to  approximately  $181,000 for 1997 and $190,000 for
1996.

                                       F-9

11.  Commitment and Contingency: (Cont'd)

     Based upon IAH's refusal to acknowledge that, effective January 1, 1996, it
occupied  the Hotel on a  month-to-month  basis,  in  February  1996,  the Ports
Authority  requested  that IAH vacate,  surrender  and  deliver the  premises by
February 29, 1996.  Following the receipt of such request, IAH brought an action
in the  Superior  Court of San Juan,  Puerto Rico for  declaratory  judgment and
possessory injunction against the Ports Authority with respect to the Hotel. The
action  seeks  a  declaratory  judgment  that,  among  other  alternatives,  IAH
exercised  an option with respect to its lease for the Hotel for an extension of
the term of five years commencing on January 1, 1996 or that the Ports Authority
executed a new lease  agreement  for a ten year period  commencing on such date.
During the year,  certain settlement  negotiations took place.  Management is of
the  opinion  that  the  Company  will  prevail  on  the  declaratory  judgment;
therefore, management will vigorously defend its position.

12.  Stockholders' Equity:

     a. Stock options

          The Company  maintains  a stock  option  plan which  provides  for the
     granting  of options to  individuals  rendering  service to the  Company to
     purchase up to 300,000 shares of common stock of the Company.  Such options
     may be either  incentive stock options or non-statutory  stock options.  No
     options are outstanding as of December 31, 1997.

     b. Common shares reserved

          Stock Option Plan                300,000
                                           =======

13.  Loss Per Share:

     In the fourth quarter of 1997,  the Company  adopted  Financial  Accounting
Standards Board Statement No. 128, "Earnings Per Share" ("Statement 128"), which
simplifies  the standards for computing  earnings per share  previously  used to
make them  comparable  to  international  standards.  The Company's net loss per
share was  calculated by dividing net income by the weighted  average  number of
common  shares  outstanding.  Prior  period  loss  per  share  did  not  require
restatement.

14.  Major Customer:

     Sales to a major customer  approximated 10% and 27% of total room sales for
the years ended December 31, 1997 and 1996, respectively.

15.  Fair Value of Financial Instruments:

     The  methods  and  assumptions  used to  estimate  the  fair  value  of the
following classes of financial instruments were:

          Current Assets and Current  Liabilities:  The carrying amount of cash,
     current  receivables  and payables and certain other  short-term  financial
     instruments approximate their fair value.

                                      F-10

                                   SIGNATURES

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

                                                   EXTECH CORPORATION

Dated: March 31, 1998                              By:/s/Morton L. Certilman
                                                       Morton L. Certilman
                                                       President

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

    Signatures                         Capacity                     Date

                             Chairman of the Board
/s/ Jay M. Haft              of Directors                     March 31, 1998
Jay M. Haft
                             President and Director
                             (Principal Executive,
                             Financial and Accounting
/s/ Morton L. Certilman      Officer)                         March 31, 1998
Morton L. Certilman

/s/ Leon Lapidus             Director                         March 31, 1998
Leon Lapidus

                                       18

                     DEALERS CHOICE AUTOMOTIVE PLANNING INC.

                                                               November 26, 1997

                                                                        $325,000

                                 PROMISSORY NOTE

     FOR VALUE RECEIVED,  DEALERS CHOICE AUTOMOTIVE PLANNING COMPANY, a New York
corporation (the "Maker"), having an address as indicated under its name, hereby
promises  to pay to the  order of EXTECH  CORPORATION,  a  Delaware  corporation
("Extech"),  at its offices at 90 Merrick Avenue, East Meadow, New York 11554 or
at such other  place as the holder  hereof  may from time to time  designate  in
writing,  in  immediately  available New York funds,  the principal sum of THREE
HUNDRED TWENTY-FIVE  THOUSAND DOLLARS ($325,000),  together with interest on the
outstanding  principal balance from November 28, 1997 at the rate of ten percent
(10%) per annum.  The principal amount of this Note shall be payable as follows:
Twenty  Thousand  Dollars  ($20,000) on each of April 21, 1998, May 21, 1998 and
June  21,  1998,  with  the  remaining   principal  amount  hereof  (the  "Final
Installment") being payable on July 21, 1998.  Notwithstanding the foregoing, in
the  event  the  Maker,  Extech,  Kevin  Lang  ("Lang")  and  Abraham  Weinzimer
("Weinzimer") mutually agree in writing not to enter into a definitive agreement
for the  acquisition  by Extech from Lang and  Weinzimer of, among other things,
all of the  outstanding  shares of capital  stock of the Maker  pursuant  to the
provisions  of a certain  letter of intent of even date among the parties,  then
the Final  Installment shall be payable on the later of July 21, 1998 or six (6)
months from the date the Maker, Extech, Lang and Weinzimer so agree not to enter
into such  agreement,  but in no event  shall the Final  Installment  be payable
later than  September 30, 1998.  Accrued  interest on this Note shall be payable
with each principal payment.

     The  payment of all  amounts  due under this Note is secured by a pledge of
all of the shares of the Maker and certain affiliated corporations owned by Lang
and Weinzimer pursuant to a Pledge Agreement of even date among Lang,  Weinzimer
and Extech (the "Pledge Agreement").

     In the  event  (a)  the  Maker  shall  (i)  fail to make  any  payment  due
hereunder,  (ii) admit in writing its inability to pay its debts as they mature;
(iii)  make  a  general  assignment  for  the  benefit  of  creditors;  (iv)  be
adjudicated a bankrupt or insolvent; (v) file a voluntary petition in bankruptcy
or a petition or an answer  seeking an  arrangement  with  creditors;  (vi) take
advantage of any  bankruptcy,  insolvency or readjustment of debt law or statute
or file an answer admitting the material allegations of a petition filed against
it in any  proceeding  under any such law;  or (vii) have  entered  against it a
court order  approving a petition filed against it under the Federal  Bankruptcy
Act; or (b) there shall be a breach of any representation, warranty, covenant or
other  agreement  set forth in the Pledge  Agreement or that  certain  letter of
intent of even date by and among the Maker, Lang,  Weinzimer and Extech and such
breach  shall  continue  unremedied  for a period of sixty  (60) days  following
notice  thereof,  then and in each and every such event,  Extech may, by written
notice to the Maker,  declare the entire  unpaid  principal  amount of this Note
then  outstanding  plus  accrued  interest  to  be  forthwith  due  and  payable
("Accelerate  Payment")  whereupon  the  same  shall  become  forthwith  due and
payable.  Notwithstanding  the  foregoing,  Extech  shall  not have the right to
Accelerate  Payment  based  upon a breach of a  representation  set forth in the
Pledge Agreement if such breach relates solely to the right of Lang or Weinzimer
to pledge  to Extech  the  shares  of one or more of the  entities  set forth on
Schedule A attached hereto.

     The Maker may prepay  the  principal  amount of this  Note,  in whole or in
part,  from time to time,  without  premium or penalty,  provided that the Maker
pays all interest  accrued with regard to the  principal  prepaid to the date of
prepayment.

     If the  Maker  shall  fail to pay when  due,  whether  by  acceleration  or
otherwise,  all or any portion of the principal  amount hereof,  any such unpaid
amount  shall bear  interest for each day from the date it was so due until paid
in full at the rate of twenty-four percent (24%) per annum, payable on demand.

     Notwithstanding  anything to the contrary  contained in this Note, the rate
of interest payable on this Note shall never exceed the maximum rate of interest
permitted under applicable law.

     This Note may not be waived,  changed,  modified or discharged  orally, but
only by an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.

     Should the  indebtedness  represented  by this Note or any part  thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceedings  (whether at the trial or appellate  level),  or should this Note be
placed in the hands of any agent or  attorneys  for  collection  upon default or
maturity,  the Maker  agrees to pay, in  addition  to all other  amounts due and
payable hereunder, all reasonable costs and expenses of collection or attempting
to collect this Note, including reasonable attorneys' fees.

     The Maker and any endorsers  hereof,  for themselves  and their  respective
representatives,  successors  and  assigns,  expressly  (a)  waive  presentment,
protest, notice of dishonor,  notice of non-payment,  notice of maturity, notice
of  protest,  diligence  in  collection,  and  the  benefit  of  any  applicable
exemptions,  including,  but not limited to, exemptions claimed under insolvency
laws,  and (b)  consent  that  Extech may  release  or  surrender,  exchange  or
substitute  any property or other  collateral  or security now held or which may
hereafter be held as security  for the payment of this Note,  or may release any
guarantor,  or may extend the time for payment or otherwise  modify the terms of
payment of any part of the whole of the debt evidenced hereby.

     Any notice, demand or request relating to any matter set forth herein shall
be in writing and shall be deemed  effective when hand  delivered,  when mailed,
postage prepaid,  by registered or certified mail, return receipt requested,  or
by  overnight  mail or courier,  or when sent by facsimile  transmission  to any
party hereto at its address  stated  herein or at such other address of which it
shall have notified the party giving such notice in writing as aforesaid.

                                        2

     Extech  shall be entitled to assign all or any portion of its right,  title
and interest in and to this Note at its sole  discretion  without  notice to the
Maker,  provided  that  the  Maker  shall  continue  to make  payments  required
hereunder to Extech until it has received notice of change of payee for payments
as provided herein.

     Notwithstanding  any  other  provision  of this  Note,  all  payments  made
hereunder shall be applied first to payment of sums payable hereunder other than
interest and principal,  secondly, interest on the principal balance outstanding
hereunder from time to time, and thirdly to principal.

     This Note shall be governed by, and construed in accordance  with, the laws
of the State of New York, excluding conflict of law principles thereof.

                                        DEALERS CHOICE AUTOMOTIVE
                                        PLANNING INC.

                                        By:/s/ Abraham Weinzimer
                                           Abraham Weinzimer, Vice President
                                           Address: 2545 Hempstead Turnpike
                                                    Suite 100
                                                    East Meadow, New York  11554

                                        3

                            CORPORATE ACKNOWLEDGMENT

STATE OF NEW YORK       )
                        ) ss.:
COUNTY OF NASSAU        )

     On November 26, 1997,  before me  personally  came Abraham  Weinzimer to me
known,  who,  by me duly  sworn,  did depose and say that  deponent  is the Vice
President of Dealers Choice Automotive Planning Inc., the corporation  described
in, and which executed the foregoing  Note, and that deponent signed his name by
order of the Board of Directors of such corporation.

                                                  Notary Public

                                        4

                                   SCHEDULE A

A DCAP Brokerage, Inc.
Payments Inc.
Diversified Coverage Asset Planning Inc.
Intandem Corporation
DCAP Agency, Inc.
Fulton Street, Inc.
FASK Agency Inc.
DCAP Flushing, Inc.
DCAP Hicksville, Inc.
DCAP Manhattan Inc.
A DCAP Services, Inc.
The Manhattan Agency Inc.
The Yonkers Agency Ltd.
DCAP Peekskill, Inc.
DCAP East Meadow, Inc.
DCP Garden City Park Inc.
DCAP Oceanside, Inc.
DCAP Hari, Inc.
DCAP Woodhaven, Inc.
The Bronx Agency Inc.
The White Plains Agency Inc.
DCAP Woodside Inc.
DCAP Seaford, Inc.
DCAP Brentwood Inc.
DCAP Queens Agency Inc.
AADCAP Greenbrook Inc.

                                        5

                     DEALERS CHOICE AUTOMOTIVE PLANNING INC.

                                                                  March 20, 1998
                                                                        $114,000

                                 PROMISSORY NOTE

     FOR VALUE  RECEIVED,  DEALERS CHOICE  AUTOMOTIVE  PLANNING INC., a New York
corporation (the "Maker"), having an address as indicated under its name, hereby
promises  to pay to the  order of EXTECH  CORPORATION,  a  Delaware  corporation
("Extech"),  at its offices at 90 Merrick Avenue, East Meadow, New York 11554 or
at such other  place as the holder  hereof  may from time to time  designate  in
writing,  in  immediately  available  New York funds,  the  principal sum of ONE
HUNDRED  FOURTEEN  THOUSAND  DOLLARS  ($114,000),  together with interest on the
outstanding  principal  balance  from the date hereof at the rate of ten percent
(10%) per annum. The principal amount of this Note shall be payable on September
30,  1998.  Accrued  interest on this Note shall be payable  with the  principal
payment.

     The payment of all amounts due under this Note is  guaranteed by Kevin Lang
("Lang")  and  Abraham  Weinzimer  ("Weinzimer")  pursuant to a Guaranty of even
date,  which  Guaranty  is secured by a pledge of all of the shares of the Maker
and certain  affiliated  corporations  owned by Lang and Weinzimer pursuant to a
Pledge Agreement dated as of November 26, 1997 among Lang,  Weinzimer and Extech
(the "Pledge Agreement").

     The Maker  agrees that the  proceeds of the loan from EXTECH  evidenced  by
this Note  shall be used  solely  for  employee  payroll  purposes  (the "Use of
Proceeds").

     In the event (a) the Maker,  Lang or  Weinzimer  shall (i) fail to make any
payment due hereunder,  (ii) admit in writing its or his inability to pay its or
his debts as they  mature;  (iii) make a general  assignment  for the benefit of
creditors;  (iv) be  adjudicated a bankrupt or  insolvent;  (v) file a voluntary
petition in bankruptcy or a petition or an answer  seeking an  arrangement  with
creditors; (vi) take advantage of any bankruptcy,  insolvency or readjustment of
debt law or statute or file an answer  admitting the material  allegations  of a
petition filed against it or him in any proceeding  under any such law; or (vii)
have entered  against it or him a court order approving a petition filed against
it or him under the  Federal  Bankruptcy  Act; or (b) there shall be a breach of
any  representation,  warranty,  covenant or other  agreement  set forth in this
Note,  the Pledge  Agreement or that certain letter of intent dated November 26,
1997 by and among the Maker,  Lang,  Weinzimer  and Extech and such breach shall
continue  unremedied  for a period of sixty (60) days  following  notice thereof
(except that there shall be no notice  requirement in the event of any breach of
the Maker's  covenant  with  respect to the Use of  Proceeds),  then in each and
every such event, Extech may, by written notice to the Maker, declare the entire
unpaid  principal  amount of this Note then outstanding plus accrued interest to
be forthwith  due and payable  ("Accelerate  Payment")  whereupon the same shall
become forthwith due and payable.  Notwithstanding  the foregoing,  Extech shall
not have the right to Accelerate Payment based upon a breach of a representation
set forth in the Pledge  Agreement if such breach relates solely to the right of
Lang or  Weinzimer to pledge to Extech the shares of one or more of the entities
set forth on Schedule A attached hereto.

     The Maker may prepay  the  principal  amount of this  Note,  in whole or in
part,  from time to time,  without  premium or penalty,  provided that the Maker
pays all interest  accrued with regard to the  principal  prepaid to the date of
prepayment.

     If the  Maker  shall  fail to pay when  due,  whether  by  acceleration  or
otherwise,  all or any portion of the principal  amount hereof,  any such unpaid
amount  shall bear  interest for each day from the date it was so due until paid
in full at the rate of sixteen percent (16%) per annum, payable on demand.

     Notwithstanding  anything to the contrary  contained in this Note, the rate
of interest payable on this Note shall never exceed the maximum rate of interest
permitted under applicable law.

     This Note may not be waived,  changed,  modified or discharged  orally, but
only by an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.

     Should the  indebtedness  represented  by this Note or any part  thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceedings  (whether at the trial or appellate  level),  or should this Note be
placed in the hands of any agent or  attorneys  for  collection  upon default or
maturity,  the Maker  agrees to pay, in  addition  to all other  amounts due and
payable hereunder, all reasonable costs and expenses of collection or attempting
to collect this Note, including reasonable attorneys' fees.

     The Maker and any endorsers  hereof,  for themselves  and their  respective
representatives,  successors  and  assigns,  expressly  (a)  waive  presentment,
protest, notice of dishonor,  notice of non-payment,  notice of maturity, notice
of  protest,  diligence  in  collection,  and  the  benefit  of  any  applicable
exemptions,  including,  but not limited to, exemptions claimed under insolvency
laws,  and (b)  consent  that  Extech may  release  or  surrender,  exchange  or
substitute  any property or other  collateral  or security now held or which may
hereafter be held as security  for the payment of this Note,  and/or may release
any guarantor,  and/or may extend the time for payment and/or  otherwise  modify
the terms of payment of any part or the whole of the debt evidenced hereby.

     Any notice, demand or request relating to any matter set forth herein shall
be in writing and shall be deemed  effective when hand  delivered,  when mailed,
postage prepaid,  by registered or certified mail, return receipt requested,  or
by  overnight  mail or courier,  or when sent by facsimile  transmission  to any
party hereto at its address  stated  herein or at such other address of which it
shall have notified the party giving such notice in writing as aforesaid.

     Extech  shall be entitled to assign all or any portion of its right,  title
and interest in and to this Note at its sole  discretion  without  notice to the
Maker,  provided  that  the  Maker  shall  continue  to make  payments  required
hereunder to Extech until it has received notice of change of payee for payments
as provided herein.

                                        2

     Notwithstanding  any  other  provision  of this  Note,  all  payments  made
hereunder shall be applied first to payment of sums payable hereunder other than
interest and principal,  secondly, interest on the principal balance outstanding
hereunder from time to time, and thirdly to principal.

     The Maker  acknowledges and agrees that the obligations under this Note are
unconditional  and are not  subject to any  defense,  counterclaim,  or right of
offset or setoff.

                                        3

     This Note shall be governed by, and construed in accordance  with, the laws
of the State of New York, excluding conflict of law principles thereof.

                                  DEALERS CHOICE AUTOMOTIVE
                                  PLANNING INC.

                                  By:/s/ Kevin Lang
                                     Kevin Lang, President
                                     Address:    2545 Hempstead Turnpike
                                                 Suite 100
                                                 East Meadow, New York  11554
                                     Telecopier Number: (516) 735-7379

                                        4

                            CORPORATE ACKNOWLEDGMENT

STATE OF NEW YORK       )
                        ) ss.:
COUNTY OF NASSAU        )

     On March 20, 1998,  before me personally came Kevin Lang to me known,  who,
by me duly sworn,  did depose and say that  deponent is the President of Dealers
Choice  Automotive  Planning  Inc.,  the  corporation  described  in,  and which
executed the foregoing  Note, and that deponent  signed his name by order of the
Board of Directors of such corporation.

                                                    Notary Public

                                        5

                                   SCHEDULE A

A DCAP Brokerage, Inc.
Payments Inc.
Diversified Coverage Asset Planning Inc.
Intandem Corporation
DCAP Agency, Inc.
Fulton Street, Inc.
FASK Agency Inc.
DCAP Flushing, Inc.
DCAP Hicksville, Inc.
DCAP Manhattan Inc.
A DCAP Services, Inc.
The Manhattan Agency Inc.
The Yonkers Agency Ltd.
DCAP Peekskill, Inc.
DCAP East Meadow, Inc.
DCP Garden City Park Inc.
DCAP Oceanside, Inc.
DCAP Hari, Inc.
DCAP Woodhaven, Inc.
The Bronx Agency Inc.
The White Plains Agency Inc.
DCAP Woodside Inc.
DCAP Seaford, Inc.
DCAP Brentwood Inc.
DCAP Queens Agency Inc.
AADCAP Greenbrook Inc.

                                        6

  

                       5
                      1

                   Year
                              Dec-31-1997
                                 Jan-01-1997
                                   Dec-31-1997
                                1
                                         1,040,389
                                   0
                                  428,516
                                   36,700
                                    6,122
                               1,454,285
                                         512,190
                                 393,334
                                 1,622,332
                          303,553
                                        0
                          0
                                    0
                                       55,914
                                     1,262,304
                   1,622,332
                                        0
                               996,618
                                          0
                                  1,136,616
                               0
                               0
                             0
                                (139,998)
                                   3,994
                            (143,992)
                                 0
                                0
                                      0
                                   (143,992)
                                  (.026)
                                  0